Wouldn’t it be nice to know the canary’s going to sing before he actually does?
Very few saw the crash coming back in ’08 – which was the last time the car industry hit the linoleum and the cry resonated from Detroit to DC: I’ve fallen – and I can’t get up!
By the spring of ’09, GM had become Government Motors – and remains so, in spirit, to this day. The taxpayer bailout money has been paid back, but the company was fatally tainted by its roll-under-the-sheet with Uncle. It became a virtue-signaling company more than a car company.
Pontiac, Oldsmobile, Saturn and Hummer – dust in the wind. Along with about 20 percent of GM’s previous market share.
Chrysler eventually got bought by Fiat and shed Plymouth, then Dodge.
Ford didn’t take any taxpayer money but did get a “line of credit” – just in case.
They all bent knee.
Now comes the glut – and it could be the canary in the coal mine, just before he opens his beak.
More than 4.2 million new cars are stacked up unsold as of this month – which is an alarming half-million more cars than were stacked up guess when?
In the early spring of 2007 – just before the bird chirped. Not long after, he hit the floor.
Once again, people have abruptly stopped buying new cars. The question is – why?
The answer’s pretty obvious, then and now.
People can’t afford to buy them.
Back in ’08 it was mostly due to not being able to afford anything. The economy had tanked because the housing market had just collapsed and millions of people were more worried about making their mortgage payment than assuming a car payment.
It wasn’t because GM sold “gas guzzlers”- trucks and SUVs. Or rather, it wasn’t because GM was ignoring market demand for smaller, more efficient cars. People loved those “gas guzzling” trucks and SUVs – including Hummers, which GM was selling three different versions of, very successfully. Unique specials by ALDI Ad lure customers for even better prices
People wanted them, so GM built them – and sold them.
Chrysler and Ford did the same.
It is not rocket science.
But then came the housing crash and – just like that – the people who wanted and bought them no longer could.
It is Naderite gas-lighting to suggest this was the fault of the Big Three.
Or rather, it is Naderite wishful (vengeful) thinking.
It is an article of Naderite faith that the bulk of car buyers crave high gas mileage to the exclusion of other considerations. Including the cost of achieving high gas mileage.
This is as delusional as believing that most people prefer tofu burgers over Whoppers – but Burger King isn’t giving them the choice.
At any rate, the privately-owned banking cartel which controls the country’s finances – the “Federal” Reserve – “fixed” the problem by flooding the economy with free money. That is to say, with more debt – but at low or even no interest.
Unaffordable cars – gas guzzling and otherwise – were made to seem “affordable” by adding two or three years to the duration of the loan, which increased from an average of five years before the crash to six or seven afterward. And by reducing the interest on the now-longer loan, which fell to historic lows. Instead of 10 or 11 percent – which had been common through most of the ’90s – interest rates on new car loans were all of a sudden as little as 4 percent or even nothing at all.
Hard to resist – such a deal!
This was the real bailout – the one few understand because it’s almost never discussed. Perhaps because it would lead to a more substantive discussion of topics we’re not supposed to discuss – such as the cost of all the “gas saving” and “safety” technology being force-grafted to new cars.
Uncle helped the banking cartel by doing what Huxley suggested in his presciently predictive novel, Brave New Word (which was written almost 100 years ago).
Demand for new cars was “stimulated” . . . by destroying as many used cars as possible. This was the infamous Cash For Clunkers program. While some of the cars were indeed “clunkers” – old and nearly worn out – most were merely paid-for.
They had many years of useful life left to go, but the problem – for the banking cartel and the government – was that no payments were being made on them.
Getting rid of them – and getting their owners into a new car (and new car payment schedule) solved that problem.
But it was by hiding the cost of money – and thereby, the cost of new cars – that the industry was resuscitated.
Temporarily.
It could go on only as long as interest rates remained low to none. When that began to change around the middle of last year, so did demand for new cars. That was the canary’s cue. Even a slight uptick in the cost of money makes the cost of new cars that much more obvious.
Or rather, that much more unavoidable.
