Tuesday, March 17, 2009

Tax My Products, Please

WSJ commentary:
"Mr. Mulally offered his own solution to the mismatch, artfully explaining that we needed to 'involve the consumer in our energy policy.' In case anyone missed his point, Michael Jackson, CEO of AutoNation, the largest auto dealer in the country, was more explicit: 'Mr. Mulally said it very elegantly last night and I will say it more straightforward. We need more expensive gasoline.'

While last year's energy spike briefly encouraged small-car sales, Mr. Jackson complained that those sales have plummeted with gas prices. "I have fuel-efficient vehicles parked at my dealerships as far as the eye can see. I can't give them away." He figures a tax that guarantees a gas-price floor of $4 a gallon is a "good start." Mr. Mulally, for his part, talked about how good Ford's sales of small cars were in Europe, and that "one of the reasons is that gasoline and diesel is somewhere between seven and nine dollars a gallon."

So: The U.S. government mandates fuel-economy standards that force Detroit to make cars Americans don't want to drive. When Detroit loses money on those cars, Washington throws taxpayer dollars at its mistake, and the car makers demand a tax increase that would prod Americans to buy the unpopular cars that Washington mandates. As for what the American consumer or taxpayer wants -- or can afford in today's economy -- who cares? Welcome to government-run energy policy."

For those of you who have read Mancur Olson's The Rise and Decline of Nations, isn't this just a "textbook" illustration of sclerosis?

1 comment:

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