Ford stockholders and dealers must be thrilled. The new boss at Ford, former Boeing airplane salesman Alan Mulally, has come out in favor of drastically raising gas taxes as a way of making cars more fuel efficient.
 
His timing couldn’t have been worse.
 
In a speech delivered Wednesday at an industry conference in Michigan, Mulally blasted the Democratic proposal to raise federal CAFE fuel mileage standards for cars and trucks to 35 mpg. He claimed such requirements would destroy the Detroit automakers.
 
But then he turned around and advocated a hike in the gas tax as a way of forcing consumers into buying more fuel efficient cars, as they have in Europe.
 
In Europe, gas averages $6 per gallon.
 
Apparently, the thinking is that raising gas taxes makes the current cars so expensive to drive that consumers will be forced to buy new ones. But the CAFE requirements will just make new cars much more expensive, with no corresponding incentive to buy them.
 
Mulally isn’t the only Detroit executive to suggest this. Rick Wagoner at GM has done so, as well. Detroit automakers can become real socialists when they think it will help them. The Detroit Three have been strong supporters of government provided national health care plans because it would get them out from under all the health care expenses for workers and retired workers that the automakers negotiated over the years with the United Auto Workers. 
 
While it is generally conceded that a massive gas tax hike has no chance of becoming law – Michigan Congressman John Dingell threatened last month to introduce just such a measure, but made it clear that he was doing so only to show how little support for it there is – for an automaker to be advocating it at this moment in time borders on insanity.
 
Last Saturday night, the House of Representatives adopted its own version of the “energy bill” passed several weeks ago in the Senate. The House version does not include any increase in CAFE standards. 
 
But the battle isn’t over. Both bills now go to a “conference committee” made of members from both the Senate and the House. 
In the House, Speaker Nancy Pelosi chose not to include the CAFE standard increase to avoid a direct confrontation with Rep. Dingell, who chairs the Energy Committee in which such legislation must originate and is adamantly opposed to an increase in the standards because he believes it would destroy the jobs of his Detroit area constituents.
 
So, Pelosi intends to sneak the increase back into the bill in the conference committee, thereby making an end run around Dingell.

Mulally’s foolish comments don’t help efforts to prevent that or, failing that, get a veto of the legislation by the President.

By advocating an increase in the gas tax, Mulally has come out in favor of federal government intervention in the automobile market. He is no longer advocating that the market should allow consumers to make their own decisions, and that federal controls of the auto industry deny consumers the freedom of choice which is central to a vibrant economy.
By doing so, he is also acknowledging that cars will not become more fuel efficient without government intervention and that government intervention is legitimate.
 
He’s only quibbling over the type of government intervention.

It reminds us of the story told about Sir Winston Churchill, British prime minister during World War Two.

Churchill was at a dinner party, seated next to an attractive lady.

He asked her if she would sleep with him for a million pounds.

Coyly, the lady responded, “maybe.”

Churchill then asked, “Would you sleep with me for one pound?”

“Of course not,” she responded. “What kind of woman do you think I am?”

“Madame, we’ve already established what kind of woman you are. We’re just haggling over the price.”

What do you think?
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2 comments:

  (20) posted on 08.9.2007

Agreed Tango... all they need is one really good car to get the average up, like the Prius does for Toyota.
My family works for Ford and absolutely hate the way that it is being run into the ground.

tango  (372) posted on 08.9.2007

LOL. Churchill was the man. But seriously, what Mulally is doing is asking the government to tighten the noose around consumers’ necks instead of those of the auto manufacturers. He is basically saying that the way to reduce consumption is not to create vehicles that use less, but to force people to drive less. He’s a bastard of the lowest order. 35mpg is nothing to panic about. It is intirely possible if the automakers in Detroit would get off their butts and do some real work for a change. Stop trying to tell the people what they want and just build what people do want.

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