Auto madness
It is simply common sense: What is rewarded thrives and what is punished withers. This holds true in just about every facet of our existence, including the business world. When businesses are scourged with confiscatory taxation and unrealistic regulatory constraints, they wither and die. But the demise of a business is hardly an end to the misery.
To be sure, Congress is employing a proven method to guarantee that a business owner, entrepreneur, or stock holder is punished. But what about the employees of that defunct business who must now be laid off? The prospective employees it cannot now hire? The consumers it can no longer serve?
The pension funds of many Americans dependent upon its fiscal vigor? Affiliated suppliers with which it can no longer commercially interact? And what about the government's lost tax revenue?
This is not the way to promote American business health, nor will it ever prove to be a boon to economic recovery.
More regulation begets more political control
If a company wishes to market its vehicles in the United States, it must conform to stringent CAFE requirements, safety legislation, design and performance regulations, and California's particulate matter regulations that prevent automakers selling high-mileage diesel-powered cars that sell well in Europe and meet all European emissions requirements.
America's automobile industry has been struggling to remain competitive while bearing the additional burden of a non-profitable cost-per-unit imbalance when compared to its foreign government-subsidized competitors. Add to this Congress' too-strict interpretations of antitrust law and requiring the industry to pay a double tax on repatriated foreign profits, and the barrier to profitability widens considerably.
Now, after decades of being bled white by exorbitant, Democrat-protected union salaries, retirement benefits, and perks, it has just been cold-cocked by a bureaucratic haymaker of epic proportions.
This Monday, President Obama ordered the government to reconsider whether California and other states could regulate vehicle emissions to help control greenhouse gas emissions. The announcement's highlights follow:
Automakers said Monday that they were working toward President Obama's goal of reducing fuel consumption, but rapid imposition of stricter emissions standards could force them to drastically cut production of larger, more profitable vehicles, adding to their financial duress.
The announcement came as General Motors and Chrysler are borrowing billions of dollars from the government to avoid bankruptcy, and as Toyota prepares to report its first operating loss in 70 years. Shortly after the president spoke, General Motors said it would cut 2,000 jobs at plants in Michigan and Ohio because of slow sales.
The California regulations, if enacted today, "would basically kill the industry," said David E. Cole, chairman of the Center for Automotive Research, an independent research organization in Ann Arbor, Mich. "It would have a devastating effect on everybody, and not just the domestics."
But Mr. Cole said he thought major modifications to the proposed standards were likely and that action was still "a long ways off," giving the car makers more time to overcome their financial problems and develop the technologies needed to sell a full lineup of compliant vehicles.
Right now, car makers say they would be able to sell only their smallest, most fuel-efficient cars -- models like the Toyota Prius, a hybrid whose sales have fallen sharply since gas prices began dropping last fall -- because once-popular vehicles like pickup trucks made by Ford and G.M. are not efficient enough.
Global scamming relies upon American gullibility
And just so no one is mistaken, this latest ploy to compel the American auto industry into perpetual Big Government servitude is being avidly championed by zealots who drank the Man-Made Global Warming Kool Aid. The acolytes of this new religious cult helped assure an Obama-led sweep by the Democrat Party and are now demanding payment.
But their two primary demands for reducing "greenhouse gas" emissions from vehicles, increasing fuel economy and reducing emissions associated with their fuel, will do more to harm the economy than they will ever do to heal a myth.
The domestic car makers, desperate for money, don't have much option but to give in to the government's demands because when the ship is foundering, you focus on survival. In an ironic twist, the Association of International Automobile Manufacturers, which counts companies such as Toyota, BMW, and Volkswagen among its members, will continue the fight against California-style over-regulation because it believes that the nation needs single fuel economy standards.
The association further asserts that California's 2006 Greenhouse Gas Law, which has been copied by more than a dozen different states, has led to an unwieldy proliferation of costly regulations.
We already have Big Government with its hands on the purse strings of our banks and lending institutions, serving as a precursor toward their eventual nationalization. I suppose they expect Americans to swallow the pap that career elected officials who know little or nothing of banking and auto manufacturing are perfectly suited to oversee their regulation and profitable operation.
As exemplified in the voting booth since 2006, they may be right in their expectations regarding American gullibility. But their prescription for a socialized economic recovery has been consistently proven to be a failure in Europe, and it will fail here as well, just as it did for a full decade following the Great Depression until World War II saved the economy.
It is often said that a sure sign of madness is trying the same thing over and over and expecting different results.