I've been thinking about fuel efficiency standards this evening. The intent is to force auto makers to make more fuel friendly cards. Every automaker essentially has to meet quotas for fuel efficient cars. Especially as the economy worsens, new CAFE standards will kill the auto makers. With fuel prices so low, there is little incentive for the average consumer to chose to buy fuel sippers. Suddenly, the already delicately positioned auto makers may be left with huge inventories of small vehicles that they will have to sell at small, if any, profit.
Environmental advocates will protest that there is a need to reduce fuel consumption and greenhouse gas emissions. But really, even if we accept those goals, CAFE standards are the wrong way to go. They are the spineless politicians' way to avoid what is the truly effective solution - raise the cost of fuel! If fuel is more expensive, there is consumer demand for smaller cars (think a few months ago), and automakers will respond. This way, the government is not forcing them to make low-demand vehicles, but achieves the same result with a lot less economic pain.
Isn't it strange that politicians were complaining about high fuel prices and global warming at the same time?