Nikkei [sub] brings the cheery weekend news that Japanese new car sales are at their lowest level in the last 41 years of recorded history. Nipponese bought only 284,035 units in April, a drop of 23 percent on the year. Last month, the Japanese government launched tax breaks for fuel-efficient cars, but they kept consumers unimpressed and clutched to their wallets. Even sales of minivehicles, which had been strong for a while, got more diminutive. The Japan Mini Vehicles Association says they sold 117,670 units, down 13.4 percent. Demand for midgetmobiles has suffered double-digit contractions for two straight months, dwindling to an 11-year low. Scratch that as a savior. Got the stomach for details?
Amongst the (still) big players in Japan, Toyota reports a sales decline of 32.5 percent, Nissan took it on the chin to the tune of 31.7 percent. Honda; riding a wave of strong demand for the Insight hybrid, eked out a 1.8 percent rise in sales—its first in six months.
Meanwhile at home, Reuters reports that US sales dropped 34.4 percent in April. The nation can seek solace in the fact that it’s the lowest level in a mere 30 years—the Japanese have it worse! Don’t you feel better now? Wait: In the SAAR crisis dept, US auto sales came in at a 9.32 million seasonally adjusted annual rate in April, according to Autodata Corp.—way below the 9.8 million rate that analysts had prayed for. In March, the number stood at 9.86 million. If this trend continues (and it’s liable to get worse), RF may win his doomsday bet of 8 million SAAR. European new car sales for April have not been tallied yet but are expected to be a mixed bag of an Abwrackprämien-orgy in Germany and sharp drops elsewhere, especially in the former growth markets of Central Europe, in Ireland, the UK and Spain.
8m SAAR would be unimaginable pain.
The media is bombarding us 24/7 with dire news about the economy. Record job losses, with more on the way.With that data, people are choosing to cancel or delay large ticket purchases. Isn’t it odd that people behaving in a rational manner are threatening to destroy civilization as we know it?
Apparently, “civilization as we know it”, in its latest incar(sic)nation was built on wants, rather than needs.
From now on, we’ll get one coffee cup, and we’ll have to wash it once a week (to save on water and soap).
Just hope that coffee holds out.
To this reporter, it looks more like people finally begin acting in a rational manner. In light of job losses, the loss of their homes and 401Ks, they delay unessential purchases.This rational behavior may just save the civilization as we know it (sans the irrational exuberance, maybe.) It’s been the irrational behavior (buy something you don’t need with money you don’t have – on all levels of society) that got us into that mess.
As far as unessential goes, the US has an absolutely obscene vehicle penetration of 833 per thousand – more cars than people with drivers licenses. The number used is 1.2 cars per 1 drivers license. The universally accepted number for market saturation is 500 cars per thousand population. Car crazed Germany has 503 cars per thousand. The G7 average, skewed by the irrational US numbers, is 610 cars per thousand. We shall approach sanity once at least the 600/1000 mark is reached in the US. That’s A LOT less cars. If the rational behavior continues, 8m SAAR will be here to stay for a while.
Isn’t it odd that people behaving in a rational manner are threatening to destroy civilization as we know it?
Not destroy it; just reset it back to a more realistic level.
We probably did 25 years’ worth of car buying in the last 10 years, which clearly is not sustainable. Equilibrium had to be restored sooner or later, and nobody said it would be painless. But it is not the end of the world.
Actually this is the end of the world as we have known it.
Ford During the Slide into the Great Depression
We probably did 25 years’ worth of car buying in the last 10 years, which clearly is not sustainable. Equilibrium had to be restored sooner or later, and nobody said it would be painless. But it is not the end of the world.
Exactly. That’s what makes the GM and Chrysler Bail Outs such a bad idea. In a rational world, the market would adjust by culling out the least efficient capacity – which is the UAW represented plants at GM and Chrysler.
Subsidizing the least efficient capacity making the least attractive product in an hugely overcapacitized industry is madness.
We probably did 25 years’ worth of car buying in the last 10 years
Paris-dakar: +1
Also, We should not forget that GM was losing ground for that entire period, and losing unimaginable gobs of money during most of it.
Subsidizing the least efficient capacity making the least attractive product in an hugely overcapacitized industry is madness.
Irrational behavior continues.
Also, We should not forget that GM was losing ground for that entire period, and losing unimaginable gobs of money during most of it.…
And that is madness. If you barely got by in that environment, and did so on the strength of a few products, products for which demand has dried up, how can anybody possibly think they can survive now?
Please remember, every purchase is a vote and we must “vote” wisely.
Japan is the model for the Post Peak Oil world. They have no oil of their own and must import it all. They also have limited land resources and a dense population so ethanol/biodiesel are not options to mitigate the situation unless they import them.
What they do have is technology and a highly educated population. They have emphasized public transportation and fuel efficient cars.
The U.S. is in a better position in that we still produce a lot of oil although it is less than 50% of our needs. And we have ethanol as a supplement as well as biodiesel. Nonetheless we should watch Japan carefully and learn.
Eventually in the decades ahead we will be more and more in the situation Japan is in. Perhaps even worse since our car market is so over saturated. Personally I have bought 3 new vehicles in the last 5 years. Now they all have very low mileage and I am out of the market. Many people are in my situation.
The future for American car sales is not bright unless some “got to have it” technology like plug-in-hybrids takes off.
We probably did 25 years’ worth of car buying in the last 10 years
Car sales in the US have been on a decline since 2000. The sales decline did not begin with the recession at all.
Last year’s new car sales were similar to 1993 levels. That suggests that we’ve overcorrected, as that was a sharp pullback. Meanwhile, consumer sentiment is improving, and durable goods spending in the first quarter is up slightly, which hints that we’ve bottomed out.
I think that those who are waiting for the end of the world will be sorely disappointed. The economic recovery has probably already started, as the bottom of it is being set about now. Just as all of the hype on the way up was unsustainable, the dive to the bottom isn’t, either.
Car sales in the US have been on a decline since 2000. The sales decline did not begin with the recession at all.
Last year’s new car sales were similar to 1993 levels. That suggests that we’ve overcorrected, as that was a sharp pullback. Meanwhile, consumer sentiment is improving, and durable goods spending in the first quarter is up slightly, which hints that we’ve bottomed out.
I think that those who are waiting for the end of the world will be sorely disappointed. The economic recovery has probably already started, as the bottom of it is being set about now. Just as all of the hype on the way up was unsustainable, the dive to the bottom isn’t, either.
Actually I agree that most of the corrective action is now behind us… I should have said that we did more car buying “in ten years” rather than “in the last ten years”.
Record-high consumer pessimism, and stock markets hitting 12-year lows, are strong signs that the worst is over. As soon as Chrysler and GM stop twitching and turn cold (are you listening Obama?) we’ll be on the road to recovery.
Hatred of a black president and the working class are driving some conservatives to a frenzy. It seems they would rather see us fail as a country than see us succeed under the new administration.
Sorry shit indeed.
97escort: Oil and ethanol has nothing to do with Japan’s dire straits. Their real estate and stock bubble bust in 1990 and they never really recovered. Recently, their economy went from bad to really, seriously bad. That and an aging population is the reason for the steady decline of their car sales.
Eventually in the decades ahead we will be more and more in the situation Japan is in. Perhaps even worse since our car market is so over saturated. Exactly. See my saturation comments above. The saving grace is that the U.S. population is (thanks to the Hispanics) in good shape, age-wise. In about 10 years, there will be a new wave of eager buyers. It will take that long.
