The Clovers are aghast that Trump is threatening to do the unimaginable – and stop threatening the car companies with federal fuel economy fatwas (and add-on fatwas forbidding or restricting how much plant food – carbon dioxide – cars may emit).
He appears to be entertaining the horrible idea that the people who buy cars ought to be free to decide for themselves how much fuel economy matters to them – since they will be the ones paying for both the car and the gas. And – oh my god! – that this is really none of the business of the “concerned” scientists and other professional busybodies who regard their opinions and preferences as holy writ enforceable at gunpoint.
“We’re going to work on the CAFE standards so you can make cars in America again,” said Trump. He should have added the qualifier – affordable cars in America again.
Leaving aside the moral issue – who are these people to tell anyone whether their next car should get 10 MPG or 40 MPG? – the issue never addressed by the media, including the automotive media, is how much will all this cost us?
Obama’s mullahs uluated about the many billions (allegedly) which would be “saved” by force-marching every automaker to build cars that average 54.5 MPG. It is the sort of “savings” one realizes by emptying your bank account to buy something you don’t need that’s 5 percent off.
Only worse, because you’re not given the option to keep your money in the bank.
A week or so ago, executives from the major automakers came to the White House to explain to Donald – who probably already grokked it – that to get a single car to average 54.5 MPG requires more than merely ululating that it will be so. A new Prius hybrid almost manages it – and the hybrid Prius costs several thousand dollars more than an otherwise similar but not 54.5 MPG non-hybrid car.
And to get every car made to average 54.5 MPG – which is what Obama’s EPA ululated in the last weeks of his regime – won’t magically just happen, either – even if the entire regulatory Mecca ululates in unison for a week straight.
In the first place, it requires technology – and new designs. These generally involve work and resources, which cost money. New components don’t generally rain from Allah’s merciful bounty, upon ululation.
The executives pointed this out to Trump – who almost certainly grokked it beforehand, since he appears to be a man who probably knows where the dipstick is under the hood of a car and also what it’s for.
It is doubtful Obama knew – or did.
Or cared.
The current CAFE fatwa is 35.5 MPG and to achieve this without going hybrid across the board has required some very elaborate – some very expensive – technology. Two specific examples: Direct injection and transmissions with eight, nine and lately ten forward speeds.
These are coming online (the new Ford F-150 pick-up, reviewed here, has a ten-speed automatic and probably two-thirds of all new vehicles are already direct-injected) because of the existing CAFE fatwa.
But they offer no particular advantage to the buyer, in terms of how the car drives or performs. Indeed, cars with these too-many-speeds automatics often have strange driving characteristics. I can vouch for this; I test drive and review new cars each week.
For instance, the sensation that the car is surging forward (it is) when the transmission skips up three or four gears on a downhill because the computer is desperate to get the transmission into the top overdrive gear as quickly as possible in order to cut engine revs to the minimum in order to squeeze out a teensy uptick in MPGs, for the sake of CAFE.
Direct injection, meanwhile, has supplanted port fuel injection (PFI) with a two-stage system that operates at extreme pressure (3,000 psi vs. 35 or so psi) and which has created a carbon deposit problem inside the engine. In engines fed fuel via PFI or TBI or even a carburetor, the fuel washes over the backsides of the valves as it enters the combustion chamber – and because gas is a solvent, that action keeps the valves from crudding up. But in a DI system, the fuel is sprayed through a hole inside the combustion chamber and there is no solvent effect.
And so, crud forms.
To fix this problem the automakers are adding a separate, additional port-fuel circuit to keep the valves clean. So now you car will have two fuel injection systems – and multiple fuel pumps rather than just one.
It is not free.
What would it take to get all cars to average 54.5 MPG?
Keep in mind that not a single non-hybrid/non-electric new car comes close to that. Obama’s fatwa was in a way an ululation demanding that most if not all cars be hybrids or electric cars – because that is probably the only way to get to a “fleet average” (CAFE terminology) of 54.5 MPG absent the discovery of miracle technologies such as Roswell Crash-style ultra-light metal that is also ultra strong (so that other fatwas regarding “safety” can also be complied with).
This brings us back to the moral issue: Why is how much or little fuel our cars use anyone else’s business, since we pay for the car and the fuel? If gas “costs too much,” we can buy a different car that uses less.
And there is another issue, very obvious, but – like the cost of the fatwas – never asked or discussed: 
If the market is so “concerned” about fuel economy – as the various scientists, “public citizens” and other such self-appointed voxxers of the populi claim, why not allow the market to apply the pressure?
Can’t have that. Pressure must come from above.
It doesn’t matter that there are already cars available that were designed to deliver much higher-than-average mileage – the Prius, for instance – which people are free to pay for if that is their priority. What the various “concerned” and the mullahs within the EPA and federal apparat are really concerned about is that people can choose not to buy such. That they are free to buy something else.
For the ululators, everyone must buy the same thing – the thing the uluators insist they buy. Or else.
Always, collectivism and coercion.
Never free choice, liberty – the market.
It’s worth recalling that the literal translation of laissez-faire is… leave us alone.
Exactly.
Good on Donald. He appears to grok.
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Now, if President Trump will remove the subsidies for “gasahol” production, then “real” gasoline will boost both automobile mileage and power output!
Hi Southerner,
It Trump will stop bombing foreigners and get back to doing things such as you suggest, I’ll be the first to cheer. But – so far – he has proved himself to be just another Republican…
Indeed, “If” is the operative word!
