This isn't what he's talking about. CAFE regulations dictate that your fleet milage has to meet a certain level, and to offset the low milage of the large powerful vehicles people want, and will buy at a profitable level, you sell little fuel efficient cars that people only buy at a bargain level (no profit or a loss). People do not now, and never have wanted, smaller cars than they are forced into by economics. Small cars sold well for 5 months or so last year, otherwise they still are not popular, and therefore not profitable.
So, this is nothing like the 70's in reality, just in the perception of the public.