Myths on Obama’s Fuel Efficiency SPeech

Fact Checking President Obama’s Fuel Efficiency Standards Speech
From Christopher Prandoni
Americans for Tax Reform

Recently, President Obama gathered union leaders, Members of Congress, and business owners in the Rose Garden for a forum on vehicle fuel efficiency standards (FES). However, many of the Presidents claims do not hold up to closer scrutiny and explain why the country and industry has not embraced his fuel efficiency plans.

Myth: “The typical driver will save roughly $3,000 over the life of the vehicle.”

FACT: Mandating higher miles per gallon (mpg) will raise the sticker price for vehicles as car makers need to install newer, more expensive technology. The price tag for a “compact car will go up $1,800 to $2,000. The price of a mid-sized car is likely to increase $4,500 to $6,000… Outfitting a full-sized pickup with a diesel, rather than a gasoline-powered V-8, and other new equipment could cost $9,000,” says Sandra Stojkovski, president of See More Systems consulting firm.Myth: “This is going to bring down the costs for transporting — for transporting goods, serving businesses and consumers alike.”

FACT: In order for FES to reduce transporting costs, the money saved from increased fuel efficiency would have to offset the inflated vehicle sticker price necessary to comply with new FES. If this were true, federal law would be wholly unnecessary as trucking companies would make the switch to more profitable trucks on their own.

Myth: “And that’s why, when we fashioned the Recovery Act to get our economy moving again, we emphasized clean energy… It’s estimated that through these investments, we’ll create or save more than 700,000 jobs.”

FACT: Quite the opposite. Governments that tilt the markets by mandating green energy actually stunt job growth by reducing overall economic productivity. European countries whose governments subsidized renewable forms of energy found this out the hard way. It is estimated that for every government mandated “green-energy job” created, 2.2 jobs in the private sector were prevented from being created.

Myth: “Auto companies will have the clear incentive to develop more efficient vehicles.”

FACT: It is no longer an incentive if it is mandated. Furthermore, car makers are worried that new mandates will force them to create vehicles people don’t want, “We’ll have to force a lot of hybrids, which people may or may not pay for,” said Bob Lutz, Vice Chairman of GM. Evidence of this problem can be seen in specific car markets where consumers are yet to embrace hybrid vehicles. “Performance hybrids and mild hybrids haven’t gained any traction in the market,” said Jake Fisher, senior automotive engineer at Consumer Reports.

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  • Rupert in Springfield

    I always love it when politicians start talking about how this or that brilliant idea will save a business lots of money in the long run.

    Has Obama ever even driven on a highway? If so he isn’t very observant.

    If he looked around he would see trucks with giant airfoils on the top of the cab, does he think they are there for decoration? Or do they save more money than they cost?

    How about trailers, has he ever noticed some are all aluminum? Does he have any clue how much a trailer of aluminum costs as opposed to one made of steel? No, he probably thinks they use aluminum just because it looks shiny.

    Yet the man thinks he knows how to improve a trucking companies bottom line better than those who have been running such companies for decades and have shown they are willing to spend money to save on fuel costs. To Obama this is a novel concept, he thinks this hasn’t occurred to trucking companies.

    What an idiot.

    The clown in chief deserves to be laughed at for more than the idiocy of spending a trillion that got us nothing but a two point bump in unemployment. The stimulus was a big expensive joke, everyone gets that, but we should also understand this man deserves to be laughed at whenever he pops up with even the hint that he knows anything about economics or business.

    Mr. Obama – I doubt very much you can even drive stick, so please don’t start trying to run truck companies. Sit there, play golf and get out of the way.

  • valley p

    “Mandating higher miles per gallon (mpg) will raise the sticker price for vehicles as car makers need to install newer, more expensive technology.”

    That is not a fact. That is one projection. A small car that gets 35 MPG can be had today for well under $20,000.

    “If this were true, federal law would be wholly unnecessary as trucking companies would make the switch to more profitable trucks on their own.”

    Not necessarily. Not if more fuel efficient trucks are not even on the market. What a mandate does is level the playing field and raise the bar.

    “European countries whose governments subsidized renewable forms of energy found this out the hard way. ”

    Then why is Denmark’s unemployment rate way better than ours?

    “It is no longer an incentive if it is mandated.”

    Oy vez. It is an incentive if they want to stay in business.

    “The stimulus was a big expensive joke, everyone gets that,”

    A joke that resulted in nearly 2 million jobs and about 1/2 the GDP growth we had since last year. Look it up.

  • Jerry

    SMART cars are the best way for us to save the earth.

    • valley p

      Jerry…did you really move to Arkansas? Did you take all those other Jerrys with you? If not, what happened to them? Lost them in therapy?

    • Scottiebill

      Smart Cars are not necessarily the best way to save the earth. They look to be good for getting around town on short errands, but who would want to drive one from here in the PNW to somewhere in the midwest? Have you looked at the available luggage space in one? It is virtually zero cubic feet. The cost of the fuel they use offsets any higher gas mileage savings. They use premium 92 octane gas. While gas prices are going down, at least fo now, premium gas is still 20-cents more than regular. And how about safety? I you have a head-on collision in one of these little gadgets, you are going to be the first one on the scene – literally! And if you are driving in a strong wind area, such as in the area in which I was raised, north central Montana, the light weight of the Smart car will not keep it from being rolled around like a ping pong ball on steroids. One more thing, a Smart car is not built for a large person, i.e., anyone over 6-feet tall and more than 200 pounds. There just isn’t the room, especially behind the steering wheel.

      • valley p

        “who would want to drive one from here in the PNW to somewhere in the midwest?”

        Who would want to go to the Midwest for any reason? Weather? Food? Culture? Maybe a Packers or Bears game.

        But seriously, how many people in Portland buy their car based on whether they might want to drive it to the Midwest one day? What is more questionable is buying a car for day to day use based on the occasional out of town trip. I mean…do the math folks.

        The Smart car is a good urban commuter vehicle, cheap, efficient, and darn easy to park. Its not designed for the windy plains of Montana, but then again 80% of Americans live in urban metro areas and spend more than 80% of their time there.

        One more thing…most Americans are not over 6′ tall and 200 pounds. But I am, and I do fit comfortably into a smart car drivers seat.

        • valley p

          Don’t listen to him, this is the real gay VP, I protest the name jumper who is trying to act gayer than I by his unintelligent posts! The nerve!

  • Bob Tiernan

    *Rupert:*

    Mr. Obama – I doubt very much you can even drive stick, so please don’t start trying to run truck companies. Sit there, play golf and get out of the way.

    *Bob T:*

    Exactly! That’s all I want him to do for the next two years and eight months. I can’t wait for this cretin to collect his pension. It’s a small price to pay to get him out after just one term.

    Bob Tiernan
    Portland

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