Gas tax proposal proves GM and Obama are engaged in 'crony capitalism'? That's laughable
Conservatives were so outraged with General Motors Co. Chairman Dan Akerson earlier this month, you would have thought he’d flown to Washington on a corporate jet.
No, he committed an even bigger sin: Akerson had the temerity to suggest the federal government should hike the tax on gasoline by as much as $1 a gallon.
In an interview with the Detroit News, Akerson said boosting the gas tax would be a smarter way of getting people to drive more fuel-efficient vehicles than requiring automakers to boost the fuel economy of the vehicles they sell.
"You know what I'd rather have them do — this will make my Republican friends puke — as gas is going to go down here now, we ought to just slap a 50-cent or a dollar tax on a gallon of gas," Akerson said.
Former Minnesota Gov. Tim Pawlenty, a Republican candidate for president, blasted Akerson for proposing a gas tax hike when the federal government still owns 26 percent of GM.
“I think we should tell him to go pound sand,” Pawlenty told a Chicago radio station. “That’s ridiculous. I mean, how much more crony capitalism can we have to benefit General Motors?”
Detroit News commentator Henry Payne said Akerson’s comments were further evidence of a “cozy relationship” between GM and President Barack Obama’s administration, which saved the automaker from the scrap heap in 2009.
“About the only thing less popular than GM’s $50 billion money-losing taxpayer bailout is high gas prices,” Payne wrote. “So naturally, Government Motors CEO Dan Akerson says he supports a hike in your gas taxes.
“Someone get this guy a PR department.”
Not necessary. Payne, also the News editorial cartoonist, has been around long enough to know Akerson’s comments didn’t come out of left field.
GM supported higher gas taxes as an alternative to increases in federal Corporate Average Fuel Economy standards long before Akerson arrived at the automaker’s Renaissance Center headquarters.
Former GM Chairman Rick Wagoner said in 2009 that boosting the federal tax to establish a minimum gasoline price of $4 a gallon was “worthy of consideration.” Wagoner and Obama weren’t exactly buddies at the time.
Ford Motor Co. Chairman Bill Ford Jr. also has advocated raising the federal gas tax.
Some have proposed that a portion of the higher tax could be rebated to low-income drivers.
Suggesting that GM and Obama are engaged in crony capitalism is almost laughable.
GM and the rest of the rest of industry have long been opposed to CAFE as a method of improving the fuel economy of cars and trucks.
Former GM Vice Chairman Bob Lutz once likened CAFE to fighting obesity by requiring clothing manufacturers to make only small sizes.
Automakers are particularly unhappy over the Obama administration’s desire to raise the fuel economy standard to as high as 62 miles per gallon by 2025.
The cost of meeting that benchmark could raise the price of a vehicle by $9,790, cut sales by 5.5 million cars and trucks a year and eliminate 260,000 jobs, according to a new study by the Center for Automotive Research in Ann Arbor.
What Akerson’s comments reflect is the need for an energy policy in this country that goes beyond, “Give me cheap gas or give me death.”
He shouldn’t be vilified for merely suggesting that tax policy should be part it.
Email Rick Haglund at haglund.rick@gmail.com.
Comments
SkepticismHipster
Mon, Jun 20, 2011 : 4 p.m.
Dude. Big businesses have been pressured for decades by progressives into being politically so now they've traded the free market for short term profits. CEOs like Akerson are like politicians. They respond to pressures from the outside, and those pressures have largely come from the politically correct left recently. Just look at Tom Borelli's comments -- <a href="http://dailycaller.com/2011/06/19/leaders-with-ginni-thomas-tom-borelli/" rel='nofollow'>http://dailycaller.com/2011/06/19/leaders-with-ginni-thomas-tom-borelli/</a> -- the solution is to nudge business back toward supporting liberty, and if the political pressure was applied to GM and Ford to be pro-free market, they would be.
Bogie
Fri, Jun 17, 2011 : 9:48 p.m.
How idiotic. People sayin' diesel, or hybrids. It all depends on your lifestyle. I'm sure what works for a suburbanite, would be impossible for a rural person, and likewise. As far as Mr. Hagland, No it's not crony capitalism- it's wealth redistribution. There are so many days, that I am happy, I did not get "brainwashed" at a major university. It seems people lose their sense of reality. Viva, the free market!
EyeHeartA2
Fri, Jun 17, 2011 : 1:58 p.m.
"That's laughable" That's also the most arrogant comment I have ever seen in this on line rag. Congratulations, Rick, you set a new low. Good job.
snapshot
Fri, Jun 17, 2011 : 3:39 a.m.
