The strange push for higher gas prices

NY Times:

American consumers aren’t buying many vehicles at all, let alone the small cars and hybrids that are clogging dealer lots and creating big inventories for the ailing industry. That S.U.V. in the garage isn’t the costly liability it was last year, when gas prices hit $4 a gallon. (For a prescient view of such a pendulum swing, see this August 2008 analysis by our colleague Andrew C. Revkin at Dot Earth.)

But the American auto industry, under pressure, has invested heavily in the small-car and hybrid market. So it should probably not be a surprise that auto industry leaders like Alan Mulally of Ford have called for higher gas taxes, an idea Detroit once abhorred.

Putting aside the political difficulties of raising gas taxes during a recession, should government act to give consumers strong incentives to drive less and accept fuel-efficient cars for the long haul?

The fact is we are already driving less and that has become another excuse to raise the gas tax. While the story highlights some in the business who want to raise the price to help clear out their inventory of fuel efficient cars, what is missed is how this lack of interest in these cars goes against the argument for why the auto industry is in trouble.

Obama in his moral preening mode keeps saying that the automakers looking for a bailout need to build more cars like those that aren't selling now. What this suggest to me is that Ford is going to be in a better position coming out of the recession to meet market demand than those who had to take the government money.


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