Tuesday, May 19, 2009

Fuel efficiency and processing speeds - the new CAFE standards

President Obama announced new fuel efficiency standards for the American Automobile industry, suggesting that something must be done about the fact that we have not seen the kind of progress in fuel efficiency in cars that we've seen with processing speeds in computers.

That's an interesting comparison. Let's look at it more closely. The computer industry was never given government mandates on processing speeds. Computers have improved exponentially due to increasing demands from customers combined with fierce competition. Software and hardware engineers do not have a powerful union. They either continue to produce new innovations or they lose their jobs.

In the auto industry, there are a very limited number of competitors. Volumes of regulations and government mandates keep it that way. The general mindset for a union labor force is "how do we get more to do less?" That's not a commentary on the quality of the people. It's the nature of a system that makes management and employees adversaries.

Government getting ahead of the free market and declaring on the public's behalf what they want and what they shall get will never lead to better products.

Hopefully, Silicon Valley will make the whole issue obsolete at some point by coming through with technology that makes the new government targets look like child's play. That is, unless the government decides to help them too.

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