GM exec Bob Lutz makes the case for a higher gas tax

General Motor’s Bob Lutz, hardly an environmentalist icon, is making news today for the common-sense argument he pitched in Detroit yesterday at the North American International Auto Show.

His argument: a graduated gasoline tax increase would be the best way to help American consumers — and automakers — make the smartest, fuel-efficient choices. Otherwise, as prices at the pump fluctuate on the whims of global oil markets, neither consumers nor companies like GM have any reasonable assurance that greener cars are really all that necessary.

They may be over the long run, of course, but people buy cars and trucks in the short run.

According to CNN’s account of Lutz’s remarks, the vice chairman of GM sees a looming contradiction:

“If the rise in gasoline prices is gradual, I think that all of us in the industry would frankly welcome that, because there is nothing more illogical than forcing fuel-saving technology when gasoline is extremely cheap,” he said when asked about any concerns about oil again rising above $80 a barrel.

The kicker, of course, is that politicians of just about every stripe — from red to blue and even green — are scared to death of attaching their names to such an unpopular proposal. U.S. House of Representatives Speaker Nancy Pelosi, a San Francisco Democrat, dismissed the idea out of hand yesterday in Detroit (no support in Congress, she dodged), while U.S. Transportation Department Secretary Ray LaHood did likewise.

Lutz argues that since consumers are so sensitive to swings in gas prices, it’s nearly impossible for carmakers to match their supplies to consumers ever-changing demands — courtesy of decisions made in far-away places like Riyadh and Caracas.

The biggest problem hitting automakers from rising gas prices, Lutz said, is the fact that consumer preferences change suddenly when gas prices rise and fall, which makes it impossible for auto manufacturers to adapt.

“Every time gas prices go back down, everybody starts buying big stuff again. Gas prices go up a buck, the big stuff is unsellable and everyone wants small cars. Go figure,” he said. “It’s like the collective memory is about three weeks long. We can’t run a business that way.”