Japan has a population density of 337 people per square kilometer. The US’ density is less than 1/10th that, at only 31. Germany clocks in at 232 and the UK at 246. ( http://en.wikipedia.org/wiki/List_of_countries_by_population_density )
Higher population densities are much more easily served by mass transportation methods than are low population densities. That must be taken into account when considering the ratio of vehicles to population.
We need to start an official SAAR pool..
I’m on record predicting 5M SARR, although I worry that I’m optimistic.
Hatred of a black president and the working class are driving some conservatives to a frenzy. It seems they would rather see us fail as a country than see us succeed under the new administration.
Sorry shit indeed.
Race Card and Class Warfare in the same post.
[golfclap]
Hatred of a black president and the working class are driving some conservatives to a frenzy. It seems they would rather see us fail as a country than see us succeed under the new administration.
Wow Buddy…..
You’re going to have to explain that one. Obama got VOTED in, right? That means at least half the population thinks he’s OK.
It seems they would rather see us fail as a country than see us succeed under the new administration
What the hell does that mean? The conservatives are the only ones with any money, and they’re not spending it to punish those who voted Democratic?
I can’t stop laughing…at your warped world view.
You need your medication…. seriously….
The comments about not supporting GM and Chrysler are purely economics based. You can spin the Obama administration any way that you’d like… but you are going to have a hard time blaming more than 30 years of declining sales on George W. Bush….
The GM and Chrysler battleships have been taking on water for my entire lifetime. Chryler sunk once and was (literally AND figuratively) bailed out. Obama has set the bail-out pumps arunning but he can’t MAKE people buy cars that they don’t want or trust.
Or can he? If so, explain….
/rant off.
Don’t be distracted by conservative vs. liberal. A certain percentage of any population are nuts. Let’s say 5% of American’s are nut jobs.
Since Sept. America has lost maybe 5 Million jobs… So this means 250,000 nut jobs now have nothing but time on their hands.
Idle hands do the work of the devil… Idle hands of nut jobs do the work of 2 or 3 devils.
Simple math…
At least when this nightmare is over Germany and Japan will still have a strong autoindustry. We will be left with a pile of excrement.
We’ll still have a strong auto industry. It’ll just be Ford and southern-based transplants instead of The Big Three. Besides, how strong can you be if you’re losing market share and money over such a long period of time?
John Horner:
Higher population densities are much more easily served by mass transportation methods than are low population densities.
Fallacious argument. Doesn’t cut it when you have more cars than you can drive.
1969, the US population stood at 199m – so the population density was much lower than today, when the population is more than 300m.
In 1969, you had 108m licensed drivers and 105m cars. About right, 522 cars per thousand. Mass transportation was worse, and nobody complained.
1983 we had 234m people (higher density) and 689 cars per thousand. We had 10 million cars more than drivers licenses. Madness beginning to bloom
2000, we had 27m cars more than drivers licenses. And the begin of easy credit.
Next year, 2001, we had 35m cars more than drivers licenses. Insanity.
“We’ll still have a strong auto industry. It’ll just be Ford and southern-based transplants instead of The Big Three. ”
No, it will be Ford, Chevillac, and the the imports.
@ CarShark
and southern-based transplants
That may be a strong manufacturing industry, but the intellectual property of the car business, (and the claim on profits!) will go and remain overseas.
You want to see what I mean? Look at the UK, once one of the largest producers of cars, which now has only transplants and a few small indigenous marques. They aren’t calling the shots any more.
@BDB/CarShark
It’ll be interesting to see how this turns out post-recession:
Germany is subsidizing their domestic market, which will canibilize sales for years to come.
Japan’s recession is slightly lagging the US, and appears to be worse from an auto-industry point of view. Japanese automakers who are over-reliant on domestic consumption may get hurt more than we expect if the recession drags on.
If the Chinese can get their act together (or buy their way into quality mfgr/engr), they may come out the big winners here.
The US likely has pent-up demand which will start purchasing once the recession winds down. Will the timing be right for a reconsituted GM?
time will tell….
@ Bertel Schmitt
“Madness in full bloom” “Insanity”
Getting a little harsh there aren’t you Bertel?
People will buy what they want, fads come and go, industries have good years and bad. Get over it.
The US has been and will likely continue to be the richest nation on the planet for a while. And it hasn’t happened by people agonizing over every penny and living their life in one-room flats with no air-conditioning.
I also think some of the smaller Japanese companies may go if things don’t improve, such as Mitsubishi and Nissan (at least in North America).
lw, I take my hat off to you, insightful and hilarious, but oh so true! As my workplace slows and layoffs happen its becoming a better place to be every day.
I also think some of the smaller Japanese companies may go if things don’t improve, such as Mitsubishi and Nissan (at least in North America).
Mitsubishi is another player who just needs to leave the stage.
Frozenman:
I’m seeing the same thing… And the nut jobs were walked out first…
So if 5% of the general population is nuts… Maybe 10% of the unemployed are nuts?
Gonna be a long hot summer in Detroit…..
Prolonged unemployment can make even a sane person nuts in a short span of time. They’ve done studies on it, and this is true even if you’re still on benefits and able to eat/afford shelter.. It just comes from boredom and general sense of worthlessness. This leads to crime, extreme political views, etc, which its why its important to keep people not just fed, clothed, and sheltered but in a job, or you can have a lot of angry, bored, extremists on your hands quickly.
http://en.wikipedia.org/wiki/List_of_countries_by_vehicles_per_capita
Obama got VOTED in, right?
But meanwhile, we have Rush Limbaugh openly saying that he’d like Obama to fail.
He’s not alone, and he went against the grain of the country by not voting for Obama. It’s the people who DIDN’T VOTE for Obama whom we’re talking about here.
The problem for the Republicans is fairly blunt. If Obama succeeds, his success could be the greatest torpedo into the side of the GOP since FDR. So yes, there are undoubtedly Republicans who want the Obama platform to crash and burn, and who will be very unhappy if the opposite occurs.
As for race and presidential politics, just remember Willie Horton. They’re not above raising the spectre of the evil minority when it serves their purposes.
This country must have a slew of very bright, talented people. If there were a way to move the overwealthy, overcompensated, over protected people and groups of people the hell out of the way, and allow the Best and Brightest (sorry for stealing the phrase!), I think the auto industry could regain it’s footing and prosper. An organism cannot survive with an overload of parasites, catch my drift?
@ Bertel Schmitt
As far as unessential goes, the US has an absolutely obscene vehicle penetration of 833 per thousand – more cars than people with drivers licenses.
Your wikipedia numbers are flawed because they consider anything with two axles and four tires a motor vehicle. I can only speak for New York State, but in NY a common two axle boat, RV, or horse trailer is considered for registration purposes a ‘motor vehicle’.
akear wrote:
At least when this nightmare is over Germany and Japan will still have a strong autoindustry. We will be left with a pile of excrement.
This is different from the last 20 years how?
Dynamic:
The numbers are old. Go straight to the source:
http://www.bts.gov/publications/national_transportation_statistics/html/table_01_11.html
Your wikipedia numbers are flawed because they consider anything with two axles and four tires a motor vehicle. I can only speak for New York State, but in NY a common two axle boat, RV, or horse trailer is considered for registration purposes a ‘motor vehicle’.
