Paying the Pied Piper

Hyundai and Kia admitted to the EPA that they overstated their mileage claims for several models.  As that is against the law, they will now not only change their showroom window stickers but will also reimburse 900,000 customers:

The payment will be based on the fuel price in the region where owners live and on the miles they drive. That amounts to about $67 for a California owner of a 2012 Elantra that was driven 15,000 miles in the last 12 months, Hyundai said. The figure includes a 15% bonus the car companies are giving to make up for inconvenience caused by the false fuel economy claims.

This headline is apropos of a conversation I was having today with a libertarian acquaintance.  I think the EPA protection here is a clear example of a public good that is much more effectively distributed by the government than by the private sector. Hyundai and Kias’ every incentive is to lie about their mileage and it takes a well-staffed Environmental Protection Agency funded “at the barrel of a gun” to mitigate the external cost to consumers and to the planet on which we depend for subsistence.

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