MovingTarget
Diamond Member
- Jun 22, 2003
- 9,002
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Originally posted by: bamacre
Originally posted by: MovingTarget
Originally posted by: bamacre
Originally posted by: MovingTarget
Your point is only partially valid, imho. Waiting and depending on gas prices to rise for cars to become more fuel efficient is a horrible energy/transportation policy. We all saw that last summer. You have to be pre-emptive and/or proactive about this. The domestics have shown that they would ignore fuel economy in favor of the short-term cash cow, the full-size vehicle. This is not a long-term strategy. If Congress had continually raised fuel economy standards, then the big 3 would still be waaaaay on top of market share, as that is why the imports started gaining on them in the malaise era.
Wait, wait, why wouldn't the domestic auto-makers have a financial interest in being pro-active? Why should they have to wait for government to tell them to make fuel-efficient cars? You've already pointed out that their competitors overseas, namely Honda and Toyota, began to make more fuel efficient cars, and profited in doing so, taking market share from our domestic auto makers who failed to make more fuel efficient cars. So again, my question is, wouldn't increased profits and market share be the incentive for making cars more fuel efficient? Rather than government intervention?
You would think that, but corporations are run by people who have proven themselves not to have long-term interests at heart. Honda and Toyota already had to face up to the fact that fuel efficiency is key to long-term viability due to the conditions in Japan, due to both government policy and access to resources that their islands simply do not have. This provides incentives that simply do not exist comparitively in our market. They are at a competitive advantage in that sense. So, the government must step in. Increased profits and market share are an incentive, but compared to the imports, our market needs an extra kick in the pants to get its act together.
Ah, so what you are saying is that our domestic automakers made poor decisions. Their poor decisions led to decreased sales, and their foreign counterparts, Honda and Toyota profited and gained market share because they made what consumers demanded? So because our domestic automakers aren't very bright, the government needs to force them to make better decisions. Is that pretty much what you're saying?
Not quite. The domestics should still make their own decisions. The government should only compensate for those market conditions that our market lacks. Honda and Toyota only profited and gained market share due to the comparitive advantage, not simply because they 'made what consumers demanded'. They simply didn't have the kick in the pants that the imports did.
The free market isn't the be-all and end-all to our problems. Just 'leaving it up to the markets' as you seem to say would be disasterous. Let the government provide the kick in teh pants to compensate for this comparitive market advantage, and let the chips fall where they may. It would still be up to the domestics to determine their fate.
