Gas Prices, Fuel Efficiency, etc.
By Arnold Kling
Lots of blather going around the blogosphere about gas prices and fuel efficiency. Most of it violates Oil Econ 101. Perhaps the most reasonable blog take is by Andrew Samwick.
The aspect of SUVs that does annoy me is that I believe that they impose a safety risk on the rest of us for which the owners bear no cost.
…The mullahs don’t care whether they get their money from someone driving an SUV 15 miles or a hybrid 45 miles–it’s the same gallon of gasoline. So tax that directly and let cost drive behavior.
On the topic of automobile innovation and fuel economy, I would offer only this: in my opinion, the biggest reason that Detroit has such a stranglehold on auto innovation is the regulatory structure that Washington set up, particularly in response to Ralph Nader. Today, I’ll bet that it takes more lawyers than engineers to bring out a new car. Deregulate autombiles, and small, innovative companies will have a chance.