By: Jeffrey Klein
We have all come to realize that Liberal’s socialist utopia driven policies and edicts generally enact the “Law of Unintended Consequences,” such as the then, little-noticed 1995 Clinton-era CRA regulations that required banks to give mortgages to low income people in high risk neighborhoods.
The stated goal was noble–to increase home ownership in America.
However, what we got was the “Sub-Prime Mortgage Crisis,” an Armageddon-like mass meltdown of the residential real estate and financial markets beginning in 2006. Over $8 trillion in stock market equity rapidly evaporated, along with trillions of dollars in home market values, leaving 50% of American homeowners with no or negative equity (“underwater”), and foreclosure rates of up to 33% in some areas.
The ruination of the entire U.S. economy devastated nearly all of the very people this pathetic plan intended to help, by loss of value, foreclosure and widespread, continuing unemployment–with minority unemployment nearly double the national average.
So, in another attempt to circumvent the market by political fiat, the Obama administration has positioned itself to force half of the new car buying population in the country out of the market, which would seriously maim all three American car companies and cost millions of good jobs.
How can they do this?
The Obama EPA is planning to enact their stunning 2025 EPA fleet fuel efficiency standard, raising it from the already high 35.5 miles per gallon mark by 2016, to a whopping 54.5 miles per gallon, according to Judson Berger’s FOXNews article yesterday.
The price from accomplishing this objective will add from $3,000 to $5,000 (today dollars) to the price of a new car–and that will cause about 6.8 million people to be unable to qualify for a loan to purchase a new car, according to Bailey Wood of the National Association of Auto Dealers (NADA).
The Obama administration “sold” the idea to the unwitting public, by saying the increase in price would pay for itself by fuel cost savings over four years. However, as Wood points out, if the customer can’t afford the new, fuel-efficient vehicle in the first place–the reduction in fuel consumption and lowered emissions is an academic non-starter.
Instead, they will go to the relatively “gas-guzzling” used car market to make their purchase, while seriously damaging Detroit by being priced out of the new car showrooms.
And in a January statement from Mitch Bainwol, head of the Alliance of Automobile Manufacturers, carmakers are in lock-step with dealers, saying … [the] “ultimate question” is whether consumers will buy these new cars.
Otherwise its’ “game over.”
In following their instincts for self-preservation, autodealers are hoping to convince the administration to delay the process, until the impact on consumers can be further studied.
Just like Obama mandated additional time for review of the Keystone Pipeline deal.
Do you really think President Obama will risk derailing his environmental extremist voter base, in an election year–just to save the country from mass destruction?
Copyright (c) 2012 by Jeffrey Klein