my harebrained scheme
So, we can all pretty much agree that the American economy is going to hell in a handbasket. It also seems clear that nobody really knows what to do about it, so even though I’m not an economist, a policy specialist, or anything that even remotely qualifies me to propose a solution, I’m gonna go right ahead and propose a solution.
For me, the straw that breaks the camel’s back is the current push by the auto industry for another big bailout. They’ve spent years making cars that are less attractive and less reliable than the competition’s, and they continued to focus on giant gas-guzzling vehicles long after it made any sense. They deserve to fail so very, very badly.
We employ too many people to just lay off all at once, they whine. Too many sub-industries depend on us, they threaten — if we fail, dominoes start falling until we’re all ruined.
It’s hard to accept, but they probably kind of have a point there. The damage from a major burnout by one of the Big Three woud probably be felt for many years. Besides, this is a big, spread-out country; we are inextricably tired to our car culture (until we have the transporters from Star Trek, and I’m not holding my breath). So today I sort of concluded that some semblance of a U.S. auto industry must be saved. I’m just not thinking that the taxpayers should save it.
What if — mainly through a series of well-structured tax incentives, but also a stern “this is a necessary step to save our country, get your shareholders on board and do this” message from the Feds — we essentially forced the oil companies to absorb the car companies?
Last I checked, the oil companies were still posting multiple billions of dollars in profits per quarter. They provide the fuel for the cars we can’t live without, so they could probably remain healthily profitable even if they started to sell the cars at or barely above manufacturing cost: the old “sell the razor cheap, screw ’em on the blades” model. Lower prices would help American cars compete with foreign cars and make auto financing feasible for more people.
Then, with the vehicle producers and fuel providers under the same roof (well, a couple of competing consolidated roofs: GeneralExxonMobilMotors, ConocoChryslerPhilips, etc.), they may be in a better position to guide an orderly, rational transition from gas-powered cars and gas stations to alternatively-fueled cars and fueling stations: by 2015, your local FordTexaco station might do about 50% of its business in gasoline and 50% via electrical-charging-kiosks or battery-exchange service (full-serve! job creation, yo!). By 2020, down to 25% gasoline, and so on.
Put another way, since the oil companies have close relationships with the retail franchises (and I believe they have lots of corporate-owned gas stations too, do they?), they’d be in the best possible position to plan and execute that transition based on the insider knowledge they’d now have from their auto manufacturing divisions’ engineering departments.
Again, the financial incentive for them to make this work would be gradually increasing taxes on the profits from gasoline sales, and ongoing generous tax breaks on profits from alternative fuel sales.
I still like this idea after kicking it around in my head over lunch and this evening. I must be missing something major. Tell me why I’ve gone off the deep end here.