Faustian BARgain

(Faustian Bargain)

After seven weeks, the United Auto Workers and the Big Three automakers reached a tentative agreement, details of which were not immediately available. That being said, the strike was about one issue, the mandated future to manufacture electric vehicles to the exclusion of all else. Making one buy an electric car is like making one eat broccoli, probably without cheese. There is no market for EV's that would be sustainable and sustainable is big on the Administration's agenda.

There was going to be an insurance policy if electric cars were not popular. The car industry will need another bail-out when the effects of forced production begin to manifest themselves. It costs Ford thousands of dollars more to print a single EV, to fill showrooms. Show rooms that will in all likelihood stay filled because there is no demand for the product.

Never fear. When politicians write books, they get their "friends" to buy thousands of copies, artificially inflating the sale numbers. That is what will have to happen here. Some bureaucrats will need to go down to that Ford or whatever dealership and have Uncle Sam buy out the inventory.

The easier thing to do, however, is let the market decide what is an appropriate level of EV production. There is a market, albeit a smaller one, for EV consumers and market forces should be able to determine that niche. But, if the last few says have reveled anything, it is that the world still runs on oil and pretending that things are otherwise is just ignorant.

So, it has been a re-curing theme that the President can reach different conclusions. that he can change policy directions. He has not called to ban any new appliances and even opened additional oil leases. The off-shore wind farm recently had a judgement against it so there is some luster off the green movement.

On one aspect, however, Biden is still mandating electric cars and the Big Three will be making them and will be forming a new partnership between President Biden, the Big Tree automakers, and the UAW. Theirs must be a symbiotic relationship, now.