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Old September 3rd, 2012 #1
Alex Linder
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Default #1 Everything Related to Cars and Car Industry Thread

[good example of regulation distorting the market]

55 MPG is Going to Cost Us
September 1, 2012
By eric

It’s fortunate for the car industry that the government regards it as “too big to fail” – because it’s going to fail again. Because of the government.

This will be third time, actually.

The first time was back in the late 1970s, when Chrysler rolled over like a mortally wounded battleship – to a great extent because it wasn’t able to turn a profit selling the cars it had anticipated the market would want – but was stuck trying to sell cars the government told Chrysler it wanted. Cars that met the first round of federal Corporate Average Fuel Economy (CAFE) standards, which stipulated 27.5 MPG at a time when the typical American car was as large as the current-era’s largest cars, with a big V-8 under the hood instead of something Toyota Corolla-sized, with a four under the hood. The Japanese at that time made nothing but small, four-cylinder cars – so Uncle handed Toyota, Datsun (Nissan now) and Honda an artificial leg up in the market – while kicking Chrysler, et al, in the soft parts.

It’s true the American cars of that time were not of primo quality. And it’s true the first round of Japanese imports were also just good little cars that sold on the merits. But it’s also just as true that CAFE imposed ruinous costs on the domestics, who were forced to prematurely retire entire vehicle platforms (and engines) long before the investment in designing, tooling and so on had been amortized (paid off) over the course of these vehicles’ otherwise natural life cycle. It almost killed Chrysler – which was (and still is) the weakest of the Big Three, with fewer resources to fall back on. But it also hurt GM and Ford.

Arguably, they never fully recovered – and staggered through the ’80s and into the ’90s, with too many brands (GM, especially) and a business model that didn’t mesh with the realities of the market – the government manipulated market. CAFE – the original law – provided an artificial incentive to mass produce the kinds of vehicles GM, Ford and Chrysler had been building back in the ’70s – big, heavy, with powerful V-8s – only now they rode higher off the ground and were marketed as “SUVs” – which were not required to meet the (much stricter) 27.5 MPG CAFE standard for passenger cars. For “light trucks, the CAFE standard was 22.5 MPG. But when the real estate bubble popped and Wall Street collapsed in ’08 and gas prices suddenly soared to $4 a gallon, GM, Ford and Chrysler were left holding the bag.

Again.

Actually, American taxpayers were left holding the bag – for the subsequent bail-out of these “too big to fail” companies, who found themselves in the economically impossible position of trying to please their customers and placate the government at the same time – and turn a profit doing it. This dynamic has been getting worse and worse ever since the first major interferences in the car market happened in the late 1960s.

Well, the stage has been set for what may prove to be the final implosion of the car industry. Caesar – oops, President Obama – has “finalized” his decision that CAFE will be upticked from the merely outrageous (by economic and engineering standards) 35.5 MPG in 2016 to the economically catastrophic 55 MPG – average – by model year 2025. (See here for Caesar’s decree.)

The Great Law Giver – who apparently also holds the title of Chief Engineer – saith this will “save Americans $8,000 a year.” He does not telleth them, of course, what it will cost.

Some perspective:

There are exactly two 2013 model non-hybrid cars on the market that meet – just barely, or not quite – the pending 35.5 MPG CAFE edict that goes into effect only three years from now (and that’s only two short model years from now): The Scion iQ (37 MPG; see here for an in-depth story about it ) and the Smart car (36 MPG). They are microscopic in size – the iQ, all of ten feet long, end to end; the Smart having room for just two people.

These cars – call them Obama Cars – are the kinds of cars all of us can expect to be driving within the next few years.

Oh, there are also hybrids like the Toyota Prius. But while the 2013 Prius does manage to pass the 2016 bar of 35.5 MPG, even it falls well short of averaging 55 MPG. The Chevy Volt electric car easily passes muster on CAFE – but it also costs $40,000.

And the rest? Into the crusher they go. Visualize, if you can, the fallout that will attend the premature obsolescence by government fiat of not just a handful of car types but of 90-plus percent of the car models on sale right now. Almost every 2013 model year vehicle you can name (including every truck) is destined for either a major refit/overhaul years before it would otherwise have happened – or outright cancellation. There is no other way. Perhaps Augustus does not realize this, but one cannot simply decree, make it so.

Well, one can so decree. But it won’t be free.

Cars that average 35.5 MPG (and 55 MPG) are certainly possible from a technological/engineering standpoint. But there will be costs. Tremendous costs. There will be costs associated with the engineering R&D necessary to achieve this. There will be costs in the form of eating the ruinous losses that will attend the mass early retirement of virtually every type of vehicle currently in production. There will be costs in the form of reduced crashworthiness (as cars are made lighter to try to make them more fuel efficient) and performance – or both, as the car companies try to satisfy conflicting – and to a great extent, irreconcilable – requirements. And of course, there will costs in the form of diminished choices for consumers – and at their unwilling expense.

A car can be very economical. Or it can be inexpensive. Or it can deliver good performance. Or it can be very safe. It is very hard – if not impossible – for it to be all these things at once.

Someone is going to have to pay for Caesar’s 35.5 MPG car – and then his 55 MPG car.

Whom do you suppose that will be?

That’s right. As consumers, we’ll “save” $8,000 on gas. But we’ll also probably pay at least $8,000 more for the car itself. New technologies don’t just pop into existence, notwithstanding the endlessly arrogant conceit of the imperator. They have to be conceived, designed and engineered. This requires some money, usually. And it will require especially clever – and very likely, not-free – engineering to reconcile the demand for a 55 MPG car that’s also a reasonably safe car. One that passes muster with Caesar, that is.

A 2013 Prius costs $24,000 to start. Do you suppose, with all the costs discussed above folded in, plus inflation, that the Future 55 MPG Prius will cost the same? Or is it reasonable to expect it will cost more.

Probably, it will cost a great deal more.

What will happen when buyers decline to buy – because they can no longer afford?

Ah yes, my little chickadee. Then, as taxpayers, we will pay. We will pay either in the form of grotesque subsidies (a preview being the $40,000 GM Volt and the $32,000 Nissan Leaf, each of which transfers a $7,500 per car bar tab to the American taxpayer) or we will pay to bail out the automakers when they capsize yet again. Which is sure to happen when they start offering up the $30,000-plus “economy” cars decreed by the gilded one.
Is it not magnificent? Is he not great?

