Friday, July 29, 2011

We’re Going for a Ride

Yesterday’s New York Times reported on the newly proposed automobile fuel-economy standards and the automakers who begrudgingly love them. I couldn’t help but notice the report was full of package deals, fallacies, and wiggle words.

Still, the industry’s meek acceptance of what are considered extremely challenging fuel-economy goals is a marked retreat from years past, when the companies argued that consumers would not be willing to pay for the technology needed to meet higher mileage requirements.

“The auto companies’ level of vitriol and rhetoric has changed,” said Dan Becker, director of the Safe Climate Campaign, a group that works to mitigate global warming. “We welcome all epiphanies.”

Vitriol and Rhetoric

Hate speech. That’s what most people think of when they hear those two words together.  While vitriol is language using bitterly abusive feeling or expression, rhetoric is the art of using language effectively. Putting the two together does not make either a form of hate speech (which is a package deal). The biggest difference between them is how they reflect upon the ability of the speaker: while the first may reflect passion for the subject, it mostly reflects the speaker’s inability to form a cogent argument; the second reflects upon the speaker’s power of persuasion. Don’t be fooled by these two fine words packaged to discredit any speaker whose point of view disagrees with your own.

Details of how the credits will work have not yet been made public, but the intention is to encourage the development of cars with far lower emissions.

Details and Intentions

There ought to be a law - don’t worry about the details. This sort of short-term thinking is the reason statists give in order to regulate all aspects of our lives. They imply that people can’t be trusted to figure things out for their own long-term benefit (shall I buy the car with the hybrid premium or the less expensive traditional gas model?) so we must be nudged by an all-knowing benevolent government which has previously determined how things will work best for us and for all men. So long as the government has good intentions (e.g., lower emissions – which has previously been sold to us as an unquestioned good), statists claim its interference in any industry is proper. Don’t be fooled by this appeal to authority. The authority to live your life comes from the fact that you are alive.

[. . .] but the real test will be if costs can be lowered enough so consumers will want to buy more electric and hybrid models.
This time, the automakers’ trade group proposed radio ads that would have raised concerns about job losses, but the proposal was squelched by some of the companies, notably G.M. and Chrysler.
 [. . .] and the White House made it clear to Detroit executives that the changes were coming and they needed to cooperate.

Free Market vs. Government Force

A successful company thrives by providing its customers with valuable goods and services – unless of course, that company relies on government funding. When a company cannot fail by virtue of underlying government support, there is no real incentive to thrive. While the auto companies that were under government receivership may or may not be on solid financial footing, they clearly remain stooges for their government bosses.  This is not vitriol, but an assessment of their actions as reported in this article.

In the end, though, Detroit was faced with an undeniable political reality: there was no graceful way to say no to an administration that just two years ago came to its aid financially.

“This was no time to fight these regulations,” said one Detroit executive, who spoke on condition of anonymity because of the nature of the closed-door negotiations. “And you’re starting to see these fundamental shifts in the market that play a huge role in this.”

Political Reality

What is political reality? There is politics and there is reality. When the government attempts to shape reality through political maneuvering (e.g., regulations, taxes, grants, and special interest spending), all it creates is a house of cards.

Just as we couldn’t continue to live in the house of cards carefully crafted through Fannie Mae and Freddie Mac, we can’t ride in a car fueled by government machinations for very long either. Sooner or later it will breakdown leaving those of us who would have been better off with the less-expensive, traditional gas models, stranded.