Interesting industry to have a look toward, is the railroads. Not that long ago, all the line locomotives used the huge slow turning GM two stroke 900 RPM direct mechanical engine, putting out about a thousand horsepower on diesel. Open up that throttle, it would belch thick clouds of black smoke, and stink up the neighbourhood. The soot from unburned fuel fouled the ground, and the engines themselves. Not certain how long the newer ones have been around, but the ones for the past 15 years or so now fit V 16 diesels delivering about 1700 hp. Open up the throttle on those, never see any dark air coming out, and you can barely smell them. Soot is all but non-existent. They are also a whole lot quieter. But the most amazing bit is they deliver those 1700 horses on far less fuel per horsepower per hour than the old ones.
Who “mandated” this improvement? And who paid for it? Why, the railroads themselves, that’s who. When fuel got more dear a few years back, they decided to cut operating expenses by redesigning the locomotive’s power and drive system. All their engineering and development costs were borne by the railroads, but so manay billions of miles have been run at far lower cost, the R&D is back in their shareholders’ pockets many times over, and continues.
So they did not like the available options…. so developed their own, on their nickel. The air is far cleaner, profits signficantly higher, they cleaned things up (by improving combustion efficiency and fuel control) of their own accord, and reap the rewards into the forseeable future.
That is how it SHOULD work. their own bottom line drove the quest for a better locomotove system. No gummit mandates needed.
Just so you’ll know, the 2 stroke diesels from 50 years ago were supercharged….as were all the Detroit Diesels at the time as far as I know. The locomotives certainly were. They had very little visible exhaust and if you stood on an overpass(I have…working road construction)and watched them pass underneath, their supercharged exhaust would burn the hair off your head if you didn’t have the sense to jerk away quickly….and it better be quickly. Those locomotives lasted decades so the ones you saw in the 60’s might well be the same ones you saw 30 years later. They were pretty good for efficiency but better engines came along. It wasn’t as if any company that could produce engines for that purpose just sat on their hands.
Probably developing an easier starting system would be a plus but I still see locomotives sitting on a siding idling for days at a time.
Years back I had a number of the early BMC Minis.. from the stock 850cc to the super hot 1275 Stage Three. Keep your happy-foot out of those SU’s and they’d cruise at 75 MPH and return 55 MPG. Yes, even the monster 1275 S stage Three. Put yer happy foot deep into that pair of large SU’s mileage would drop to maybe 45…. but the fun factor tripled as the tyre wear factor went to one third. Those cars handled like naught else I’ve ever owned ran a long time, and were FUN to drive. Pushing the 850 single small SU version was as much fun as doing so to the Monster.
there is nothing like those in the market today.
Frankly unless the regs get dialed back, for a while at least, watch quite a few nameplates and brands going away for good. For Dodge, Chrysler, Fiat, Volvo, Mitsubishi, Nissan, and a few others, their grasp on the US market is very weak. Even VW has taken a huge blow with it’s dieselgate.
The costs of developing for the US market is getting to the point even the large automakers are having problems with the amount of capital that is required to develop even one vehicle.
We would have Chinese brands here too, if it wasn’t for the regulations. There is no question they want in, but our rulers have shut them out.
Eric, I thought you should know that I came across this article on zerohedge.com under Tyler Durden’s byline. It does start with “Via Eric Peters Autos”, but the clear impression is that Durden wrote the article. You are definitely not credited as the author.
Thanks, Mike – and so it goes… well, as long as the word gets out, eh?
Clover,
The majority of current car tailpipe exhaust is water vapor and C02 – an innocuous/ inert gas gas that plays no role whatsoever in the formation of smog, does not cause or contribute to respiratory or other health problems.
Second, the article argued that it’s none of the government’s business dictating fuel economy standards. You somehow equate that with advocating for leaded gas.
And what do mufflers have to do with anything, as far as emissions or mileage?
Clovers are such easy meat!
The article argues that the “con”sumer should have absolute freedom to consume and pollute as he sees fit. Well lad, it’s not your air! If you wish to view the composition of exhaust from the burning of hydrocarbons you can go here…http://www.nutramed.com/environment/carsepa.htm
It is absolutely the role of government to “promote the general welfare” Since the air and environment belongs to all of us it is incumbent on government to regulate those activities that affect us all.
The point about leaded gas and burning your used tires on the front lawn speaks exactly to the authors point of government not dictating personal behavior. If you’re free to consume mass quantities of petroleum and foul the air as you see fit with your car why not let you choose if you want to burn leaded gas or burn your used tires or dump your used motor oil down a storm drain?
My point about mufflers is the same…according to your mindset the consumer should not be dictated to as to whether he should muffler his car or not. He should be able to remove any device, make all the noise he wants, burn all the gas he desires and do whatever he pleases by virtue of his ability to pay for it.
Sorry…we live in a society where common resources exist and the individual is not allowed to make the rules that affect everyone else. You and the author can discount climate change all you want but you are willfully delusional and intellectually dishonest. The science is settled. You have NO right to destroy the environment that belongs to us all and all future generations.
No, Clover, the article did not argue that the consumer “should have absolute freedom to consume and pollute as he sees fit. ” That is entirely your confection. Your exaggerated, hysterical confection.