Throw it in the woods?

http://ericpetersautos.com/2012/09/0...g-to-cost-you/

Last edited by Alex Linder; September 3rd, 2012 at 08:42 PM.
 
Old September 4th, 2012 #2
Hunter Morrow
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There has always been influence in the market. The government subsidized the creation of gargantuan SUVs and trucks. The government in the 1980s put tariffs on foreign motorcycles over 700 CCs to save Harley Davidson, tarrifs in excess of 50 percent of the retail value of the motorcycle. It bought GM. Government vehicles and vehicle contracts are all politicized. The government has actively impeded America from getting the best motor vehicles at the best price for at least 40 years.
 
Old September 4th, 2012 #3
Fred
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The most detrimental thing that ever happened to the US auto industry is the Federal government.

I can go on and on. It really burns me up.
 
Old September 4th, 2012 #4
Rick Ronsavelle
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Default 40 years before this article was written

[Business set up this filthy system. They are hardly victims of government]

Business & the New Deal

James J. Martin

Reason Dec. 1975



The "reforms" of the New Deal are widely attributed, whether with praise or blame, to Franklin Roosevelt. In a recent article in REASON (February 1975), Jerome Tuccille exposed the intellectual leanings-collectivist-of the Brain Trust members who surrounded FDR as advisors and advocated many of the New Deal programs. There are, however, two dimensions missing from Mr. Tuccille's article: the large number of New Deal innovations which still touch the lives of nearly every person in this country, and the immense part played by Big Finance, Big Industry and Big Agriculture in making the New Deal possible in the first place.

The New Deal made no headway in curing the major problem of 1930-1940-unemployment-but it left behind a mountain of bureaucratic interferences which has never been materially abated. The Social Security Administration, the Securities and Exchange Commission, the Federal Deposit Insurance Corporation, The Tennessee Valley Authority, the Federal Housing Administration, the Commodity Credit Corporation and a vast complex of agricultural programs related to the Soil Conservation and Domestic Allotment Act of 1938-and there are many others—are still with us. One should not adopt a cheerful notion that the New Deal just blew away one day: a large part of one of its "three R's"—"reform"—is very much a part of our life.

As for another of the R's—recovery"—we come face to face here with a complex of matters which takes us well beyond the New Dealers. In the summer of 1967 I delivered two lectures dealing with the origins of the New Deal in the decade or dozen years before the FDR era began. It amounted to over two hours of chapter and verse on the massive evidence behind the thesis that most of what was placed at the doorstep of FDR's social workers, visionaries and "pointy-headed perfessers" deserved to be lodged instead at various points along the way from the end of World War I to 1932. I want to deal with part of that subject here.

CONSERVATIVE HOOVER?

I used to wonder whether anyone had listened to the speeches of Herbert Hoover in the 1928 presidential campaign, and in case anyone did, why they did not care to remember them, especially Republicans after Hoover was defeated by Roosevelt in 1932. Mr. Hoover after this latter date became America's outstanding oral enemy of central planning, but next to his successor was our leading practitioner of planning. In 1928, as before and after, it was very obvious that he had no intention of taking the government out of business; government had proceeded prodigiously in just the opposite direction in 1917-1919, and steadily encroached thereafter. (Mr. Hoover was Secretary of Commerce under both his predecessors in the White House.)

Hoover believed that the "proper promotion" of business was to be one of the government's chief cares. He made it plain that a major government cause should be the maintenance of a high tariff while promoting foreign trade (a cute pair of contradictions), the encouragement and protection of trade associations in industry and cooperatives in agriculture. He further declared that it was the government's responsibility to construct those public works which private enterprise preferred not to finance—does anyone remember Hoover (Boulder) Dam?—and to undertake extended scientific and technological research on behalf of business. Furthermore, government was to assist business toward standardization and other operating economies, and even foster directly, through favors or open subsidies, such specific businesses as radio, aviation and shipping.

A year after his election the effects of the business collapse which had begun in the fall of his first year in office began to be felt, and we find Mr. Hoover advancing additional forms of national planning. He proposed: 1) to steady the price level by persuading employers to avoid cuts in wages; 2) to bolster prices of agricultural products through a complex of government price supports administered by the Federal Farm Board; 3) to keep up general business volume by persuading corporations to go ahead with capital expenditures already contemplated; 4) to help construction and building businesses by avoiding cuts in public construction projects; 5) to reduce distress-selling by maintaining easy conditions in the money market through the ministrations of the Reconstruction Finance Corporation, another invention of his regime (it is interesting to see widespread recent discussion in favor of reviving the RFC).

The extent of this governmental program of aids and subsidies to railroads, real estate, banks, public works and many, many other enterprises was most substantial. Twitted Stuart Chase in 1932, "If there is a banker or a businessman decrying the heresies of that two billions of dollars of collectivism known as the Reconstruction Finance Corporation, I have not heard his voice!" It has thus amused me over the years to hear conservatives and their cousins indict Roosevelt for inventing the massive federal bureaucracy inflicted upon us via the New Deal.

One of the most stinging attacks on Hoover was written in 1931 (published in 1932, in the second half of the Hoover administration) by James M. Beck, former Solicitor General of the United States, and a Republican. In Our Wonderland of Bureaucracy, Beck blasted the Hoover government for "wandering further afield in crazy experiments in State Socialism." (Chase estimated that the U.S. was already past the 50 percent mark in the drift to socialism early in 1932; one often wonders what our agitated white-haired patriots are talking about when they shudder about the coming of socialism). Other related critiques of advanced and seemingly intolerable bureaucratic impositions at that moment (1932) were Charles Warren's Congress as Santa Claus and Sterling F. Edmunds' The Federal Octopus; Albert Jay Nock's September, 1932 American Mercury article, "if We Must Have a Revolution," also deserves a glance in this connection.

