Well, no, nor can they, because they caused the problem in the first place. Bruce "Bootleggers and Baptists" Yandle might have begun thinking about that phenomenon when he worked on technology-forcing legislation during the Carter administration.
Back in 1977, as a senior economist on President Jimmy Carter's Council on Wage and Price Stability, I participated in Department of Transportation (DOT) proceedings that set the first fuel economy standards for the U.S. fleet. What transpired is a great example of what can happen when federal regulations become completely entangled with a major economic sector. The forces at play help to explain why a woman happily drives a 5,000-pound SUV to transport 10 pounds of groceries.The F-150 of the time was smaller than its current version, and the Suburban and assorted Jeep knock-offs were utilitarian, intended to be a cheaper version of the Land Rover for going bushwhacking. These days, whenever commentary about the size of those land yachts and the hazard they pose to pedestrians comes up, it quickly degenerates into slanging matches about whether the skippers of those land yachts or their critics have the lowest testosterone. And thus serious policy analysis goes by the board.
I can assure readers that no one in those proceedings thought the Ford F-150 pickup, beginning in 1982, would top the all-vehicle bestseller list for 41 consecutive years. And we could have never guessed that truck-like SUVs would become vehicles of choice for U.S. consumers. We couldn't have; SUVs did not exist at the time.
We expected just the reverse. Cars would get smaller, we thought. Fuel economy would rise, and large, weighty vehicles would be a thing of the past, primarily because of the regulations being put in place.
Mr Yandle's story continues with the unintended consequences. (So it always is with Good Intentions, isn't it?)
In the face of skyrocketing oil prices, Congress froze gasoline prices to protect American consumers from pocketbook shock. Then came the hard part. Elected officials sought to require U.S. automakers to build the smaller, more economical cars that unquestionably would have been built had gasoline prices been allowed to rise freely. Yet the fuel economy standards hit passenger sedans hard while leaving light trucks, which were not seen as passenger vehicles, almost untouched.Ah, government. Higher fuel prices induce substitutions to smaller cars. So Our Political Masters gave us the opportunity to pay lower fuel prices, if we could find any. Then they sought to counteract the substitution by effectively limiting the production of family sedans and station wagons. And agrarian and business interests made a business case for standard sized pickups and step vans. That became a loophole big enough to drive first a minivan and then a Hummer through.
As the fuel economy standards began to bite consumers, they found that trucks provided comfort and safety no longer available in the downsized sedans. Truck sales surged, and in 1990, Ford placed a four-door body on a Ranger truck frame and introduced the Ford Explorer, a passenger vehicle that satisfied the government's truck definition. This inspired an explosion of similar SUV production across the industry. Trucks became beautiful, expensive, and highly desirable.
All the while, the fuel economy standard for trucks remained less strict than for sedans. To make things even better for U.S. producers, almost-prohibitive tariffs on European light trucks were extended to the rest of the world. Many foreign producers eventually jumped the tariff wall and built trucks and cars here, but the home-grown industry enjoyed an early advantage.
In the way of government, there is no ukase that cannot be corrected with another ukase.
Over the years, regulatory priorities changed. America became the world's leading oil producer. Old fuel efficiency worries were bolstered by concerns about smog, emissions, and climate change. Electric vehicles became the politically hoped-for solution.Yes, and I might win the lottery. Steven Greenhut takes up where Bruce Yandle left off.
But instead of overhauling the aging fuel efficiency apparatus—perhaps even moving to a straightforward tax on carbon emissions—politicians added more ornaments to the fuel economy Christmas tree. It now includes requirements for producers of too many gasoline-powered vehicles to subsidize those that make electric cars. Today's DOT-proposed fuel economy regulations can only be met by a significantly enlarged electric fleet. These are accompanied by proposed emission regulations by the Environmental Protection Agency.
Now we're left with a maze of regulations and rules that I doubt anyone can fully explain. The industrial organization that results is so opaque that no one can tell what anything really costs when factoring for the credits, subsidies, or tax breaks paid for or enjoyed by all involved.
Perhaps it's time to start anew.
One of my favorite economic rules is simple. Whenever a progressive scold blames capitalism or private companies for a "market failure"—i.e., the inefficient or seemingly inexplicable distribution of goods or services in the economy—it's best to dig a little deeper. Almost always, some government regulation, tax, or law is largely to blame.He concludes with an economically sensible argument.
One recent example involves the proliferation of mega-pickup trucks. It doesn't take scientific analysis to notice these vehicles, which account for more than 20 percent of all passenger vehicle sales in the United States, have gotten huge. I recently parked my 2012 full-size V-8 RAM next to a new model in a parking lot and mine looked like a toy. They've gotten pricey, too. I paid $19,000 for mine brand new—and the average full-size pickup now approaches $60,000.
"Driving a large pickup or SUV increases the likelihood you'll kill or injure someone; its thirsty power plant… spews more air pollution and greenhouse emissions," according to a report last year in Bloomberg. This has, of course, led to calls for more regulation. The article focused on a proposal by the District of Columbia to impose a $500 annual fee on trucks that exceed 6,000 pounds. The European Union has proposed bans on U.S.-style trucks.
