Tuesday, August 28, 2012

Central planners aren't limited by market or manufacturing realities

The central planners of the Obama administration are at it again, telling us bureaucratic decrees are what bring innovation and better living. 

The administration today finalized demands that automakers boost average vehicle mileage to over 54 miles per gallon by 2025. 

Sounds great until you consider the costs. The National Automobile Dealers Association estimates the improved mileage standards will add another $3000 to the cost of an average vehicle.  That's a price hike that the NADA says could push another seven percent of the car buying public out of the new car market.  

And that $3000 is presumably in addition to the $1000 being be built into cars to meet previously mandated 2016 standards. 

Even if you can still afford the car, it may not be as big or as robust as the one you can buy today for much less.  And that's assuming car makers can perform the mileage miracles government demands.  

What's the alternative if they can't?  Big bucks car buyers get crammed into Chevy Volts? While the rest of us start keeping our minivans longer... say 20, 30 or more years kinda like Cubans have kept their pre-Castro Detroit iron running?

If demands aren't rooted in some sense of reality, government may drive automakers into oblivion with higher mileage demands. That's often been the downfall of bureaucratic central planners. They reach too far for too much, and wreck what they had in the first place.  

Even if car makers do manage to meet government demands, do the resulting innovations come at the expense of others that might have been even better if the innovators hadn't been bound by the perimeters demanded by  over controlling bureaucrats? 

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