UNEMPLOYMENT "RELIEF"

Before going on to the "recovery" aspect of the New Deal and the part played by Big Industry and Big Agriculture in the launching of both the National Recovery Administration and the Agricultural Adjustment Administration, let us take a look at a very important part of the first of the "3 R's," the make-work and public works "relief" programs. Harry Hopkins did not originate the idea of deliberately invented work as an unemployment blotter, whatever notoriety he was to accrue to himself as director of the Works Progress Administration (WPA). (incidentally, the WPA was not disbanded until 1943, well after the U.S. was into World War 11, the real lifeboat which rescued the country from the Depression.) There had been all kinds of talk long before 1933 about "public works" as a solution to what appeared to be hard-core unemployment. In the third week of March of that year the London Times published a series of spirited essays by J. M. Keynes (commented upon favorably in Business Week, March 22, 1933, p. 26). Although it was these essays, in which Keynes urged a vast public works program "as a means of combating depression," which drew later attention, he had been preceded by many others.

One of the most lucid sponsorships of such activity was that of Dean Wallace B. Donham of the Business Administration Graduate School of Harvard University, in the Harvard Business Review of April 1931. In his "Can American Business Meet the Present Emergency?" he declared,

As a long time program I believe that the government should have at all times a great variety of such public and semi-public projects advanced to the stage where they can be started whenever an unemployment emergency occurs. As a matter of permanent planning, the government should at all times, through employment agencies cooperatively maintained by the federal and state governments, have an effectively accurate knowledge of the incidence and volume of unemployment. Whenever this index shows more than the normal amount of unemployment ' public works should be started to take up the slack.

Mr. Hoover had surely "started to take up the slack" in this way well before Mr. Roosevelt appeared on the scene. Hoover Dam was just one of hundreds of projects already well under way by March 1933. They were inherited by FDR, and expanded and extended as provided under the second part of the National Industrial Recovery Act, though under Hoover they had been administered by the RFC. In essence the public works programs amounted to a disguised form of public investment in capital-goods industries related to building and construction in particular. Probably this aspect of the matter became even more pronounced under Roosevelt than Hoover. With the evolution of the Public Works Administration (PWA), we see an operation which was far more concerned with bailing out the building and construction industry than with sopping up unemployment. Unlike the WPA, the PWA did not have to hire unemployed people, its projects were pre-planned and submitted for approval (to PWA moguls such as Harold Ickes), and the scope of these operations was nationwide. It was said at one time that there was a PWA project in every American county except one. But its ancestry is solidly located within the Hoover era.

THE ROOTS OF "NATIONAL RECOVERY"

Let us proceed to the NRA. By mid-1932, there were at least 7,000 trade associations in this country,

>>>Next to his successor, Herbert Hoover was our leading practitioner of central planning.

most of them busily at work undermining free competition. They were responsible for promoting fierce retaliation against intra-industry price cutting. What these trade associations preferred were "price understandings." They encouraged the pooling of cost-accounting practices, industrial processes, and patents and trade secrets in a given enterprise, while providing various other forms of aid and comfort to one another.

Agreements on restriction of output were assiduously pursued. Such "gentlemen's agreements" prevailed 'even in agriculture for sugar and rubber, and also in copper and petroleum production. Allocation of production or marketing schedules was another aspect of this approach. And during most of the 1920's, four very sick enterprises in the U.S.—building, coal, oil and agriculture—had been steadily bellowing and lowing for government regulation of production and competition. Building spokesmen had frankly and vigorously espoused federal subsidies to bolster the mortgage structure; Roosevelt's Federal Housing Administration had deep roots.

These trade associations had been under construction all during the 1920's. They had been pushed unceasingly by Hoover's Commerce Department since the Harding days, and they were the basic foundation of Roosevelt's NRA.

Fundamental to the business recovery which was expected to take place under the NRA was the organization of businesses according to kind, to operate within a special "code" governing and regulating its members and detailing how they were to behave toward one another and to the economic world at large. The administrative cadre in each of these was known as a "code authority," and in the cases of three-fifths of America's major industries, all the members of the code authority were selected from the trade association or institute representing its member firms. In many of these, the code authority was identical with the governing board of the trade association.

One of the most incisive descriptions of the NRA codes and their trade association foundations is that of Carl F. Taeusch, "Business Ethics and the NRA Codes," in the January 1934 Harvard Business Review:

Practically every code begins by defining the membership of the group, indicating the trade group which is to be held responsible for administering the code, and virtually makes membership compulsory by making all persons engaged in the business subject to the code provisions. This is a direct reversion to the principle and organization methods of the medieval guilds, and closely observes the same underlying features of the professional codes. The significant fact about these code definitions is that they organize business by industries, with vertical relationships. . . . This again reverts to the medieval guild purpose of controlling a commodity from the raw material stage to its final disposal by sale to the consumer.

Perhaps the most important part of the NRA codes is, therefore, not so much the listing of unfair practices but rather the description of the administrative methods to be employed for their control. . . . The administration of these codes is placed largely in the hands of representatives of existing trade associations. Provision is also made for including in the membership of such governing boards one or more representatives of the Government, but without voting power. (Emphasis in the original.)

All this is of uncommon importance and interest. It is obvious that the trade associations for which Hoover labored so assiduously in the 1920's were the foundation stone of the NRA and Mr. Roosevelt's hoped-for economic revival; now they had become compulsory, instead of voluntary. Otherwise the scenario was the same, and obviously recognizable to all veteran members of these once-voluntary bodies in the days of Mr. Hoover.

The membership of parties from the Government in these economic bodies was significant, although not alarming to Europeans, among whom the term "mixed economy" had currency well before the New Deal, and who were inclined well before this to look upon subdivisions of the state as legitimate members of business corporations. (Otto Nathan of Princeton once published in the American Economic Review a good analysis of the similarity between the NRA codes and the cartelized German businesses, both before, and after the arrival of, Hitler's National Socialism.) One could understand, therefore, what Roosevelt was talking about in his fireside chat of May 7, 1933, when he explained:

It is wholly wrong to call the measures that we have taken government control of farming, control of industry, and control of transportation. It is rather a partnership between government and farming and industry and transportation, a partnership in planning and a partnership to see that the plans are carried out.

It is of more than casual significance to observe that over 400 of the largest trade associations were at work. preparing codes and over 100 had already been submitted before the NIRA was even a bill under preparation by administration lawyers. Over 500 were in the hands of the latter within. a month, before Congress even had the bill.