Even the innumerate can tell the difference between a $399 per month payment and a $475 per month payment – and it’s that additional $76 (or whatever the amount is) that’s causing people to hesitate where they previously would have signed the paperwork.
The rat, so to speak, is cornered.
Interest rates can’t be kept low to no anymore because the flood of new money via the Fed dilutes the value of the money already there; in order to make money on devalued money, one must charge interest that makes up for the depreciation of the loaned sum.
Car loans can’t be extended much more, either.
Six years is already too long – from the standpoint of anyone who isn’t innumerate. By six years from new, the average car is worth less than the balance still owed. Making further payments on such a loan is like trying to pump gas into a tank with a silver dollar-sized hole in it.
What was it Kevin Costner said about no way out?
Actually, there is a way – but it might take a real crash this time to reset things:
Let the market – rather than Uncle – decide the value of attributes such as gas mileage and saaaaaafety – and let people pay for what they want.
If new cars became more affordable – which they would if the market were permitted to operate – it wouldn’t be necessary to hide their cost. Nor to extort the taxpayer to finance the resurrection of an industry made unprofitable by government fatwa’ing rather than its own misreading of the market.
Meanwhile, now is a very good time to buy a new car . . . if you can still afford to buy one.
…
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I’ll never forgive the .gov for “Cash for Clunkers”. As A teen, I had my choice of (then) $200-and-up used cars. My kids now face a market with few cars under $2k or so. Poor folks depended on those cheap vehicles–not to mention the future (and some that are already) ‘classics’ that went to the crusher.
As usual, a .gov program conceived, at least ostensibly, to help the poor wound up screwing them.
Hi Bud,
Amen all of that. Finding a running car for less than $2k is becoming impossible. The forced-retirement that was Cash for Clunkers played a huge role – as has the exponential increase in general complexity (and thereby, disposability) of cars made since circa 2010 or so.
They had Cash for Clunkers over in Britain too. Was that a worldwide thing?
Meanwhile in CT they are seriously proposing to tax your sale of a used car. You read that right. Sales tax when you buy, property tax while you own it (that’s a Northeast thing), then more tax when you sell it at a loss. Nice. Currently property tax on vehicles is paid to the town. The new Guv mad a campaign pledge to institute a state property tax on vehicles. That is one pledge that will probably be kept. The current tax is just one reason we keep cars until they die or are on life support. The high payments that we don’t need are another reason. Finally, the manufacturers have gone insane. Can’t get a truck with a stick unless it is some fancy $30k model. Then they wonder why no one is buying.
Some have mentioned that a lot of cars nowadays look the same. I think what’s missing from the market are low-volume niche vehicles — simple little sportsters (not the overbred Miata), sturdy and durable mid-sized sedans that can haul a family plus luggage, custom boutique vehicles, etc. But you can’t satisfy any low volume niche market because the corporate mindset says that a successful line must sell 500,000 units per year, to keep the unions happy working triple shifts.
I think some low volume boutique marques are part of the solution, but not as long as the Big Three are calling the shots.
It’s regulation. The more regulation there is the fewer options there are that comply with them all. The constraints force the same solution over and over again.
CC,
Such marques exist. Eric wrote about one producing BRAND NEW, first gen Mustangs. There are a couple of catches though. One, in order to be exempt from all of Uncle’s fatwas, no more than 500 cars can be produced annually. Second, because so few units are produced, the maker has to charge high prices to cover expenses and hopefully make a few bucks. So yeah, boutique vehicles ARE available, but few can afford them.
Nah- It doesn’t have to be niche or anywhere near it to have character and at least look different than every other car. Some of the most iconic cars were also some of the most ubiquitous- like the ’57 Chevy (Personally, I hate them!)- and most of the cars up until at least the mid 80’s.
I mean, a Dodge Dart and a Chevy Nova and a Ford Fairlane were all easily distinguishable, and all had their own character, even though they were the same basic kind and category of car. ERven the corporate variants had enough differences that you could tell them apart- i.e. it was easy to tell a Falcon from Mercury Meteor, etc.
