CAFE standards — the federal fuel-mileage rules for automobiles — appear in The Bob Zadek Show not as a subject of statutory or regulatory analysis but as an illustration in two separate arguments. In a 2011 episode, the standards serve as Bob Zadek’s example of crony capitalism and of the dependence of large automakers on the federal government. In a 2022 episode, they serve as a marker of the Japan scare of the 1990s and of what Zadek calls economic war. Neither excerpt describes the standards’ content, their statutory basis, or their legal history.
Crony capitalism and the automakers (2011)
In the 2011 episode, Don Boudreaux, identified as a professor of economics at George Mason University and a blogger at Cafe Hayek, argued that free-market economics is not pro-business but pro-consumer and pro-freedom, and that business people too often seek favors from politicians. He said politicians are champions at avoiding blame and pointing fingers at others, and criticized a former governor — referred to as Ms. Granholm — for denying responsibility for her own actions, calling her a big-government, high-tax governor and saying she got her way in the legislature and in Ann Arbor, with results visible in Michigan. Boudreaux added that she was not the only one and that Michigan had a long history of bad policies, but that she continued and championed them The Second American Revolution – NOW (2011).
Bob Zadek then turned to the phrase “pro-business,” which he called a deceptive concept, saying business and free markets are basically unrelated. He named Jeffrey Immelt at General Electric and said General Electric is a government agent disguised as a business, so in bed with the political process and so dependent on it for profitability and survival that it and others like it would fear the free market. Boudreaux agreed, listing General Electric, Archer Daniels Midland, Martin Marietta and Boeing, and said the list of so-called businesses that suckle at the teat of government is very long. He said the leaders of these firms are pro-government, that free markets are about giving consumers maximum freedom, and that tariffs, regulations and in many cases high taxes are means of protecting powerful businesses from competition The Second American Revolution – NOW (2011).
Zadek then offered CAFE standards as his example. He called the display sickening when Obama gets in front of the cameras and announces doubling the CAFE standards, the fuel mileage standards for cars, with three automobile CEO puppets nodding and saying they love it. Zadek asked what choice they have, noting that government owns one of them, or a substantial portion, and is a creditor of another, so they are so dependent on government, which has saved their jobs, that they do not dare protest a policy he described as bad for the automobile buying public, bad for the manufacturers and stifling to competition. He said they might as well be working for the US Department of Commerce and are just arms of the federal government. Zadek added that when he talks about free markets he is not talking about business but about entrepreneurship and small business, and he described a sickening, incestuous relationship between government and business through tax breaks and loopholes, with General Electric as the most ugly example, such that most large businesses are simply instrumentalities of the federal government The Second American Revolution – NOW (2011).
Boudreaux responded that he wanted to take the “crony” out of “crony capitalism,” that crony capitalism is not even capitalism but just cronyism, and that he wanted to replace cronyism with capitalism — maximum freedom for consumers to spend their money as they see fit and maximum freedom for entrepreneurs to compete for those consumer dollars, with no expectation of government protection if they fail to compete. He called General Electric a monument to cronyism The Second American Revolution – NOW (2011).
The CAFE episode thus functions in the argument as evidence of a general thesis: that large firms in regulated industries align with government rather than with markets. The standards themselves are named only as the occasion for the automakers’ public assent; the excerpt does not state the standards’ levels, their effective dates, or the mechanism by which they were imposed.
The Japan scare and economic war (2022)
In a 2022 episode, Zadek recalled the 1990s, when Japan was temporarily very strong economically, and described what he called, in his own words, a peaceful 9/11 threat: a Japanese company’s purchase of Rockefeller Center. He said the fear was palpable and strong that Japan would take us over, and that he flashed back to that tiny event in time — not only the Rockefeller Center purchase but the “invasion” of Japanese cars as a threat to American car manufacturers. He said that in part the United States was in economic war with Japan, and that the concept of economic war is itself insane because Japan was just giving the American public exactly what it wanted. He offered this as an example of the perception of threat from another country that is really quite benign or nonexistent China & the Stupidity of War (2022).
John Mueller agreed, saying there is quite a section in his book on the Japan thing. He noted that Japan also bought MGM and Sony Pictures, and said he used to refer to it as the “Flash Japan Buys Pearl Harbor” syndrome. He mentioned a book called The Coming War with Japan, published around 1990 or 1991, in the middle of the concern about Japan, and said its author is now head of Stratfor, which he described as one of the chief prediction agencies working for the Pentagon. Mueller said it is interesting that Toyota recently became the most popular car in the United States and that no one seemed to be squirming over the issue despite its suspiciously Japanese name. He said the hysteria over Japan — the Japan scare about their buying everything, going to Hawaii and golfing on our golf courses — reminds him very much of the concerns about China currently, including fears that China will build up militarily, outclass the United States economically, and buy the country out. He said that to a degree this has happened with Toyota, Honda and Subaru, and that it was pure Japan hysteria for those years China & the Stupidity of War (2022).
In this episode Zadek’s reference to CAFE standards is retrospective and hedged: he says the country did not have the CAFE standards at the time of the Japan scare, but that the United States was in part in economic war with Japan. The standards appear as one item in a list of remembered responses to Japanese competition, alongside the Rockefeller Center purchase and the perceived invasion of Japanese cars. The excerpt does not say when CAFE standards were enacted or how they related to Japanese imports.
Across episodes: no development
The two episodes touch CAFE standards in different contexts — a 2011 argument about crony capitalism and automaker dependence on government, and a 2022 discussion of the Japan scare and economic war — and the excerpts show no development of the topic between them. The earlier treatment uses the standards as a present-day policy example; the later treatment recalls them as part of a historical episode, and Zadek’s own recollection in 2022 that the standards were not in place during the Japan scare is not reconciled with the 2011 discussion. No guest in either excerpt analyzes the standards as law.
What the sources do not cover
The excerpts do not state the content of any CAFE standard, the statute or agency that issued it, the levels to which the standards were raised, or the dates of any rulemaking. They do not name the automobile companies whose executives Zadek describes as nodding, nor identify which company the government owned or of which it was a creditor. They do not give the title or field of Ms. Granholm beyond Boudreaux’s description of her as a governor, and they do not state the holding of any case or the amendment on which any dispute turned.