These codes were filtered through six deputy administrators, all. of them businessmen. These six men were in turn dependent for advice on an Industrial Advisory Board, all seven of these being businessmen and corporation executives of vast reputation, including Alfred P. Sloan, president of General Motors, Walter C. Teagle, chairman of the board of Standard Oil of New Jersey (Teagle had been leader of the spread-the-work movement under Hoover), Gerard Swope, president of General Electric, and Louis Kirstein, vice president of William Filene's Sons, the big Boston AMC department store.

BUSINESS/GOVERNMENT PARTNERSHIP

Two headlines in Business Week in June 1933 were indicative: "Associations Beat the Gun" referred to the activities of the leaders of some 35 trade associations closeting with "key officials" of the New Deal, and "Further Action by Many Industries Eager for Government Control pointed to two score of major trade associations working feverishly on NRA codes in conjunction with the Chamber of Commerce, the National Association of Manufacturers, the National Industrial Conference Board, the Congress of Industries, the National Association of Commercial Organization Secretaries and the American Trade Association Executives. The major firms made a point of mentioning that they had enlisted. Early in 1933 Bayer's advertising included the advisory, "And remember, Aspirin is a member of NRA," which prompted William Saroyan to wonder whether NRA was a member of aspirin.

One of the most succinct catalogues of the booby traps built into the NRA was that of Henry Hazlitt in the December 1933 American Mercury:

It is obvious that under the present NRA programme the American consumer is to become the victim of a series of trades and industries which, in the name of 'fair competition,' will be in effect monopolies, consisting of units that agree not 'to make too serious an effort. to undersell each other; restricting production, fixing prices—doing everything, in fact, that monopolies are formed to do. . . . it [the NRA] creates a series of cartels under the aegis of government that will soon have the consumer completely at their mercy.

But, after all, this was the logical consequence of the halcyon days of the trade associations in the Hoover era, when it was proclaimed that "The age of competition is over; we have now entered the age of cooperation.

By mid-1932 there were at least 7000 trade associations, most of them
busily at work undermining free competition
.

Still another contemporary critic was John T. Flynn, who spared no names in his Harper's Magazine article in September 1934, "Whose Child is the NRA?" Said Flynn, "The NRA plan represented almost entirely the influence and ideology of big business men. The share of the Brain Trust in its paternity was microscopic, the share of the Chamber of Commerce and other business interests was predominant." Flynn went on to state in no evasive or hesitant terms that all the price-fixing, control of production, enumerated trade practices and hours and wages limitations written into this regulatory octopus originated with non-New Dealers, and that it had the full stamp of approval of the Industrial Advisory Council of the Department of Commerce all big business to a man.

ANOTHER PARTNERSHIP

In the same way that ten to fifteen years of regulatory tendencies in business and industry preceded the New Deal's NRA, like activity and propaganda preceded its agricultural adventure. Contrary to modern fairy tales, New Dealers did not invent the scarcity programs and related efforts of the Agricultural Adjustment Administration to raise agricultural prices; they took the responsibility for them.

Not only was there a predecessor in the Hoover era in the shape of the Federal Farm Board buying up crops to maintain a desired price level for farm products. There was also a steady flow of literature for years before 1933 discussing the need for limitation of output, and comprehensive interference in the shape of agricultural price controls in order to achieve independence from international prices. Enough laws pertaining to agriculture were passed between 1921 and 1931 to make up the equivalent of a printed book of 354 pages, and a large number of them were lobbied through Congress by the political farmers of the American Farm Bureau Federation.

From the time of the first big collapse of agricultural prices between 1920 and 1922 (my father was wiped out by that one and returned to the woods as a timber cutter) down to the early months of 1933, there was growing concern for "national self-sufficiency" in agriculture (Keynes's article on the subject in the summer 1933 issue of the Yale Review was at the tail end of a lengthy discussion). We find Dean Donham of Harvard expressing a strong view on this as well as make-work. In an address at the prestigious Wharton School of Business of the University of Pennsylvania on March 23, 1933 he called out: "Our first task is to restore the farmer's buying power by isolating the farmer from international price levels and by regulating home-consumed crops." Allied to this as well as to domestic manufactures was a "Buy American" political drive, which sometimes had serio-comic consequences. On one occasion the U.S. Army announced that it was cooperating with this program and in the New York Times for November 29, 1933 told the world it was going to "bar alien foods" from the Army mess, including in this proscription even bananas.

The American Farm Bureau Federation was heavily responsible for the basic law creating the Triple A, according to its president, Edward A. O'Neal. In a radio address on March 30, 1933, he revealed the following:

At the conference called by Secretary Wallace on March 10, attended by 34 farm leaders representing practically every national farm organization in the United States, views were frankly exchanged in an effort to work out an effective program. A committee was appointed, made up entirely of farm leaders, and within two hours it came back with a definite program, which, after discussion, was agreed upon by the group. This statement of principles was presented first to Assistant Secretary Tugwell, and then to Secretary Wallace, both of whom approved it. They told us they would henceforth call this program "their baby," thus assuming full responsibility. On the next day this program was presented to President Roosevelt by a committee led by Secretary Wallace, of which I was a member. The Department of Agriculture promptly drafted a bill which carried out these principles and submitted it to the President for approval. We farm leaders were called in by Secretary Wallace and Assistant Secretary Tugwell to go over the bill, and we gave it our approval. President Roosevelt then promptly forwarded the bill to Congress with a brief message urging its early enactment.

(Mr. O'Neal identified Henry Wallace and Rexford Guy Tugwell, the new bosses of the Agriculture Department in the New Deal, but did not mention Mordecai Ezekiel, Wallace's right hand man along with Tugwell, and a holdover from a previous Republican administration.)

In this way the Agricultural Adjustment Act replaced Mr. Hoover's Federal Farm Board and a policy of interference with agriculture was continued. But, as in all other areas of activity with a continuity from Hoover to Roosevelt, it was vastly expanded, with immensely greater funding. In addition to the AAA, legislation was passed creating the Farm Credit Administration. The latter consolidated 34 special credit agencies dating, through various administrations, all the way back to 1916, and provided a new one for refinancing farm mortgages.

