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A Short Lesson on CAFE Standards

BEGIN TRANSCRIPT

RUSH: Martin in Ann Arbor, Michigan. Speaking of the devil, welcome to the EIB Network, sir. It's great to have you here.

CALLER: Hey, Rush, mega dittos.

RUSH: Thank you.

CALLER: I was curious about your opinion on... I kind of find it to be like non-conservative, really, for a couple of the Republicans, you know, are -- are running about Michigan's one state recession and what they're going to do to fix it, too, but to me that goes right against conservative principles as far as, you know, small government versus Big Government and everything else. I don't see it being the federal government's problem. You know --

RUSH: What, specifically, are you referring to out there, Martin?

CALLER: I'm 99% sure Romney and Huckabee had both talked about, you know, Michigan's "one-state recession" and what they want to do to fix it and rebound the state.

RUSH: If you're talking about Romney saying he wanted to inject $20 billion a year of federal money into revitalizing the auto industry... Is that what you're referring to?

CALLER: I guess. I mean, it just sounds to me like populism, like you've been talking about. It just sounds like they're --

RUSH: I don't mean to be... Don't take this the wrong way, but if you're going to call here and be upset over the injection of Big Government populism in the campaign and not be able to tell me what it is, I'm a little suspicious.

CALLER: Well, no. That is what it is.

RUSH: Okay.

CALLER: I don't blame our state's problems on the federal government. I mean, I got strong views as far as why we have the problems that we have.

RUSH: Amen. Your problem --

CALLER: It's not the federal government and it's not the president, so I don't like hearing them running on how they're going to fix it.

RUSH: Wait, wait, wait, wait. Wait just a second. Wait just a second. Part of your state's problem could, in fact, be laid at the feet of the federal government.

CALLER: Okay.

RUSH: And that's their attempt to run the auto industry with miles-per-gallon standards, and all those other regulations that they have put on that industry.

CALLER: I agree with that.

RUSH: Also, the health care mess that is out of control because the government is involved in it. I know GM and Chrysler and Ford, they made all kinds of bad decisions, but they're in the health care business! They're not in the auto business anymore. There's so much wrong, and a lot of this you can trace directly to the federal government. In fact, I looked something up the other night. I have to remember this off the top of my head. The first implementation of CAFE standards, mileage standards, was in the seventies with Nixon during the contrived oil shortage days. That's when the federal government started mandating these CAFE standards, and, at that time, I think we imported 35% of our oil. Now, follow me on this. The first CAFE standards, 1970, '71, something like that, we imported 75% of our oil. Since then, we've had two or three more incremental additions to CAFE standards -- and mileage, by the way, the fleet mileage in America has gone way up. If you average all the cars manufactured here, and all the cars sold on the highways you'll find that the average mile per gallon is much greater than it was in the 1970s. So CAFE standards have given us more cars and more opportunity for people who want to buy 'em to get greater miles per gallon, than in the 1970s.

Yet with the overall fleet miles per gallon going up, we now import 60% of our oil. Now, is there a disconnect here? The CAFE standards were supposed to reduce the imports. CAFE standards were supposed to save fuel. They were supposed to get people more economical, energy expenses, travel costs, greater miles per gallon. What happened? People did more driving, see? Now we're going to repeat the mistake. More CAFE standards, more demands on the auto business, that they produce cars with even greater miles per gallon, and people are going to be driving more because it's going to be cheaper at the pump, even though the pump price is going up. It's only $2.80 in the last 40 years, by the way, but still, when you get more mileage people drive more and so we're using more energy. Guess what? We need more imports. So you might ask yourself a question: "Are these CAFE standards actually counterproductive?" We keep doing this same thing, and guess what? We keep importing more oil! We're telling ourselves, "We're saving gas. We're protecting the environment. We're really being good citizens and stewards of the planet, Mr. Limbaugh," and yet we're importing twice as much oil today, as we did when the first CAFE standards were put into place.

BREAK TRANSCRIPT

RUSH: I'm going to continue talking about the call from Michigan, because there were a couple things I didn't get the same response to what he said, "Too many Republicans came in there and started pandering like liberals," and he was referring specifically to Romney, who said that he would funnel $20 billion a year of federal money into the auto industry for research on various things: fuel, energy efficiency, and all this. By the way, I frankly agree with the caller on that. To me, that was pandering to people in the state. Politicians do it. This is what we were talking about yesterday about conservatism having to have underlying principles that form a foundation. (sigh) We just don't have anybody out there that's pure. We're going to have to bite the bullet on some things as this heads on down the path. But, you know, these CAFE standards, remember now in the 1970s we first instituted these things with Richard Nixon after the price of gasoline shot up from a quarter to over a dollar. We had these contrived shortages. Everybody said, "We need more mileage, more mileage. I can't handle it!" Whining and moaning about it.

So here came the CAFE standards, which is basically federal mandates on miles per gallon, and Detroit retooled, and started making a bunch of cars that nobody really wanted back then. But they got more gas mileage. We were importing 35% of our oil at the time. We've had, I don't know how many, increases. Clinton had a CAFE standard increase. The energy bill that was just talked about has one in it that is really Draconian, and there have probably been a couple of others. Now, the point of this, CAFE standards supposed to mean that we get more fuel economy, greater mileage; ergo, supposed to use less gasoline. It hasn't worked. We're now importing over 60% of our oil. We now import 13% of our gasoline. We import refined gasoline as well, now. We don't have enough refinery capacity to refine enough oil into gasoline to meet our own domestic needs. We're having to import that, too, despite all these miles per gallon increases. So it's not working, because, as the miles per gallon go up, people can drive more, because they get greater fuel economy. It's not working! What does it all mean? Well, aside from the fact that insanity is doing the same thing over and over again and expecting a different result, the fact of the matter is that we're not growing.

Well, that's not right. We are growing, and we got people who are trying to stunt it. It's not just that people are driving more, we have a robust economy. We have much more affluence today than we had in the seventies. People are more mobile, much more mobile. They're able to fly more than they could then, drive more than they could then, and, of course, this is putting all kinds of pressure on energy. Despite all these massive government efforts to increase gas mileage and so forth, we're now importing almost twice as much oil as we did when the first CAFE standards were put into place. Now, the bottom line to all this is, we are a growth oriented country and society. Conservation is wonderful. It's a fabulous thing. I like saving as much on things as I like, but it's not going to help me grow. It simply is not going to do that. So we've got to find a way to find our own energy, and it's there, but we have people standing in the way. Who's standing in the way? Government. This is why I think the federal government is partially responsible for what's happened in Michigan, the one-state recession, with all of these do-gooder regulations on mileage and so forth.

It's like I said yesterday: If you let people do it whose business it is to make, design, manufacture, and sell cars that people want, that's what will happen. But if you have a bunch of people involved who have no idea how to design a car, make a car that somebody wants and instead the government is going to tell these industries how they have to operate, you're going to get what you get, and you're going to have what we have. It's just plain as day to me that what we need is more of our own resources, and we need to continue focused on growth.

END TRANSCRIPT

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