Fuel efficient or market efficient?

The Atlantic Monthly column by Megan McArdle: One thing is clear about the bailout: congress intends to use it to push GM et. al. into manufacturing more fuel efficient cars. This means cars that are either a) smaller, b) more expensive, or both. When gas prices were high, a lot of people blamed Detroit's troubles on the fact that they hadn't learned to make awesome small cars. But Toyota isn't so successful in the US because of the Yaris and the Corolla; its core business, like Honda's, is American-sized sedans, station wagons, luxury cars, and so on...