I pointed out that CO2 – what’s at issue here – is not a pollutant. I also argued that – with regard to actual pollutants – we’ve long ago reached the point of diminishing returns; fractional – negligible – “gains” at increasingly high cost. People – including you, apparently – do not grok that modern cars (cars built since the ’90s) are this close to being “zero emissions” (some qualify as partial zero emissions already) and none of them emit significant amounts of anything harmful.
Which is why the uber Clovers are now attempting to characterize C02 as a pollutant, and lesser Clovers such as yourself are parroting the line. Because it can’t be “cleaned up” – and so becomes the trump card for controlling cars (that is, controlling people) now that the other excuses are becoming not-viable.
And the “science” in re “climate change”is far from settled, Clover.
It is possible average temperatures have gone up; whether this is natural and normal is another question. Also whether man’s production of C02 is having a meaningful effect. You don’t grok any of that. You stomp your feet like an angry little kid and screech – the science is settled!
The article also argued that the mileage a person’s car gets is their business – not yours.
The gas I buy is mine, Clover. And whether I use a lot or little, it causes you no harm whatsoever.
Your day is over, Clover.
The high tide is receding.
Der Tag kommt….
Ever learned a thing about what “libertarianism” is? The FIRST precept of the concept is.. DO NO HARM. In other words, your stupidity about leaded fuel, burning tyres on the back lot (later the front one, make up my mind here you have me confused). etc belies your ignorance. Eric Peters NEVER supports harming…. and particularly opposes the HARMS inflicted by unelected unaccountable gummit hooh hahs upon every aspect of our lives in this country.
I happen to have need of a vehicle that has lots of space inside, and also can carry a LOT of weight…. so mine gets about 18 mpg. I looked into also having as a daily option a smaller car that gets far better economy, but after trying this for a few months I learned the added insurance premium (HOW can I drive TWO cars on the road at the same time?) was more than the money I could save by being kinder to the environment by using the less thirsty one when I could.. once more, gummit hooh hahs MANDATE my behaviour, FORCING me to drive the thirstier one all the time. STOOPID or whut?
“Since the air and environment belongs to all of us it is incumbent on government to regulate those activities that affect us all.”
The above is sheer hokum. If something belongs to everyone, why is it that only the government owns and regulates and enforces through taxes, restrictions, and at the point of its guns, the ownership right to the air and environment in question? Especially since people cannot lawfully delegate rights they do not possess to a third party.
eric, I guess mufflers have little to do with it. I’ve run many semi trucks with no mufflers right to this very day and the DOT would have cured me of the myth of mufflers if I’d had to have any. Mufflers are a silly thing anyway. I was stopped by a DPS one day, not really because of my loud exhaust(not that loud)but because of my long hair(not that long). I asked him why when I traveled this same highway in a big rig that made much more noise he seemed to be fine with it. He responded by saying you couldn’t get the big rig to run that quietly. Bullshit. You can have big mufflers on big rigs and they’re quiet although the tire and gear noise won’t be. We see no engine brake signs at the edge of towns, typically on a severe slope where you need one most and not near housing where it might disturb people sleeping…..hmmmm, wonder why? Could it be you aren’t really reading small signs and are paying attention to being safe rather than quiet? Often you just have the engine brake on and don’t think about it till you hear the roar just as you see the red and blues come on on a hidden cop with nothing to do but wait for big rigs to come into town a few mph over the posted speed(often a drop of 15mph all at once)or the engine brake sign is set at a place where you would back off and it would work for the first time in miles. Of course if you cut it off immediately and the cop is there he’s only there to collect revenue no matter you turned if off when it turned on. Truckers see this crap every day. Top a big hill and there’s the PSL at 15mph less just before the no engine brake sign. You let off and hit the brake causing the engine brake to come on at the same time you’re trying to slow down. It’s easy to see the towns that use it for revenue and the ones that don’t. You won’t be surprised by a big drop in speed in some towns but you will in others. Some towns don’t have an engine brake sign because they don’t have all night cops waiting to collect revenue.
My wife and I lived right off a major highway once and she said the dog would go bananas way before I got near town. They just didn’t realize the advantage of a KK(kanine korps)back then. Hell, they could have put engine brake signs a mile from town and made a killing. Trooper “Well, my dog heard you loud and clear”. Yeah, and woke your fat ass up.
I once passed by a cop I already knew was there. I was doing the numbers but in a gear where I the engine was near the top of the power band. He pulled me over and ticketed me for speeding. I pointed out to the obese occifers(short, fat one)I could only go 2-3 mph faster in that gear than the PSL but I wasn’t. I was young, he was a shithead and I got a ticket I didn’t pay until they agreed to not put it on the record. That wasn’t uncommon either because money was all they wanted.
I’ll bet Obama thought the dipstick was the person sitting in the drivers’ seat of the car in front of his that wouldn’t gun the accelerator to 50 MPH when the light turned green. When the reality was the dipstick was the person sitting in the back seat of his limo.
I question what the Federal ayatollahs’ real reasoning is when they mandate all kinds of physical additions to cars, in the name of “safety,” while also demanding the cars be light enough to achieve their ridiculous CAFE standards.
When private industry makes decisions of choosing production methods that don’t take the extreme to prevent death and injury, they are called “profiteers”: People who place business profits above customer safety.
What name should be applied to these government ayatollahs, issuing their fatwas from on high?
