Time to Change Gears for a Fuel-Efficient Future

By Warren Brown
Sunday, October 26, 2008

We have the chance to remake the automobile industry, to strengthen America's technological muscle. But we are frittering away the opportunity.

We are mired in nonproductive, ideological arguments over "socialism" vs. "free enterprise." Worse, I fear, we are being suckered by the siren song of cheap gasoline.

The national media are celebrating the fall of pump prices below the $4 a gallon for regular unleaded nearly all of us were paying this summer. In many parts of the country, pump prices have now sunk below $3 a gallon.

Statistical evidence does not yet support suspicion of recidivism in the matter of American consumer profligacy in the consumption of fossil fuels. But there is anecdotal reason to worry.

I have been getting calls and receiving e-mails from readers asking whether now is a good time -- to paraphrase the sense of those communications -- to buy a truck or a full-size sport-utility vehicle. The thinking goes thusly: Almost all car companies are offering massive rebates on slow-selling trucks and SUVs. That makes them a bargain. Big rebates plus falling gasoline prices now make those big rides a good deal.

It is delusional thinking, but no more so than that taking place in the halls of Congress, where lawmakers apparently are laboring under the illusion that we have time to save the domestic automobile industry, to beef up America's prowess in fuel-efficient technologies.

We don't.

American car companies and the tens of thousands of jobs connected to them, directly and indirectly, are in bad shape. Soaring gasoline prices this summer and frozen credit this autumn have walloped their sales. Global regulatory changes requiring increased fuel efficiency and cleaner emissions rapidly are increasing product development costs.

We can wag fingers and self-righteously shout that the domestic car companies are reaping the unhappy fruits of the thoughtless seeds they planted. Schadenfreude is joy in hypocrisy. We bought all of those big trucks and big-engine cars. And we demanded more of them as long as we had access to the developed world's cheapest gasoline. But we whined like babies and screamed for more fuel-efficient vehicles like infants crying for nipples when gasoline topped $4 a gallon.

Put another way, we -- consumers and politicians -- were complicit in the automobile industry's reluctance to do better in the arenas of fuel economy and emissions control. The natural tendency in a purely profit-oriented, capitalist system is to give consumers what they are demanding at a price that returns a handsome reward on investment in product development.

Increased fuel efficiency and emissions controls usually require increased development costs. If consumers aren't demanding those things and, by implication, are not willing to pay more for them, why invest the enormous amount of money to make them available?

Aware of that capitalist conundrum, governments, the U.S. government chief among them, exercised the socialist lever of regulation. Car companies would have to improve fuel economy and emissions control by government mandate. But this is where things got dicey in the United States.

In Europe and Asia, governments provided financial incentives to the car companies to move forward in the development of alternative fuels and propulsion systems. In the United States, we embraced socialism when it came to regulating the industry but demanded hard-knuckles capitalism in compliance with our regulatory demands.

It is an approach designed for failure.

What is needed now is a concerted application of common sense.

Congress can do that by immediately releasing the $25 billion it has promised the industry in direct, low-interest loans to help it redesign cars and trucks for a more fuel-efficient future. It can do that by supporting independent companies, such as AFS Trinity of Washington state, in advanced propulsion research. It can do that by making consumers assume some responsibility for energy conservation -- by placing a floor, such as $4 a gallon for regular unleaded, beneath pump prices for gasoline.

There is nothing wrong with socialism as long as it actually produces something for the general good. Saving domestic car companies speaks to that good. Helping those companies become competitive in future technologies will ensure the continuation of an American economy attached to something real -- product development and manufacturing. That helps to create a future for American employment.

It's time for the government to stop fooling around and release the money it promised the industry in those direct, low-interest loans.

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