Thursday, May 21, 2009

Fuel standards and the ban on job exporting bankrupted GM?

Cause and effect are getting mixed up by this MSM
junk programme called The Kudlow Report on NBC where some tosswit shouts to the audience like a used car salesman to a deaf retiree whom he's trying to rip off.

Myron Ebell is running with his small cars kill theme, while Kudlow is running with the myth that only SUVs are profitable.

They both commit the direct and devious error of causality.

Throughout the Bush administration, there was no further fuel standards regulation, or limitation on how many jobs could be exported over-seas. And then the US automakers went bankrupt -- partly because there had been no regulation to prepare them for the inevitable changes in the market when fuel prices became high and the credit bubble burst.

Following this, new standards have been proposed, monumental bail-outs have occurred, and there is beginning to be some necessary regulation.

But you can lie to people that the latter events caused the former, can't you Myron and Kudlow. It's easy, once things get a little bit into the past to get the events out of order.

Oh yeah, the price of doing nothing is end of life as we know it.

Sweet dreams.

Transcript follows:
Ebell: The cars people are going to be given a choice are going to be smaller, have less performance, and they're going to be less safe than the current mix of cars that are on the market.

Kudlow: Blah blah car makers out of business due to prior fuel standards, blah union wages, therefore they're losing their shirt and the SUVs out to dinner and the consumers may not be buying it as well because they can't be making it profitable.

Hwang: This is good for consumers, good for America, save money with fuels.

Kudlow: What's the evidence for saving money on fuel?

Hwang: Talking points waffle, not able to process this total nonsense question.

Kudlow: Myron, I always thought free market and free enterprise stimulated schumpeterian innovation and entrepreneurship, so I'm not sure about how regulation stimulates that. Sounds a little like Government control. This 33% rate of return number from the White House, what do you think of that?

Ebell: Not much. I think you've got it right, Larry. Free markets and consumers making choices are what stimulates innovation and technological process. The fact is that the government has been stifling innovation through all of these regulations. We would be far ahead with renewable energy if we didn't have all these mandates and subsidies. These people become corporate welfare dependents.

Now we have General Motors and Chrysler are essentially government managed. If you think they were poorly managed under private ownership, wait till you see President Obama and NRDC start making the decisions for what kind of cars you're going to be able to drive.

Kudlow: Nobody's explained to me how they're going to make money on these cars, and that's the think I'm going to ask you. Will the government let GM make their parts in China? If they have to make them at home, they can't do it. Whereas their competitors, Honda, Nissan, they can do it overseas more cheaply.

Hwang: Firstly, I have to respond to the earlier points. What I just heard was completely counterfactual to the market place today, which is that for the last 20 years the government has failed. It has failed Detroit in setting higher standards unlike in other countries who have much better fuel economy, and they're delivering vehicles to the US market place that are much more competitive than the Detroit product.

Kudlow: But nobody is buying these cars.

Ebell: Can I respond? Toyota's pickups get poorer mileage than GM's pickups. The fact is they sell a lot of smaller cars which they produce at lower wages and lower production costs overseas. They can't compete in the big car market. Their cars are actually less efficient than the Americans ones.

Kudlow: Two fleet rule, imports, our car makers can't do that. These requirements for greener cars, we helped bankrupt them, did we not?

Hwang: I believe American workers can compete.


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