The Tiny Car vs Big Government

President Trump recently posted a declaration that confused me a bit. He wrote that he has approved “TINY CARS to be built in America,” proclaiming that they will be inexpensive, safe, fuel-efficient, and amazing. He thanked the Department of Justice and the Departments of Transportation and Environment and demanded that manufacturers start building them now. It sounded like the leader of a centrally planned economy who personally decides which products are permitted. The tone was almost authoritarian, as if the market had been waiting for permission from the state to innovate.

There is a saying: perception is reality. Trump wants us to believe that he is in charge of everything in the country and the world, from diverting hurricanes to stopping wars, regulating trade, and producing automobiles. As for his “permission,” it is necessary to translate from “Trumpish” to English, and after a translation and disregarding the paternalistic tone, we can see the rationale behind his words. So here it is.

An American president should not be announcing that he “approved” a type of car. Automakers do not need presidential blessings to produce what consumers desire. They need a straightforward condition: freedom to operate under a rational regulatory framework. When Trump writes that tiny cars are now allowed, it means that before his administration’s actions, they were effectively banned by a thicket of federal standards. The president’s declaration becomes a strange admission of the government’s own interventionism.

America has never lacked creativity in the automobile industry. However, for decades, the United States enforced safety and regulatory standards that made tiny cars almost impossible to produce and sell legally for normal street driving. While Europe and Japan operate efficient and affordable micro-vehicles, Americans have been denied access to them. The reason is not consumers’ rejection. It is regulations that assume all cars must withstand collisions with the heaviest SUVs on the road. The noble intention to protect people resulted in eliminating consumer choice and raising entry barriers.

Free-market economists understand that value is subjective. Some individuals willingly accept a higher level of risk in exchange for a lower price, easier parking, and better fuel savings. Others may place safety above all other characteristics. Both sets of preferences are legitimate because consumers themselves are the best judges of their own wants and priorities. Government planners, however, assume they know better than the market. In this case, regulators imposed a subjective preference on the entire population by outlawing inexpensive, small cars through safety standards that only large and heavy vehicles can meet.

The result is visible everywhere. American streets are full of gigantic vehicles that often carry a single person from one parking lot to another. Meanwhile, a more modest solution is practically absent from the market. This is not the invisible hand of the consumer that canceled them. This is the heavy hand of bureaucrats who replace the wisdom of dispersed individuals with committee-made mandates.

Trump’s statement, therefore, reveals a deeper truth. The market for tiny cars was never free to develop. Now that the administration is signaling regulatory relaxation, politicians ask to be thanked for restoring a slice of freedom that consumers had in the first place. More often than not, the government creates artificial barriers, and politicians later claim credit for removing them even though those barriers should never have existed.

The correct principle is that people are entitled to buy any machine they judge suitable, provided they accept responsibility for the risks. Safety is important. Yet it is best pursued through innovation and honest information, not by prohibitions that infantilize the public.

There is another curious aspect of the post. The president thanked the Department of Justice, among others. Why should the DOJ be involved in the approval of consumer goods? If law enforcement agencies have become part of industrial policy, the separation between policing and production erodes. The government appears increasingly interested in directing what private enterprise can and cannot do. That should trouble anyone who values a free economy.

As I mentioned earlier, the announcement also reflects the political craving to direct the economy. A president issues commands. Manufacturers obey. Citizens cheer. It is a primitive model of governance that disregards entrepreneurship. The United States prospered when creative individuals were left alone to satisfy the needs of others through voluntary exchange. It declined when its leaders attempted to pick winners, shape tastes, and micromanage industries.

Tiny cars are not a revolutionary invention. They are commonplace in other developed countries. What is refreshing is the idea that Americans might again be trusted to choose what they drive without federal enforcers acting as paternal guardians. The key change is not the cars themselves but the rollback of bureaucratic power.

The market did not need approval for tiny cars. It needed the government to stop forbidding them. President Trump made the right move, in essence, but not in presentation.