Making Dearborn Independent


Writing in the New York Times, Daniel Sperling and Deborah Gordon, authors of the forthcoming book Two Billion Cars: Driving Toward Sustainability, advocate saving the Detroit auto industry by further taxing those who buy their (already overpriced) products:

One way to [fund the bailout] would be to establish a price floor of $3.50 per gallon on gasoline. If the price drops below that, as it recently has, the federal government would impose a variable tax to bring the price up to $3.50. If the price goes above $3.50, then the tax disappears. The money raised by the variable tax would be used, at least in the short term, to provide loan guarantees to the auto companies. (To ease the burden of higher gasoline prices on low-income taxpayers, some of the revenue would be provided to them as tax credits or vouchers.)

Of course higher gasoline prices would burden low-income Americans in other ways too, by increasing the cost of most consumer goods. And good luck convincing those who have recently purchased a Ford or a Chrysler (there must  be someone buying American cars) that an artificial price for gasoline is required, in order to give even more of your money to the selfless members of the United Auto Workers union.

Via Cato, Mark Perry, professor of economics at the Flint campus of the University of Michigan, argues that "Maybe the country would be better off in the long run if we let the Big Three fail, and in the process break the UAW labor monopoly, and then let Toyota, Honda and Volkswagen take over the U.S. auto industry, and restore realistic, competitive, market wages to the industry." He provides this helpful chart (which is further explained here; headline reference explained here):