I generally don't care what other people drive, but critics aren't entirely wrong to point out the ill effects of mega-truck proliferation—or the oddity of using a 6,500-pound, 22-foot-long vehicle mainly as a grocery-getter. Pedestrian deaths have reached 40-year highs and the Insurance Institute for Highway Safety research shows that as trucks and SUVs have gotten taller and heavier, they likewise have posed greater risks to those outside the vehicle.
But before we engage in a regulatory frenzy, it might be wise to assess how we reached this point. Part of it is due to consumer demand and manufacturer marketing, but that's an insufficient explanation. I live on an acreage and need a truck for routine work duties and hauling a trailer. The anti-car zealots seem to think we all should get around on buses and bicycles, but the bigger question is why there aren't many smaller, affordable truck options.
The panoply of regulatory rules, labor standards, tariffs, and taxes also drive up manufacturing costs, which means car makers need to maximize profit per unit. That offers more incentive to push the priciest vehicles possible. Often, Detroit is fine with additional regulations, which cuts out upstart and foreign competitors. That's not market failure, but government failure. So those seriously concerned about massive pickups should consider less regulation rather than more of it.With the car companies working to make even the big sport-utes and pickups fuel efficient (heck, the current Cold Spring Shops crossover gets almost as good mileage as our three previous Golfs and Rabbits), perhaps now is the time to abolish all the fuel economy standards and mandates, because a family sedan or station wagon that exceeds an automobile-specific fuel economy standard still, using contemporary construction techniques, be less guzzling than that crew-cab Ram or three-row Navigator with two pull-down video screens for the kiddos.
Note, though, that Mr Greenhut invokes anti-car zealots, and, unfortunately, the staid Economist also dips into those culture war themes in a lament over those Rams, Navigators, and Hummers.
In theory, regulators could insist that vehicles were lighter. Good luck with that. Pickup drivers love sitting behind the wheel of a huge truck. Running for election on a platform of banning massive cars would be a metrosexual caricature. In America it is hard enough to persuade gun owners to embrace sensible gun laws, because of a mistaken belief that guns make people safer. For big cars that argument is even harder to make, because up to a point it is actually true.Some states base registration fees on vehicle weight, which, in their role as owners and maintainers of the streets and roads, is only fitting and proper. Lower curb weights also mean guardrails don't have to be reinforced as if against an armored cavalry charge.
What, then, could make roads safer? As people become aware of the risk their choices impose on everyone else, attitudes to owning gigantic cars may change. This need not come at any cost to their drivers’ safety. We estimate that if the heaviest 10% of vehicles in America’s fleet shrank by roughly 1,000lb, road fatalities in multi-car crashes would fall by 12%, or 2,300 a year, without sacrificing the safety of the heavier cars.
Attitudes can be nudged with reforms. Bizarrely, the government body that rates cars for safety did not propose taking the safety of pedestrians or other vehicles into consideration until last year. Because of a trade dispute with Europe over exports of poultry, many lighter foreign-made trucks are not even sold in America, a wrinkle known as the “chicken tax”. Tax deductions for working vehicles encourage people to buy trucks. Fuel standards, introduced in the 1970s to boost efficient vehicles, gave pickups a carve-out, inadvertently boosting their sales.
The problem is that thousands of miles of guardrails installed alongside American highways were designed decades ago, when vehicles were much lighter than the behemoths that increasingly dominate the U.S. car market. And cars are only getting heavier: Bulkier electrified versions of big cars are poised to arrive in the years ahead. The risk of huge vehicles tearing through guardrails is yet another reason to expect American car bloat to augur an expensive, and dangerous, roadway future.There they go again with the "bloat" and the heavier electric cars are yet more intrusive regulatory complexity, aren't they? Complete with opportunities to pass the buck.
In a statement, a Federal Highway Administration spokesperson showed little interest in assuming responsibility for a future guardrail overhaul, saying that “states and local governments are responsible for properly selecting, installing, maintaining, and replacing roadside safety hardware, including guardrails,” and requesting that further questions be directed to them.And adding more pages to the Federal Register, notes Outside the Beltway's James Joyner, is going to be a fool's errand.
If we want Americans to buy smaller, American-made vehicles, the free market is unlikely to get us there.Sorry, no. The best thing for the government to do is to go away.
We can apply tariffs on imports to offset the advantages of cheap labor and lax regulations. But doing so will radically increase the costs to American consumers and upend the liberal order we’ve spent the last eight decades building.
We can radically increase CAFE standards, further driving up the costs of gas-guzzling vehicles. But, again, that harms consumers, forcing them to settle for products—again, the second-most expensive thing they own—they don’t want or pay more for what they do, thus being unable to afford other purchases.
We can more heavily subsidize the purchase of American-made EVs, at a fairly hefty cost to the Treasury.
There are probably other interventions that haven’t come readily to mind. But we’re not going to innovate our way out of the problem.


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