NEW DEAL AGRICULTURE

There has been much effort ex post facto to read the history of agriculture under the New Deal backward. Part of this has concerned Mr. Wallace and his peccadilloes, most of which had nothing to do with the farm program. Henry A. Wallace was probably the most popular appointee of FDR, and one of the few with a close relation to what he was supposed to be doing. He was a 44-year-old Iowa dirt farmer and, curiously, vegetarian (Iowa prided itself on the size, number and succulence of its hogs). His father, Henry C., had been Secretary of Agriculture under Calvin Coolidge in 1922, and his grandfather had established Wallace's Farmer, an influential farm magazine. (HAW incidentally was the perfector of a valuable variety of hybrid seed corn.) Farmers considered that the job was in the hands of one of their own.

When it came to the programs Wallace was fronting and trying to make work, however, farmer behavior Was a mixture of opportunism and evasion. It was obvious that the AAA was administered on a county-by-county basis and that meant, in almost every case, by a committee of big farmers. They were the ones who voted periodically whether the programs would be continued—and of course agreed, as the checks kept coming in. The process reminded one humorous critic of the story in Plutarch of Pericles asking the recipients of public handouts in Greece whether they thought he was being too extravagant: "They cried out loudly and told him to draw freely from the public funds and spare naught whatsoever." But in this case it was the recipients under the AAA who had themselves made the original provisions for the raid on the public larder.

One should not neglect the hundreds of thousands of free enterprise individualists among the farmers who were indecent in their haste to sign crop or animal reduction contracts with the AAA. Many boosted their figures on claimed past production in order to maximize the size of the check they would get for such reduction, forgetting that the USDA had detailed statistics county by county on the total of hogs, corn, etc. produced in the past. In many counties the totals claimed by farmers in these reduction programs exceeded known past production.

The behavior of the farmers on other programs is also instructive. Wallace announced at the start an immediate goal of withdrawing 40 to 100 million acres of crop land from agricultural production. As it turned out, the total far exceeded that. (This amount was even withdrawn from production in the short years of the J. F. Kennedy administration, without a peep of protest.) Intimately connected to this was the planned elimination of 11.7 million acres devoted to cotton as per the crop year of 1933. This plan was announced at a time when the new crop was already planted and growing, and part of it had to be plowed under. There is no estimate as to the number of nervous breakdowns this produced among mules who had been carefully trained to walk between rows and now had to be retrained to walk through a row in order to bury the growing plants. But Mr. Wallace announced in July, 1933 that 10 million acres had been pledged for abandonment, which would have reduced the crop by about 31/2 million bales.

Expecting circumvention of this planned sabotage by more intensive cultivation of remaining acreage, the cotton producers agreed in further negotiations not to increase their commercial fertilizer per acre of planted land. They also agreed not to devote the idled land to the production of some other "nationally produced agricultural commodity." They adhered to this stipulation and to the restraint on additional commercial fertilizer. What they did, however, was increase the application of natural fertilizer instead. The result was that production on the drastically reduced acreage went up from 174 to 209 pounds per acre, and the 1933 crop as a consequence finished out at 13,177,000 bales, about equal to that of 1932. When coupled with the big increase in cotton production in India and Africa, the world position of American cotton was worse than before. But Mr. Wallace was not to blame: he was simply trying to make operational what the Big Agriculture people had put in his hands in March 1933 as their ideal program.

Of course, it had been pointed out that just because you can get dogs to chase a football, that does not mean you can make a football team out of them. People, who are much more complex and ornery than dogs, make the success of grand plans even more problematic. The noncooperators among the farmers guaranteed even more roadblocks in the way of the price-raising-by-planned-scarcity stratagems of Big Agriculture. (One farmer critic of the scheme, commenting in 1934, the year that the famous Dionne quintuplets were born, remarked that it was lucky that they had been born in Canada; in the United States, perhaps three of them would have been plowed under.)

That this program became a minor adjunct of national calamity by 1934—as a consequence of the catastrophic drought that year and the natural and drastic crop reduction which resulted is a side issue. The fact remains that the AAA was a solution dreamed up by the leadership of Big Agriculture. There is an interesting interlock to be noticed between the AAA and the NRA, incidentally. About 30 percent of industry came under the controls of AAA as well as Big Industry's NRA because of the

>>>It was the recipients under the AAA who had themselves made the original provisions for this raid on the public larder.

nature of the business involved: the processing of agricultural products, especially food, tobacco, and textiles, whether as manufacturers, processors, or purveyors, in fact.

BANKERS AND GOLD

In still another policy area where it is conventional to castigate New Dealers and make them out as the sole villains—the suspension of gold payments—an examination of the climate of opinion is called for. This was not Roosevelt's exclusive idea, nor was it pushed by his academic advisors. But the views of another power group are worth looking at in this connection. An "Interim Report" by a committee of businessmen and one banker, Frank A. Vanderlip, long the president of National City Bank of New York, was circulated privately for several weeks before Roosevelt's inauguration in March 1933. Among the signers of this memorandum were General Robert E. Wood and Lessing Rosenwald of Sears Roebuck, J. H. Rand of Remington Rand, Vincent Bendix, the appliance mogul, and several other nationally known business and industrial figures. The data it contained had been gathered by the National Industrial Conference Board, one of the most conservative think tanks in the land. Its main specification was the following: "Congress with the least possible delay should grant powers to the President permitting him to suspend specie payments and embargo gold exports." This was given a tremendous huzza by Business Week (March 15, 1933, p. g).

(While on the subject of money and finance, it should be noted that despite all the lavish promises of financial decentralization which were part of New Deal declarations, there really was nothing to fear in most circles of Big Finance. This despite the securities, banking and other "reforms," most of which appear to have been hallooed by much of the establishment on Wall Street and among the big banking fraternity. Contrary to the brave talk of the "reformers," financial concentration steadily piled up between 1933 and 1941. For instance: 1) New York Clearing House bank deposits increased 94 percent in those eight years, from $7 billion to $13.8 billion; 2) the five largest insurance companies increased their assets nearly 400 percent, surpassing the combined assets of all the rest of the nation's insurance companies put together; 3) a single Wall Street

In early 1933 an enormous volume of business was transacted without any banks or money at all.

investment banking firm managed 80 percent of all the nation's first-grade registered bond issues. And this represents the mere tip of the story. One may conclude that the pledge to disentangle the New York City banks, the insurance companies, major railroads, the super-public utilities and the giant industrial corporations was so much perfumed eyewash.)

