Friday, December 12, 2008


Your analysis ignores the regulated monopoly created by the tricks and turns in the CAFE standards. Foreign cars must be significantly retooled to meet US regulations. If you want to sell a lot of cars in America, you must do like the Japanese and build your plants here. Now that the plants are here, the monopoly protection helps them just as much as the "little three in Detroit". The "little three" must become at least as efficient as the domesticated foreign producers. If they cannot or will not, we should let them expire.

When you have monopolies, you do not have free markets. The unjustified salaries and wages and huge inefficiencies were born and breed by the monopoly rules written by Detroit lawyers and passed into law by congress and signed into law by presidents. We get into trouble when we are inconsistent in sticking to our principles.

It took the rail roads 25 years to "retool" into profitable businesses after the regulated protection was ended. It took the airlines 30 years and some believe they are not there yet. America can and should compete on an even playing field. We have no reason to be afraid of competition. If, as a result of open markets, the Japanese, South Koreans and Chinese take over the car business, it will be because our competitive strengths lie elsewhere. The highest paid jobs are no longer the manufacturing jobs. Thousands of labs across our country are researching and designing products that are far more rare and valuable than autos.

The reasons that gasoline taxes should be increased are because we should eliminate the taxes on productive pursuits and raise our revenue by taxing the least productive pursuits. The huge tax increases on cigarettes was justifiable because this habit of many was doing great harm to the many more non smokers. Those who waste fuel simply because they can are polluting the air of everyone else unnecessarily. By raising the tax on driving while reducing the tax on income, we will increase our incomes while reducing our driving expense. We can individually make our own choices to achieve the common good. We do not need to play favorites.

Republicans and democrats are guilty of picking and choosing winners and losers based on politics and not based on merit. The practice is too common. It ranges all the way to billion dollar bailouts of rich bankers to uniform school teacher salaries no matter what the level of competence. The invisible hand works when price is set by supply and demand, not by political regulation or favor.


Cast all your anxiety on him because he cares for you. I Peter 5:7

Jack Miller
1825 Curraghmore Road
Clemmons, NC 27012

On Fri, Dec 12, 2008 at 11:43 AM, Al wrote:

Unions are evil, government is evil, business is evil. All three have been willing to gain at the expense of the other two in the past. But, all three have also done many good things too and are necessary to maintain a balance of power that will lead to real progress.

Only individuals pay taxes. Business taxes are added to the cost of doing business and passed on to the customer.

Taxes are necessary to provide for the common good, which is not always the same as perceived by the individual

The common good is a dynamic target, always changing, sometimes a little, sometimes a lot.

Economics and politics cannot be separated, but must be balanced. Extremes have gotten us to where we are today.

How should the auto manufacturer situation be approached?

The manufacturers have been working with the unions and current and future costs have been reduced and will get even more reductions. The $75 per hour cost per employee has been cut nearly in half for new hires. New more efficient vehicles are in the works, but remember less than a year ago the buying public was happily buying big vehicles at high profit margins. Imported vehicles have been growing in size over the last 20 years. It is only because of the home government tax policies on fuel that foreign manufacturers have had smaller, more efficient vehicles available.

If our government will pass higher taxes on fuel, then I think we should offer loans to the vehicle manufacturers, as we will have a reasonable expectation for repayment based on continued higher fuel prices. The public will continue to buy more fuel efficient vehicles because fuel prices will become more consistent. The trend in industrialized countries has always been for the consumer to purchase the biggest, most powerful vehicle he can afford. If the government wants to control the amount of fuel used do it with taxes, not with CAFE or gas guzzler surcharges.

If congress continues to let the market determine the total price of fuel, then bankruptcy is the best solution. Let the free market determine who manufactures our vehicles. The price of and profit made on larger vehicles will rise based on supply as world manufacturing capacity of larger cars will be limited for some time. The surviving domestic manufacturer will do well.