The Obama Administration has issued new CAFE standards to require that carmakers produce vehicles with an average of 35.5 miles per gallon by 2016. The Obama camp claims this will only raise auto prices by an average of $1,300, which stretches the use of the word "only" for most car-buyers. Those in the auto industry have predicted the end of the SUV as we know it and the reallocation of trucks to those that require such vehicles for work.
I am torn here. On one hand I get very frustrated by the civilian tanks that seem to be escalating an arms race of "safer cars" (i.e., my Honda Accord would be a perfectly safe car as long as I am never hit by a Hummer, Excursion, etc.). I am also frustrated when I see such a car with a "Get Out of Iraq, NOW" bumper sticker when it is my own personal belief that we would let the Middle East become the battle-field of Africa if we didn't care so much about the stabilization of fuel prices vis a vi our love affair with big ass cars.
On the other hand, I agree with one of my Anonymi that I would much rather the administration tax fuel prices and let the market innovate in response. If you want to drive an SUV, go ahead. You will be subsidizing our government in the same way a smoker subsidizes health care.
The problem with just leaving well enough alone is that the American people are no longer rational economic actors. Consumers saw gas prices go down and thought "Whew that was scary" and then went back to their Tanks. Those prices will be back and next time it will probably be for good. Oil is a commodity that will rise with the coming inflation and soar when the US economy turns in on itself with the devaluation of the US Dollar (I know I am skipping some steps, but work with me).
I guess the real question is, are CAFE standards anachronistic anyway? Should Obama have made the new standards based on alternative energy?
Or...should he have just left the darned thing alone?