The numbers are flawed, just as you suggest, but not by all that much. The article I linked above -also Wiki- puts it at 765, still highest in the world.
What I wonder about is how 500 got to be “universally accepted” as market saturation. 14 countries have more than 500 cars per 1000 people.
# Bertel Schmitt :
May 3rd, 2009 at 11:53 am
Dynamic:
The numbers are old. Go straight to the source:
http://www.bts.gov/publications/national_transportation_statistics/html/table_01_11.html
Thank you for updating me.
Go straight to the source
The BTS fails to account for how many of those cars are parked on blocks, next to trailers…
OK, seriously, you do need to account for the vehicles that are in various fleets, etc. You can’t just divide licenses by vehicle count to project the optimal market size.
John Horner’s point is basically sound. The US lifestyle is more car dependent. We own more cars, and we use the cars that we do have more.
When projecting the future size of the market, we have to remember this. If I were to guess, I would say that the long-term trend will call for less bling and more leasing. The used car market will also have an impact, as buying used late-model cars becomes a more serious consideration for a greater number of buyers. A two-year old car today is much better than what a two-year old car used to be.
BDB You are 100% correct and the gov. has made it way too easy for the lazy to collect their checks and get into mischief because they have to much spare time.
Pch101:
The problem for the Republicans is fairly blunt. If Obama succeeds, his success could be the greatest torpedo into the side of the GOP since FDR. So yes, there are undoubtedly Republicans who want the Obama platform to crash and burn, and who will be very unhappy if the opposite occurs.
This whole thread is getting rediculous. I live in the midwest in a reliable red state until this past year. I know lots of people who did not vote for Obama. The only reason anyone in my circle hopes he fails is because of a good faith belief that Obama is doing things that are not helpful but are harmful to the health of the country. People can have a rousing debate over who is right here, but Puh-leeze, lets not bash the motives of those who disagree with you, especially when they are motives that you are attributing to them in the first place.
I have never met (and you will be hard pressed to find) a conservative soul who thinks “Oh, Jeez – Obama is actually right about everything and is solving all the problems of the country. But Holy Crap, if he succeeds, we are all ruined!” This is nonsense.
Obama does have a real problem, though. He ran as a centrist. The right screamed that he was a garden variety liberal, but nobody believed them. Obama won over the center of the electorate. Obama needs to hope that these voters do not perceive a hard-leftward tack in governing and thus get buyers remorse.
cnyguy: I know, but in the grand scheme of things, the number of two axle horse trailers can be disregarded. If you find a number for those, I’ll gladly deduct them. It doesn’t matter. Anybody in the industry knows that 760 or 833 cars per thousand is absolutely unsustainable – unless there is easy credit and a wealth effect. Neither exist anymore.
But meanwhile, we have Rush Limbaugh openly saying that he’d like Obama to fail.
He’s not alone, and he went against the grain of the country by not voting for Obama. It’s the people who DIDN’T VOTE for Obama whom we’re talking about here.
Please, that’s just the nature of contemporary political discourse. The things said about Obama are still tame compared to the things GWB’s opponents said about him.
Seriously, people were openly glorifying GWB’s assassination while he was still in office.
The Obama supporters are going to overplay this sort of whining. The Race Card will only carry you so far.
lets not bash the motives of those who disagree with you
Mr. Limbaugh was absolutely clear about his motives. Unless you think that no one concurs with him, accept the fact that there is absolutely a group of Republicans in this country who want Obama to fail. Perhaps not all, but certainly some of the most partisan of the bunch.
If you don’t like that, take it up with Limbaugh, not with me for simply relaying the message. Shooting the messenger results in killing the wrong guy.
The things said about Obama are still tame compared to the things GWB’s opponents said about him.
Even if that’s true, that belies your point that nobody wants Obama to fail. Now you’re arguing that people from all sides of the spectrum want their opponents to fail, and that your side doesn’t have a monopoly on it.
Clearly, there are some right-wing partisans cheering against Obama. That’s just a fact, whether or not you like it. Limbaugh was able to say it without provoking any controversy from his wing of the political spectrum, which suggests that he wasn’t saying anything that they found to be particularly offensive.
Dynamic:
What I wonder about is how 500 got to be “universally accepted” as market saturation. 14 countries have more than 500 cars per 1000 people.
500/1000 is a rule of thumb number. Whether it’s 550 or 481 in a country doesn’t matter. Malta and Luxembourg are aberrations. If you look at the numbers, you’ll see that approximately 500 are approximately right for most developed countries. Even Australia, which, after Mongolia, has the second lowest population density of the world, only has 619/1000 – according to Wikipedia.
The population density argument is a red herring. In Malta and Luxembourg, you can basically walk from one side to the other. Look at Canada: 563. The US number, be it 760 or 833, is a bubble, and it is bursting. “This time it’s different” is a sure indicator of a bubble.
So having well over one car per driver is “obscene.” Gee, that must mean it’s a bad thing. I feel remorse for having more than one TV, considering that I can watch only one at a time.
For my two-driver home, there are four registered vehicles. Two are antiques, but they still count towards that cars-per-driver number. A friend has maybe a dozen tagged vehicles (and many more that are just for display purposes or serve as parts cars). I know a guy who must have sixty or more cars he can choose from when he wants to take a spin. He’s quite a collector. We’re all doing that thing Jefferson called “the pursuit of happiness.”
The government isn’t unhappy; they get tax revenue from every registered vehicle whether or not it gets driven. We can’t drive two vehicles at a time, so having extra cars doesn’t create more pollution. Nevertheless, I guess I should regret that we car lovers are offending Europe and other enlightened and/or poorer societies. It’s probably Bush’s fault.
No, the point of recovery is not behind us.
How did people finance their car purchases, and all the other wild purchases, including the house flipping?
By taking out loans against their houses and properties, the value of which was rising madly for years.
The foreclosures we’ve seen this far are just the beginning — Carmageddon? Look at CA housing? That’s armageddon.
And here’s the sad truth: people have been taking out interest only loans, and now they’re approaching the point where the down-payments kick in, with higher interest rates also kicking in, as per contract, since the low rates were used to reel them in.
The housing market is on the precipice – check out the mortgage rate resets:
http://www.calculatedriskblog.com/2007/10/imf-mortgage-reset-chart.html
PCH101, what’s wrong with wanting Obama to fail?
For example, I want Obama to fail in establishing cap-and-trade carbon regulation. In other words, my policy goals differ from the president’s. Has that become unacceptable? Racist? Subversive?
By the way, though I may disagree with the prez on specific measures for fighting terrorism, I very much want him to succeed in keeping America safe. See, I’m not totally evil.
All: This post is not a political post. It has nothing to do with Republican or Democrat. It starts with numbers in Japan. The gist of the post is: Carmageddon is still in full swing, around the world. Carmageddon doesn’t care whether donkeys or elephants rule. It’s a bubble, and it’s bursting. The bigger the bubble, the bigger the burst.
I want Obama to fail in establishing cap-and-trade carbon regulation. In other words, my policy goals differ from the president’s. Has that become unacceptable?
No, you’re entitled to think what you want. But then don’t pretend that you don’t want him to fail, when you actually want him to fall flat on his face. Be consistent, and don’t be dishonest.
At least Limbaugh was honest about his intentions. Not everybody is, apparently.