Further, while on the subject of gold, money and the New Deal, it might be instructive to many who did not live through the period of bank suspensions and the paralysis of the money system early in 1933 to note what actually happened. Many gurus flit about the land today predicting a monetary armageddon while urging the necessity for squirreling away gold and oatmeal in order to survive. The assumption is that those who do not have these materials will either break out in red-eyed rioting rage and burn down the countryside, or sit quietly on curbstones and die. The early months of 1933 are the only laboratory we have to observe what people actually did under such stress, and there is virtually no one studying it. The fact is that an enormous volume of business was transacted without any banks or money at all. Furthermore, many businesses invented their own money systems, a wide variety of private scrip and coupon systems which functioned quite well in the emergency. And of course there was an incredible volume of simple barter; Business Week (March 15, 1933, p. 16) pictured one man swapping a saw in a grocery store for strawberry preserves and some onions. This writer is of the opinion that the reservoir of simple common sense is far from exhausted, and that one may reasonably expect that people would behave not very much differently from their predecessors in 1933.

LESSONS OF HISTORY

In summary, it is important to recognize that the New Deal is not a historical curiosity. A very large part of it is still here, and very deeply entrenched. (Some major aspects were enumerated at the outset but there are many others which might be called to mind, including the Federal Communications Commission, the Civil Aeronautics Board [FAA], the Farm Security Administration, the National Labor Relations Board—all New Deal creations, and very much alive.) Rarely does one encounter any political force in the land which is interested in terminating any of these programs and institutions. Furthermore, even the portions of the New Deal which have been phased out or concluded, such as the make-work and unemployment relief agencies (FERA, CWA and WPA), the federal prop-up of the construction and building industries (PWA), the youth support and unemployment blotters (NYA and CCC), and the super-backup plan of federal monetary support for ailing big businesses (RFC), are really only in a state of dormancy, and might be dusted off and put back into operation in far less time than the complacent might think. In the last 18 months every one of these has been given sympathetic airing in some sector of American public opinion, though with rococo tailoring and cosmetic disguise to suit our presumably more sophisticated (though perhaps just more sophistical) times. (The Pepsi Generation has been probably more vulnerable to deception at the hands of our sap factories than have previous ones.)

The remaining point which this commentary has made, and to which a major part of the space has been devoted, concerns the intellectual and ideological origins of the "recovery" aspect of the New Deal impulse. Stressed, instead of conventional fulminating about the arcane and slithery machinations of alien and socialist subversives, has been the substantial part played by Big Finance, Big Industry and Big Agriculture in posing the solutions to the economic catastrophe of the Depression of the 1920's. This undoubtedly collides with the simple-minded legendary which is part of the amusement and bemusement of the youth in what passes for "history" in the schools today, but it might prove salutary to anyone unhappy with the situation, and lead to some worthwhile investigations beyond what has been presented here.

James J. Martin in received his M.A. and Ph.D. from the University of Michigan. A leading revisionist historian, his books include the classic Men Against the State, American Liberalism and World Politics, and Revisionist Viewpoints. He is currently at work on a book dealing with U.S.-Soviet relations during World War 11.
 
Old September 4th, 2012 #5
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Keep the subject on cars. We don't need unrelated yard-long articles.
 
Old September 4th, 2012 #6
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The first article mentions a couple of challenges faced by the auto industry in the 60s and 70s but it glaringly fails to tell the reader of the real reasons why Japan caught and surpassed the U.S.

Firstly, it had to do with the communistic extortion style of collective bargaining of the unions and their jewish cousins in the media demonizing the companies thus swaying public opinion against its management. This powerful tagteam gave the unions an unfair advantage and the companies were insidiously and effectively ground into the dirt by 1980.

Secondly, and just as important to the destruction of the U.S. auto industry was the forced implementation of affirmative action racial quotas. Unqualified niggers building cars is a recipe for disaster and so it was.

Overpaid, union-protected, lazy and incompetent niggers on the production line building slipshod cars was the primary cause that wrecked America`s auto industry.

All of the other excuses are just smoke screens thown up by the jew in order to hide their destructive mischief. The American Auto industry had been building steadily improved cars since its inception. Its downfall exactly coincides with the increasing control of the jew.
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Old September 5th, 2012 #7
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Overpaid, union-protected, lazy and incompetent niggers on the production line building slipshod cars was the primary cause that wrecked America`s auto industry.
unquote


Retired military officers have told me they could not discipline Congoids and females, and so make no mistake never could car companies discipline them either daily, and fire or not hire bums. Detroit suffered sabotage on their economy line of cars in the early 1970's, especially by zoned out hostile drinking doping savages and a few whigger/hippy types. Whole plant lines were shut down for sabotage.

Add in worker comp, high wages, and high retirements and there you go.

High wages in a form of sharing the profit for doing diligent caring work with pride, and being awake and respectful would be worth high wages, but that was not the case especially among those hired in the 1966-74 era IMO.

Media, war, and removing White freedom in 1965 played itz part totally.
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Old September 5th, 2012 #8
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Forty years ago I heard stories of people finding discarded beer cans behind the door panels of their newly purchased 1970s cars. 1975-1985 American cars were arguably the worst cars ever built by Detroit. Very much in the same dismal league as the shitheaps built by the Communist Soviet Union of that era.

Even way back then I can remember pondering how it was possible for Japan to build a quality efficient car and then incur the costs to ship it all the way to the other side of the earth and still be able to outdo America`s auto offerings. And even with the insults of the Chevy Vega and the Ford Pinto slapping me in the face I still didn't have a clue. And now since becoming racially aware all of the pieces of the puzzle have become clear to me.

I've come to understand it has been the jew all along choking the life out of the car companies and when they had them on their knees the jew took them over. No, of course it`s not as simple as the jew appointing another jew as the president of the company. They reserve those powerless positions for their goy sellouts. The jew is always behind the scenes in hidden control of the accounting departments where they can skim the lion`s share of the profits for themselves and their co conspirators in government
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Old September 5th, 2012 #9
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The auto industry is something I know quite a bit about.

I know of no other industry that has been so unfairly bashed and incorrectly analyzed than the US auto industry.

When I said

"The most detrimental thing that ever happened to the US auto industry is the Federal government. "

I meant it.

So please don't get me started with all of this Unions and crappy cars stuff. It was the Federal Government as the main reason for their demise.

I can explain but it is lengthy.

BTW: I just love my new Dodge

Last edited by Fred; September 5th, 2012 at 03:30 PM.
 
