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Some Say Focus On Green Cars Can Wait

Bigger isn't better in the United States. Bigger is best. We like our value meals super-sized, our Gulps double big and our millions, well, mega. And what we drive - SUVs, trucks, vans - is certainly a reflection.

"People love their SUVs," says Dr. David Cole, Chairman of the Center for Automotive Research in Ann Arbor, Mich. "And they love them even more when gas is less than $2 a gallon."

CEOs from the Big Three American automakers - Ford, General Motors and Chrysler - went before Congress this week asking for big money: $34 billion in emergency loans to save their ailing companies from imminent demise.

But a major sticking point for many members of Congress was whether these companies will use the money to build smaller, more fuel-efficient vehicles, not necessarily the immediate health of the industry.

Cole says talk of manufacturing high-mileage vehicles detracts from the true issue at hand.

"The real problem has nothing to do with clean vehicles. It has to do with credit markets," he says.

"It's like if there's an accident and you call an ambulance. You need life support to revive the patient right away," says Cole about the current financial state of GM, Ford and Chrysler. This "bridge" loan, Cole believes, would provide the necessary, if temporary, life support.

American automakers lag behind Japanese companies like Honda and Toyota in mass-producing green vehicles. (The Toyota Prius and Honda Civic Hybrid lead the hybrid market). But perhaps American carmakers have been slow to get on the green bandwagon for good reason, says Clifford Winston, an economist at the Brookings Institute. He explains it very simply - market demand.

If consumers want green vehicles, "they'll demand them," says Winston. The bulk of that limited demand so far, Winston explains, is confined to the East and West Coasts.

"People's choice of vehicle can be explained very rationally. Fuel economy may be just one of many considerations like price, carrying capacity and comfort," he says.

Over the summer the price for a gallon of gas hit its peak at $4.11. Today, it's down to $1.77, according the American Automobile Association.

So why does Congress harp on investing in green technology - a long-term issue - when the industry is facing immediate financial collapse? Politics, says University of California Santa Barbara political science professor Eric Smith.

"You're seeing a rare example of crisis politics and members of Congress are using the opportunity to extort concessions from the auto companies like investments in hybrids," he said in a phone interview.

Members of Congress, Smith says, "have to look tough on environmental issues," and they're leveraging the failures of the auto industry to channel money for long-term hybrid projects that will please their constituents. And with the auto executives beholden to Congress's checkbook for immediate aid, it works.

Adds Smith, "We can call it politics as usual."

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