I fully agree that we need more fuel efficient vehicles. But I also firmly believe that the vast majority of American drivers (and others around the world) will always buy the biggest, most powerful vehicle they think they can afford to operate. When gas was cheap in this country, they bought big SUVs and trucks because they could afford them, even though there were plenty of small, efficient vehicles offered. Sure, some people bought compacts for a variety of reasons but most people went big. What caused that trend to turn around seemingly overnight? Certainly not anything that politicians and bureaucrats did with fuel economy regulations. Plain and simple, it was that gas prices shot up.

Gore Vidal has dubbed this country the United States of Amnesia because consumers have a notoriously short memory. Raising CAFE standards will not help reduce fuel consumption unless people are willing to buy more efficient vehicles and that's something that is unlikely to happen if fuel prices drop (unless of course our economy continues its collapse, in which case nobody will be buying anything). Over at Motor Trend, editor Angus McKenzie thinks that CAFE combined with low fuel prices has actually made things worse by encouraging automakers (including Toyota and Nissan and to a lesser degree Honda) to build big trucks and consumers to buy them. Instead, he suggests attacking the demand side (as I have done for years) by scrapping the plans for $100 billion in loans to the industry along with the current supply-based CAFE rules. McKenzie says the money should be used to stimulate demand for high efficiency vehicles. McKenzie doesn't mention fuel prices, but I would add that attempts to reduce fuel prices much below $4 / gallon should also be abandoned. As Dr. David Cole has said, a floor price should be set for petroleum to keep demand up for efficiency and then if the market price drops below that, tax it up to the minimum price. This will do a lot more to reduce fuel consumption than the ridiculous footprint-based fuel economy rules now being put forward by NHTSA.

[Source: Motor Trend]

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