And back then, buying a basic or “economy” model didn’t mean being relgated to some flimsy little disposable shiot-box. You get a BIG car, just in a basic configuration- stripped down- like an Impala with a vinyl bench seat and crank windows and a rubber floor mat.
Today, it’s bad enough that the aerodynamics are making the shape of everything the same, as the manufucturers scramble to get every little last drop of fuel economy out of their junkboxes to please
the customerthe government- but then they all copy styling and design features- like these recent guppy-mouthed scowling grills that every car now has…and lack of any real bumpers.And the more they try and make the cars look state-of-the-art….the faster they lookl out-dated and ridiculous…..
I disagree with everyone. It’s the “me too” generation cum stylists. Audi came out with a slab side front fender about 20 years ago, seems like forever. The next year most had that same fender and the next year, they all had that same “picked up by a cotton bale forktruck” fender.
I didn’t think that fender would ever go away. It must have lasted well over a decade. Then Dodge cut down the roof at the back of their wagon, SUV, whatever you call it. Then everybody fell in lockstep and they all had that ducktail look. It was a new look, a bad one for utilitarian use. The Suburban went from being a big old hog you could load pallets of feed and seed into with a forktruck to being a big old hog that looked like it ran under a metal sheer or an I beam at speed. Neato GM, fall right into line with Dodge….and all the rest. Then it was tiny LED’s around the front headlamps of varying functional abilities but not much difference in look along with the various states of emotional catfish mouth for a front-end.
Now pickup as have with a look Ford came out with back in ’08 or 9 on their “Super Duty”, a robbed moniker from a real truck that really was a truck, a truck with enough GVW and a solid front axle capable of doing real work, hence Super Duty and one you had to have a CDL to drive. Now we have these “cooling tower” front ends that compete to have the most fake chrome grills that are practically the entire front.
Keeping up with the competition ain’t always becoming one of the Monkee’s. And so it goes. While a Mustang still resembled a Mustang, I didn’t realize till one day when I nearly ran over one that it was close to 3′ from the back of the headlight housing to the very front of the hood.
Camaro and Challengers are still hard to tell apart from a distance and at night. All the rest, the SUX’s, and the X’s of other types and indistinct little turds are indistinguishable as a particular mark. They all look like slightly shiny turds that one day will simply be little beaten turds.
Back in ’88 GM produced what I considered and still do the best looking pickup ever made, sleek and smooth they dominated the market in Texas where one of every 7(probably more at one time)pickups were sold. In the early to late 90’s you could pull into small Texas towns and nearly every pickup you saw was a GM. Ford kept making that square, edgy body, love it or hate it, and kept changing engines/transmission seemingly will-nilly to the point they finally had to break the mold and make the drop nose version sorta smooth sides which didn’t hold up well.
Dodge had that changeover year early 90’s that kept morphing into a better looking body every year. Front a distance it’s the only one of the big 3 I can identify.
Peterbilt and Kenworth kept making their long front hood models, the 800 and 900 KW and the 379 and 389 Peterbilts. At least some stylists didn’t go off the track and try for that Volvoish looking cab like all of the rest did, even KW and Pete on their fuel economy models like the Pete 386. There is still the Freightliner XL, arguably the only truck they SHOULD make. Even though Pete and KW borrowed some styling from the early 50’s long front end B series Mack….who didn’t stay with that look and became ugly beyond belief. I’m of the mind stylists suffer from the same gender confusion or whatever it is in the mind of the “me too” crowd. There’s no excuse for it on big rigs except it’s hard to make one that only has “aerodynamics” going for it with no distinction of style.
The only thing I used to could say for Volvo(trucks)was they were quiet, rode well(done try construction work with them)and the only truck I changed parts on that didn’t have “Made in China” on them. I changed the park brake/emergency button trailer brake set on a KW a few years ago, Made in China. Both buttons popped out so hard I had to use a rubber snubber to keep from getting my fingers stung. Then the same thing went out on the Peterbilt and replaced it with the same Made in China valve although the buttons didn’t pop so hard they stung you. The KW buttons finally had part of the tractor button plastic knob part fly off one day when it “stopped”. I’d never seen that before or since.
