Obama Giveth and He Taketh Away

The New York Times reports that the Obama administration is set to allow 14 states, including California, to impose new restrictions on auto emissions. In addition, the administration will impose higher fuel efficiency standards.

These actions will cost auto makers money to meet the new standards, and with respect to the fuel efficiency mandate, to produce cars profitably that people want to buy.

As discussed in an earlier column, this illustrates perfectly the burdens that government has long imposed on the Big Three. And while it may seem that the government wants to help them with the recent bailout, these new actions will make it harder for the auto makers to achieve profitability on a sustainable basis - and vastly increase the need for further bailouts.