The Big Three U.S. automakers were busy at the political conventions of both major parties this year, lobbying for more gravy from the taxpayers. Specifically, they're not satisfied with the $25 billion in low-interest loans Congress voted to grant them last year, ostensibly to help them develop new fuel-efficient cars and retool to produce them. They want another $50 billion in similar loans from Uncle Sugar, er, Sam.
Barack Obama signed on to the idea long ago. Probably because the pundits have designated Michigan as a "battleground" state in November, John McCain has endorsed the idea as well. So much for deep philosophical or fiscal differences between the two major parties. There are votes to be won, and what did you think taxpayers' money was there for, anyway?
The automakers argue that Congress has saddled them with stricter fuel economy rules, or CAFɠstandards, which will cost around $100 billion for them to meet. There's a certain plausibility here, but the simpler approach would be to repeal the CAFɠstandards. When gas prices have risen, consumers have always migrated toward more fuel-efficient cars, creating genuine incentives to invest in them.