Old September 17th, 2012 #10
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Default General Motors pushing U.S. to sell stake

The folks over at Ford must be laughing.


General Motors pushing U.S. to sell stake

http://www.marketwatch.com/story/gen...ort-2012-09-17

By William Spain

CHICAGO (MarketWatch) -- The Treasury Department is resisting General Motors' push to for the government to sell off its stake in the auto maker, The Wall Street Journal reports. Following a $50 billion bailout in 2009, the U.S. taxpayers now own almost 27% of the company. But the newspaper said GM executives are now chafing at that, saying it hurts the company's reputation and its ability to attract top talent due to pay restrictions.
 
Old September 21st, 2012 #11
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I have long wondered what if America had announced the 21st Century Moment program in 1996 when all those EV cars were comming out? America could have spent 25 billion dollars over the subsequent 20 years into making a fully electric line of 2 to 6 seater cars that got 150 to 200 miles to a universal plug/charge. You know, the Neo-Nazi Electro-Hitler Mobile. The People's Car. The equivalent of the Nissan Leaf should have came out about a decade ago and just further and further improved in price, range, size, utility and features.

Instead, these gargantuan, smog-belching land barges were financially incentivized. People think that the subsidization and tax write offs of Volts and Leafs is so OUTRAGEOUS. Drives 'em berserk. But there used to be a part of the tax code not even 10 years ago where if you bought a car that weighed more than 6000 pounds for business use you didn't pay a luxury tax, got compensated for the "accelerated depreciation" of the vehicle and received a $100,000 rebate. Scheisters were getting these land barges for free if they weren't being outright paid to buy them. Furthermore, they could always just sell the car for a profit.

You can still get these depreciation and other shenanigan write offs and in about 4 to 6 years have a net cost of zero, outside of license, registration, oil and gas and maintenance. 0 dollar renting of the car, then you own it outright and sell it for a profit. Totally nuts. It completely distorts the market.

http://www.bankrate.com/brm/itax/biz...20030403b1.asp

This swindling is proposed as a "biz tip" and then they even tell you the 50 cars that qualify.
 
Old September 21st, 2012 #12
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The US car industry is largely a victim of its own stupidity.
Detroit clings to antiquated technologies and refuses to innovate unless it is forced to do so.
The fuel consumption of cars could be cut in half tomorrow by simply replacing petrol engines with turbocharged diesel engines.
I drive a Peugeot diesel, which uses 5.2 litres per 100 kilometres. That equates to about 55mpg.
In terms of performance there is nothing between the petrol and diesel versions of this mid-sized car.
In Europe diesels and the use of smart technology rather than brute force has resulted in cars that are in every way superior.
Detroit, by contrast, is fixated on the petrol engine. No matter how refined or tricked up the petrol engine may become, the essential physics remain unchanged. Under optimum conditions a petrol engine is (at best) 24% efficient at converting the energy potential of the fuel into mechanical energy. A diesel, by comparison, is 40% efficient. This is why a diesel uses about half the fuel to do the same work.
A modern diesel that is maintained (keep the injectors clean) is nothing like the smoke-belching behemoths one sometimes sees on the highway. Every puff of black smoke from a diesel tells you that the engine has not been maintained.
Here in Australia the local subsidaries of Ford and General Motors continue to produce large cars that have petrol engines. Their share of the market has gone from 80% 30 years ago to less than 20% today, because people do not want to buy big petrol cars that cost too much to buy and too much to run.
The exeuctives responsible for product decisions at GM and Ford are apparently oblivious to the burgeoning number of European and Korean diesels that pass them on the freeway every day while they are on their way to work.
Detroit has resisted progress at every opportunity due to its fixation on the petrol engine.
A good example was what General Motors did to its first truly successful electric vehicle. This was detailed in a documentary called Who killed the electric car?
If the car industry interests you, take the time to watch this documentary on YouTube. I could not help but come to the conclusion that General Motors is both stupid and evil . . . and deserves whatever misery may befall it.
 
Old September 22nd, 2012 #13
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Firstly, electric cars are not the answer in America. When I worked at GM during the 90's the electric cars were heavily researched. I had a very high security clearance and was able to wander the Tech center pretty freely.

They did have some electric cars with great acceleration and speed. The electric motors were also very reliable mechanically. But there were issues. Range was poor and the time to recharge was unacceptable. The discarded batteries were also expensive to dispose of and had be done properly or they would harm the environment.

The main reason was costs to produce the vehicle. After the math was done it was determined that the public would not buy the vehicle and making a profit was not possible. All of this is true almost 20 years later.

Gas is a great fuel for cars. It burns cleanly and is more cost effective to the consumer in the long run when you consider what the costs are for the electric car.

GM did not sack the program but they did reduce funding after determining that electric cars suck. And they do suck.

Diesel has been regulated by the Federal Government to the point where it is also not cost effective to the consumer to purchase for a car. The costs of production are too high. They work well for trucks but at an additional cost of about 7,000 dollars per vehicle.

It is easy to point fingers and call companies names if it makes you feel better. Just remember this. The media is against domestic production. So they lie and distort when referring to the US auto industry.
 
Old September 22nd, 2012 #14
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Quote:
Originally Posted by Fred View Post
Firstly, electric cars are not the answer in America. When I worked at GM during the 90's the electric cars were heavily researched. I had a very high security clearance and was able to wander the Tech center pretty freely.

They did have some electric cars with great acceleration and speed. The electric motors were also very reliable mechanically. But there were issues. Range was poor and the time to recharge was unacceptable. The discarded batteries were also expensive to dispose of and had be done properly or they would harm the environment.

The main reason was costs to produce the vehicle. After the math was done it was determined that the public would not buy the vehicle and making a profit was not possible. All of this is true almost 20 years later.

Gas is a great fuel for cars. It burns cleanly and is more cost effective to the consumer in the long run when you consider what the costs are for the electric car.

GM did not sack the program but they did reduce funding after determining that electric cars suck. And they do suck.

Diesel has been regulated by the Federal Government to the point where it is also not cost effective to the consumer to purchase for a car. The costs of production are too high. They work well for trucks but at an additional cost of about 7,000 dollars per vehicle.

