A recent story in the Raleigh News & Observer highlights two separate but related pathological features of government:
1. Regulatory agencies are rewarded for imposing stricter regulations:
The proposal is being developed by the Environmental Protection Agency, the National Highway Traffic Safety Administration and the California Air Resources Board, which has led the nation in setting tough standards.
Market actors face simple incentives. If they perform well, they make more money. The feedback mechanism for bureaucrats is a bit different. Because their salaries are relatively fixed, they act so as to maximize either their leisure or prestige. Personally, I’d prefer it if the California Air Resources Board had opted for the former.
Instead, though, they “led the nation in setting tough standards,” and as a result, they get to play with the big boys. As if “toughness” were an impressive quality in this context!
The California Air Resources Board is being rewarded with prestige for having had the audacity to interfere the most with the free market. By choosing a higher number than their other state colleagues (and choosing a number requires no great “toughness!”), they’ve won.
2. Government cannot make credible long-term commitments:
The auto companies are asking the government to phase in the standard gradually, to allow credits for using certain technologies and fuels and to include a review period that could lower the target if it proves too costly, industry and government officials said.
The arguments being advanced by government agencies sound convincing, and they’re confident in their predictions. Why, then, should there be a “review period?” The answer involves the role of the media in this dance between government and industry.
The headline of the article says that “56.2 mpg by 2025 is the goal.” Note that that’s the HEADLINE. Bold, unrealistic predictions about the distant future make headlines. Then, in the future, when the government adjusts those predictions to correspond a little more closely with reality, we got a whole new set of headlines.
To whoever at the N&O wrote that headline: wanna bet that the average mpg of American cars will not be 56.2 by 2025?.