This is more scary I think.

http://www.scoop.co.nz/stories/HL0303/S00080.htm

Interesting.

One of the big causes of the economic revolution in England from 1760 on was that they went from having a medeival road system that was a joke, to having highways you could really travel on.

The key to that was the turnpike trusts, who maintained the roads and charged you to use them. The turnpikes could say “sure you can use heavy narrow-wheeled carriages that rip up the roads - but we’ll charge you a toll three times as much as anyone else”. So people didn’t. So road maintenance got cheaper.

It was a nice example of the govt taking what was a market externality (the way some types of carriages ruined the roads) and re-arranging things so as to put a price on it.

(and don’t dis the the industrial revolution - it was England’s move from the famine-ridden 3rd-world poverty of the peasant economy to the still-imperfect-but-better-than-that modern economy. Dickensian England sucked, but a lot less people starved and froze to death and they managed to achieve ‘luxuries’ like literacy for the masses that the peasant economy could not. Yes, we can move to a post-industrial economy that will be better, but you had to start at the start.)

> San Francisco have just banned all vehicles which weigh over 2700kg from the city. Apparently they were destroying the roads as they are too heavy…

This superficially sounds like a great idea, but if taken literally it would mean no firefighting trucks, which is clearly a safety problem. There may also be an issue with construction cranes. I presume they have an exception, at least for the fire trucks…

Congress has done things in the typically convoluted way of politicians. In 2002 the National Academy of Sciences reviewed all aspects of the CAFE system and recommended some major changes. In 2003 Congress authorised NHTSA to develop and implement a new CAFE system for light trucks and vans but not for passenger cars. This year Congress authorised NHTSA to extend the new system to passenger cars. This four year delay has meant that SUV mpg standards have caught up with passenger cars of the same size. From now on they should improve at the same rate which removes one of the major profit factors that favoured SUVs.

The reformed CAFE system for light trucks takes into account the number of seats and not just the type of chassis. Under the old system SUVs were classified as light trucks simply because they had light truck chassis. Likewise MPVs were classified as vans if they had a van chassis.

The decision to have different CAFE standards for cars and LTVs was made in the 1970s for the reasons you gave. Over the next decade Chrysler created MPVs and SUVs to both meet customer demand for big station wagons and to take advantage the CAFE system. Essentially they could sell big “cars” and not be penalised for not achieving the car CAFE minimum MPG.

> What a good idea, reclassify SUV’s as light trucks…. The head of the IEA is saying that sort of thing.

In the US, SUVs always have been classified as light trucks. This gives them an unfair market advantage over cars, in that a vehicle bought for business use incurs GST if it is a car, but not if it is a truck. This means that a real estate agent, accountant, or any other self-employed person who doesn’t need a truck for work can often get an SUV more cheaply than a car, when the SUV is more expensive to build, just because they don’t pay GST on the SUV.

This rule was introduced to help people like builders and drainlayers, who really do need light trucks for work. But Bush II increased the loopholes in it, so more white-collar workers could take advantage of it. The BMW X5, Porsche Cayenne and Mercedes ML series all weigh the same amount, which just happens to be the least a truck can weigh in the US without being classed as a car, and therefore incur GST. It has been suggested that he did this to protect the US motor industry, because US-made SUVs are not as inferior to Japanese SUVs as US cars are to Japanese cars.

Classifying SUVs as trucks might be logical, but not under a tax system that gives trucks an advantage over cars.

Scary stuff if it’s true… Wonder if it’s the same here (hope not!)

NZ needs to alter terms of trade to use something other than US$ for settlment.

BJ