Just how does Warren Buffett suggest we improve our balance of payments? Does he suggest we withdraw from our trade agreements and impose tarriffs? Can you say Smoot-Hawley?

The only other thing I can think that might help is higher oil prices. That would reduce demand, and therefore our imports. It would also increase the cost of shipping imports to us. Perhaps something bad should happen to Saudi and Iranian oil fields?

That would turn out to have undesireable side effects.

Does he expect American companies to push on a rope?

1) The cost to build a car, large or small is about the same. The materials cost difference is rather small. The overhead, labor, payroll taxes, benefits, and retirement costs are the same for each car.

2) You can charge more for a big car than a small one. The margin on a small car is slim to nonexistent.

3) The CAFE standard applies to the fleet mileage. Nobody wants a big car with a small engine. Detroit learned that in the ’70s, when they put 4 cylinder engines in full size cars. Even with the downsized platforms the performance is miserable. The full size cars *must* have the larger engines. Nobody wanted the small cars. The US companies practically had to give them away. Even so, the CAFE standard requires the car companies to push on a rope.

4) The foreign companies have lower overhead, so they could make a profit on the smaller cars, and could afford to improve them.

5) The CAFE standards and gas guzzler taxes don’t apply to light and full size trucks. This was supposed to protect small business. All companies can sell as many of *those* as they want. This makes an SUV a better value. Thus the SUV boom was born. Even the Japanese got into the act.

6) American trucks and SUVs are better than their import counterparts. They are more durable and get better mileage. The US makers reinvested their profits in that market to continually improve their products. The lower overhead of the imports was eroding their advantage.

7) The high gasoline prices killed *everyone’s* SUV and truck sales. I bet Toyota, Nissan, and Honda management regret trying to get into that market. I doubt they even began to recoup their investment in it.

A Japanese or European car dies immediately if it doesn’t get its scheduled maintenance. It also voids the warranty. An American car waits to die until just after its warranty runs out.

It’s like the gas gauge. When the gauge on my ‘83 Rabbit GTI said the 10 gallon tank was empty, it was *empty*. Not so on American cars. People get bad habits.

My last three cars have been American, though the Ford Fusion was assembled in Mexico.