Obama’s fascism overwhelms auto industry

by Rossputin | 1:10 am, May 20, 2009 | Comments Off

If there’s one thing we’ve learned from Tuesday’s announcement of an “agreement” among governments, environmentalists, and auto makers, it’s that if you’re not at the table, you’re on the menu.

It is remarkable – and frightening – to read of those groups as “former foes”. If automakers are not foes of the environmentalists, one thing is certain: Consumers are getting screwed.

The Obama Administration is proposing Corporate Average Fuel Economy standards of 35.5 miles per gallon by 2016, 4 years earlier than Congress had mandated in 2007. Furthermore, the administration will for the first time regulate tailpipe carbon emissions in their Quixotic quest to limit carbon dioxide – a compound with no proven negative effects of any sort.

Keep in mind when you hear about the automakers agreeing to this plan that there must be something they expect to be extremely beneficial to them, just as the major tobacco companies agreed to their industry settlement some years ago even though the public thought that “Big Tobacco” was being punished. What’s happened since then? The plan all but eliminated the possibility of new competition in that business, thus protecting the companies’ profit margins, and the price of cigarettes has gone up 10-fold. I don’t smoke – I never have – but is creating a tobacco version of OPEC really what the public thought they were getting? This MUST be what’s happening now. We just don’t know the details yet.

And now that government owns large stakes or at least is a major creditor of these companies, they have no room to complain. As I’ve said a few times lately, they are being reminded of Dick Armey’s maxim that when you make a deal with the devil you are the junior partner. Make no mistake: When it comes to a free-market economy, Obama and the Congressional Democratic leadership are the devil. After seeing the President fire the CEO of a private company (Rick Wagoner of GM), after hearing that the White House threatened a hedge fund that was pushing back on the horrible terms Chrysler bond holders were offered, who in the business community has the will to fight back?

There are a few likely ways this repugnant collaboration will play out, and the way the media is describing, with simply an expected $800 to $1,600 increase in the cost of a car in a few years is not one of them.

Here is my take on the most likely outcome:

In the next two years, one or more of the Big 3 will fail because the costs of retooling to meet these standards were impossible, particularly for companies still in the grip of unions. (Or, it might get to a position where it normally would fail, but the political damage to our fascist president from that outcome would be so large that Congress will throw more money at the company to prop it up.)

Before 2012, then the new standards being to take place, the value of used pickup trucks, SUV’s and other soon-to-be-nearly-illegal cars will skyrocket. During the next two years, people will start buying “inefficient” vehicles as investments. (Thanks to Don Boudreaux for the idea about the plan boosting the value of used cars while lowering the value of new car models, if not their price.)

Before 2016, more people will die in car accidents because of small, light, unsafe cars, and the planet will have shown us clearly that there is no man-made global warming. Prices of US-made cars will have risen more than estimates.

Also, well before 2016, it will be clear that by the time 2016 arrives, the only companies which will have had any success in having an average fuel economy near the new standard will be the Chinese, followed somewhat closely by the Japanese whose average will still be higher because they will still be making some cars that many people actually want to buy. The Big 3 (more likely Big 2 by then) will get temporary waivers from the requirement and Congress will try to pass protectionist legislation, making it harder for foreign companies to compete, and raising the cost of living and the cost of doing business for every American who uses a car.

People will get so angry that the government is moving to make pick-up trucks, SUVs, and safe cars (that won’t collapse under the weight of a small rodent) unaffordable – for no actual benefit and at huge actual cost – that there will be a massive electoral backlash against Democrats. Republicans will win large majorities in Congress between 2012 and 2014 on a platform of repealing these standards.

I must say that along my “we’re living Atlas Shrugged” theme, I’m glad this is happening. It will take this sort of egregious over-reach, this sort of elimination of consumer choice from an electorate that expects to generally be able to buy what they want to if they can afford it, this sort of fascist control over private enterprise, to cause the benumbed public to awaken from their torpor and realize that command economies don’t work, never have worked, can’t work, and are extremely destructive to the standard of living of those souls unfortunate enough to live in a place which attempts central planning.

Make no mistake; this is NOT about the environment. This is, just like “cap and trade” and “health care reform”, about giving government maximum control over our economic lives, about letting government pick winners and losers so that the winners can then re-elect the (Democratic) politicians who picked them, and about attacking capitalism.

Although I am not a social issues conservative, I’ve said for some time that the type of destruction of freedom which “liberals” want is far more dangerous than the elimination of social issues freedoms which liberals claim to value. I’m pro-choice, but if it comes to our society losing the right to abortion on demand versus losing our private property, it’s not exactly difficult to see which is the greater threat to our Republic.

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