Sunday, June 11, 2006

Boo of the Month I:Gas Rebates from GM and Ford-Bad Cars, Worse Policy

How far have GM and Ford fallen? Having built a slew of gas guzzling SUVs and cars that noone wants, they are offering cheaper gasoline as a sales incentive. For GM, it is a cap of $1.99 per gallon of gas for a year. Ford has one upped GM by providing debit cards good for $1000 of gas. Policy makers have been discussing a gasoline tax to discourage excessive consumption. The GM and Ford plans are a "negative tax"-they encourage profligate use of gas and discourage conservation. Let's avoid these deals and send GM and Ford a message that the best way to solve their corporate profitabilty problems are not with free gas, but better, more fuel-efficient vehicles.

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