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Why Fiat Chrysler, VW thought they could get away with cheating

You know the old saying: "Man plans and God laughs." And when it comes to environmental regulations, governments make rules, and the automakers laugh. And they laugh because they can and do cheat those rules in more ways than you can imagine. Today's charges that Fiat Chrysler used deceptive software to cover up diesel emissions could be just the latest example of that, but most of the ways around government environmental laws are 100 percent legal. And that's led to a culture of cheating and deception for years.

Just to clarify, what the EPA is accusing Fiat Chrysler of doing and what Volkswagen has admitted to doing by using the software are both crimes. They are not allowed as part of some kind of legislative loophole. But they are a result of a culture that has encouraged less-than-upstanding tricks and semantic games to evade the real intent of emissions curbing laws.

Government rules mandating emissions maximums and mileage standards have been around for a long time, but they took on a new urgency in 2011 when the Obama Administration set a new standard of 54.5 miles per gallon for new cars and trucks by 2025. America's big car makers publicly supported the move, but that was probably at least in part because they knew they had a few tricks up their sleeve. Of course they did, since they had been legally skirting them for a long time already.

It would take too long to list all the tricks and loopholes the auto industry and its lobbyists have used over the years to game the emissions and mileage rules. But some of the greatest hits include making rear seats removable from smaller vehicles to get them reclassifying as "storage bearing SUV's or light trucks," manufacturing super small cars they know won't sell very well just to bring down overall fleet mileage averages, installing "skip shift" devices into sports cars that almost all users knew how to disable, producing "flex fuel" vehicles that can use ethanol but almost no one does, and making SUV's meant for passengers just a little bigger to get them classified as heavy duty trucks with correspondingly more lax emissions rules.

Again, all of the above were legal loopholes the automakers and their lawyers spent a lot of effort working on over the years. And it's hard to believe those public and private moves didn't send a clear message to everyone in the industry that Washington's environmental rules are simply an obstacle to be gamed out and defeated. Actually reducing emissions, or making the vehicles most of us drive more fuel efficient, is just the line they pretend to uphold.

But wait! Haven't cars actually become more fuel efficient anyway? Yes, on the most part they have. But that's mostly because that's what the consumers have demanded from the industry after two rounds of $4 a gallon national gas prices over the past decade. In the end, it's the market that will be the real catalyst for more environmentally friendly cars and not the government.

That doesn't mean that we should go without any regulations at all, even on emissions and mileage. But the rules need to be written more clearly, with no loopholes, and fewer opportunities for lobbyists to sully the process. And the easiest way to do that is to focus solely on reducing the worst kinds of pollution that are easy to detect and easy to enforce. Mandating averages like 54.5 MPG within eight years from now is not an example of a reasonable goal... not without encouraging more cheating and chicanery that is.

What we have now is a cynically politicized process filled with players who don't really care that much about protecting the environment as they do about scoring political points. It's no wonder VW and possibly Fiat Chrysler decided to cheat even more blatantly given the culture of deception and trickery connected to the whole process for so long. And no one should be surprised if more automakers get caught using cheating software or other blatantly illegal scams. Meanwhile, consumers will reward the companies the make the best vehicles with the best fuel efficiency in the long run. Let's give them more power than the government currently does to make that happen.

Commentary by Jake Novak, CNBC.com senior columnist. Follow him on Twitter @jakejakeny.

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