Diary

Death By Cafe

No, this is not about drinking too much coffee.  This is about Americans being able to drive the cars they love.  Americans love big cars.  They allow us to haul our families, our cargo, and even our sense of freedom where ever the open road leads.  There is a great sentimental attachment to big cars but very practical reasons as well.  My family SUV is nearly overflowing when loaded with 2 adults, 2 car seats with munchkins, and the necessary luggage for a simple overnight trip.  Big cars are safer too.  Studies by Harvard and the Brookings Institution found that for every 100 lbs you shave off an auto, 780 more people die each year in auto accidents.   The lefty Prius apologists argue that once everybody is driving a Styrofoam matchbox green car, big SUV’s will no longer pose a threat to the eco-friendly.  However, at highway speeds, your green conscience will not save you from tractor-trailers, jersey walls, trees, or the edge of the bridge on your way home from Chappaquiddick. 

More and more Americans will have to drive the green deathtraps in the near future since Obama mandated stricter CAFE (Corporate Average Fuel Economy) standards by 2016.  For every SUV an auto maker sells, they’ll have to sell more green deathtraps to bring the average mpg down to Obama mandates.  Let’s apply some basic economics to figure out how this all plays out.  Americans want big cars but supply will have to remain low in order to meet CAFE standards.  Demand for little green deathtraps will remain low even though car makers need to sell more to meet the standards.  Apply basic supply and demand principles and large cars will be priced much higher (high demand low supply) and green deathtraps will have to be priced much lower (high supply low demand).  Most automakers will probably have to absorb much of the cost of the costly-to-produce green deathtraps except GM and Chrysler who will still be getting Govt subsidies. 

 

Obama’s Earth-friendly policies will mean that more poor and middle-class Americans, who can’t afford to bid on the few large cars still on the market, will die at a much higher rate in auto accidents than wealthier Americans.  It’s certainly change, but I’m not sure where the hope comes in.

The supply and demand analysis will change if Obama engineers higher gas prices to make green deathtraps seem more appealing but he’s still making bigger, safer cars cost prohibitive to the average American so the net result is the same.