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Markets Get Blamed When Regulations Backfire by jacobtothe

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· @jacobtothe ·
$7.45
Markets Get Blamed When Regulations Backfire
If you live in North America, you have probably noticed some strange things about car designs over time. When I was a kid, sedans and station wagons were still common family haulers. Minivans were starting to take hold, and the Chevy Suburban or Jeep Wagoneer were popular choices for folks who needed both cargo and passenger space. Yet there were still a lot of small cars on the road. Many got decent gas mileage, too, in spite of now-obsolete carburetors still lingering in some budget models. The compact pickup was a popular choice, often a Japanese make under its own brand or badge-engineered under a domestic nameplate.

Over the years, small cars either bloated with each new generation, or got cancelled entirely. Small pickups used to be all the rage, but they grew to be almost the size of a half-ton full-size, and the full-size heavy-duty trucks got stupid huge. Minivans and then car-based SUVs took over from sedans as family haulers. Cars got heavier and bigger and harder to see out from within.

Of course, the usual scapegoats are corporate greed, oversized Americans, oversized egos, and a seething hatred for Mother Earth Gaia, but what if there are more problems than that? What if the systemic problems come from well-intentioned (allegedly) regulations backfiring by creating perverse incentives counterproductive to their stated ends?

One issue is explained in the video below, describing how the wheelbase of a car or truck plays a major role in determining where it falls against the ever-changing fuel economy regulations in the US. People could own smaller, more-efficient vehicles that serve their needs better, but it's either illegal or prohibitively expensive to have it. So they buy a stupid-big pickup with a big engine.

https://www.youtube.com/watch?v=azI3nqrHEXM

There are more nuances than my simple paragraph, so take a look. But the incentives drive big trucks because they're easier to bring into compliance. Size adds weight and air resistance, which both make fuel economy targets harder to reach. But it's easier to build bigger when internal combustion engines (ICEs) are approaching the best fuel economy available from current technology. Bureaucrats setting arbitrary mandates is not how we achieve progress.

Other industry analysts have pointed to other regulatory issues, too. "Safety standards" have led to changes in the size of the pillars, the height of the belt line, and other visibility-impeding design considerations. They also add weight, which adversely affects fuel economy.

There is also a huge push to replace ICE vehicles with electric or hybrid powertrains. There are advantages to electric engines, but they are not the be-all and end-all. Hybrids add mechanical complexity, which means more points of failure. Batteries have a definite lifespan, and replacement can be prohibitively expensive. Damage can be harder to repair, and thus it is easier to write off such a car as a total loss, resulting in all the energy and material costs of total replacement. Pollution from mining, refining, and manufacturing battery components are often overlooked, as are the infrastructure strain of more electricity demand. This is regulatory overreach masquerading as "green energy."

I'm no apologist for corporations, and I don't want to pretend the automakers are purely victims of government. There's also an assumption that the current market is purely a consequence of consumer demand. [The followup to the above video delves into this as well.](https://www.youtube.com/watch?v=UgUAMGXFJBw) I would love to have a modernized Mazda B-series with a slight size increase for better crash protection and a modern engine. I want a compact truck. But the ones available are all old and driven to death. And I blame government intervention first and foremost for this gap in the market.

<center>![Hive Divider Bar Centered.png](https://files.peakd.com/file/peakd-hive/jacobtothe/SzfvUD8g-Hive20Divider20Bar20Centered.png)</center>

This post was a followup to [bad history blaming markets](https://peakd.com/hive-112018/@jacobtothe/free-market-fearmongering-debunked) and [the nuances behind "planned obsolescence."](https://peakd.com/hive-112018/@jacobtothe/planned-obsolescence-free-market-fearmongering-debunked-again) Check them out, too, and let's discuss how real economic and political factors play a role in problems people want to blame on ["capitalism"](https://peakd.com/hive-112018/@jacobtothe/blame-capitalism) and "greed."

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vote details (110)
@alohaed ·
$0.05
I miss my S-10 pickup it was the perfect size. 

Lawmakers and Governors can pass a 1,000 regulations or compliance goals - but the lithium and rare earth pipeline is not adequate to hit any of the state goals in the past few years. 

Legislatures will wind up having to walk back regulatory targets and blame it on everything and anything but their own decoupling from reality.
👍  
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vote details (1)
@jacobtothe ·
LiFePo batteries are better in almost every respect except space efficiency compared to current LiPo tech, but the fact remains batteries are heavy, charging takes time, and  not every application is ideal. For those of us who can't afford a fleet, the most versatile option is ideal, and that often means a 4x4 or AWD gas- or diesel-powered vehicle for passengers and cargo.

No one wants to let the market process winnow out the bad until the better remain. The push for mandates and milestones has nothing to do with the market or the environment.
👍  
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vote details (1)
@coloneljethro ·
Meh, I think you give regulations too much credit and people's bullheadedness too little.  The market produces what consumers want to buy (albeit with a bit of a lag), the issue is that what consumers want oscillates wildly depending on the price of gas.  You saw it with the steady increase in power and size of autos up to the 1973 oil crisis, and ever since we've cycled back and forth between fuel efficiency and 'fuck it'.  The current situation reminds me a lot of where we were in the late 90s, before we embarked upon the crusade to make the world safe for KBR/Halliburton/democracy and everybody rediscovered the concept of fuel economy.

Not saying there's not unintended consequences from regulations but that macro trends have played a far larger role in shaping things.
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@jacobtothe ·
What consumers want is affected by what is available from which they can choose. Regulations affect that a lot. So do import duties. Why aren't kei cars an option for Americans? Why can't we buy the European diesels that get 40-50 mpg? Why can't we have Australian utes or the old mini-trucks? Legal hurdles have a lot to do with these issues.

Additionally, federal fiscal policy and low interest rates make the cost to borrow for big trucks look better than it would on a market with more open pricing. $80k is absurd for a truck. We can get a 2 door base model half tom for around $35k, but the add-ons areassi ely overpriced for corporate profits, too. It'd many layers of onion, but blaming consumers and corporations misses a huge part of the equation.
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@djbravo ·
The era of old cars is ending now but people want you to see these cars on the roads, so we see that many people bring them but the government does not allow these things. 
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@owasco ·
$0.04
Interesting! I tried to find a compact pickup truck a few months ago, and was astonished at how BIG the so-called smaller-sized trucks are these days - they are enormous! My family had a small truck back in the day, and even the kids could safely drive it around the back forty. I see old rusty small trucks now and then, and have always wondered what happened to that size. Thanks for the info! .
👍  
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vote details (1)
@jacobtothe ·
If you're outside the US, there are probably different laws in play and different options. So many cars make Americans ask, "but why can't I buy that here?" When we learn they exist, and either import taxes or regulatory barriers are usually to blame.
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@geneeverett ·
If they got rid of the insane over regulation we could have a $9K all in perfectly safe mid size car.
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@owasco ·
$0.04
We have tiny cars. I've never understood why we can't have tiny trucks. Mini vans simply do not cut the mustard. So stupid. 
👍  
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vote details (1)
@rafzat ·
$0.04
Most small cars actually got canceled entirely, lol
There are some of them that we don't even see out there anymore 
👍  
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