Here is one more reason why private businesses are often assisted by government regulation...
Gas price swings have trapped automakers before, especially last summer when the price spike caught many with too many pickup trucks and sport utility vehicles and too few smaller, more efficient cars. Lower prices cut sales of the Prius gas-electric hybrid by 45 percent in December and forced Toyota Motor Corp. to shelve construction of a new factory to make them in the U.S.
http://www.msnbc.msn.com/id/28643952/ (http://www.msnbc.msn.com/id/28643952/)
I think the articles' conclusion is debatable at best. Lower gas prices caused a 45 drop in sales and a shelving of a new plant?? So it had nothing at all to do with the giant economic slowdown. Nothing at all.
This is exactly the short term thinking that got them into this predicament... ::)
.....and it's governments responsibility to assist the auto industry by regulating another industry to create artificial market conditions? How do we as individuals and small businesses get big brother to protect our every move?
Any rapid increase or decrease throws the equilibrium off.
Now with gas prices, clearly the rapid rise in fuel prices created a huge problem in the overall economy (not just car sales)....but it wasn't just the oil & gas industry playing with the prices....the rapid changes have been fueled (pun intended) by speculators and market futurists....add on top of that the whims of OPEC and it can get out of hand.
All that is being argued here is to set a floor (and perhaps a ceiling as well) so fluctuations are not so dramatic.
So... your actually advocating the governments intervention in fuel prices?? No kidding?
yes...and even if they don't do it outright....opening/closing of our strategic reserves also effects the price....they can do that now.
Slippery slope.
What else would you like for them to control that they don't already?
Quoteyes...and even if they don't do it outright....opening/closing of our strategic reserves also effects the price....they can do that now.
Nixon tried that... it failed miserably. The government should be buying every drop of oil they can get and stuff it into the reserve...
the price of oil continues to drop because demand is low and apparently our reserves are at record levels.
This is good news. That said... Detroit should get off their ass, quit making excuses, and start making fuel efficient, and alternative autos.
they are...Ford is about to release the 2010 Fusion....and the hybrid version gets around 35mpg city...which blows away all other hybrids its size....its only beat by the Civic and Prius.
But, with gas prices low, Prius sales dropped by 45% in the fall while truck sales actually climbed slightly....so for Ford, the big question is will people buy it?
Build it and they will come. Jacking up fuel prices so Detroit can sell cars is silly...
it has little to do with selling cars to me.....I'm suggesting a floor and a ceiling....such that wild swings in the market don't have a ripple effect through our whole economy!
The effects of these swings are short term. I trust market forces to set the price of oil (I may not like the price) much, much more than a bureaucrat in the government. Perhaps that same bureaucrat can set wage upper and lower limits so the rich don't get richer and the poor do not get poorer.
Quote from: tufsu1 on January 16, 2009, 08:10:47 AM
they are...Ford is about to release the 2010 Fusion....and the hybrid version gets around 35mpg city...which blows away all other hybrids its size....its only beat by the Civic and Prius.
I'm so0o excited about the 2010 Fusion. I'm hoping that it's the start of a fleet of vehicles that revitalizes Detroit. The Hybrid Escape has also been on my 'I Want One!' list for a while now as well. I've got a cash-stash already in progress to buy either one of those. I can't wait.
Chevy/GM, even though it's even more tarnished than Ford, has more hybrids and fuel-efficient cars than any other carmaker. That's their selling point, but it falls on deaf ears because it's 'Chevy'. The Volt plug-in is going to be huge... and it'd be bigger if it was coming from Toyota. It's all about brand equity and peoples' perception. And then there's the Spark, and the Cruze. All compact and very fuel-efficient for being non-Hybrids.
Honda canned the Accord Hybrid (I understand market demand, but it was still a shortsighted move, IMO), but the newly-revived Insight promises to compete effectively with the Prius.
There are more Hybrid model options now (or about to debut) than there ever have been. I hope enough people make the smart move and go that route for their next vehicle. In my opinion, it should be the next logical step in the evolution of the automobile.
With all the recent innovations that have made their way into everyone's everyday car, coupled with the fact that the overall relative prices have remained steady, and people's renewed interest and vigor for models so-equipped, it just seems logical that a hybrid, in some form, becomes the norm rather than the exception.
And enough hybrids on the road (on the order of millions, not the tens of thousands as is the case now) might just help 'regulate' those gas prices.
Quote from: BridgeTroll on January 16, 2009, 08:22:57 AM
The effects of these swings are short term. I trust market forces to set the price of oil (I may not like the price) much, much more than a bureaucrat in the government. Perhaps that same bureaucrat can set wage upper and lower limits so the rich don't get richer and the poor do not get poorer.
sounds good :-)
Your trust of government bureaucrats to make the best decisions for you is inspiring... :)
I see the biggest problem is having oil on the commodities market. I do not want to restrict buying ang selling of oil we just do not need to assist in the frenzy. Let oil producers sell to oil distributors in real market ecconomics not wall street fantasy world.