Should the US Congress force Detroit automakers to create cars with higher fuel mileage efficiency?

No

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by Roger Quinn

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America has a long tradition of a successful free market economy. Like any economy in the world, ours operates the best when the government interferes very little. Despite this fact Congress has recently found the need to impose its own business standards on Detroit automakers by making them abide by efficiency standards. This action would have been justified years ago when the price of gas in the United States was low and carbon emissions from gasoline was an externality that the free market could not account for. However, today the price of gas is very high and demand for fuel efficient vehicles is rising. In today's scenario the free market economy will respond to rising demand of fuel efficient vehicles with cars that get better and better gas mileage, making government interference unnecessary and even costly. If Congress were to intervene under the current economic conditions their efforts would result in a inefficient and complicated mess of laws that would do more harm than good.

There is no doubt that America needs to use less oil. No matter what one's opinion of global warming, no one can deny that dependence on foreign oil is harmful to the country. Had gas prices remained low demand for vehicles that were fuel efficient would not have gone up. In this case Congress would be justified in their entrance into the market. Even though the cost of producing expensive, unpopular vehicles would have been high, it would have been offset by the benefits of reducing the national dependence on foreign oil and possibly a reduction of greenhouse gasses (if global warming is real). But gas prices did not stay low, and with gas over $3 a gallon the demand for vehicles that use less fuel are in high demand. Suddenly developing and producing vehicles that are more efficient is a profitable venture. Ford, Chevrolet, and Chrysler are all following the examples of foreign auto makers who have risen to the top by making small cars. And why are these foreign manufacturers more successful making small cars? Because they have been operating in these market conditions for years. High gas prices have been the norm in Europe for decades. Yet these foreign companies, from Honda to Volkswagen to Toyota, all became very good at producing these type of vehicles not from government regulation but from the free market dictating what product to sell. Given enough time American auto makers can also perfect the manufacture of fuel efficient vehicles, without being rushed by a Congressional mandate.

Congress has a long history of interfering with the economy, and a long history of failing. Tariffs trying to protect domestic industries, price ceilings on gasoline, printing money to increase the supply, and the luxury tax are all examples of economic policies from Congress that seem like a good idea and may have some value, but ultimately are mishandled to the point that they hurt the economy. The bottom line is that Congress inevitably harms the economy with its policies. In the case of a efficiency mandate Congress would undoubtedly decide how the Big Three should go about meeting their demands and put these ideas into the law. Diesel vehicles, which have a long history of being disliked by the federal government due to their emissions, would probably be pushed away by new legislation. This is a very real possibility despite the fact that new clean diesel cars are just as clean as gasoline and get far better mileage. Congress is already discriminating against diesel fuel by having higher tax rates on it than regular unleaded gas. If any technology advance that could potentially provide a breakthrough in fuel efficiency were to be developed it would have to be approved by Congress as being viable before it received any attention from auto makers.

Vehicles today are more fuel efficient than ever. Great advances have been made over the last decade without any government regulations to push them. To interfere with the free market at a time when America needs and wants innovative, efficient vehicles would be a costly and unnecessary mistake. We need to let the principle of supply and demand take over and allow our car companies to create better cars at a pace that is affordable and takes all possible solutions into account.

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