Carmageddon is still in full swing, around the world. Carmageddon doesn’t care whether donkeys or elephants rule. It’s a bubble, and it’s bursting.
Your point is well taken. However, I disagree with the second part; I think that the bubble has already well burst, and the bottom is just about upon us. This is one of the darkest-before-the-dawn moments of the economic cycle.
As for the first part, you have some people who are ideologically driven to hope that the bottom isn’t here, because they would hate for a recovery to have anything that resembles an Obama thumbprint on it. The Austrian econo-ideologues are particularly prone to such drama, which happens frequently since the cycles always prove them wrong.
Personally, I’m more interested in just assessing the cycle. The recession started over a year ago and all of the markets – stocks, housing, autos, commodities, retail — have collapsed substantially from their peaks, so by historical standards, the contraction is already long, broad and deep. Barring the end of the world, the signs of a bottom are here. As usual, most people won’t see the change in direction until long after it has already happened.
The number of cars/thousand will stay high in the US for a long time. Keep in that it’s much easier/cheaper to keep extra cars in the US than most other countries. In Oregon, registration is $27/year. Insurance: $300/yr for each of my cars, $100/yr for the RV. No taxes, or smog/safety checks ever. That’s why I have four vehicles registered, and we’re two drivers.
The average age will go up, but I don’t think there will be a drastic change in the number/thousand. At least not in the shorter term.
Funnilly enough crises( bubble deflations) come and go and car companies usually survive it. Only one country can never manage car tempests. it is USA. Whenever a small breeze blows at least one company is blown away, whether Plymouth, oldsmobile, you name it. How come a tiny company like suzuki never dies, while a giant , which was recently the largest car company on earth, must die because sales have plummetted? because legs of any car company are as strong as their domestic engineering. Carrying a massive goliath body on lanky spiderlegs of borrowed rebadges make domestic giants scuffing on clay legs.Believe me, not a single japanese car company will die, once the fan stops and shit gets wiped off.They will simply gather back their engineers and create another great product. What will you do? probably yahoo on…….
Even if that’s true, that belies your point that nobody wants Obama to fail. Now you’re arguing that people from all sides of the spectrum want their opponents to fail, and that your side doesn’t have a monopoly on it.
I’m entirely clear on that, I want Obama to fail because I believe his policies will damage free enterprise, individual liberty and the national security of the United States.
My problem is when people equate ‘wanting Obama to fail’ with ‘wanting the US to fail’ or ‘wanting Obama to fail’ to ‘racism’.
Both assertions are the worst sort of tendentious partisan bullshit and are quite contemptible.
“If Obama succeeds, his success could be the greatest torpedo into the side of the GOP since FDR.”
Yes if you define “his success” as failure of the New Deal by the end of 1938. Unemployment was 17.4 percent down from a high of 23 percent 1933. Roosevelt did not end the Depression, Hitler did. The economic corner wasn’t turned until 1950 and the market did not regain the 1929 Dow until 1954.
No President has “managed” the economy and neither will Obama. How is he doing GM and Chrysler? Bush did it?
It’s odd to me that people have put so much time and energy (both Dems and Republicans) into Obama.
The US government derives power from two places…
#1 – The ability to spend money
#2 – The ability to wage war
Obama ran on an anti-war campaign so he is down to #1…
Tax revenues are dropping like a rock and foreign investors are cutting way back on buying our debt.
This leaves the US government effectively neutered. Obama has been reduced to pitching cars on late night TV…
Buy a Chrysler! You’ve got the best warranty there is! Backed by me! Easy financing provided by the treasury! Come on DOWN!
Wouldn’t matter if a turtle was president… Without money or war, there isn’t much of importance that can be done.
I find it ironic that Bush II waged multiple wars and spent all the money. He really outdid himself on the cash in the last 6 months of his term.
Obama and the Dems are slicing the biggest turd ever pooped and deciding who gets the largest slice.
Bertel: The population density argument is not fallacious when comparing the auto ownership habits of the US, Japan and Germany.
500/1000 is a rule of thumb number. Whether it’s 550 or 481 in a country doesn’t matter. Malta and Luxembourg are aberrations. If you look at the numbers, you’ll see that approximately 500 are approximately right for most developed countries. Even Australia, which, after Mongolia, has the second lowest population density of the world, only has 619/1000 – according to Wikipedia.
I just want to know where the rule of thumb comes from. Is it widely accepted by market analysts, or is it your opinion? You’re opinion is ok, you are an intelligent sensible person. I’m not trying to start something, just wondering how the 500 number gets to be rule of thumb.
It looks to me like different countries just have different numbers. It’s the nature of their market. I don’t see why the US should necessarily be anywhere near 500. Or even 600. We are what we are, Australia is what it is, and so on.
The population density argument is a red herring. In Malta and Luxembourg, you can basically walk from one side to the other. Look at Canada: 563. The US number, be it 760 or 833, is a bubble, and it is bursting. “This time it’s different” is a sure indicator of a bubble.
I do agree that it seems to have little relationship to pop. density. Luxembourg is #2, Australia 3rd, Malta, 4th, Italy 5th….
Yes if you define “his success” as failure of the New Deal by the end of 1938.
Here we go again.
Forget whether or not you liked FDR. That’s not the point being discussed here.
This tangent is about political parties and their dance for power. FDR effectively marginalized the Republican party for about two decades. The GOP had minority status in the congress and no shot at the White House.
The GOP does not want this to happen again. However, as usual, there are conflicts, as the entrenched wings of losing enterprises fight for their own agendas, instead of the success of the organization as a whole.
The last thing that the Republican party wants is a recovery for which Obama gets credit. If things go very well for Obama, it ensures that he gets reelected in 2012, and it provides a positive halo to his party as a whole. Since politicians like to win, it is not surprising that the minority wants things to go badly enough that the tide can shift back in their direction.
At the very least, the GOP would like a recovery that gives Obama little or no credit. But since that isn’t likely, some have opted to go for the destroy-the-village version of politics.
This is just how the game is played. When the long-time victors are defeated, they tend to get a little nutty, with some who are disoriented, others who are unfocused and others still who respond by digging in their heels and circling the wagons. That’s what we’re seeing with the GOP circa 2009.
Now you have shifted your argument to comparing the auto ownership rates of 1969 vs today in the US. Much has changed in the intervening 40 years, including a much higher fraction of women in the workforce. In 1969 it was still common for a husband and wife to share one car. In fact, many older women from my grandparent’s generation never drove at all. Much has changed in 40 years. Household incomes are way up since 1969, and much of that is due to the rise of the two income household. For the majority of US workers, two jobs means two cars. Also, the US’ mass transit system is not better today than it was in 1969. Many passenger bus and train routes have disappeared over the past 40 years.
Another difference today is a higher average income. The more money people have, the more they purchase individual transport as well as occasional use vehicles for fun. There is nothing ipso facto wrong with that. China’s personal transport ownership rate is rising at a rapid clip as people can afford it. Like the US, China is a vast country and people want to be able to get around. Japan has a different set of problems thanks to its very small size. Many of the Japanese people I knew in Tokyo often owned a car, but rarely used it. Owning a car in urban Japan is much like owning a car in Manhattan … more trouble than it is worth.
I don’t want the US to fail.
Obama’s spending has made that inevitable at this point.
