The Great Clunker Con proved one thing, at least: New cars are
too expensive for a growing number of consumers. But chop $4,500
or so off the price and all of a sudden buyers are a lot more
interested.
The problem is the interest (and sales) could only last as long
as the payola continued to flow. Taking money from Taxpayer A to
help Taxpayer B get behind the wheel of a brand-new car is
ultimately just another government transfer payment scheme.
Now that the handouts are finished with, sales will almost
certainly recede to where they were.
Still, there’s a better option to consider: Why not just do the
obvious and make the cars cheaper permanently — but without any
government financial flim-flam?
It could be done, easily. And it might just save the car
industry. Perhaps even the economy itself.
For openers, the federal government needs to get out of the car
designing business. Lawyer politicians like Barack Obama and D.C.
bureaucrats do not comprehend even Lemonade Stand real-world
economics. If it were up to them, instead of five cents per paper
cupful you’d have $4 filtered water in a glass, scrupulously
maintained at a carefully monitored 38 degrees Fahrenheit and
sold only by appropriately trained and attired food service
workers making an approved wage — with approved benefits.
The lemonade might taste great — but it would be unaffordable.
And so it is with today’s new cars. No question, they are
sturdier and more crashworthy than their counterparts of the past
— to a great extent because of government mandates governing
everything from how strong bumpers have to be to the number of
air bags your next new car must be fitted with.
As a result of all this, new cars are also much heavier, more
complicated — and expensive — than the cars of the past.
But which is better: A car that performs well in a 30 mph offset
barrier crash but is also beyond your means? Or a car that’s
maybe not quite so sturdy but which you can still afford to buy?
Like it or not, that’s the bottom line choice here. Just as we
can’t all drive V-8 Cadillacs, neither can average people afford
to buy the ever-increasing roster of safety equipment that
Washington regulators think they need — and should be
forced to purchase, in an ever-increasing spiral of
add-on expense.
This creates all manner of absurd distortions. For example, the
car companies have had to go to ridiculous lengths — using
completely unnecessary technology — to (barely) achieve the same
fuel economy in a modern gas-electric hybrid car that was
possible in a simpler, non-hybrid car 20 or 30 years ago … at
two or three times the price.
For instance: A 2010 Toyota Prius hybrid gets about the same
real-world mileage as a late 1970s VW Rabbit diesel or '80s-era
Plymouth Champ. But the Prius costs several times what those cars
cost because it is vastly more complicated. Get rid of the weight
and expense-padding “safety” mandates and the car companies could
stamp out legions of simple, lightweight 50 mpg (or better)
economy compacts that could be sold for less than $10,000 brand
new.
After all, 40 mpg cars were common 25 years ago — before the
government’s rules added several hundred pounds of deadweight to
each new vehicle. Nix the rules that add the weight — and with
the benefit of modern engine technology, such as direct injection
and Continuously Variable (CVT) transmissions — it should be
easy to build a 60 mpg economy compact without having to resort
to elaborate hybrid vehicle technology.
With diesel power, 70-80 mpg ought to be possible.
In fact, VW sells a compact diesel model in Europe that is
capable of close to that figure — but we don’t get it
here, thanks to Uncle Sam.
The little vee-dub can’t pass the government’s safety standards.
As the opening to the “Six Million Dollar Man” put it, We
have the technology. What we lack — or rather, what Detroit
lacks — is the freedom to develop it and offer it for sale to
the public.
If only the car companies were allowed to build what the market
needs rather than what the government wants, the situation would
fix itself, without massive government bailouts — or Clunker
Cons.
GM CEO Fritz Henderson and the rest of Detroit’s honchos need to
make this case before the public — instead of clapping like
trained seals at Obama press conferences.
Who knows — they might actually sell some cars.
