General Motors CEO Rick Wagoner is now calling for higher federal gas taxes. Finally we see the American car companies doing something proactive to protect themselves rather than complaining and dragging their feet ad nauseum about fuel economy standards.
Rick is finally seeing what Europeans have seen for years. The only way to support higher fuel economy is to raise the price of fuel. When fuel economy standards are levied against car makers, they have to sell somewhat unpopular fuel efficient cars, often at a loss, so they can meet the standards, while the big money making gas guzzlers get sold quick because they are popular. As I've said before, this is a top down approach, and it hasn't worked for years. See car makers' financial crisis.
The bottom up approach, the correct approach is to encourage buyers to want to buy more fuel efficient cars. Why would they need to buy a fuel efficient car? The only way it works is if fuel is expensive. I noticed a stark difference in driving habits when I moved to Arkansas. When I lived in Oregon, I lived about 15 miles from town. We only went to town when we really needed to and cut or consolidated unnecessary trips. Gas was somewhat expensive. Therefore, many people drove smaller or at least more modest cars. Compact pickups like Chevy S10's, Toyota Tacomas and Nissans were more popular. Only the more wealthy among them drove the big SUV's, most families with a bunch of kids had minivans, not Suburbans. When I moved to Arkansas, I noticed that there were many more of the large SUVs, pickups and cars. The gas was cheaper.
The truth is, people will buy what they want to buy, you can't tell the car manufacturers to make fewer big vehicles. They make what is demanded of them. Now car makers realize that what is demanded of them (due to their needing money) is fuel efficinet cars. They also realize that they can't keep doing what they always have because the climate has changed. So in order to be able to market and support expensive but excellent electric and hybrid cars like the Chevy Volt, they need gas prices to be higher. We all need gas prices to be higher to support the changes that are necessary to achieve a sustainable existence.
If you buy a gallon of gas, the terrorists win. Really.
WiredForStereo
Showing posts with label Fuel Economy. Show all posts
Showing posts with label Fuel Economy. Show all posts
Tuesday, February 10, 2009
Tuesday, December 9, 2008
Top Down and Bottom Up
No, this is not a post about porn.
Ok, now that you've wiped your eyes from laughing so hard you cried, I'll continue.
We have in our country a crisis of management and organization and I'll tell you how it works. The bailouts show this well. Who got the first biggest least regulated bailouts? Banks did. Tell me what exactly banks make. Tell me what exactly the big banks make for me that my small local Arvest bank who doesn't need a bailout can't make for me.
Now the car manufacturers are trying to get bailouts. What do car makers make? Pickles. And who eats pickles? I do. Why is it so hard for industries that actually make things to get help? It's because for 28 years now, we have been living under Reaganomics. This philosophy says "free trade solves everything." Never mind that we don't actually make anything here anymore. What is our economy supported by? Not a whole lot, and that is borne out by the economy slumping because the people with the money to spend (that meaning the most people, the statistically significant group,) can't spend it because they don't have it anymore and they don't have it anymore because their jobs get shipped across our borders, and they've run out of credit.
Here's a conundrum. Some are saying that American auto makers have failed to compete with Asian and European automakers. But here's a question? Who do Toyota and Honda have to compete with in their main markets? They only have to compete with each other because Japan has Fair Trade policy. They have policy that protects their car manufacturers from outside influence. The kinds of cars they make are decided by what people want to buy and what people want to buy is guided by high gas prices. This is true in Europe too.
Here's the top down and bottom up concept. We have in American these things called CAFE standards (Corporate Average Fuel Economy) that decide what our car's gas mileage should be. This is a top down approach. What this leads us to is this: We have cheap gas (relatively) which means the Ford F-150 is the most popular selling vehicle. It gets bad gas mileage. But it makes money. Ford loses money on smaller cars because people don't really need or want them, but yet, it is required to make them by law. Reminder: this is top down philosophy. An additional factor is that cars and trucks are defined differently and have different requirements which means if Ford, GM and Chrysler can get you to buy a "truck" (truck, SUV, or minivan) they don't have to worry about CAFE so much and can sell huge unnecessary gas guzzling machines that don't help the world.
In Europe and Japan, gasoline prices are kept a bit higher than in America due to taxes with a great result. Car manufacturers have no problem making and selling cars that get an average of 40 miles per gallon or more. In fact our average fuel economy is around 60% of what theirs is. Their car manufacturers are not forced to do something that the market doesn't support and they get a sweet tax to build roads with. This is a bottom up approach, see how it works better? You can cause something far greater to happen if you make a small change to each of a million people than if you make a large change to one or a few people at the top. And really, the average person doesn't pay any more in total because even the gas costs more, you don't use as much of it. Win win.
It's like this. How can you beat a champion boxer? Buy a new set of gloves?, no. Stomp on his toes. He won't be so interested in punching you anymore, at least until he can walk again.