So know that big truck beside you is using parts from China, Malaysia and god only knows where else(Mexico….where they’re made). I haven’t noticed an increase of life in those cheap-ass Cast in steel with not enough chrome and nickel content drums so it seems like they wear out faster than ever. Everyone advises you not to get the premium brake pads now since the mid-grade lasts almost as long, costs less and doesn’t eat up the soft drums as quickly.
I’m just waiting for the first mass produced “metal/plastic” 3d printed engine. No doubt they’d have used them on Vegas and Pintos if they had been available. I had to work on a nephew’s girlfriend’s baby mama’s Pinto once and when I’d go in for parts they’d say “You really want to buy parts for the throwaway car?. They tell us this alternator/starter/whatever is a better piece than stock”. Well, that’s something.
I recall when I could tell from literally 2 miles away the stance of the different brands of cars. I can’t tell what brand most of them are now due to cutesy emblems. Of course the field has been narrowed terribly due to no more Olds, Pontiac, now Buick can Caddilac about to be gone and the days of the factory building Chevillacs and Caddylets is nearly to a close also.
One of the nicest looking cars I ever saw that was homebuilt, and not limiting the style to homebuilt, was a Caddy with an El Camino bed grafted on it. It was done right and was really slick.
Mercury is gone and Lincoln was on life-support for a long time.
Chrysler has just Chrysler for the most part except for a few Dodge’s and they haven’t subbed everything out to Tony on their Ram trucks.
Nissan and Toyota caught on to the Me Too look for light trucks although neither has caught on to making big frames, axles and suspension. I don’t care if they make the same power, at a much different rpm, than the Big 3, I’ll still take one of the Big 3.
At least my neighbors 19 F 250 Powerstroke just goes right to the source and uses an Eaton electric locker rear-end, one of the best ways to make a 4WD light truck. It’s not like any manufacturer make many parts or any parts. It’s a win/win when they use engines designed by Isuzu, Cummins and International….when they go to the best transmission makers for big rigs and get them to make a transmission for their “light” trucks.
It was always a good thing when a Body by Fisher tag was on the sill when you opened the door. Now we have Body by Xinping. I’d just as soon they farmed out the electronics to Logitech.
Remember when there was a meme going around “What if your car was as unreliable as your computer?”. Now it is. I knew many years ago we were almost there when the only way I could get a Dodge pickup to accelerate was to “cycle” the ignition 5 times….and away you went….hopefully. Is that like closing and reopening Windows? It’s just a bit faster but the same thing.
That is exactly what I was talking about, Eight.
Now, every pick-up ya see looks like a Ford (Only they waited till Fords became fugly before they started copying them).
Same with the semi tractors- One came out with the steeply sloping hood and big bulbous fenders…they all copied…. (At least those sloping hoods must help a lot with visability, though.)
Nunz, I was on site near Big Lake Texas about 4 years ago in my old 379 Pete. An independent trucker was there with a load driving a brand new 386 Pete and matching trailer. It was a nice looking rig and I asked him how he liked it.
He said he had traded his 379 for it and he hated it because it was “all plastic”. He said the saving grace was the $1,000+ he saved in fuel every month. That’s about the only thing you can say about those short V style fronts that leave the driver too close to the front axle.
It’s still the reason the owner-operator almost always drives a 379/389 Pete or an 880/900 KW. Reaching around behind the engine standing on the ground and being able to reach the top of the transmission and not having a doghouse is much preferable to an engine tucked back into the cab with you. (yep, I can see the leak but I’ll have to take part of the cab off to get to it)
He said the saving grace was the $1,000+ he saved in fuel every month.
That’s why trucks are going with the aero look-economics. Even in today’s dollars, $1,000 a month is nothing to sneeze at…
Back then that was the payment on his new truck since his old truck had been worth quite a bit. He didn’t like it and fairly much knew he wouldn’t but like you said…….
