Yesterday, The New York Times released a report exposing how the oil industry, not the automobile industry, influenced the Trump administration’s proposal to roll back strong fuel efficiency standards introduced under President Obama.
Marathon Petroleum, the nation’s biggest oil refiner, along with the Koch network, launched an aggressive, but covert, campaign to keep Americans hooked on their gas-guzzlers. The oil industry’s fingerprints can be seen on letters from state lawmakers to the Transportation Department, Facebook ads, public comments and draft legislation for states.
It now makes sense why automakers expressed some concern about how far the administration’s rollback goes... the proposal wasn’t written for them.
The Trump administration went to great lengths to make the oil-backed proposal palatable to the public, releasing an analysis so flawed and cherry-picked that researchers called the justification “embarrassing,” “dishonest” and “sloppy.”
When the Trump administration proposed rolling back Obama-era clean car standards in August, it claimed that the new rules would save lives--literally calling the proposal the SAFE Vehicle Rule, short for the Safer Affordable Fuel Efficient Vehicles Proposed Rule. (Subtlety is Trump’s calling card, after all.)
And now we know that the math justifying some of the SAFE proposal’s claims would be in danger of failing basic Econ 101. In a letter in Science, 11 academics ripped apart the proposal. Not only would it not make people safer, they argued, but the analysis also overstated the economic benefits of the rollback by more than $110 billion. Apparently, justifying the relaxed fuel standard requires ignorance of basic economics.
For example, it’s a pretty basic concept that raising a product’s price lowers demand. So if you were to assume an increase in fuel economy standards means an increase in the price of a new car, then the demand for cars will decrease, right? Fewer people could afford them, and businesses could only afford to buy fewer. In turn, the country’s overall fleet size will decrease. That makes sense to anyone familiar with the theory of supply and demand. (And, again, assuming that raising the mileage on a car makes it more expensive.)
Fewer cars on the road is a good thing from a public health perspective--it means fewer crashes, fatalities, traffic, pollution and fossil fuel dependence.
But the Trump administration ignored basic economic theory and argued that relaxing standards (thereby lowering the price, by their argument) would somehow decrease the country’s fleet size by six million by 2029. But letting less efficient cars on the road would mean you could expect to end up with a larger fleet. As the study puts it, the administration's report “violates simple economic principles.”
Not that this is anything new. Trump and his administration have showed time and time again that they don’t understand Economics 101--or, more likely, they are willing to ignore it to advance their agenda.
If you were to wager whether the administration headed by a man who managed to bankrupt casinos wasn’t particularly adept in economics…well, that’d probably be a pretty SAFE bet.