Friday, May 05, 2006

Perverse incentives

Transportation Secretary Norman Y. Mineta told members of the House Energy and Commerce Committee on Wednesday that Congress should not impose an "arbitrary" standard on its own. Rather, Mr. Mineta said, it should let the administration develop "size based" rules that would impose different requirements for big cars and small cars.

"A size-based system eliminates the perverse incentives for manufacturers to produce smaller and more dangerous vehicles, instead of introducing fuel-saving technologies," Mr. Mineta said. (NY Times)

While we're talking about perverse incentives, about the Bush administration's size-based system, which encourages automakers to make their cars heavier so that they don't have to meet stricter mileage requirements?

As for "smaller and more dangerous vehicles", I guess Mineta has forgotten the only reason they're dangerous is because of all the large cars and SUVs on the road?

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