I wish they would get rid of the fatwa regarding head rests. Unless one drives lying down, one has to go to impossible lengths to be able to exercise proper posture behind the wheel of a modern vehicle. Vastly uncomfortable.
Every time 0bama flew in AF1, whether for official state business or just to go to a NY restaurant, he burned more fuel than I will ever burn in all the cars I will ever drive in my entire life.
More important to me is if Trump thinks it is none of the government’s damn business about my “safety”. Godamn busybodies – no matter their specific cause – can all go to hell.
I’d say that the EPA can introduce whatever regulations they like, but compliance with them by the carmakers is strictly voluntary.
Then let the market decide what product sells.
kerdasi, it’s not all the fault of the EPA. The way cars look now because of design to be pedestrian friendly with multiple gasbags to make sure you know you hit something a little hard, crumple zones and low frame heights are all fatwas of the NHTSA. Recall there was once a move to get the best CD possible resulting in low hood heights and a slippery shape but no more. Now pickups are merely bricks with headlights and huge expensive grills that won’t stop a wren and bumpers that are “pedestrian friendly” so you spend another $1000 or more(hey, it’s just money)for a big Ranchhand cowcatcher so you can avoid that $20,000 repair bill when you run over a hog or deer or cow or horse. We have those great big Ranchhand bumpers on the rear too that save those $1000 tail lamp assemblies that look like they were ordered by “money is no object NASA”. Last year’s model may fit this years or may not but they won’t look the same. Whatever happened to having a big bumper and heavy side pieces that protected the body with any old bolt on brake/stop/turnsignal assembly with a big piece of steel outside it you could get replacement parts for at any parts store? My old 55 Chevy was made that way. I came up to a blind intersection once where you had to stop or risk being run over from the side. A classmate of mine was dogging me and probably never considered stopping there or the fact that I would. he ran into me with his dad’s 2 year old Ford stationwagon that unbeknownst to him, his dad had just sold and was headed that way with the new owner when he came on the carnage. And endgates being made of heavy metal back then resulted in a shiny spot on the endgate with zero damage to the pickup. The car however had the front clip, bumper, radiator, etc. destroyed.
Well-said, Skunk…
Trump may throw us a few small bones, like easing off the EPA a bit, etc, but I think it’s becoming clear that except for such little crumbs, it’s just gonna be more of the same, as the proposed budget is going to be throwing yet more money to the military, DHS, and VA. (Vet’rins Affairs, not Virginia!).
Thaqt singlewide in the desert is starting to look better and better, isn’t it, Eric? Really- no matter who is in the WH, things will only ever get worse and not better, because in the history of the world, no government has ever voluntarily given up the power on which it was drunk on.
If we don’t separate ourselves in the near future, we either suffer the consequences that our loony countrymen have tolerated for so long, and or suffer the implosion of the system- and neither one of those options will be pretty. (Although the latter would be preferable if it happened in our lifetime, but who wants to continue suffering the former indefinitely and maybe until we expire, if it doesn’t?
It would be nice to be able to live free, and free of all this insanity for a few years before we croak.
Hi Nunzio,
In re the singlewide in the desert: If I find the right woman – anyone out there? – I could be persuaded. Better a small cabin in the woods, though. Mountains and lots of trees are more my thing.
I wish he would also see that Korea is Koreans’ business.
Gotta agree w/that, E Morris
The main reason we need the cleaning action of gasoline is because of the EGR and PCV systems. Both of these systems purposely dump carbon and sludge into the intake tract in order to “imporove” emissions. So the politician’s logic is to feed an engine it’s own crap in order to make it seem like it’s running cleaner than it actually is.
In reality we are all forced to drive cars with engines being held back by archaic emissions systems which were mandated by bureaucrats 50 years ago.
I personally like PCV systems. Remember the draft tube systems previously used? There was always a slick spot down the middles of the lane from it.
If there is no fuel above an intake valve, there should be nearly no deposition upon them. What is likely happening is overlap of the camshaft lobes is allowing back pressure to back up into the intake, thus the deposits. This phenomena was instigated by motorcycle and racing engines with over sized lobes with extended durations, creating an easier breathing engine. Variable timing probably also exacerbates this issue The issue with this back flow is this hot gas can also cause preignition and detonation. Port injection not only cleaned the valve it would also quench this heat somewhat. A solution might be to stop the back flow and also create a hotter running valve to burn off the deposits.
Engine makers are stuck between a rock and a hard place when it comes to regulators. Burning hotter is better for efficiency and it burns off more particulates, but it also increasses NOx emissions, so it’s a no-go. I wonder if EGR (exhaust gas recirculation) might be responsible for the deposits, because EGR is utilized in pretty much all engines to reduce combustion temperatures. It is what it sounds like, pumping exhaust gases into the intake to replace some combustible gas with inert gas. Cooler cylinder temperatures increase hydrocarbon emissions, and cause early catalyst wear, which must last 10y/100,000 miles by law. I’m actually quite impressed how well engines run within these limits, and how low the price is, all things considered.
You expressed it better than I.
Except hotter valves equate to hotter engines, which push up NOX. Oxides of Nitrogen. You can’t get ahead.
Emissions regulations suck and I am glad that the Trump administration is going to throw Obamas last ditch attempt to solidify emissions regultions back to the trash can.
It would actually be a very simple presentation to the american people to get them behind not chasing the last tiny fractions at great cost. Even Trump could be taught to deliver it. The problem is that facts don’t work any more. The media would simply bring on their “experts” to wave it off as lies.
