I remember as a young lad watching the news with my father in 1975 when the government announced the implementation of the CAFÉ standard for automakers. I remember this even though I was a beardless youth of 10 because I couldn’t figure out what coffee shops and car makers had in common and why the government was involved. My father explained that CAFÉ stood for Corporate Average Fuel Economy and it was a mandate that all U.S. automakers achieve a certain miles per gallon when the gas mileage of all their vehicles under 8,000 pounds are averaged together. Dad, being somewhat of a math whiz, used this opportunity to launch into an impromptu lesson on ratios and averages, effectively ruining my evening. This moronic scheme was in response to the Arab oil embargo and the ensuing shortages that ushered in some of the worst cars of all time.
Today the CAFÉ standard is slated to go up to 35.5 MPG in 2016 and 54.5 MPG by 2025. They also use a different method to calculate the corporate average by using the cubic footprint of the car, what ever, who cares. There are many jail house layers in the automotive press who argue about the future standards being realistic or if the timetable is achievable, I personally think it’s like arguing the gross tonnage of the train about to hit you while your car is stalled on the tracks.
What I can’t understand, and what I never hear discussed, is why we have the standard in the first place. I have a hard time imaging the level of the mind and its convoluted thinking that hatched such a dizzy idea. Somewhere in an office or conference room in Washington DC in 1975 a bunch of people pretending to be functioning adults discussed, planned and implemented this regulation. That someone didn’t put a stop to this is inconceivable to me. These politicians and bureaucrats actually took themselves seriously enough to show up for work and discuss this plan as if they were doing something necessary and important.
The CAFÉ standard only makes sense if you make a few assumptions; first, that people are too stupid to know what’s good for them, second, that free market forces don’t exist and third, its Ok for the government to do whatever it wants. The third assumption is proving itself to be truer everyday so I’ll concentrate on the first two.
To illustrate our first assumption, that people are stupid, let’s pretend its 2012, gas is heading toward $6 a gallon and horror of horrors the CAFÉ standard doesn’t exist. We look into the household of Joe and Sally Average of Anytown U.S.A. Its evening in Anytown, Joe and Sally put their 2.3 children to bed and now sit around their kitchen table discussing their finances.
Joe: Boy, our budget has really taken a hit lately, it’s like we just can’t keep up with the bills anymore.
Sally: I know, it’s seems to have gotten worse since gas has gone over $5 a gallon but I’m sure that has nothing to do with it. Is there any place we can trim some expenses?
Joe: We have already dropped the cable TV and we don’t go out to eat anymore. What about transportation?
Sally: I don’t see how we can trim anything there, after all you need the 2 ton dump truck to drive to the office and I have to have the 22 foot motor home to take the kids to school.
Joe: You’re right, I’m sure the government wouldn’t allow the car companies to force us to buy these big vehicles if they were bad for us. Hey, I just had a thought, what if you use the motorhome’s kitchen to make your coffee in the morning instead buying your cappuccino at that expensive café?
Sally: That just might work, I’ll try it tomorrow.
The curtain closes on Mr. and Mrs. Average feeling hopeful for the future.
A ridiculous example I know, but the CAFÉ standard assumes that without legislation people will continue to buy vehicles they can’t afford to operate because they’re too stupid to make other choices. “But if the car companies only make inefficient vehicles the Averages have no choice.” You might make that argument which leads us to assumption number two.
Market forces do not exist.
Corporations cannot force you to buy something unless they have their own police force or are the only ones who make a particular product you can’t live without. The government assumes that unless they put some arbitrary standard on car companies they will never build fuel efficient vehicles no matter how much customers want them. Tone deafness toward customers has never been true, even when the big three had the American market mostly to themselves. In the 1950’s the U.S. was building an interstate highway system that, for the first time, allowed pain free high speed automobile travel. Americans wanted cars that could ply these new highways with speed, comfort and ease. Detroit was only too happy to oblige with big tail-finned barges powered by ever increasing V8 engines. Even in this time of cheap gas you could still buy fuel efficient cars from England, Germany and the micro sized American Crosley. In addition, by the end of the 50’s the big three had a new breed of compacts on their drawing boards and soon U.S roads would be populated with Falcons, Corvairs, Valiants and Larks.
Today we no longer have the big three but rather the big one and a half. Ford is the last independent car company left standing. GM is partially owned by the government and Chrysler is owned by Fiat which is controlled by the Italian government. My point is there is no American car monopoly and it would be suicide for Ford or GM not make fuel efficient cars with the Koreans, Japanese and VW breathing down their necks. So why do we need a CAFÉ standard? Car companies will build the cars we want and if one company refuses their competition will pull a muscle leaping in to fill the void.
The CAFÉ standard is only a number pulled out of thin air anyway. If 54 miles per gallon is good then why not make it 100 miles per gallon? Isn’t the 100 MPG carburetor of 1970’s folk lore fame buried with Jimmy Hoffa in a New Jersey landfill?
If you assume that the government arrived at the CAFÉ standard through extensive research into fuel efficiency versus the exact moment the earth will combust from global warming I have some carbon credits to sell you. The CAFÉ number represents nothing more scientific than another intrusion of bureaucratic control in an area where the government has no business. There was a time when Americans would have never allowed government inserting itself into the car business, or the mortgage business, or the healthcare business, but those radicals are as extinct as American Motors.
Marve Harwell (c) 2012
Marve Harwell (c) 2012
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