It's the same concept with tax policy. Reaganomics and Bushies say "give tax cuts to the rich to stimulate the economy." The rich are so few, you can give them a sizable tax cut and it won't do much. Give the bottom of the group the tax cuts, and you will have a much larger bang for your buck. Simple math, give one person a million dollar tax cut, or give a million people a thousand dollar tax cut. One case yields $999,000,000 more than the other. Which do you think (long term) is better for the economy? That's why I advocate a return to the tax structure of 1980, adjusted for inflation and the cost of living of course.
This country is built on this type of principle. It is what it is today because of a top marginal tax rate of 70%. But that has been rapidly torn down by the last 28 years of unregulated capitalistic rule that puts most of the money into the hands of those who already have it. The biggest problem with this is the enabler. Christians were duped into supporting this way of thinking simply because they weren't looking out for who Jesus told them to be looking out for. They were looking out for themselves, their comfort, and sold themselves to the gospel of wealth and disguised it as morality.
Jesus was a bottom up guy. You help your neighbor, he helps his, he helps his, he helps his. Jesus never advocated banning or passing a constitutional amendment to ban or restrict anything. It was contrary to the way he worked and still works. He is a bottom up guy. He never used his power or influence to in anyway limit the actions of non-believers. Christians shouldn't either. In case you can't figure it out, what I'm saying is don't use your vote to keep gays from getting married. If you don't believe in same sex marriage, then don't marry someone of your same sex. The constitution should not be soiled by such petty nonsense. It should be a proud and right giving document, not a document that takes away. Marriage is between you and God, not you and the constitution or the law. Give unto God that which is God's, and God gives marriage, not Uncle Sam. Simply said passing a law banning same sex marriage is a top down approach, and Jesus was a bottom up guy. They are incompatible.
And that is my foray in to top an bottom philosophy. Top down doesn't work well, that's why we all hate the government. Try bottom up. It will work better. And stay away from demagoguery. That's a lowest denominator situation and that doesn't work either.
Jesus was a bottom up guy, and so am I.
WiredForStereo
P.S. Those of you who think that everyone wants to come to America, sorry to burst your bubble, but Europeans like their free health care, Canadians do too, that's why we don't have a wall up there.
Ok, now that you've wiped your eyes from laughing so hard you cried, I'll continue.
We have in our country a crisis of management and organization and I'll tell you how it works. The bailouts show this well. Who got the first biggest least regulated bailouts? Banks did. Tell me what exactly banks make. Tell me what exactly the big banks make for me that my small local Arvest bank who doesn't need a bailout can't make for me.
Now the car manufacturers are trying to get bailouts. What do car makers make? Pickles. And who eats pickles? I do. Why is it so hard for industries that actually make things to get help? It's because for 28 years now, we have been living under Reaganomics. This philosophy says "free trade solves everything." Never mind that we don't actually make anything here anymore. What is our economy supported by? Not a whole lot, and that is borne out by the economy slumping because the people with the money to spend (that meaning the most people, the statistically significant group,) can't spend it because they don't have it anymore and they don't have it anymore because their jobs get shipped across our borders, and they've run out of credit.
Here's a conundrum. Some are saying that American auto makers have failed to compete with Asian and European automakers. But here's a question? Who do Toyota and Honda have to compete with in their main markets? They only have to compete with each other because Japan has Fair Trade policy. They have policy that protects their car manufacturers from outside influence. The kinds of cars they make are decided by what people want to buy and what people want to buy is guided by high gas prices. This is true in Europe too.
Here's the top down and bottom up concept. We have in American these things called CAFE standards (Corporate Average Fuel Economy) that decide what our car's gas mileage should be. This is a top down approach. What this leads us to is this: We have cheap gas (relatively) which means the Ford F-150 is the most popular selling vehicle. It gets bad gas mileage. But it makes money. Ford loses money on smaller cars because people don't really need or want them, but yet, it is required to make them by law. Reminder: this is top down philosophy. An additional factor is that cars and trucks are defined differently and have different requirements which means if Ford, GM and Chrysler can get you to buy a "truck" (truck, SUV, or minivan) they don't have to worry about CAFE so much and can sell huge unnecessary gas guzzling machines that don't help the world.
In Europe and Japan, gasoline prices are kept a bit higher than in America due to taxes with a great result. Car manufacturers have no problem making and selling cars that get an average of 40 miles per gallon or more. In fact our average fuel economy is around 60% of what theirs is. Their car manufacturers are not forced to do something that the market doesn't support and they get a sweet tax to build roads with. This is a bottom up approach, see how it works better? You can cause something far greater to happen if you make a small change to each of a million people than if you make a large change to one or a few people at the top. And really, the average person doesn't pay any more in total because even the gas costs more, you don't use as much of it. Win win.
It's like this. How can you beat a champion boxer? Buy a new set of gloves?, no. Stomp on his toes. He won't be so interested in punching you anymore, at least until he can walk again.