We are not yet at the bottom since people continue to be fired at a huge rate while house prices ontinue to decline. People don’t yet realize how serious the economic situation is. What is going to revive it?
Dynamic88:
I just want to know where the rule of thumb comes from. Is it widely accepted by market analysts, or is it your opinion? You’re opinion is ok, you are an intelligent sensible person. I’m not trying to start something, just wondering how the 500 number gets to be rule of thumb.
The 500/1000 rule has been a rule of thumb where I spent all my professional life, namely in the European auto industry. They used that number not just for Europe, but for the world. I’m old enough to remember when VW entered China in 1984 and when they forecasted that China would be the world’s largest car market. They didn’t think it would be so early. Applying the 500/1000 rule on China, it would mean 650m – 750m units, a frightening thought. Look at the Czech Republic, Poland: They went from next to no cars per thousand into the general vicinity of the magical number – in less than 20 years.
If you look at the stats, you see a cluster in the general vicinity of 500 for most developed countries. The G7 average is around 600.
“Market saturation” is not cast in stone. There is always replacement, second (or 5th) cars. It’s a rule of thumb that once the number hits 500, incremental sales will be much harder and take a longer time. Demographics also play a big role. Sales depend on the number of people who are in the new car buying age. In Germany, the new car buying age is between 40 and 60, before, they usually buy used. In the US, that age is younger, due to easier credit and higher prevalence of private leasing.
If you look at the stats, you see a cluster in the general vicinity of 500 for most developed countries. The G7 average is around 600.
We have cheap fuel, cheap roads, cheap vehicle registration, cheap available land in much of the country (still), and enough do-it-yourselfers to keep cars on the road, along with many people who need them for commuting. Cheap, cheap.
Perhaps more importantly, we also have a large market of consumers that creates substantial competition, which motivates car makers to make cheap cars designed with us in mind. (Compare the Mondeo with a Fusion for an example of how this plays out.)
I would assume that just as long as these conditions continue, the US will dominate the world in per capita car ownership. We have no shortage of concrete blocks to provide adequate storage for enough of them…
Bertel – While 8m SAAR may be a temporary reality, I doubt it will be the new normal. Much the same happened in the 1970s which was then followed by a decade long orgy of consumption in the 80s. US consumers generally buy what they want if they can afford it and as soon as the job market picks up there is no reason why they would not return to doing just that. An additional reason why the US will never even be close to the EU 500 cars per 1000 licensed drivers is that US drivers need more cars due to the lack of public transport and the urban planning around the use of the car.
Armageddon stories make great reading but the doomsayers have a poor predictive record.
PCH1201: I don’t doubt there are cycles. I’ve seen many of them in my life. My first work for VW was done in 1973, right when the first oil crisis hit (we launched the first Golf…) After that, I’ve seen big ones and small ones, long ones and short ones. Yes, when the cycle turns, there is always pent-up demand. If I would know where we are in the cycle, I wouldn’t be typing this. I would be buying puts or calls. The real estate crisis in the 90’s took 8 years to correct. This one might take longer. The more governments intervene, the longer the cycles usually take. Look at Japan: Big intervention, they never recovered.
“BDB You are 100% correct and the gov. has made it way too easy for the lazy to collect their checks and get into mischief because they have to much spare time.”
Well, the alternative isn’t to let them starve. It’s to try to keep and create jobs.
“Yes if you define “his success” as failure of the New Deal by the end of 1938. ”
Roosevelt cut spending in 1937 in an attempt to balance the budget. This caused the economy to contract. If he had not cut back on spending in 1937 the depression would have ended that year.
Still, even in 1938, a contraction year, every single economic indicator had improved from 1933, the low point of the depression.
http://upload.wikimedia.org/wikipedia/commons/4/46/US_Manufacturing_Employment_Graph_-_1920_to_1940.svg
http://en.wikipedia.org/wiki/File:US_Employment_Graph_-_1920_to_1940.svg
http://upload.wikimedia.org/wikipedia/commons/d/da/Gdp20-40.jpg
Every single measure was rapidly improving until he cut spending in a bid to balance the budget. So while you’re right that in 1938 the economy contracted (though not nearly to 1933 levels) it was because Roosevelt CUT BACK on the New Deal that year, not because it was a “failure”.
carguy: 500 per 1000 pop. Not per licensed driver.
dzwax :
May 3rd, 2009 at 9:17 am
Hatred of a black president and the working class are driving some conservatives to a frenzy. It seems they would rather see us fail as a country than see us succeed under the new administration.
Sorry shit indeed.
I don’t know where you get this from but it’s a stretch to assert hatred of a black president and the working class by conservatives are driving the US into a ditch.
If you honestly believe this is the problem that by itself is some sorry shit.
The automakers problems started decades ago and the can got kicked down the road until now. We are all going to feel the impact of these two companies shrinking, the only chance we have is the displaced workers find alternative employment, not an easy task.
So please spare us the race baiting and class warfare.
The 500/1000 rule has been a rule of thumb where I spent all my professional life, namely in the European auto industry. They used that number not just for Europe, but for the world. …
Thank you for the reply.
If I read the BTS table correctly, and the population data here – http://www.npg.org/facts/us_historical_pops.htm it would appear the US market was at saturation in the late ’60s.
You can`t extuingish fire with paper money. Gold would do, it doesn`t burn. Obama administration calculated that by 2013 jobless rate would fall to 5.2 per cent.What a fairy tale! Why would it? Actually who will hire those millions of people now out of factories and shops? will all those workers from Chrysler go and work for Tesla? Anyway, even if someone hired them, who would pay them more than 9 bucks an hour? Where are those skiled jobs necessary that would yield more than 9 bucks an hour? How will you pay your mortgage with these 9 bucks? How will Gm sell their Suburbans having folks around making 9 bucks an hour? Should I continue..?Carmageddon hasn`t come to kill car companies, carmagedon has come to kill companies that pretend to be car companies. We shall see which king is naked.
paris-dakar . . .
“I want Obama to fail because I believe his policies will damage free enterprise, individual liberty and the national security of the United States.”
Really?
Sir, with all due respect, if Obama damages our indivitual liberty, is it because he has not completed of job of reversing the excessive executive powers Mr Bush grabbed. I am still wating for Habeus Corpus to return as it existed before Mr Bush Jr.
Obama will damage free enterprise? Laughable. If your definition of free enterprise is how it existed since Mr. Reagan, and particularly as it existed with Mr Bush Jr, then damage it, please! Unbridled free markets are like an unbridled horse. They will run wild and trample people. Pollution, war(no bid contracts for Halliburton etc in Iraq), extreme wealth concentration and polarization, profiteering health insurance companies come immediately to mind. Free enterprise has arguably (I would say evidently)damaged the nation quite effectively recently.
The problems we face now have not been caused by free enterprise unrestrained. That is a hysterical lib talking point.
The problem was the fed holding down interest rates artificially low for too long, encouraging real estate and other speculation by people taking out HELOC loans.
Another problem was Fannie and Freddie pressuring lenders to make loans to people who were not qualified to pay them back, because to do otherwise would be racist. Or something.
I repeat: this problem has been caused by government policies, not by unrestrained free markets. Moving in the direction of freer markets would be better for us in the long run, but fat chance of that happening.
And so what if Limbaugh said he wants Obama to fail? Compared to 8 years of the president being compared to Adolph Hitler, with people making movies fantasizing about W being assassinated, that seems remarkably tame.