There are so many problems that go unaddressed. Automotive emissions is for all intensive purposes solved. The big gains are to be found in vehicle maintenance and longevity of the systems not lower scores on the tests. Maybe that’s what Trump should do. Refocus the regulators on MTBF and longevity of emissions systems. I think the automakers would be more agreeable to increasing the warranty on existing emissions systems than chasing the last tiny fraction. It should be far easier and cheaper.
Fake news! Fake news!
Yup.. just like building a racing engine. Its pretty cheap to get 95% the power out of the selected engine. But that last fiver percent costs way more than all the 95% that came before it.
We’re past the point of diminishing returns. Friend of mine has spent lots of time in Europe recently… he showed me a pic of his 8 passenger van that holds its own on the Autobahn and delivers close to 60 MPG on diesel. And you cannot even smell the vapours coming out of the tailpipe. And the whole stupid thing costs the equivalent of $19K in Germany. He wants one, all kinds of bad, but he’d never get it into this country. SIXTY MPG in a VAN? Can you imagine a dodge Caravan doing that?
There have to be compromises somewhere to do that.
emissions, crash safety, somewhere.
Eric:
Good article. I’m hopeful. I heard the speech yesterday as well.
I’m disappointed he didn’t mention anything about NHTSA. They’re the other 1/2 of this equation of ridiculously unaffordable cars.
However, even if every CAFE mandate were rejected, if the US issues the tariffs or “Border Adjustment Tax” he’s been discussing, car’s (and everything else we buy) will just get even more expensive – and cars will get worse mileage. The cost increase of the tariff or BAT will cancel out any savings of not being forced to subsidies the “stupid” tech via EPA mandates.
Tariffs are merely sales taxes on imported goods. Nothing more. How somebody thinks they’re “helping” me by forcing me to pay $7 for exactly the same piece of crap I used to pay $5 for is beyond my comprehension. I guess I’m screwing myself by buying stuff on sale also.
If we think tariffs between countries help, then tariffs between states would be even better. If tariffs between states are good, then tariffs between cities are even better. What would apparently help us the most under this logic is tariffs on anything you don’t build within your own home with your own hands.
I’m all for reducing regulations, but this other talk is scary.
Everyone should read “Economics in One Lesson” by Hazlitt (including Trump). Very short book. Very easy to understand. Well-written and entertaining. No complicated formulas. It is purely a logical investigation of economic action. It was written in 1946, but you’d think it was written yesterday.
Follows what happens when anybody screws with the price of anything in any way. Tariffs are just one of many (centuries old) ways prices are messed with.
I wish him the best on dismantling the EPA down to nothing if he can do it.
Thanks
Blake
I trolled Trump on Twitter about treating interstate commerce like he does international commerce. Don’t know if he read it but his next tweet on the subject he added the clarification that companies can move to whatever state they want.
I am hoping he is just using the threat of tariffs to work out better trade deals and nothing more. Huff and puff. I can’t believe he things they would be a good idea. But I can see it as a card that could be played since most countries won’t want to change the deals since they generally favor them. Trump is no Obama, who gave away the store. Obama couldn’t negotiate a deal on a new car let alone anything the government has to deal with.
I wouldn’t be so sure. I would gladly accept a flat revenue tariff, even a steep one of (say) 20%, for the regeneration of American opportunity.
This would be especially so if it were to completely replace (ineffective, illegal, immoral political weapon that is) the income tax system. Hazlitt is great, but there are always nuances and judgements to any situation. Taking poison is unhealthy, unless the alternative is to be tortured to death by an enemy.
Just saying tariffs are bad or unacceptable is too simple.
Hi Ernie:
I agree. I’d gladly trade a flat, say 20% tariff on everything over income taxes. This was the rate that funded almost 100% of Federal revenues for over a century prior to income tax.
But today we have both.
However, today the only people a tariff helps are the industries being protected by the tariff. However this “help” comes at the direct expense of everyone who buys the protected product.
Assuming a 40% tariff, instead of me buying a $5 piece of crap for $7, I’d rather buy it for $5, and use the other $2 to support ANOTHER business for the another product that never came into existence since the tariff consumed that $2.
Multiply that $2 by everyone buying that product and that is a lot of business that never comes into existence. The unseen. The broken window fallacy.
The economy, net, including jobs, net, are harmed by tariffs today.
https://www.usitc.gov/tata/hts/index.htm
3,707 pages of tariffs today. 52 pages just for cheese alone!
“Free Trade” my ass.
“However, today the only people a tariff helps are the industries being protected by the tariff. However this “help” comes at the direct expense of everyone who buys the protected product.”
You have summed it up well. And either the ‘native’ companies get more money than their product is worth (where is the fairness in that) or, if people insist on buying the import anyway, the gunvermin coffers are enlarged by the tariffs, which are, after all, taxes.
I will give it time. I bet that he will be onto NHTSA next. Well, maybe not. I don’t know. I have been pleasantly suprised that he is attacking emissions and CAFE at this point. We will see what happens. I suspect that NHTSA rulemaking will at least slow significantly..
Blake – You make some excellent points, but I disagree on the border adjustment tax. Yes, tariffs will make imported cars initially more expensive. I saw that in the early 1980s when the Japanese car companies enacted voluntary import restraints in the US. At the time, at the young age of 18, I disagreed with the Reagan administration policy. However, the policy allowed car companies like Toyota and Honda to consider building a manufacturing presence in the US that has lasted for over 30 years.