It's the same concept with tax policy. Reaganomics and Bushies say "give tax cuts to the rich to stimulate the economy." The rich are so few, you can give them a sizable tax cut and it won't do much. Give the bottom of the group the tax cuts, and you will have a much larger bang for your buck. Simple math, give one person a million dollar tax cut, or give a million people a thousand dollar tax cut. One case yields $999,000,000 more than the other. Which do you think (long term) is better for the economy? That's why I advocate a return to the tax structure of 1980, adjusted for inflation and the cost of living of course.
This country is built on this type of principle. It is what it is today because of a top marginal tax rate of 70%. But that has been rapidly torn down by the last 28 years of unregulated capitalistic rule that puts most of the money into the hands of those who already have it. The biggest problem with this is the enabler. Christians were duped into supporting this way of thinking simply because they weren't looking out for who Jesus told them to be looking out for. They were looking out for themselves, their comfort, and sold themselves to the gospel of wealth and disguised it as morality.
Jesus was a bottom up guy. You help your neighbor, he helps his, he helps his, he helps his. Jesus never advocated banning or passing a constitutional amendment to ban or restrict anything. It was contrary to the way he worked and still works. He is a bottom up guy. He never used his power or influence to in anyway limit the actions of non-believers. Christians shouldn't either. In case you can't figure it out, what I'm saying is don't use your vote to keep gays from getting married. If you don't believe in same sex marriage, then don't marry someone of your same sex. The constitution should not be soiled by such petty nonsense. It should be a proud and right giving document, not a document that takes away. Marriage is between you and God, not you and the constitution or the law. Give unto God that which is God's, and God gives marriage, not Uncle Sam. Simply said passing a law banning same sex marriage is a top down approach, and Jesus was a bottom up guy. They are incompatible.
And that is my foray in to top an bottom philosophy. Top down doesn't work well, that's why we all hate the government. Try bottom up. It will work better. And stay away from demagoguery. That's a lowest denominator situation and that doesn't work either.
Jesus was a bottom up guy, and so am I.
WiredForStereo
P.S. Those of you who think that everyone wants to come to America, sorry to burst your bubble, but Europeans like their free health care, Canadians do too, that's why we don't have a wall up there.
Tuesday, June 3, 2008
GM Closing Four Truck and SUV Plants!
In a move that I have been waiting for, for a long time, GM is closing four plants according to the Associated Press in a story out this morning.
Rising gas prices have precipitated a dramatic switch from larger vehicles to smaller ones, and American car companies have been left out in the cold in a sense because their gas sipping options are far less populous than those of foreign car makers.
GM, the one responsible for attempted murder of the electric car not five years ago can now be seen as making amends for that. It now appears that the Chevy Volt just may actually happen. The shift away from bigger vehicles is even more dramatic when you understand that switching from a 10 mpg vehicle to a 20 mpg vehicle saves approximately 600 gallons of fuel per year while switching from a 50 mpg to a 100 mpg saves only 120 gallons. Think if someone switches from a Hummer to a Prius, they would save approximately 750 gallons of fuel a year, and at current prices, that's a hunk of change.
Speaking of Hummer, GM has decided to reevaluate the brand, possibly even selling it. This is the thing I am glad of the most, because Hummer means so much more than just a big SUV, it really represents something to the rest of the world. The rest of the world sees Hummers as small tanks, and here our moderately wealthy drive them as family cars or commuters.
GM says the change is permanent, let's hope so, and let's hope that other car manufacturers do the same. Toyota needs to get rid of Sequoia.
I think with the right impetus, we can transition away from fossil fuels without having a huge crash.
WiredForStereo
Rising gas prices have precipitated a dramatic switch from larger vehicles to smaller ones, and American car companies have been left out in the cold in a sense because their gas sipping options are far less populous than those of foreign car makers.
GM, the one responsible for attempted murder of the electric car not five years ago can now be seen as making amends for that. It now appears that the Chevy Volt just may actually happen. The shift away from bigger vehicles is even more dramatic when you understand that switching from a 10 mpg vehicle to a 20 mpg vehicle saves approximately 600 gallons of fuel per year while switching from a 50 mpg to a 100 mpg saves only 120 gallons. Think if someone switches from a Hummer to a Prius, they would save approximately 750 gallons of fuel a year, and at current prices, that's a hunk of change.
Speaking of Hummer, GM has decided to reevaluate the brand, possibly even selling it. This is the thing I am glad of the most, because Hummer means so much more than just a big SUV, it really represents something to the rest of the world. The rest of the world sees Hummers as small tanks, and here our moderately wealthy drive them as family cars or commuters.
GM says the change is permanent, let's hope so, and let's hope that other car manufacturers do the same. Toyota needs to get rid of Sequoia.
I think with the right impetus, we can transition away from fossil fuels without having a huge crash.
WiredForStereo
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