Quotulatiousness

February 23, 2010

More market-rigging to favour Government Motors

Filed under: Economics, Germany, Law, USA — Tags: , , , — Nicholas @ 07:09

If you’re a fan of German sports cars, this might be a swan song for your preferred makes and models:

In a few years, by 2016 to be exact, P.J. O’Rourke’s “ass-engined Nazi slot car” may be history in the U.S.A. Gone. By that time, Porsche needs to have a Corporate Average Fuel Economy (CAFE) of 41.4 mpg — if President Obama gets his wish. Mission impossible, says Porsche. Jack Baruth, stock up. Porsches will be extinct.

On May 19, 2009 President Barack Obama proposed a new national fuel economy program. If signed into law in May this year, as currently planned, the law will throw a nasty punch, beginning in the model year 2012.

Porsche-Lobbyist Stefan Schläfli talked to the German Edition of the Financial Times, before taking off for Washington for a last ditch effort to save the endangered species. Says the FTD: “Hardest hit will be German producers of premium brands which sell big-engined large cars. Critics in the German camp don’t think this is a coincidence. The formulas used to calculate the maximum permissible values are tailor-made for U.S. manufacturers. Basis for the calculation will be wheel base and track width — highly unusual criteria.”

A short and compact Porsche is faced with much stricter limits than a Corvette. Not to mention a pick-up. Large manufacturers turn into a CAFE-society, and can offset their thirsty oinkers with smaller cars. Porsche doesn’t have that option. Neither does Aston Martin, Jaguar, Land Rover and other eclectic brands.

Now that the government has a major financial stake in GM and Chrysler, they don’t even need to pretend to be even-handed in their regulatory fixes.

September 18, 2009

US tariff on Chinese tires “a colossal blunder”

Filed under: China, Economics, USA — Tags: , , — Nicholas @ 09:14

I don’t read The Economist regularly these days, having given up my 20-year subscription about five years back. Their steady drift away from free markets towards statist models made the publication less and less interesting (and much more live most other financial publications). This article, however, at least covers the situation in an even-handed way:

You can be fairly sure that when a government slips an announcement out at nine o’clock on a Friday night, it is not proud of what it is doing. That is one of the only things that makes sense about Barack Obama’s decision to break a commitment he, along with other G20 leaders, reaffirmed last April: to avoid protectionist measures at a time of great economic peril. In every other way the president’s decision to slap a 35% tariff on imported Chinese tyres looks like a colossal blunder, confirming his critics’ worst fears about the president’s inability to stand up to his party’s special interests and stick to the centre ground he promised to occupy in office.

This newspaper endorsed Mr Obama at last year’s election in part because he had surrounded himself with enough intelligent centrists. We also said that the eventual success of his presidency would be based on two things: resuscitating the world economy; and bringing the new emerging powers into the Western order. He has now hurt both objectives.

Several sources mentioned that yesterday’s announcement about cancelling the ABM systems that were to be installed in Poland and the Czech Republic was an attempt to cozy up to Russia. This move can only be interpreted as an attempt to look tough against the Chinese — which would just be dumb — or (even more disturbingly) solid proof that Barack Obama doesn’t have a clue on international trade.

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