The stock price of Volkswagen AG is seeing a decrease by 20% or so today; the DAX index reacts by a drop by 0.6% which is visibly worse than other European stock indices (those went up). This brutal drop occurred after Volkswagen has admitted that it has employed a variety of software tricks – generally referred to as a "defeat device" – to understate its cars' emissions in order to please the Environmental Protection Agency (EPA) in the U.S.
The tricks have been used for 7 years in the diesel models sold in the U.S. which include Audi A3, VW Jetta, Beetle, Golf and Passat. In the past, the EPA has caught Renault, Volvo, Honda, and Ford using similar defeat devices but no one has ever thought that those were existential threats for the carmakers.
Such manipulation with the data shouldn't be taking place in an ideal world. Both Volkswagen and the EPA are responsible for this scam – the EPA is responsible because by its regulations most of which shouldn't exist in a free society, it has more or less forced everyone to cheat. However, it's obvious that I view Volkswagen primarily as a victim of the environmentalism that has run amok, especially when I see that the plans to punish Volkswagen are absolutely disproportionate. The EPA extortionists will demand $37,500 to be paid for each car that has used the tricks – $18 billion in total.
Coincidentally or not, the market capitalization decreased by pretty much the same amount today. We could argue that the markets are rational and they're expecting that the promised fines are everything that we will see, except for details, so the value of the company has decreased exactly by the gargantuan fine that is probably going to be requested.
I don't have to explain to you how huge $37,500 per car is. You may buy two very good new cars for that amount – and the amount is only supposed to be a fine for the underreporting of some emissions.
You may ask: Which emissions? Now, the cheating may have been used for the CO2 emissions as well. In the case of CO2, because it is a harmless or more precisely beneficial gas, I think that all companies in the world should rig the system as much as they can. If I criticize Volkswagen for something, it's their inability to do the tricks right – so that no one can find out.
However, the emissions that have been manipulated also include the oxides of nitrogen. And those are harmful, I think. However, I don't really believe that different diesel cars differ so terribly much from each other when it comes to NOx emissions. All of the diesel motors burn the diesel fuel and it must chemically mean pretty much the same thing. It's a known fact that diesel motors have higher nitrogen oxide emissions than petrol cars (and the particulate ones). Also, it's been known for years that the standard tests significantly underestimate the NOx emissions of diesel motors. So there are known facts about all diesel motors. Are the VW motors worse in any sense? We must clearly be discussing some modifications of the numbers that are inconsequential in the context of the industry, aren't they?
I could comprehend something like a $1,000 fine per car. But $37,500 per car? The institution demanding such a thing is obviously much more criminal than the company that has "tweaked" the software.
Such environmental fanatics exist not only in the U.S. We have them in Europe, too. (We also have similar overly active Stalinist bureaucrats in Europe who are trying to destroy American companies such as Google – those aßholes love to talk about monopolies instead.) The European ones may have entangled themselves with the government even more closely than their American counterparts. But I have mixed feelings about the question whether the American or European environmentalists are the more fanatical and insufferable ones. To be honest, I ultimately think that the American ones are worse. They combine the characteristic American vigor and excess of enthusiasm and energy with a pathological cause.
However, attempts to escalate this software tweaking into a scandal with far-reaching implications that would go well beyond Volkswagen exist in Europe, too. Deutsche Umwelthilfe (German Environmental Relief), a union of diverse kinds of environmentalist lobbies that pretends to be a company of a sort, is already proposing to ban all diesel cars in Germany (not to mention the obvious demands for the VW's CEO Martin Winterkorn to resign). I kid you not. An hour ago, it was the #1 news story at several news servers, including Sme.sk in Slovakia.
Do you really believe that the diesel cars are so much worse than the petrol cars? Shouldn't we know the answers to similar questions independently of the Volkswagen software? Have they hurt us? Can you imagine the astronomical financial costs that such a ban would bring?
It seems to me that the number and influence of several PC fringe movements such as the pro-Islam activists and the environmentalists has reached so insane heights that we are entering an era in which the conflicts will be increasingly serious. A decade ago, such people were mostly annoying isolated whackos who were saying nonsense but they weren't capable of doing much.
But these days, they're sitting in nice chairs in tons of government agencies and organizations that only pretend to be non-governmental. They openly defend things like the deliberate propagation of millions of new Muslims all over Europe; or proposals like the ban on all diesel cars. I am afraid that if we don't exploit one of the last opportunities to neutralize them, they will take over the Western civilization and almost completely destroy it.
The harassment of Volkswagen by the EPA sheds a completely new light on the detail that Škoda, the Czech subsidiary of Volkswagen, isn't exporting any cars to North America. Even if some insane fine ($8.9 billion) for a European bank (BNP) in the U.S. wasn't enough to convince me, after the new story of Volkswagen today, I think it's right to say that the U.S. is no longer a safe and free market and a careful company should think twice before it exports anything over there because (starting from the Department of State and probably the White House itself, too), the American government is full of psychopaths who won't hesitate to demand a de facto infinite fine for an infinitesimal sin from virtually anyone and everyone.
As long as the lunatics in the EPA remain at large, I wouldn't recommend anyone to export things to the U.S.