I believe that Trump’s policy of adjusting tariffs would bring some of the manufacturing back here as well. Combined with his stated policy of deregulation, I believe that the price of cars will be slightly lower than they would be without the same action. In addition, moving the manufacturing back here will yield benefits of the economies of scale and will also help regional economies here. Trump may not actually have to enact policy. The threat of it may just bring more jobs here. lol.
The big deal in the big valley remains the regulations and the effect that has had on car prices. No tariff that accounts for all border costs, etc would amount to more than maybe $2000. On the other hand, the costs of regulations is approaching $5,000 for some vehicles.
We live in an imperfect world. I agree that foreign competition was good for many consumers. I agree with letting the best automobiles in the country. On the other hand, labor arbitrage is bad. Making a product that you previously made here based on transient economic circumstances overseas has destroyed jobs in this country. We are transferring jobs overseas to enhance profitability by a few percent.
I don’t think that cars from Japan, Germany, the UK or even Korea should be subject to tariffs. On the other hand, cars from Mexico, China and other countries should.
Trump’s tarriff’s especially the BAT will only harm manufacturing. Parts are sourced world wide. As such it will become more expensive to do final assembly in the USA, not less. It will cause all sorts of problems.
That’s a good point and something that I’m not sure has been thought out properly. I think that the BAT should only apply to assembled products, not components or raw materials. That’s just my opinion though. I still think that there needs to be a way to equalize the effects of wide wage and regulation disparities between trading partners. It’s long overdue. Again, only “third world” countries would be subject to tariffs on finished products, not countries like UK, Germany (although I am starting to hate that country), or Japan.
Elson’s (this is not a typo) history of the United States remarks on what the domestic lead industry did when it got congressional protection: it sat on its laurels instead of becoming more competitive. That’s always a risk with protectionism. But the truth is, as Patrick Buchanan points out in his “The Great Betrayal,” America’s most productive decades were under heavy protectionism. For example, British rails in free trade were cheap even after shipping charges to America. Under heavy tariffs, however, domestic rail production shot up and the cost, hard as it is to believe for free traders, plummeted far below that of British rails. The quality was better to boot.
When England turned from protectionism (or mercantilism) it quickly became an economic 2nd rate power, eclipsed by America and then Germany, both of which prospered under protectionism. To this day every single major economic power–China, Japan, France, you name it–got its start (and in some cases is still practicing) through various barriers to trade and stiff tariffs.
Buchanan adduces a variety of such examples, and libertarians and free traders have been trying ever since to fathom how our economy boomed so mightily under such heavy protectionism. The Independent Institute journal gave it a shot, attributing the prosperity to mass immigration in the late 19th century. Unsuccessfully, I think.
Perhaps a certain mindset is necessary for protectionism to work: the willingness to use the break from competition to improve one’s own situation as so many industries in America did in the late 19th to early 20th century, or Harley did much later. John Calhoun and John Randolph of Roanoke thought such protectionism was unconstitutional, and they might have been right. That is a possible huge drawback to protective tariffs. But in certain circumstances they can work very well.
I required all of my kids to read Hazlitt’s excellent “Economics in One Lesson,” which has proofed them against such things as the Broken Window fallacy. But the truth is that given the right leadership and protection for the much-despised “infant industries” libertarians think don’t exist, economic miracles can happen.
Excellent post. I completely agree with what you are saying that our prosperity was due to protective tariffs. However, I disagree that protectionism is unconstitutional. Tariffs are the main tool and are permitted in the constitution. Congress has the authority to regulate trade among nations. Of course, I don’t trust the last 40 congresses on that. It’s time that something was tried. I think that the willingness to “break out” is part of our competitive nature. It has to be better than what we have been doing the last 40 years or so. I am with Buchanan on trade. He was a genius.
Protectionism is an economic drag on people’s standards of living generally speaking. It’s not to say other factors cannot overcome the drag. When this country was freer it could overcome the drag. When a domestic industry is protected from foreign competition but no vigorous domestic competition the drag of protectionism matters little. Today a big player or three is protected from competition both foreign and domestic. There are more drags on the system.
The free trade agreements are not free trade either. They are big player crony trade deals that allow the big players to remain protected in the domestic market while locating their production facilities overseas to obtain the lowest labor costs on the planet. In the old protectionism they were stuck keeping their factories in the USA.
Amen to that.
As my previous post, 3,707 pages of different tariffs is not “free trade.”
Giant nut corporations would never be profitable growing almonds and pistachios in the desert – except for tariffs.
Tariffs make them profitable – at the expense of everyone who buys almonds and pistachios.
We should all be eating cheaper almonds so that the desert business can make stuff more suitable to being made in the desert.
Then we could afford to support both almond growers and the newly formed hourglass factory workers for the hourglass factory that just opened up in the desert.
The hourglass factory workers never get the job in the hourglass factory in the desert. This is because because the almond and pistachio makers in the desert took the money that their customers could have spent on hourglasses.
I’d rather work the same number of hours to buy hourglasses, almonds, and pistachios over just almonds and pistachios.
The more people any person can trade with, the richer they are.
National boundaries are no more real that city or state boundaries when it comes to trade.