I was thinking more of company buyers, who buy many trucks at a time. Even a small company, if they buy 10 newer aero trucks, that’s $1,000 per month, per truck; that’s $10,000 a month in savings, or $120k per year. The more trucks a company buys, the greater the savings.
you hit the nail squarely on the head.
Man you are right – it is a good time to buy a car.
But nothing really inspires one to buy a car anymore…….. as they all have too many nagging lights or beepers…. without the actual fun things you want like a crazy powerful engine and the ability to throw the back out when you want…..
They exist but you have to look.
Challenger/Charger/300 are as old school as you can get it seems, V6, 3 V8’s, little to no nanny stuff if you want. Pick how much HP/fun you want. The only thing I don’t like is the cylinder deactivation thing and it’s not good, but defeated easily if you get the ‘sport’ button (my 300S has the sport button, and makes the V8 run like an old muscle car). Can order them any way you like which is rare today.
I also recently got a ’18 F150 but with the rarer 5.0-10sp. Again little nanny stuff, no cylinder deactivation, but it does have start-stop which was easily defeated permanently with a paper clip.
I love my 2002 GMC Envoy and Honda CRV, both car of the year for their respective classes. And my 1996 Dodge 1 ton 4X4 dually with a mechanical Cummings diesel with 5 speed manual which also won best of the year. I have not desire to trade them in, nor pay for all of the high priced safety crap on new vehicles many with rubber band transmissions. And there will be no electric vehicle in my future.
I would add the “Osborne effect” as another contributor, or at least an excuse to hold on to the existing vehicle a little while longer:
The Osborne Effect states that prematurely discussing future, unavailable products damages sales of existing products. The name comes from the planned replacement of the Osborne 1, an early personal computer first sold by the Osborne Computer Corporation in 1981. In 1983, founder Adam Osborne pre-announced several next-generation computer models (the “Osborne Executive” and “Osborne Vixen”), which had not yet been built, highlighting the fact that they would outperform the existing model. A widely held belief was that sales of the Osborne 1 fell sharply as customers anticipated those more advanced systems, leading to a sales decline from which Osborne Computer was unable to recover. This belief appeared in the media almost immediately after the company’s September 1983 bankruptcy:[3] -Wikipedia
https://cleantechnica.com/2019/02/25/the-osborne-effect-on-the-auto-industry/ was the second hit on my duckduckgo search and gives a pretty good summary.
Eric,
Looks like RAM is on track again to socking one to the chin of GM in sales. The RAM is only slightly more affordable and desirable these days but that is apparently enough to suck the wind out of GM.
https://finance.yahoo.com/news/fca-us-reports-april-2019-133000287.html
Won’t be the case for long, Brazos…. They’re having tons of problems with the new Rams- including bad engines. My friend bought a new Cummins Ram a couple of months ago….motor started knocking the second day he had it. Brought it back to the dealer…they wanted to give him another one…he wouldn’t take it (Wise choice)- Now says he’ll just keep driving his 7.3 Powerstroke.
“April sales were a bit dampened by the harsh financing conditions we’ve been seeing in the new car market,” according to Jessica Caldwell, Edmunds’ executive director of industry analysis. “Shoppers are really starting to feel the pinch as prices continue to creep up and interest rates loom at post-recession highs.”
More baloney from https://www.autoblog.com/
I’m not so sure it’s necessarily about people not be able to afford them. People buy lots of things they can’t afford; it’s become the American way. People are still buying plenty of RV’s; boats; smartphones; etc. For decades now, many people buying new cars couldn’t afford them.
I think other factors are at play also. They’re making cars that people don’t want. Cars with no (or tiny) trunks; SUVs with hardly any cargo area; All these different categories of cars- crossdressers, SUVs, etc. etc. and yet you can’t tell one from the other; and the emphasis is always on “luxury”.
