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.

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. 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.

This post was a followup to bad history blaming markets and the nuances behind "planned obsolescence." 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" and "greed."