The Economy Of Common Sense
Wednesday - February 11, 2009
On my way to school each morning, I pass a dealership of one of the increasingly not-so-big-three American car companies. I’ve been passing it for 32 years now. At one time, its array of models included a Japanese-made sub-compact, a compact, a small sedan and a very light pickup.
No more - and not for a long time. Now the lot displays big trucks, big SUVs and big sedans. I mean really big sedans. The only cars on the lot that even verge on small, sane, perhaps reasonably fuel-efficient are to be found on its used car lot.
This American car maker has, of course, begged - and received - big truck loads of cash from the American taxpayer.
Less than a week after his inauguration, President Barack Obama ordered the Transportation Department to begin drawing up rules imposing higher fuel-economy standards on cars and light trucks. Two years ago, a Congress controlled by Democrats passed a law mandating a 40 percent improvement for autos and light trucks by 2020.
Needless to say, oilman George W. Bush didn’t ask his Transportation Department to write the regulations.
Now automobile industry folks will tell you that they don’t like government “mandates.”
(Nor, of course, do they like government interference in the market, save when they’re going bankrupt - then they want all the cash the government will give them.) They’ll also tell you that, in building muscle cars and monster trucks, they are just responding to consumer demand.
Come on. Advertising has nothing to do with demand? All those 30-second spots of ex-NFLer Howie Long telling you about the power, the durability, the manliness of the truck line he’s selling? The message is simple: To be a real man you need a truck with enough horse power (and consequently zero fuel efficiency) to move small mountains. Afuel-efficient compact, sub-compact, a hybrid (save when it’s powering a heavy SUV or truck), public transportation? Those are for wusses.
Far more important to car manufacturers is that they don’t make sufficient profit - and short-term profit is what it’s all about, always has been, always will be. So for decades, despite the dire warnings of environmentalists and economists alike, Detroit fought mandated fuel-efficiency standards.
Last summer anyone driving an SUV or overpowered truck learned the folly of that policy at the gas pump. Detroit has learned it in its dealer showrooms.
Obama’s move to raise fuel efficiency standards simply made sense - good, old common sense.
So did his public scolding of Wall Street bankers, who gave themselves $20 billion in bonuses as the economy tanked and the government was appropriating $700 billion to bail them out - and his subsequent decision that $500,000 constitute the maximum executive pay for heads of banks receiving the as yet unallocated federal funds.
“There will be time for them to make profits, and there will be time for them to get bonuses,” said Obama. “Now’s not that time. It is the height of irresponsibility. It is shameful. And part of what we’re going to need is for the folks on Wall Street who are asking for help to show some restraint and show some discipline and show some sense of responsibility.”
Strong stuff, but richly deserved. Since Ronald Reagan proclaimed famously almost three decades ago that “Government is not the answer; government is the problem,” the nation has had to listen to right-wing ideologues worship the private sector and stigmatize any government activity (save the military) as inefficient and corrupt.
But the present state of the nation’s economy rests in the laps of those same right-wing ideologues who licensed bankers and automobile executives (among others) to do anything in the name of short term profit. Or, to use Vice President Joe Biden’s more biblical term, in the name of “greed” and taking “care of me.”
Limiting executive compensation just made sense. Now, if he just hadn’t tried to hire so many people who hadn’t paid their taxes, we might be able to call Obama the common-sense president.
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