If People Don't Spend Money on Cars, They Will Spend it On Something Else

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Wednesday, 15 December 2010 16:21

The auto industry put out a study that apparently assumes that if people don't spend money on cars, they will not spend it on anything. This was in the context of evaluating the employment impact of proposals to substantially increase mileage standards.

The NYT uncritically reported the projections from this study, which found that a large increase in mileage standards could reduce the number of jobs nationwide by 1.3 million. The article did not include the views of any economists who would have pointed out the unrealistic nature of this assumption.