10/27/2004

New Cars With New Presidency

What will happen to the auto industry after the elections? Cars and gasoline are becoming an extremely popular topic lately. With oil prices up and cars sucking the gas, the two candidates for president are giving their thoughts on the topic. Also, the CO2 from the cars have been getting many scientists worried about global warming because one-third of CO2 is distributed from the vehicles we drive.
President Bush wants to increase the tax credit from purchasing a hybrid, $1,500 up to $4,000. He and Congress have also approved $300 million for the research of hydrogen fell cell cars. With the prices increasing for oil, we need to do something with the cars that we drive. Kerry also wants to raise the mile per gallon on economy cars from 24 to 36 within the next 10 years. The problem is the auto industry and the workers don't like it. So, Kerry will probably raise the tax credit up to $5,000 for the purchase of hybrid cars.
I believe that something has to be done about the rising prices we are seeing from oil. I don't believe the government should get involved with the gas prices or hybrid cars. If the market wants hybrid cars then the people will get the cars.

3 comments:

Anonymous said...

global warming is a theory that is it. Sure, breathing smoggy air sucks, and it causes health complications, but global warming as a platform to rally a hybrid car is silly. I am just as down as anyone else to buy a ride that cuts costs of operating, but no so down when that same car has as much horse power as a horse and buggy, and the price of fixing it would cost me my liver in a black market auction. There will have to be a much larger push to get GM, Toyota, and Ford to restructure their operations to make way for the r&d of a hybrid car, then all the implications of the rest of the world market to make the change as well. Not to mention the conflict of interest of Oil companies to back off and support such a revolutionizing adjustment.

Ernie said...

I know that economists believe that an open, free market is always the end-all in getting sufficient results for whatever is needed. Say for instance, the comment about the government not doing anything as far as tax credits for hybrid purchases. The government does exist for some purposes and it is in this instance that I believe people may need some kind of incentive in order to want to purchase a hybrid.

Dr. Tufte said...

Two of the three suggestions here bother me.

Giving a surplus to producers to do R&D is sensible - it may help them overcome fixed costs that might keep them out of the market.

But subsidizing buyers is a bad thing. This cash goes straight to the producers.

I also don't agree with the increase in MPG requirements. The standard way the automakers achieve this goal is by making lighter cars, that are also less safe. You have to be really dumb to think that's a good tradeoff.