Money for Nothing

Gas prices are high. So high, that yesterday the owner of your blogger's favorite pizzeria had to explain to a customer - repeatedly - why gas prices forced him to charge more per slice. And when prices get that high, Congress always seems to feel it has the power to step in and alter the meeting place of supply and demand.

Once they were through passing "price gouging" legislation that made it illegal for companies to charge"unconscionably excessive" prices, "tak[e] unfair advantage of unusual market conditions," and "increase prices unreasonably" during an emergency, the next target was auto makers. Rather than letting the free market decide how efficient a car your average American wants to drive, the Senate passed legislation that would increase the minimum vehicle mileage average to 35 mpg by 2020.

The Washington Post explains that leadership in the House of Representatives is considering the same,

As the price of benchmark West Texas crude oil topped $70 a barrel for the first time in 10 months, House Speaker Nancy Pelosi (Calif.) yesterday affirmed her support for the tougher fuel-economy standards recently passed by the Senate.

And after a news conference touting energy measures recently approved by 11 House committees, Majority Leader Steny H. Hoyer (Md.) said such standards -- currently missing from the House measures -- would be introduced in time to resolve differences between House and Senate energy legislation later this year.

What they don't talk about is the cost of such a change. Fortunately, Charles Krauthammer dedicates this column on Real Clear Politics to the issue,

[T]o quote Sen. Dianne Feinstein precisely: "What the China situation, or the other countries' situation, shows is that these automakers, in all of these countries, build the automobile that the requirements for mileage state. And they don't fight it, they just do it."

Yes. That is how things work in Communist Party dictatorships. It is odd to hold up China as a model of corporate-government relations. It is also poor salesmanship. Just a week after Feinstein made that statement, the Brilliance BS6 sedan -- "a car with which [China] wanted to conquer Europe's automobile market" -- failed a German crash test so miserably that it may be banned from Europe, reported the European news agency AFX News. "It was the second time in less than two years that a Chinese-made car has failed the test, following the spectacular failure of the Landwind sport-utility vehicle made by Jiangling Motors 18 months ago."

You get what you pay for. When you build lighter cars with more fuel efficiency, you know that ultimately -- even with the best (let alone Chinese) technology -- safety is compromised. That happened three decades ago when U.S. mileage efficiency rose dramatically in response to the oil shocks of the '70s. It will probably happen again.

Now we may, as a society, decide that the trade-off is worth it. We may reason that fuel inefficiency leads to dependency on foreign oil which in turn leads us to lives lost in other ways -- such as wars to defend our interests in the oil-rich Middle East and elsewhere. But what we cannot deny is that there are trade-offs. What is fundamentally wrong with the energy bill the Senate passed last week and with the debate leading up to it is the chronic, almost pathological, refusal to recognize that there are such trade-offs.

That pathological refusal equates to a lack of full understanding by the public - especially when the mainstream media fails to point it out.