There’s more than enough blame to spread around. This problem didn’t start 100 days ago (when did the Death Watches start?). In fact, let’s leave the dems vs repubs/libs vs cons angle out of it, lest this thread go farther off topic than it already has.
If you lived in the US, Canada, Europe or a few other countries post Reagan revolution you lived through the greatest period of prosperity in the history of mankind.
There were no unbridled free markets. Wall Street and Congress are basically one and the same. Freddie Mac, Fannie Mae, artificially low interest rates, change the management at AIG so they can insure the junk and encourage and force banks to make bad loans. Just some of the US governments actions.
Some unbridled freemarkets. The government knew what was going on and chose to ignore it. Even ignored Madoff although they were warned many times.
“…it looks more like people finally begin acting in a rational manner”.
People in general do so, most of the time. Investments/income down? Spend less. The weak producers go to the wall, the better ones come out in a stronger position. This is what a recession is: A cleansing of poor investment choices.
But before that can happen the government comes along and says, oh no, that’s no good. We have to spend more to ‘overcome’ the recession. Here’s a trillion dollars of free cash. Go out and spend and ‘stimulate’ the economy.
We’ll let our grandkids pick up the credit card bill.
The question is how much prestige will America lose if the domestic autoindustry disappears.
@Brett_McS
You won’t have to worry about your grandkids picking up the bill. The bills are coming due within the next 1-3 years.
Hatred of a black president and the working class are driving some conservatives to a frenzy. It seems they would rather see us fail as a country than see us succeed under the new administration.
Sorry shit indeed.
I think you are on the money. LBJ is reported to have told aides that his pushing civil rights legislation through would lose the South for the Democrats for his generation and that of the younger aides. And he was right. So then we see Nixon win over Humphrey even though Wallace got significant vote that would otherwise have gone to Nixon. Kevin Phillips describes this well in “The Emerging Republican Majority” as well as later books. Of course those who call themselves conservatives can’t be openly racist, and the ‘haves’ probably aren’t. But they saw race as a powerful tool and have used it well. But the conservatives aren’t interested in protecting the environment or constitutional rights. Where they are conservative is in maintaining the status quo regarding the class structure in our so called classless society. Miraculously they line up almost perfectly with business interests who don’t want profits to be diminished by regulations conserving the environment or the values our society is supposedly based on.
The morphing of racism into so called conservative values has been brilliant. And more recently religion has proven a handy manipulative tool. It was all going so well until the greed of the haves led to ever more deregulation and the resulting reckless financial shenanigans that brought the house of cards down. The US public is too poorly educated and easily manipulated to understand how they’ve been had, but they can understand losing their material goodies.
ttacgreg :
May 3rd, 2009 at 5:02 pm
paris-dakar . . .
Sir, with all due respect, if Obama damages our indivitual liberty, is it because he has not completed of job of reversing the excessive executive powers Mr Bush grabbed. I am still wating for Habeus Corpus to return as it existed before Mr Bush Jr.
So am I. Unfortunately, Presidents historically do not give up power that they complained about before the election. And this cuts across party lines. Heard anything about virtually unencumbered wire-tapping lately?
Pch101:
At the very least, the GOP would like a recovery that gives Obama little or no credit. But since that isn’t likely, some have opted to go for the destroy-the-village version of politics.
Good first point. A weak recovery would be best for the GOP. But that’s unlikely – the deeper the recession the more robust the recovery.
‘Destroy-the-village’ reflects Limbaugh’s tone, not that of the elected GOP. And even with 60 votes in the Senate, I think Obama may have some serious issues with his own party. Health care will be critical.
This is just how the game is played. When the long-time victors are defeated, they tend to get a little nutty, with some who are disoriented, others who are unfocused and others still who respond by digging in their heels and circling the wagons. That’s what we’re seeing with the GOP circa 2009.
Yes. The Congressional Democrats of ’94 come to mind.
But defeat can focus the opposition. 2010 will be a critical year for the national GOP. If they lose more seats, they’re baked for a while.
2012? Who knows – you’ve got to favor President Obama as the incumbent – but Dems shouldn’t count on the GOP running another weak candidate who kneecaps his own fund raising. Expect each candidate to raise over $2 billion for the general election. It will be brutal.
And don’t forget the wild card that jumbles everything: Another terror strike.
Skimming the comments, I’m really astounded, and disgusted, by the percentage of Limbaugh/Hannity types who frequent this blog. For those of you who are still confused, Hannity and Limbaugh are both chickenhawks, liars, and all round creeps, in other words, they are perfect neo-conmen, corporate shills.
The roots of our current economic problems go back a lot farther than Obama. The starting point of our current mess can be traced to the dynamic duo of Nixon/Kissinger. It was the gruesome twosome who decoupled the dollar from yellow gold and hitched it to the black liquid variety.
As for Obama, what do you expect him to do? Tell the truth? You stand up in front of the average Douchebagus Americanus and tell him/her that it’s time they got off their asses, lose their sense of entitlement(and some weight) and get real jobs producing things of real value — tighten your belts and live within your means. Yeah, that would go over really well.
“Everything is gonna burn. We’ll all take turns. I’ll get mine too.” But I’ll have a good time watching most of you go first.
Interesting talking points bluecon.
May I point out that with the exception of Mr. Clinton, it has been the Republicans in control of this government that allegedly interfered too much with the markets, starting with Mr. Reagan? Your points would be far more believable and valid were these past 25 years ones of Democratic Party government. Mr Clinton gets no pass from me either, in 1999 he signed Phil Grahm’s (btw Republican senator) bill that nullified the Glass Stiegel Act that separated risky speculative investment banking from commercial banking.
I also remember the Savings & Loan fiaso of the 80’s. Mr. Reagan signed a law that allowed these institutions to be created. They were subject to far less regulation, and collapsed, at taxpayer’s expense. I remember seeing video of Mr. Reagan signing that law. Surrounded supporters, the first words out of his mouth were “Gentlemen, we have hit the jackpot!”
Unregulated capitalism leads to wealth polarization, corruption, booms and busts, and wars. Left to its own it will posess and control governments as well. Plutocratic government is not democratic and most certainly people living in a plutocracy have no freedoms or justice availed to them. “He who has the gold, makes the rules”. I strongly suspect we live in a plutocracy at this time.
@Skor
Be careful out there. A large % of the population is pretty happy with Hannity and Rush.
You probably don’t get thru a day without support from someone who watches Hannity every night and listens to Rush every day.
Rush’s and Hannity’s rating and only going UP.
I’m not taking sides, but it’s never good to put down millions of people for their principles and beliefs.
Never ends well.
Neither political party EVER wants the other to be able to take credit for ANYTHING good that happens. Both parties are equally guilty, and that is a contributing factor to the collapse-in-process we are experiencing in the U.S. today. Potential success is torpedoed at every opportunity by both parties.
I have a hard time believing that there are any true patriots in government, these days… only cynical, self-interested, self-perpetuating bureaucrats.
I want Obama to fail in implementing those policies that I personally believe are harmful for this country, but then again, I feel the same way about every POTUS, not just Obama.
We all have differing belief systems, priorities and moral standards, and these dictate what we each think is harmful or good for this country.
That’s just the way it is, how it has always been, and always will be.
Deal with it.
Political hatreds aside, the simple fact is that there have been too many car makers for the market for many years now.