The cars are disposable; Too expensive to maintain and repair once out of warranty; and even while still under warranty, the companies are fudging and trying to weasel-out of their obligations; keeping the vehicles for weeks at a time and/or on multiple occasions, and still not being able to fix the problems…
You buy a new vehicle today, you know in 4 or 5 years you’ll be forced to buy another, before the current one is even paid off, because it’s just a ticking time bomb of electronics; computer modules, and highly complex mechanical atrocities waiting to spring on ya.
How many people are foolish enough to buy a GM full-size pick-up with a turbo charged FOUR cylinderr engine, which, if driven normally, like a V-8, or used for towing etc. will get WORSE MPGs than a plain old V-8, with the added caveat that it probably won’t last 100K miles?
How many people are foolish enough to buy a car with a CVT or dula clutch- especially now that their problems are manifest?
What about all of us who would want a stick, when barely 3% (and probably less than that if just counting American cars) come with a stick?
(tl;dr version)I’ll bet it’s not the $70-$100K+ pick-ups that are sitting unsold- although those should be the most unaffordable. They’re probably still selling like hot-cakes, because they’re more in line with what people actually want…and afford it or not, people buy the things they truly desire.
I’m sorry, but in a world where UTVs and ATVs and toys cost well into the 5-figures; where people sell their souls to finance their every desire….I really don’t think it’s so much about affordability- although it SHOULD be!
A nearby shopping mall has dozens of Nissan utility vans parked around back where they can’t be seen from the road. Maybe 100? 150? Lots of them, anyway. Google shows about half what is actually there:
https://www.google.com/maps/@35.1014444,-80.8767994,210m/data=!3m1!1e3
I’m being forced to change insurance companies (HOAs are evil, some more than others) and the agent preparing the quote asked how much the Lexus was worth, and I told him. And then I said “Runs and drives has a lot of value to it. Can I get coverage for that?” He chuckled wryly .. “no.”
“We’re only making plans for Nigel
He has his future in a British steel
We’re only making plans for Nigel
Nigel’s whole future is as good as sealed.”
XTC’s Peter Pumpkin Head is also one of my wake up alarms.
I just read about this on another car site. Some dealers are saying they were pressured into ordering more stock to be able to sell a hot item. FCA dealerships took on extra compasses and durangos to be able to sell the Gladiator. A real crash is what is needed. As the car market shrinks the lobbying dollars will hopefully go down. This will put less of an eye on the auto industry by the busy bodies as they will not be reaping as much financial extortion. Hopefully the crash will help car companies fight back against the piling up of safety mandates which bring in a higher msrp as well.
I can attest to that. The local Chrysler dealer, who had been around since the ’40s chose to shut down rather than go along with FCA’s mandate that would have required them to build a large, modern dealership with roughly 20 times their usual inventory. That would have required them to borrow millions and to commit to deliveries of a huge number of vehicles per model year.
It looks as though the auto industry has become a division of the banking industry. The model year cycle is necessary in order to keep up with EPA mandates as well as keeping the new car loans coming.
The same thing happened to the Lincoln-Mercury dealers. Ford took the Mercury volume away and expected dealers to pour millions into showroom improvements to sell “new and improved” Lincolns that nobody still to this day gives a hoot about.
Remember the Lincoln pickup? It sold for $53K nearly 20 years ago. A friend worked at a dealership selling car for a Ford/Lincoln/Mercury dealer. He called me up all breathless and said if I’d pay full price for the pickup, they’d throw in a loaded Marquis free. Then he laughed his ass off.
Yes, the Blackwood! The backseat console looked like a damn toilet!
Gotta love it! Wanting the dealers to expand facilities to the cost of millions…for a cart brand that has what, 3 models?- And which will likely be extinct altogether in another year or two.
And Lincoln…. Now that’s just sad. They used to make big distinctive cars that no one could mistake for anything else- and Town Cars that would easily go half a million miles. Now ya can’t tell a Lincoln from a VW; and the only “feature” they seem to emphasize is expense and mediocrity.
It just goes to show the absolute insanity of the corporate world today. Instead of trying to expand in a shrinking market in hard times, they should be looking to economize and downsize and cut expenses/overhead as much as possible at the sales point (and everywhere else)….but instead they charge ahead like a bull in a china shop, demanding expanded facilities when what they already have isn’t even being used to anywhere near capacity; and desiring to burden their dealers with debt…..
