Paul Ingrassia, who just signed on to write a book about the decline of Detroit, has an opinion piece in today’s WSJ. Like Holman Jenkins, he sees problems with CAFE–though not for the same reasons–and reinforces the need for higher gas prices as a market solution to building greener cars:
Congress must revisit one of its own special-interest shibboleths if it really wants to save Detroit. Requiring car companies to meet corporate average fuel economy (CAFE) standards forces them to lose money on small cars that people don’t want so they can sell big cars that people do want, at least until gas prices soar out of sight. Proof positive came last month, when the Toyota Sequoia and Honda Pilot SUVs posted big gains while sales of most other cars plunged. The obvious reason: gasoline prices plunged too.
The reason Europe has fuel-efficient cars is high gas prices, not CAFE laws. What’s more, the only times that Americans have switched to smaller cars is 1973, 1979 and the spring of 2008, when gas prices here were high. So the time has come for Congress to stop pretending that fuel-economy can be legislated and to put market forces to work. That means raising gasoline taxes — offset by cuts in income taxes and by gas vouchers for needy people. These measures would succeed at raising fuel economy and in reducing automotive emissions where the CAFE law has failed.
The Latest Song of Detroit
WSJ, December 4, 2008