Let's notforget that GM and the employee unions will likely default on 10 BILLION dollars of the bailout due to their decreased stock value. Chrysler will likely default on 6 BILLION. They already screwed creditors out of BILLIONS through a government sanctioned bankruptcy where unions fared VERY well. Now they tout their "success", and union employees are getting bonuses. All while they screw the taxpayers and that doesn't even take into consideration the dealer abuse of the consumers. Even they managed to be excluded from the new consumer protection laws designed to prevent the consumer from getting cheated. What a noble and ethical industry we saved. Keep up the good work guys, you definitely won't get a second chance from the American people again regardless of your union political clout.
RayA2
Thu, Jun 16, 2011 : 4:17 p.m.
Awakened, A gallon of Diesel fuel contains 1.12 times more energy than a gallon of gasoline. The tradeoff is that there is a lot less diesel fuel produced from a barrel of oil than there is gasoline. I believe the ratio is 6 gallons of gasoline per 1 gallon of diesel fuel. Diesel fuel has been cheap because it has less demand. It was originally what was left over after you refined the gasoline out of the crude. If you want to see the cost at the pump skyrocket, have everyone switch to diesel fuel. You will also accelerate global warming also since diesel engines produce 13% more CO2 than gasoline engines. Far better to switch to smaller, or hybrid vehicles and make the most of what we have. I agree with you completely that energy companies have, especially the republikan party, in their back pocket. When you hear "drill baby drill" chanted at their convention, you know who's smiling all the way to the bank.
John B.
Thu, Jun 16, 2011 : 8:01 p.m.
TRS: Once again, for perhaps the seven billionth time, global warming does not mean that at every point on the globe, at every moment, it will be hotter than it was previously. That is moronic. Overall, we are having the hottest years on record, ever, and we are having more extreme weather more frequently. Flooding, droughts, hurricanes, tsunamis, etc. This is EXACTLY what climate change is. If you can't see that, I'm sorry for you.
RayA2
Thu, Jun 16, 2011 : 6:30 p.m.
trs80, Apparently your scientific mind forgot about the 90deg days we've already had...
trs80
Thu, Jun 16, 2011 : 6:28 p.m.
Global warming, eh? Could have fooled me, been cold and rainy here the past few months.
newsboy
Thu, Jun 16, 2011 : 3:49 p.m.
Potholes anyone $$$
Gordon
Thu, Jun 16, 2011 : 1:10 p.m.
Anybody living in a Metro area similar to Detroit / Ann Arbor / Macomb must be astounded by the number of cars driving East & West going to jobs opposite of where they live. Mobility is the America way for numoruos reasons; but an attitude such as GM executives display would be (as a couple have written) would be laughed out of elementry school.
Dcam
Thu, Jun 16, 2011 : 1:06 p.m.
Henry Ford II back in 1980 said he'd like to see $5 a gallon gas, it would drive fuel economy. Once again you go to the most biased source there is regarding automotive - David Cole and CAR, who've said anything progressive can't be done, factories have too much capacity, taxes are too high for automakers, pay is to high for autoworkers - etc, etc, etc. Where do these people come up with such numbers? But, it wasn't that long ago they were claiming 30 mile per gallon cars would be impossible, too. And, yet, people driving Chevy Malibus claim 30 plus miles all the time. David Cole, CAR and GM said it couldn't be done. Sen William Proxmire was very accurate in 1980 when he said that after Chysler gets its bailout money, the industry will go right back to making the same gas guzzling barges they always made. GM was accurate back then, too. They said bailing out Chrysler would change the way America does business. It changed. If blacksmiths and carriage makers had had the handouts of today - we'd still be in horse and buggies, autos would never have got a start. But, one can't prop up failed business models forever.
John B.
Thu, Jun 16, 2011 : 7:55 p.m.
The world is far more complex than you seem to think it is. Shades of grey, not black-or-white: 1) In the 1980s, Chrysler was building K-cars, which were far more fuel-efficient than their competitors' products. 2) Chrysler paid back those loans early, with interest. 3) Much of the current GM and Chrysler loans have already been paid back, with interest. We will very likely break even overall, maybe profit a bit. 4) Are you saying that we should have let GM and Chrysler fail? The loans have been successful beyond any rational person's expectations, and the alternative would have been unthinkable - faliure of many, many Tier 1, Tier 2, and perhaps Tier 3 suppliers, in addition to GM and Chrysler. You think Michigan is in bad shape now...?
Madhatter
Thu, Jun 16, 2011 : 12:55 p.m.