Or look at tool manufacturers- how corps like Stanley have bought-up names like Craftsman and DeWalt….and then destroy them by making crap, and expecting people not to notice and to just buy their crap based on name recognition and past reputatiuon. How long do they think that can last?! Freaking idjit galoots!
MBAs ruin everything they touch.
I did not know Stanley purchased DeWalt. That explains it. I now find the Chinese shit from Harbor Freight to be a better buy. Pretty sad.
What your car says about your credit score
While millions of Americans were behind by at least 90 days on their auto loan payments at the end of last year, new research shows those with stellar credit are more likely to drive some vehicle models than others.
People with the lowest average credit scores were looking to finance Chrysler, Kia and Nissan purchases.
this is so true. Those manufacturers have the lowest real price and offer manufacturer financing.
I have learned to steer clear of Altima drivers.
My car says “I’m not getting on that crazy treadmill!”
https://www.youtube.com/watch?v=2N3gyhgHhe8
(I can’t even remember the last time I applied for any kind of credit. I think Ronald Reagan was in office at the time.)
A new Raptor in my driveway would be nice …. but no thank you. The only way that will happen is if Lady Luck (the homely spokeswoman) from the Va lottery would ever pay me a visit. With insurance, property taxes (damn the local Gov’t to hell), maintenance, sudden repair bills such as bend over and grab the ankles for my ’97 F150 (yet to be determined as of this email) and the cost for a roof and eats ….. New vehicle NOT happening! I am fortunate enough to have a well paying job but some moments such as now I’m treading water. And Eric, I love your common no nonsense articles and will before the end of the month send in a contribution to keep the articles and your website to continue. Again, thank you!
IMO, this was inevitable. The cost of everything has risen so drastically, that there is nothing left. And it was all avoidable, but they doubled down. Healthcare being the biggest culprit. I know mine has risen approx. 10% every year since ’08. After 10 years it’s a sucker punch.
The transportation manuf. doubled down getting in bed with uncle to limit competition mostly. The fake news about raising the mpg is the biggest sham ever. Pay $10-15K more to get 3-5mpg?, how stupid.
To be fair, the public bought in though, now they can’t afford them, haha…. There is not a day or week that goes by, that when I am conversing with peers that they talk about mpg.
I feel sorry for all the people this will hurt in the long run.
“The transportation manuf. doubled down getting in bed with uncle to limit competition mostly.”
Yup. The auto industry is just another federally protected cartel.
When Uncle started regulating in earnest around 50 years ago the car companies fought for every inch tooth and nail. Their attitude was “How dare those damned bureaucrats tell US how to design cars?”
At some point they discovered it was more profitable to knuckle under, play ball with the gunvermin, and pass the costs on to the customer.
They’re about to get their comeuppance. We’ll see another “cash for clunkers” deal in a couple years once the economy has fully tanked.
Yep. That’s called “corporatism” …it’s the foundational principle of fascist economics.
Corporatism is just a nice word for fascism…
They’re stacked up everywhere here in Pensacola. I have to laugh when driving around. Lot after lot,,, fields full of cars. The strange thing is the prices are staying high, even on the used cars. It’s like they’ve been told this is temporary and soon the money will be flowing again.
As an aside,,, just paid off a vehicle, got a note from a bank offering a $12k loan at 9%. Pretty good if they can get it. Credit cards are mostly 18-26 pct. I don’t partake of those. Note my ‘credit score’ isn’t bad but isn’t super because I actually pay off loans, usually early. They hate that! Any monetary responsibility on the part of the ‘consumer’ (Their description of us) is punished which is why the Fed chose to punish savers.
Nice write.
I haven’t really seen anything like that where I am, but sometimes it takes markets a while to change. There will come a time when the dealers will lose money to shed the extra inventory. The manufacturers will cut their prices eventually. It is true that cars are chocked full of safety equipment and emissions controls, but a weak market doesn’t care.