CAFE and Demonizing the Auto Industry

OpinionJournal takes the occasion of an Obama speech in which he speaks of "the tyranny of oil" to point out some much needed common sense on CAFE standards:

Since 1974, domestic fuel economy has risen by about 60%. The gains initially came through sharp reductions in the size and weight of cars; think of the Pinto or Chevette. Since the 1990s, improvements have been driven by technological advances. But over the same period, oil imports have increased; Americans use more gasoline than ever and hence emit more as well.

That's because the indirect tax of mileage standards is an exceptionally inefficient way to influence consumption. CAFE doesn't affect how many vehicles are on the road (a figure that keeps going up). And by making cars and trucks more fuel-efficient, it may encourage people to drive more. If you get more miles to the gallon, then driving becomes cheaper, so driving demand goes up and offsets any overall efficiency gains.

Designing high mileage vehicles is relatively easy--they're all over Europe--and such cars have been introduced to the American market in the past. Consumers have plenty of such options to choose from now. But aside from fads like the Prius, Americans have proved unwilling to buy them. The miles-per-gallon advances over the last 30 years have translated into bigger, more powerful cars with more features. These are the vehicles Americans actually want.

Not without reason, either: There is a tradeoff between safety and efficiency. The National Academy of Sciences concluded that CAFE standards contributed to as many as 3,200 additional fatalities each year, because downsized cars are less safe in accidents. Other studies from the Brookings Institution and the Competitive Enterprise Institute put that number significantly higher.

(Emphasis in original.)

Obama apparently thinks that the way to the Democratic nomination is to lecture the American people on how they use too much oil. My gut instinct is that Americans generally don't like being lectured to like that.