Borders going out of business.....That's laughable Pfizer leaving the best town in the U.S.......That's laughable Millions becomming unemployed.......That's laughable Country going bankrupt because of irresponsability......That's laughable Being rushed into a life of minimum wage jobs and stangnant growth because of poor policies....That's laughable Finally, believing you have any clue how much a dollar gas tax will destroy the economy and ruin the financial stability of millions....yeah, that's real laughable. I guess the millions of people out there without jobs and homes are just laughing their heads off. Now they can laugh harder at a possible $1 gas tax increase! Who will be the next person without a job laughing because they might have to pay an extra $1.00 per gallon because some CEO wants to push his failure of an electric car that gets 25 miles per charge for 40 grand. Now that's something worth laughing at.
Dive75
Thu, Jun 16, 2011 : 12:48 p.m.
The candidates are doing nothing more than leveraging an upopular idea against their opponents. This is the game of politics. These methods are employed by all parties. Pointing out the obvious flaws in our political system is the part that is laughable. "Some have proposed that a portion of the higher tax could be rebated to low-income drivers." Excellent, let us reward more people for mediocraty and failure to achieve. Let us continue the hand outs and entitlements that have saddled us with an enormous debt burden. What a winning concept. We get to pay for the short comings of other people yet again.
John B.
Thu, Jun 16, 2011 : 7:44 p.m.
Unfortunately, we are in our current economic mess primarily because of personal and corporate income tax rates that are too low (this has been going on for thirty years now), combined with defense expenditures that that are too high, so your logic is incorrect. Gasoline should have a floor price of $4 per gallon, period. $5 would be better, but I'll take $4. That would also allow future planning to be much better for many industries whose health hinge on the price of oil / gasoline.
Rork Kuick
Thu, Jun 16, 2011 : 12:48 p.m.
CAFE standards rather than fossil fuel taxes: inconceivable, except in the U.S.
Adam Jaskiewicz
Thu, Jun 16, 2011 : 12:10 p.m.
Do it.
KJMClark
Thu, Jun 16, 2011 : 11:46 a.m.
It does show that Pawlenty isn't the sharpest tool in the shed. Akerson didn't say the additional gas tax revenue would go to GM. In fact, he knows pretty well that it would initially hurt GM - they still sell a lot of trucks. However, it *would* be a simpler way to get people to pay for more fuel efficiency than constantly raising CAFE standards. Besides, gas prices are staying high and headed higher anyway, at least until China's bubble bursts. We could use the money to fix the roads, which is where gas tax money usually goes. As it is, the money's going to go to Saudi Arabia. Iran, and Venezuela. The Saudi Princes, Comrade Chavez, and Ahmadinejad's nuclear weapons program thank us.
mkogrady
Thu, Jun 16, 2011 : 11:12 a.m.
An increase in gas will change consumer behavior, but not like GM may think. My guess is that more people will choose to Telecommute and hang onto their current cars longer, or until they have more money in their pocket to buy a more fuel efficient car. Think of it this way - Driving 250 miles back and forth to work will cost you about $45 per week, but Telecommuting 14 days per month and driving into work 6 days per month for that precious face-time with your peers and manager will cost about $65 for the entire month. The other $140 you DON'T spend on gas can be spent on something the benefits you or your family. Go ahead and raise it. I have a laptop and Home Internet Access already, and DO Telecommute on a regular basis because my current salary is not keeping up with cost increases. I have to save money elsewhere.
Gordon
Thu, Jun 16, 2011 : 1:01 p.m.
Obviously this makes sense. Nothing like the auto industry living in it's own little bubble. New tech needed folks.
Awakened
Thu, Jun 16, 2011 : 11:02 a.m.
The Volkswagen Golf diesel gets 75 mpg. The Jaguar XKS diesel (hardly a compact!) gets 45 mpg. In Europe and Asia mini-mini vans and mini-mini pickups are all the rage for their economy and practicality in urban settings. You can't buy any of them in the US because of import policies that ostensibly protect our car companies. In Europe the Ford Focus diesel gets 65 mpg. So our companies CAN build them. They could compete. Is it really big oil, Wall Street speculators, and the banks that finance them we are protecting? Or is it the campaign dollars that both Republican and Democrat big wigs get? We can certain, only, that none of these groups is looking out for us.
John B.
Thu, Jun 16, 2011 : 8:08 p.m.
I hear you , but it's not "import policies" that prevent these vehices from being sold in the USA, it's Emissions Laws. If the manufacturers in question wanted to sell those vehicles here, they could do the work necessary to certify them here. However, I'm sure they've decided that the volume they would sell is insufficient to make a profit, so they've chosen not to pursue those niches. I would NOT want us to lower our emissions standards so that dirtier vehicles could be sold. We have really cleaned up our passenger-car diesels in this country, and imo we don't need to take any steps backward in that area.
Greg
Thu, Jun 16, 2011 : 10:58 a.m.
Funny, seems those who want this tax are all making millions of dollars (even before their bonuses). Sadly most of us don't make anything like what these arrogant CEO's make.