Competition has been fierce and only the economic boom and consequent cheap credit has kept the weak players in the game.
Had the bubble not burst so quickly, the sequence of events would have been slower in unfolding, but it would have been the same.The demise of Chrysler has been under way for a long time, and the same with GM. I’m not confident that germanic statistics can be used to determine how many cars Americans can afford (or deserve) to own, but conditions now mean that number will fall for a few years.
When a market shrinks the weak players fail, whether you’re talking about chewing gum, or cars. An interesting example can be found in the sale of Budweiser to a foreign company. The largest player in a declining market, with unimaginative products goes under. Sound familiar? (Note – nI don’t know what the statistics say about the per capita consumption of beers by Americans should be according to industry statistics – anybody know?
I don’t know what the statistics say about the per capita consumption of beers by Americans should be according to industry statistics – anybody know?
Wackypedia has a page on it would you believe.
(I would have guessed Ireland, Germany, Australia, but not the Czech Republic – that has to be a statistical error).
American Beer is just brackish water (if you’re lucky).
Mr Clinton gets no pass from me either, in 1999 he signed Phil Grahm’s (btw Republican senator) bill that nullified the Glass Stiegel Act that separated risky speculative investment banking from commercial banking.
Not to defend Clinton, but the bill had passed both chambers of congress by veto-proof margins.
And certainly not to defend most of the congress, but the general population was caught up in the free market bullshit. Reagan was an ignorant, lazy front man, but, as Obama said during the campaign, he was transformative. Terrible president but a hell of a salesman for the right. Interesting to see the sell job that has been done on him since he’s been out. All the roads, buildings, schools, etc. named after him for what? Just to pump the idea into people’s brain that he was great so that those failed policies can be sustained.
Car people have strange political discussions on car enthusiasts’ sites.
While arguing about wanting the present administration to fail, it might be worthwhile to consider what China is doing. That’s one determined opponent. While Obama is reduced to flogging failed car brands, China is buying nations and redefining the international exchange currency, which will soon be the SDR:
http://www.tomdispatch.com/post/175067/dilip_hiro_the_newest_superpower
Meanwhile, out on the lot, the NYTimes shows a car buyer in apparent distress. What will his dollar get him:
http://graphics8.nytimes.com/images/2009/05/04/business/04showroom.xlarge1.jpg
The voters wanted big government so they got it. The voters wanted easy credit so they got it. The voters wanted lots of government spending and high regulation so they got it.
Now they are going to spend the rest of their lives paying for it.
The usual way for a government that has spent to much money to get out of debt is inflation. Inflate the money and it is easy to payoff the loans. Sorta like a huge tax on the people but what the heck.
I think that those who are waiting for the end of the world will be sorely disappointed. The economic recovery has probably already started, as the bottom of it is being set about now.
To clarify, better than before doesn’t necessarily mean immediate recovery. Most likely we’ll see “recession” conditions for while, but at least it’ll be stable.
The usual way for a government that has spent to much money to get out of debt is inflation.
This understanding is wrong. They are also using fiscal policy to control employment level, and the ensuing inflation will be counter by monetary policy (interest hike) later, which will lead to a predictable and the usual “recession” part of the cycle.
The only reason anyone in my circle hopes he fails is because of a good faith belief that Obama is doing things that are not helpful but are harmful to the health of the country.
That is just dishonest. If Obama does in fact succeed, those same people will still have the same ideology. This is because they never construct those ideas from a factual basis, nor did they ever intent to, so why start now?
Just look at TTAC for an example. The believers in said worldview will continue on and on despite being shown to be wrong every time. Funny enough, it’s generally those same people who are drawn to the theories that assume humans are fundamentally rational.
Funny enough, it’s generally those same people who are drawn to the theories that assume humans are fundamentally rational.
An excellent point, Economics is alone amongst the social sciences in making that simplifying assumption. Psychologists and Sociologist never start with the assumption that people are rational players who do what is in their own long term best interest. Economists, by and large, start with the Rational Man assumption. Upon that assumption they build a tower worthy of Babel by summoning up Isaac Newton’s Calculus and applying it in ways old Isaac never dreamed of. There is a small renegade subset of Economists who explicitly challenge the Rational Man/Economic Man basis of classical economics, but they are still in the minority:
http://www.paecon.net/PAEarticles/ChronicleJan03.htm
Skor, you nailed it!-`The roots of our current economic problems go back a lot farther than Obama. The starting point of our current mess can be traced to the dynamic duo of Nixon/Kissinger. It was the gruesome twosome who decoupled the dollar from yellow gold and hitched it to the black liquid variety. `
`As for Obama, what do you expect him to do? Tell the truth? You stand up in front of the average Douchebagus Americanus and tell him/her that it’s time they got off their asses, lose their sense of entitlement(and some weight) and get real jobs producing things of real value — tighten your belts and live within your means. Yeah, that would go over really well.` The most important thing I put in bold. :)
TTACgreg- you are righ on this one-`Unregulated capitalism leads to wealth polarization, corruption, booms and busts, and wars.`
Lokkii- I believe you are right on this one-` When a market shrinks the weak players fail, whether you’re talking about chewing gum, or cars. The largest player in a declining market, with unimaginative products goes under. `( especially if your product diversity is scarce, products obsolete, of low quality, and mostly are rebadges anyway).
It was the gruesome twosome who decoupled the dollar from yellow gold and hitched it to the black liquid variety.
The “standard” didn’t mean much of anything at that point anyway. In fact, that was proven by the kinda dickish actions of old europe which led to the final decoupling.
Peter Schiff figured the whole thing out.
Why was there nobody in government that saw this coming?
Sure seems like government incompetence.
“As for race and presidential politics, just remember Willie Horton.”
Ah yes, Willie Horton. Great move by Al Gore. Al Gore? Why yes. He used the Willie Horton murder in an ad against Michael Dukakis during the 1988 Democrat presidential primary. Someone on George H.W. Bush’s staff saw that ad and thought it would be good to run their version of it during the general election. There was a difference between the two ads though. In the Al Gore ad, it prominently displayed Willie’s mug shot, and you knew in no uncertain terms that he was black (the ad was run in a southern primary – way to go Al Gore!). In the H.W. national ad, it showed a line of men, black and white, coming and going thru a revolving door of a prison. The voice over talked about Willie Horton, but did not show his picture. You didn’t know what race he was unless you knew the about the incident from the news or you had seen the original Al Gore ad.
What was funny was seeing Democrats saying they were shocked, shocked I tell you, that someone could be soooo racist as H.W. was in that ad. But this also reminds me of the stuff that Hillary’s campaign used on Obama during the last presidential primary. I’m so glad those Democrats doen’t have a racist bone in their bodies. :-)
Fact is S&L’s started in the 1880’s and most adopted the S&L moniker formally in the 1940’s. Chances are Ronald Reagan had little influence then.
BTW, we own three vehicles and average age is 8. Only drive one at a time but my pick up is used a lot by others.
Gosh, how to respond to “Carmageddon” without dealing with the politics?
Because politics is central to all of this, that’s why. Wake Up America!
Sorry, Bertel. :)
American Beer is just brackish water (if you’re lucky).
Now you have gone too far sir!
America produces some of the best beer in the world these days and even the Belgians and Germans are copying our styles to catch up.