I’ve personally been to and talked to almond growers in a rather dry part of California. Their methods of irrigation are generally compatible with a private property society. (wells on their own land, saw a new well being sunk too). All of these were were family operations.
The climate there is perfect for the trees except for the water issues. That is generally the result of actions by development and the state that prevents the water making it to them from the mountains.
Also they dominate the market for almonds worldwide so I don’t think they have any protection from foreign growers in the USA. They sell globally and make up something like 82% of the world’s production.
I think there’s an element of “all else being equal” involved.
If China had to abide by the same level of regulations on pay and conditions as American manufacturers do then the price they sell their products at would be somewhat comparable to the price paid for American made products. The increased price of American goods reflects the better treatment of American workers.
There is a social cost as well. Those of us in the +3SD IQ range find most things fairly easy to grasp, but there are people who are literally incapable of doing more advanced work. When a job in America is replaced by a job in China the American worker may well be unable to find a job of comparable value, or indeed any job at all. That means that they’ll be a drain on the tax system, moreso than if their job was protected by a tariff, and they’ll be bringing up their children without the inspiration of hard work that our father’s modeled for us, leading to societal decay (like Detroit).
“If China had to abide by the same level of regulations on pay and conditions as American manufacturers do then the price they sell their products at would be somewhat comparable to the price paid for American made products.”
The correct answer to that is to eliminate the American regulations.
Amen
“Lousy trade deal” for me does not equal less shit for more money.
Tariffs = less shit for same money or more money for same shit.
Anybody that wants to stick a government gun at me to tell me I can trade my dollars for the stuff the guy next door makes, but I have to pay 20% more for exactly the same shit from the guy 2 houses down is not doing me any favors.
Correction:
Meant ‘”Lousy trade deal does not mean more shit for less money.”
I, personally, like more shit for less money.
Nunzio, the market is a harsh mistress. Nobody can survive it for long providing products not aligned with customer preferences. There would be *some* car company that recognized the true market trends and cater to them. That company would flourish, and the “snowflake” companies providing expensive products with fewer customers willing to buy them, would wither.
As it should be.
The problem is: no car company is aligned with true customer preferences. So there is nobody to go to. And when they try (VW) they get smashed down with the hammers of regulation.
That, and the fact that the typical consumer is mostly inert when it comes to cars. Whatever the latest gadget du jour is, consumers want it while giving next to no consideration whether it’s really useful or just an expensive gimmick that will need replacing someday.
So even if a simplified car were offered, something that I would buy, it wouldn’t see the light of day because there are so few like me. Mass consumerism hasn’t increased choice, it’s decreased it.
Hi Ross,
At the root of so many of our troubles is debt. Even the term, “consumer” (loathsome, isn’t it?) is a spawn of the debt-based system. Remember when the term used was buyer? That is a respectable honorific. A “consumer” sounds like a thing at the trough…
People have been conditioned to gadgetry via seemingly endless financing and debt.
If people were to live within their means, much of this nonsense would go away or be restricted to a small segment of the market (as was the case, once).
Instead, the now typical scenario is a person with almost no significant ready cash savings, a huge mortgage and credit card bills, driving around in a $40,000 vehicle he can just barely make the payments on.
It’s the view of people as livestock driving the terms and debt is how they are bridled.
Just the way people buy cars today is telling. The salesperson talks about the monthly payment, not the total price of the car. You want to spend $200 a month, well if you willing to pay $230 we have this car with this trendy gadget all the kids have been writing home about (like anyone writes letters anymore). Lot of people end up taking home that $230 car rather then the $200 car they came in looking for. That “little” extra ends up costing $1800 over five years, and that doesn’t even including the extra financing costs.
The total price is irrelevant because most people are going to not pay cash. The sticker may say $25,000, but most people are actually going to pay $45,000, since they are financing it. That number may be on a piece of papers somewhere, but few will bother looking for it.
The only person paying $25,000 is the guy paying cash. Frankly the automakers can’t afford too many cash buyers. The make far more money from financing.
Yep. Everyone is payment minded. They can think of no other way. Status is measured by the old ways but it is simply an appearance. A shell. A person with actual means, a positive net worth, looks poor now.
On an expanded note ever notice that these days its all about the indicators of a good economy and not an actual good economy?
Volkswagen did not “get smashed down”, they folded like a cheap suit propped against a windward wall in a thunderstorm.
Eric, you forgot to mention, and this needs to be stressed at every turn: there is technology that will deliver stunning mileage – small diesels. At least, small diesels that burn real diesel fuel, not the sludge that is currently being passed off as diesel fuel and engines not hamstrung by ridiculous emissions fatwas as well. Economy rally drivers in the UK were getting 90 mpg out of diesel powered Ford Focus cars five years ago.
Anti, this is especially true if you let the market determine the degree of safety features (e.g. WEIGHT) that these cars are sold with. A combination of a real diesel with light weight is a sure pleaser to the economy set.
I knew a guy that drove a Geo Metro many years after they were no longer made and his was junk, just because of the incredible mileage it got because of low weight and that tiny three cylinder engine. He got almost 50mpg and was perfectly happy with he fact he was in a flyweight deathtrap. There are such people out there, but manufacturers should be able to cater to *all* preferences.
