Diane Feinstein and Susan Collins are disappointed in the political process. Have they been kidnapped and replaced by zombies? Sleeping for the last 40 years or so? They can't believe how the process actually works:
It's amazing how quickly a good idea can go bad in Washington. In
January, we joined with Sen. Charles Schumer to introduce a bill that
would allow Americans to trade in gas-guzzling cars in exchange for
vouchers worth up to $4,500 toward the purchase of vehicles with
greatly improved fuel economy. This legislation was modeled after programs in California and Texas that improved fuel efficiency, reduced
pollution, and helped easily identifiable groups of Americans explicitly while the harm and costs were spread widely across the general taxpaying public stimulated auto sales.
Our "Cash for Our Friends in Detroit Clunkers" proposal was a win-win for the environment
and the economy. Then Detroit auto industry lobbyists got involved.
Boy, that sure shocked us. Why would they do that? Soon a rival bill emerged in the House, tailored perfectly to the auto
industry's specifications.
The House bill was written so quickly that one of its main
components — a provision that would have excluded any vehicle
manufactured overseas — had to be removed because it violated trade
laws. Too bad. That would really have helped our "economy." Those nasty trade agreements sure can prevent a good law from getting even better. But the worst item on the auto industry's wish list is still at
the heart of the bill — a provision that undermines fuel-efficiency
standards.
On Tuesday, the House approved this legislation, which would
subsidize the purchase of a new Hummer H3T (16 mpg) or a new Dodge Ram
1500 4×4 truck (15 mpg), but not a two-year-old Ford Focus (27 mpg) or
used Chevy Colorado (20 mpg). A companion bill is pending in the Senate.
Where is the world's smallest violin? You mean the lobbyists actually influenced the bill? And a new Hummer gets preference over a used Ford Focus? Well that's what happens when you have the wasteful idea of subsidizing new car purchases. It leads to waste. Why are you surprised?
Actually I am surprised. Why didn't they just require all Americans to destroy ALL of their cars every six months. That would be even more helpful to a small select group of politically-important Americans the economy.
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With a hat tip to Mencius Moldbug, what do you get when you mix fine wine with sewage? You get sewage. And what do you get when you mix even the best of ideas with politics? Politics.
You left out a few other humdingers in there, Russ. How about: "Each participating driver would save up to 176 gallons of gas a year", somehow magically forgetting the lessons of the 70s.
Or this cute passage: "Last summer, $4-a-gallon gas prices forced many Americans to park their guzzlers. Today, average gas prices are creeping back up toward $3 a gallon. Drivers in a tough economy need more incentives for fuel efficiency, not subsidies for inefficient vehicles that will cost more in the long run." Let us not forget the seldom quoted clause in Article 2 of the constitution: "Congrefs shall pass no law restricting the ability of the people to enjoy transportation that is not dear to them.
Come to think of it, why did we ever ditch the f-for-s spelling in English? I kind of like it.
One last one before I hop in my Sherman tank to go to work… "Our approach is good for both the economy and the environment". That they both probably genuinely believe this puzzling statement is fine support for the central thesis contained in the third book on the list in the sidebar.
Sheesh.
Great post. In Japan–and believe me I don't hold Japan up as a model for anything except as maybe some kind of soft totalitarianism–they pretty much do require you to get a new car every six months. Okay, not every six months, but the insurance rates on any car more than four years old (as I recall) skyrocket to such a level as to force everyone to replace their cars every four years. (Meanwhile, the stockpile of used Japanese cars flood the rest of Asia.)
So, we go from the U.S. automakers' planned obsolescence to the government's mandated obsolescence.
I owned seven American cars during the first sixteen years I was driving. I owned four Nissans during the next twenty five years.
U.S. automakers deem a part that lasts through the warranty a good part. They don't care how long a part lasts after the warranty ends (except that replacement parts are a profit center.) The result is a Darwinian drift toward parts that last one year.
Somehow the Japanese never caught on to that. My four Nissans had two repairs over twenty five years outside of routine maintenance; One starter motor and one fuel pump.
Our interests are not aligned. U.S. automakers think they do better with cars that provide a continuing stream of income from breakdowns. I think I'll do better with cars that don't break down.
Meanwhile, the stockpile of used Japanese cars flood the rest of Asia.
Many of the cars driven in Japan are not available here in the states – they aren't considered safe.
I wonder how many of those safety regulations were put in place at the request of the domestic auto industry so as to stifle competition?
Hold on.
The rule is, build a better mousetrap and the world beats a path to your door.
Didn't the government already mandate a better car? Then why do they need additional stimulus? Aren't people already planning a path beating to the new, mandated better car?
Is this how the housing bubble started? Stimulus upon stimulus?
Are we going to be creating a bubble in the auto market?
.
Professor Roberts,
I love when you do the strike-out text thing.
Just a note on a typo of sorts. Your "Too Bad" comment after the bit about having to yank out the domestic-only provision is priceless and on the mark, but it needs a strike-out to indicate that Feinstein and Collins didn't actually say "too bad."
Not that I'd be surprised if they did.
OregonGuy:
"Are we going to be creating a bubble in the auto market?"
A fascinating question, one that touches on the nature of asset "bubbles" (a term I haven't quite come to grips with yet). My take is that international competition will prevent a run-up in the price of domestic cars, and that because of this, the increase in the money supply will finally show up as run-of-the-mill inflation.
Though it's entirely possible you could be right. It's not that much of a stretch to omit the condiitonals from the "Buy American" clauses.
My take is that international competition will prevent a run-up in the price of domestic cars
Both Japan and Europe have all kinds of gas sipping vehicles available that cannot be legally sold in this country due to safety regulations.
What I'm wondering is how domestic companies will be able to produce gas sippers that comply.
I don't think it can be done.
So regulations will need to be relaxed, but that will allow the competition to sell their cars.
Russ,
You had posted this same entry very late in the evening about five or six days ago; what had happened to it back then?
Someone's costly political games being foiled by someone's costly political games.
It is sad, but not for any reasons Feinstein or Collins could fathom.
Russ Roberts wrote: "Actually I am surprised. Why didn't they just require all Americans to destroy ALL of their cars every six months. That would be even more helpful to a small select group of politically-important Americans the economy."
Isn't this the broken window economy?
Sam Wilson wrote: "Come to think of it, why did we ever ditch the f-for-s spelling in English? I kind of like it."
It's not an f-for-s. Look carefully at an "f" and at the f-for-s at the beginning of double "ses". They are not the same.
I know, Bob. I was being facetious. Perhaps not the wisest idea here at the cafe, but I guefs that's the risk I have to take.
Car accidents must stimulate the economy too!
Great stuff. Thanks.
I'm reminded of Brave New World, where it was every person's duty to consume and people were indoctrinated from birth to prefer the new over the old. It's starting to get a little scary how themes from Brave New World and 1984 seem to be reflected in the President's policies.
"It's starting to get a little scary how themes from Brave New World and 1984 seem to be reflected in the President's policies."
That'f nothing. Over in Blighty world it'f been a Brave New World fince 1984. Well, fince 1997. It feemf longer. Back in '84 good old Maggie held the reinf and all waf good with the world.
Cheers.
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