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The Truth About CAFE Standards

BEGIN TRANSCRIPT

RUSH: One of the reasons why Obama is not going to okay the Keystone pipeline, you ever heard of a guy named Tom Steyer?  He is a huge billionaire.  Major, major Democrat bankroller, donor, bundler.  Tom Steyer just promised to give the Democrat Party $100 million for the 2014 campaign if Obama, among other things, will continue disapproving of the Keystone pipeline.  One hundred million dollars from a Democrat donor. 

Let me go to the phones and start in Antwerp, Ohio.  John, thank you for calling.  It's great to have you with us today.  Hello, sir.

CALLER:  Hello, Rush.  How are you?

RUSH:  Good.  Good.  Very good.  Thank you.

CALLER:  Fantastic.  Good to finally speak with you.

RUSH:  Yeah.  Yeah.  Same here.

CALLER:  Hey, I got a comment.  You brought up the CAFE standards just a little bit ago.  I worked for General Motors, I worked for the company for 13 years.

RUSH:  What did you do?

CALLER:  Assembly.  I worked in a foundry for a while and then I moved to an assembly plant.  There's a trick with the CAFE standards.  That's imposed across the entire fleet of vehicles.

RUSH:  Yeah, John, let's explain.  In the first place, for the low-information Yahoo News readers in the audience, would you tell us what CAFE standard is.  Corporate average fuel economy, is that it?

CALLER:  Yes.

RUSH:  And what that means is you take the average of every vehicle you make, the whole fleet, right?

CALLER:  Absolutely.

RUSH:  And the whole fleet average mileage has to come in under whatever the CAFE standard is, right?

CALLER:  Exactly, yes.

RUSH:  Okay.

CALLER:  And, now, it may change slightly on some of the larger vehicles, but it really doesn't take a hit on their crown jewels, their trucks, their vans, their SUVs.  What they profit on, the vehicles they make money on --

RUSH:  Right.

CALLER:  -- they're not gonna take a hit on those.  So that's why you get your Cobalts and your Volts and the vehicles that they offer high incentives on --

RUSH:  Folks, this is important, this is important to know, because John here's exactly right.  These CAFE standards the government just unilaterally imposes, and I'm gonna make up a number.  Let's say that the corporate average fuel efficiency, the average mileage that a company must achieve with every car in its fleet is 15 miles a gallon.  Just making it up.  That means if they have a car, an SUV that gets 12 to 13 or whatever, they've gotta make a bunch of little lawn mowers with seats on 'em that get 30 miles to a gallon --

CALLER:  Exactly.

RUSH:  -- which I'm sure John's gonna say, nobody wants.

CALLER:  Right, which is why you see at the end of the model year these huge incentives on the smaller cars, the ones that there's not a large -- the people aren't just standing in line to buy these, you know.

RUSH:  Now, let me ask you a question, John.  It's calling for a political opinion, and you may not have thought about it, and I don't mean to be forcing you into an answer.  But how serious are they?  If you're the government, and if you really, really, really think that automobiles are destroying the planet, and you have established a fuel efficiency of 15 miles to the gallon, and you're dead serious about it, why would you allow them to even make a car that gets eight to 10, if you're really serious about it?  I mean, the question, if you're gonna have a 15 mile per -- let's make it 18 just for the hell of it here, just to make it more reasonable.  If you're gonna have a demand that the company cannot have an average fuel mileage under 18 miles a gallon, why wouldn't you just impose it on every vehicle, if you're serious, and my point, why do they even allow the SUVs to be made, if they're the problem, if they're destroying the planet?

CALLER:  Because the CAFE standards are window dressing.  It's a way for the government to say, "We've done something."

RUSH:  Exactly.

CALLER:  But they're still profiting off the corporation.  They're not gonna cripple the corporation.

RUSH:  No.  They have to allow the company to make the products people want, and they want the trucks and the SUVs.  The moms want it.  The soccer moms want those things.

CALLER:  Yes.

RUSH:  But here comes this CAFE standard thing, so they gotta make a bunch of crap, relatively speaking.  I mean, if that's all they sold, they'd be out of business --

CALLER:  Yes.

RUSH:  -- in order to come in under that average fuel efficiency that the government demands.  It's a total, arbitrary intervention in the private sector, and it leads to the creation or production of cars that the company would never make otherwise.

CALLER:  Exactly.  Well said.

RUSH:  I think your point is that is why General Motors is still crippled now, right?

CALLER:  Oh, exactly, yes.  Yeah, when they're forced to offset the vehicle that they profit from with vehicles that they don't, of course, it's gonna hurt their bottom line.

RUSH:  I need to tell you a short story.  I went to General Motors six years ago, five or six years ago in advance of them becoming official sponsors.  And I reacquainted myself with Bob Lutz, who back then liked me.  But we've had a falling out over global warming.  He's big on the Volt and so forth, he's a corporate guy, and he blames me for -- anyway.  I went up and spent two hours with him.  And I knew before I got there that he had designed a really luxurious Cadillac that was either a 12- or 16-cylinder engine.  It was gonna be a beast.  Luxury, not an SUV.  It was a sedan.  And when we're walking around I saw the mock-up of it.  The life size model. It was gorgeous. It was beautiful. I said, "When is that coming out?" 

He said, "We can't make it.  CAFE standards." 

I said, "Now, wait a minute."  And I was dead serious.  "Every year BMW, Bentley, Rolls-Royce, Mercedes produce these big hog sedans of 600-horsepower twin turbo V-12s, what do you mean you can't do it?" 

He said, "Well, they're not gonna be able to do it for long."

Well, the 2015 Mercedes S-Class just hit, and they're still doing it.  He said that Cadillac, GM couldn't do it. I guess they couldn't fit that car into their corporate average fleet.  Mercedes must make a bunch of puddle jumpers in Europe that get them under the standard. I still don't know why Mercedes, Daimler-Benz, I don't know why they can do it and GM can't.  It was a gorgeous car that Lutz had designed, and they couldn't make it because of the CAFE standards.

BREAK TRANSCRIPT

RUSH:  You can almost say that the CAFE standards, federal CAFE standards put the poor at greater risk, because they're the ones that buy these little cars in the greater numbers because that's all they can afford on what Obama gives 'em.

END TRANSCRIPT

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