Obama Attacks Big Oil and the Big Three - Without a Fight?

Remember when gas was $4 a gallon and carmakers offered zero-percent interest to anyone with credit? Bush-43 was in office along with all of the conspiracy theories behind Exxon's record profits. The Big Three automakers were going bankrupt simply because Toyota made a better car.

Fast forward two years and Gas is $2 a gallon. The Big Three are officially on the dole because of the "economic slow-down". Exxon saw a record drop in profits (that leap off the top of the mountain can be quite a trip), but was still one of the only Fortune 500 to post an amazing profit. Bush-43 is enjoying retirement between official dinners at SMU and Texas Rangers games. His old oil buddies cashed out while the going was good.

Enter President Obama. The President became the first to openly propose aggressive changes to minimum fuel economy standards while touting "global warming" as a reason. Certainly, President Obama is not the first to increase these standards, but it is something of a relief to hear a President refer to global warming as a real concern. It took his predecessor nearly two terms to admit what the rest of the world has suspected for the last twenty years.

Now comes the interesting part.

While these changes have come at a snail's pace, it looks like it may be quickening. The new proposal would accelerate the new standards to be implemented by 2016, rather than 2020. In the past, such recommendations would have triggered a big red flare to launch over Detroit to signal that they were being attacked. Big Oil would secretly start expanding their lobbying coffers while boosting airtime of their latest commercials showing how much they are doing for the whales off Alaska.

I suspect this time will be different. There will be fight, but I suspect that it will be about as formidable as a 40 year old boxer coming out of retirement for one last fight. The old guard is either too fat and happy...or begging for their next welfare check.

Big Oil has been entirely too profitable over that last few years to use supply and demand as an argument. The Big Three simply do not have a leg to stand on. They can claim that logistics and costs make it prohibitive, but the fact of the matter is that the technology has been around for over twenty years...and they will be using our tax dollars to fund the new costs. For those that think the government is taking over the automotive industry, your argument just received another bullet point.

So what does that mean for us, the American driver? Well, 2016 is about the next time that most of us will be able to afford to finance a new car after the credit crises we're in now. I've been told that most credit right-offs take at least seven years to disappear from your credit report. If the Big Three are left by 2016, they'll surely be ready to begin the cycle again.