Just made a 253 mile trip in my 91 Ford Festiva. Filled the tank at the start and when I filled it at the finish, I had to put 4.5 gallons of the cheapest 87 octane regular in it. Plus it’s so nimble it’s the best alternative to a motorcycle I’ve found in this bitter climate.
for the math challenged and because I like to gloat that is 45.5 MPG in my $300 car:))
For the typographically challenged that was 5.5 gallons…
I rented one of those. I think it had an 85 mph speedometer, too. How fast did you drive it? 55?
Speedo don’t work but my smartphone app and my seat of the pants/calculated butt harmonic detector both say 60… odometer for mileage calcs is also app/ well known routes.
You must be referring to me and my 320,000 mile Geo Metro, which finally met its end in the hands of my son.
Yup, and these numbers were achievable 30 and 40 years ago. I know I’m preaching to the choir, if anybody is well aware of and written about the diesel dilemma it’s EP Autos, but I figured I’d bring it up again.
What worries me, at this point, even if the government completely went away and we were able to return to a free-market, how much of this BS would the car companies voluntarily still keep right on pursuing, without missing a beat, because of the fact that American business is now largely run by special snowflakes (or rather, just flakes) who are advocates of all the leftist/”green”/Obozo BS [e.g. GM’s “diversity” BS…); and because such a large part of the population have been indoctrinated with this BS, that that is what they have been conditioned to “want”?
And in a real-world scenario, even if the EPA “relaxes” their fartwars, the companies still have special snowflake states, like CA. and NY and MA. to deal with, which states you can be sure will not “relax” their “environMENTAL” fartwars. (The term “Babylon” comes to mind)
Sadly, I don’t see any escape from this totalitarian system, -despite any good that Mr. Trump may do- until the whole system just implodes/goes away/gets nuked. Sure, if the fed standards are “relaxed”, there may spring up a few high-end specialty low-volume manufacturers, or the big 3 may start making a few (expensive) performance cars again; but for the average car buyer, I don’t see much changing.
The car manufacturers were forced to develop all of this complex technology, and in a way, it works to their advantage as long as people will buy it, because it insures a short life for their products, and the chance to keep supplying the trained salivating dog customers with the latest & greatest. And on the low end, they’d probably start flooding the market with Yugo-esque crapboxes.
“What worries me, at this point, even if the government completely went away and we were able to return to a free-market, how much of this BS would the car companies voluntarily still keep right on pursuing, without missing a beat”
It’s a fiercely competitive marketplace. For example, I doubt people who buy sports cars would voluntarily choose to purchase a two liter turbo’d engine when for about the same price a non-turbo’d V8 with way more power and torque was offered by a competitor. Hell, Chevy is running ads knocking Ford’s aluminum truck beds, which shave off some weight but can’t take the same abuse as a steel truck bed. There’s thrifty buyers who are going to pay thousands extra to squeeze out a few more MPGs when gas is at $2 a gallon. And so on.
Sure, there’s a market for Priuses among liberals. But even my lefty GF drives a SUV that gets middling gas mileage, and thinks that under 20 MPG or so overall is fine — she stated preference is to talk the standard issue alarms about the threat of global warming, but her revealed preference is a big “fuck you” to all that when it impacts her life in a meaningful way.
LOL. I agree a competitive marketplace would give birth to new manufacturers who might just supplant parts of the captive market of the large automakers. The Big 3 carmakers did a number on Preston Tucker years ago, but the large car companies might have a tougher time stifling innovation in this day. There is just a lot more access to information than we had even 10 years ago.
The standards for new cars would return to bodies like SAE and compliance would be voluntary. So yes much would be retained because it would be in those standards. Those standards would play a role in customer expectations and lawsuits. But at the same time a fair amount wouldn’t be retained and customer demands would change the standards over time. It is unlikely there would be a private standard for fuel economy beyond how to measure it.
Good comment. I agree. Much in the way that appliances are “regulated” today. You have UL and EC approvals as well as NEC for home, building and substation wiring. The standards would change over time, but I see that the average car would be a Rear Wheel Drive car having the handling characteristics of a late 1990’s Jaguar XJ6, the dimensions of a 2006-08 Ford Fusion, the greenhouse of a Lexus LS 400, the safety features of a mid 2000’s vehicle, the emissions profile of a mid 1990s car as well.
The demand for cars like a 1970 Plymouth Road Runner would probably be a very small niche market, as most millenial snowflakes and 50+ Gen Xers like me wouldn’t be comfortable driving an ill handling beast in our traffic clogged roadways.
The market would find a balance.
FMVSS was simply copied from SAE when the government took over in the 1960s. Of course they never talk about where their fully formed regulations came from. The story is always automakers killed people and then there was a lawyer named Nader so the government waved its hand and granted us safe cars. People believe the fairy tale of course.
you mean, Ralph Nader, the guy who deliberately falsified the dreck about how “unsafe at any speed” the Corvair was, thus killing that entire line? I drove a number of those for years. Unsafe? Not. He is a liar and a charlatan.
Of course he’s a lying showman. But the myth says something else.
The “imterstate commerce clause” mandates that goods can freely move between states with no restrictions. In other words, California’s insane voters can mandate whatever they want for their residents to buy/own, but they CANNOT tell anyone they can’t go to Arizona and buy aNon-Calif standard car, bring it back, and register/drive it. Nor can they tell me I cannot move to their hellhole of a state and bring the Fed standard car I’ve owned for twenty years, register and drive it there.
But the AtG’s office are asleep, never prosecute this flagrant violation of the Constitution they swore they’d uphold