It is easy to point fingers and call companies names if it makes you feel better. Just remember this. The media is against domestic production. So they lie and distort when referring to the US auto industry.
Do you think that the oil industry encourages (through pay-offs and other forms of corruption) the auto-industry to manufacture automobiles that are not fuel-effecient, so that the oil-industry can make more money selling more gas to automobile owners who are forced to drive cars that only get 25 miles per gallon instead of 50 or 60 miles per gallon?
 
Old September 22nd, 2012 #15
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Quote:
Originally Posted by Steven L. Akins View Post
Do you think that the oil industry encourages (through pay-offs and other forms of corruption) the auto-industry to manufacture automobiles that are not fuel-effecient, so that the oil-industry can make more money selling more gas to automobile owners who are forced to drive cars that only get 25 miles per gallon instead of 50 or 60 miles per gallon?
No, They don't.

I know a quick way to increase millage in cars. Just revert back to the emission standards before the Clinton admin.

Another way is to get rid of Corn gas.

I consider 25 miles per gallon to be pretty good. In order to get 50 -60 mile per gallon you are driving an under powered unsafe roller skate. Until recently, the demand for these types of vehicles has been low in the US.

Cars and trucks have come a long way since the 70's with mileage. You can buy a 350 + HP full size car that gets well over 20 mpg. My full size 4x4 with almost 400 hp gets 18 mpg. That's pretty good considering the silly demands made by the Fed.

Most people want room, power, and safety. Who wants to put their family in a tinker toy?

If there was some evolutionary way to get better mileage and still meet federal regulations, The manufactures would use it.
 
Old September 22nd, 2012 #16
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Fred

I've been critcal of the American auto industry much in the same way as I've been critical toward the United States. Two things that have been insidiously systematically destroyed by the jew.

If not for the many decent hardworking White men working for the U.S. auto industry, that business in America would have died decades ago. And I do not fault the individual White union members, I fault the union leaders AT THE VERY TOP who were/are jew sellouts.

I firmly believe Americans have been capable of building cars equal to that built in Germany, had it not been for the jew forcing detrimental government regulations and suicidal social engineering, that might be the reality today.

To say the carmakers problems are caused solely by the government without mentioning the jews control the government, could be misleading to the newbis.



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Old September 22nd, 2012 #17
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Quote:
Originally Posted by Fred View Post
No, They don't.

I know a quick way to increase millage in cars. Just revert back to the emission standards before the Clinton admin.

Another way is to get rid of Corn gas.

I consider 25 miles per gallon to be pretty good. In order to get 50 -60 mile per gallon you are driving an under powered unsafe roller skate. Until recently, the demand for these types of vehicles has been low in the US.

Cars and trucks have come a long way since the 70's with mileage. You can buy a 350 + HP full size car that gets well over 20 mpg. My full size 4x4 with almost 400 hp gets 18 mpg. That's pretty good considering the silly demands made by the Fed.

Most people want room, power, and safety. Who wants to put their family in a tinker toy?

If there was some evolutionary way to get better mileage and still meet federal regulations, The manufactures would use it.
Is there any truth that the auto and or oil industries have bought up the patents of devices that have been developed to greatly increase gas mileage on vehicles, such as the Fish carburetor, and by doing so kept them from being produced and marketed so as to keep fuel effeciency low and gas sales high?
 
Old October 2nd, 2012 #18
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How The Government Killed Fuel Efficient Cars And Trucks

Derek Kreindler, TTAC

Close your eyes and imagine it's 1979. A first-term Democratic president struggles with unemployment, malaise, high energy prices, and embassy trouble. The landscape of today looks like the landscape of then, but there's one important thing missing: The compact pickup. Where did they go? The small pickup was an indelible symbol of America's lowered expectations in the Seventies and Eighties. Now that crappy times are here again, where are the paper-thin truck beds and wheezy-but-indestructible four-cylinders to pull them?

As car guys, we tend to view things through a certain lens; the design and performance characteristics of a car are what's considered important. The proliferation of cars and trucks that are antithetical to these characteristics, like crossovers and larger, heavier passenger cars, are something that we've collectively lamented for some time.

But to understand why this has happened, we need to view product decisions through the lens of CAFE and its incentives. The choices of American consumers are a factor; we like to buy pickups and SUVs, no doubt. But what if the government's decisions played a part in moving the market, and the very laws set up to ostensibly promote more fuel efficient vehicles ended up doing the opposite?

CAFÉ for Decaf drinkers

CAFE (industry short hand for Corporate Average Fuel Economy) came as a result of the 1973 oil embargo, as a means to mandate fuel economy targets for cars and light trucks. Over the last four decades, the standards have evolved, with the latest iteration being the targets set for fuel economy in the year 2025. The 2025 targets were released this summer, and comprise a 1,944 page tome full of arcane language and legalese that, while essential for understanding CAFE, are totally inaccessible to the general public. No wonder, as our Editor Emeritus Ed Niedermeyer wrote

http://jalopnik.com/5948172/how-the-...ars-and-trucks
 
Old October 10th, 2012 #19
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Are German Central Planners Pulling the Plug on Government Cars?
Posted by Karen De Coster on October 8, 2012 06:21 PM

Some of the German media is reporting that the government has abandoned its pipe dream of flooding the market with unwanted, government-subsidized, battery-powered cars.

Chancellor Angela Merkel will meet with auto industry leaders on Monday for a summit on electric mobility. The government has become less enthusiastic about electric cars, unnamed government sources said.

The automobile industry has said that without additional government subsidies they can only sell 600,000 electric cars by 2020 at best.

Spiegel Online reports:

Just over a year ago, Chancellor Angela Merkel set the bold goal of increasing the number of electric cars in the country to 1 million by 2020. But today there are only 4,600 of them driving on German roads, a mere 0.01 percent of all registered cars, despite years of research. So much for a high-voltage success story.

...The country has already pumped €500 million in state aid into the promotion of electromobility as part of its fiscal stimulus measures during the global economic crisis.

Just a week ago, the media was reporting that the German government would subsidize the electric car revolution. Funny, the same thing happened here with Obama's Green Dream.

http://www.spiegel.de/international/...-a-859172.html
 
Old October 11th, 2012 #20
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I don't think cars nowadays have any soul or styling. You can't pick 'em out anymore. God, give me Studebaker over all this Jap crap. All these heartless, soulless, gutless little econoboxes make me sick.

The current names are awful as well.
 
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