I urge you to drop the BMC (bud, miller coors) and check out some of your local, tasty, craft brews.
check out the top 100 beers on http://www.beeradvocate.com if you don’t believe me.
If only the domestic car industry was half as creative as the domestic craft beer industry…
@ GeeDashOff
Why thank you for the link! When I’m in the USA next I’ll be sure to look it up.
Last time I was in there I was lucky enough to take the train from Chicago to Seattle and I couldn’t even get a decent beer! (Wow, is that trip something to behold – I will refuse to fly or drive next time and insist on the train).
If you’re ever in Australia, you’d be in craft-beer heaven.
Ah yes, Willie Horton. Great move by Al Gore. Al Gore? Why yes. He used the Willie Horton murder in an ad against Michael Dukakis during the 1988 Democrat presidential primary.
This is false. Al Gore questioned the Massachusetts program during the debate, but never even mentioned Horton.
—
Fact is S&L’s started in the 1880’s and most adopted the S&L moniker formally in the 1940’s. Chances are Ronald Reagan had little influence then.
They were deregulated during the early 80’s, which contributed to the crisis.
—
Also, just as a general note, people should stop trusting sources that provide false info.
Bertel Schmitt: As far as unessential goes, the US has an absolutely obscene vehicle penetration of 833 per thousand – more cars than people with drivers licenses.
There’s nothing “obscene” about it. Given our relatively low costs of auto ownership, and more available space, it stands to reason that people who want to own several vehicles can afford to do so.
A friend who loves old domestic barges owns no less than five – plus a 1999 Intrepid and a 1985 Chevrolet Silverado. All are in running condition. He just likes old cars, he has the money to buy them, and he has the space to store them. This is where less density in the U.S. as compared to say, Europe, comes into play – since land isn’t at a premium, he can afford a lot big enough to house these vehicles in a garage.
Another friend – recently divorced – decided to supplement his 1989 Honda Civic wagon with a used, mint-condition Honda S2000 as a “fun” car. Again, he can afford it, has a place to store it, so…why not?
I fail to see what is obscene about that.
skor: The starting point of our current mess can be traced to the dynamic duo of Nixon/Kissinger.
I would place the starting point before then, when Lyndon Johnson thought that we could simultaneously wage a war in Vietnam and greatly increase spending on social programs (i.e., the Great Society).
Incidentally, that mean old Republican, Richard Nixon, actually bragged that it was under his watch that federal spending for social programs first outstripped spending on defense-related programs. It’s best to look at what presidents have actually done, as opposed to merely looking at their party affiliation.
BDB: Roosevelt cut spending in 1937 in an attempt to balance the budget. This caused the economy to contract. If he had not cut back on spending in 1937 the depression would have ended that year.
Still, even in 1938, a contraction year, every single economic indicator had improved from 1933, the low point of the depression.
Key indicators still weren’t at 1920s levels, which is the real comparison point.
The unemployment rate stood at 4.2 percent in 1928, the last year before the Great Crash. It was at 16.9 percent in 1936, and still at 14.7 percent in 1940, when defense orders were accelerating.
ttacgreg: Mr Clinton gets no pass from me either, in 1999 he signed Phil Grahm’s (btw Republican senator) bill that nullified the Glass Stiegel Act that separated risky speculative investment banking from commercial banking.
The Glass-Steagall Act separated investment and commercial banking. It prohibited commercial banks from underwriting or dealing in securities, and from affiliating with firms that engaged principally in that business.
Gramm-Leach-Bliley repealed only the second of these provisions, allowing banks and securities firms to be affiliated under the same holding company. Thus J.P. Morgan Chase was able to acquire Bear Stearns, and Bank of America could acquire Merrill Lynch. Nevertheless, banks themselves were and still are prohibited from underwriting or dealing in securities.
Allowing banks and securities firms to affiliate under the same holding company had no effect on the financial crisis. None of the investment banks that have gotten into trouble — Bear, Lehman, Merrill, Goldman or Morgan Stanley — were affiliated with commercial banks. And none of the banks that have major securities affiliates — Citibank, Bank of America, and J.P. Morgan Chase, to name a few — are among the banks that have thus far encountered serious financial problems. The ability of these banks to diversify into nonbanking activities has been a source of their strength.
The banks that have succumbed to financial problems got into trouble by investing in bad mortgages or mortgage-backed securities, not because of the securities activities of an affiliated securities firm. Federal Reserve regulations significantly restrict transactions between banks and their affiliates.
The starting point of our current mess can be traced to the dynamic duo of Nixon/Kissinger.
I would place the starting point before then, when Lyndon Johnson thought that we could simultaneously wage a war in Vietnam and greatly increase spending on social programs (i.e., the Great Society).
From WW2 until very recently (hell, let’s include recently) was an extremely successful period of prosperity, compared to any nation.
But when you’re a broken clock, you gotta take the few times when you’re right and try to extrapolate that to cover the all time in between when you’re not. So it’s safe to say you believe those of your ideology predicted this from decades back?
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And none of the banks that have major securities affiliates — Citibank, Bank of America, and J.P. Morgan Chase, to name a few — are among the banks that have thus far encountered serious financial problems.
Not coincidentally, Citi had the most significant internal trading of that group, and the worse off. I guess by now getting dozens if not more in bailouts is no longer considered a serious financial problem. The nature of commercial banking also helped dilute the poison.
This means that the prior law was watered down at the institutions’ own peril.
So while G-Steagall repeal was not the cause of the major problem, it certainly was symptomatic of the times.
agenthex: From WW2 until very recently (hell, let’s include recently) was an extremely successful period of prosperity, compared to any nation.
I guess that includes the hated Ronald Reagan’s two terms…I thought that the nation went to hell in a handbasket after 1980, according to your side.
agenthex: But when you’re a broken clock, you gotta take the few times when you’re right and try to extrapolate that to cover the all time in between when you’re not. So it’s safe to say you believe those of your ideology predicted this from decades back?
Actions taken in a large, complex economy can take years – even decades – to have effects, both good and bad.
Regarding the Great Society – it was well-intentioned, but if you think that the creation of an entitlement mentality is a good thing, I’ll have you meet with my wife, who teaches in an urban school district. Hint – she isn’t blaming rich people, George W. Bush or Republicans for our society’s problems.
Unlike you, she has real-world experience, so her views are based in reality, not what she has read in the history books. She can help you become better informed.
Incidentally, last time I checked, even many left-leaning centrists have sounded the warning bell about increasing entitlements, and their potential negative impact on the economy…I guess they are just a broken clock, too?
agenthex: So while G-Steagall repeal was not the cause of the major problem, it certainly was symptomatic of the times.
In other words, it had nothing to do with the present crisis, and actually alleviated it, although I know that it’s hard for you to admit.
I guess that includes the hated Ronald Reagan’s two terms…I thought that the nation went to hell in a handbasket after 1980, according to your side.
See, here’s your problem. You take sides. Reagan ended up spending massively and running up significant deficits needlessly, which I’m sure you can be proud of.
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Unlike you, she has real-world experience, so her views are based in reality, not what she has read in the history books. She can help you become better informed.
Yes, I’m sure all that anecdotal, personally biased info (endorse by you no less) trumps a proper understanding of history.
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In other words, it had nothing to do with the present crisis, and actually alleviated it
If by alleviate, you mean make slightly worse. I’ve already pointed out the mistake in your arg above. The usual dodging and repeating yourself is not going to get anywhere.