(Title source may be found here.)
Depending on how you look at things, I may never have owned a brand new car (a term I always hear in my head with the inflection and cadence of a game-show host). Many of the cars I’ve owned were hand-me-downs, from my first car to my grandparents’ 1974 Gran Torino and the ’03 Santa Fe the Spawn inherited from my folks. Others I bought at dealerships, but they were used cars, or at best (as was the case with the drum hauler) an unsold model from a prior year, back inventory taking up lot space and deeply discounted. Even the convertible I bought when I was younger and foolishly burning through an inheritance was an “executive program car”, a nice way of saying used.
Our most recent automotive purchase was Mrs. M’s ride, which was 2 years old when we bought it, with 40,000 miles on it. We’ll have it paid off pretty soon, I think. I’m not complaining about any of this — they get us where we need to go and they have CD players and air conditioning, so they meet our needs. Still, over the years, we’ve grown used to saying, “We got a new car — well, new for us.” I don’t expect that to change in the years to come.
Why am I talking about this today? Well, a couple of weeks back, Edward N. Luttwak wrote a piece in the Times Literary Supplement, a review of several books about the surprising US election last year. Luttwak performs his own post-mortem in the process, and while it would be an understatement to say his conclusions don’t thrill me (he suggests that we may see 16 years of Trumpian presidency, with Ivanka succeeding her dad), he suggests that the inability of many — most? — Americans to afford a new car may be a key to understanding the rebellions we saw in both major parties last year.
[T]he cheapest new car on sale in the United States in 2016 was the Nissan Versa sedan at $12,825, twice the level that average households could afford in Detroit or Cleveland, and more than average households could afford in cities ranging from Philadelphia, Orlando, Milwaukee, Memphis, Providence, New Orleans, Miami and Buffalo, as well as, a fortiori, in a very great number of smaller localities across the United States, even in high-income states such as California and Oregon, as well much more commonly in the lower-income Southern [Hi there! — Prof. M] and rust-belt states.
Part of this, Luttwak contends, is due to wage stagnation, to which the major candidates at least gave lip service. The other big reason, however, is interesting as well:
It was the other phenomenon, the other blade of the scissors that cut off the possibility of new car ownership for more and more Americans that Trump squarely attacked as Sanders did not and could not: the regulatory regime that has been relentlessly forcing up new car prices from the 1977 average of $4,317, equivalent to $17,544 in 2016, to an actual average price today that exceeds $30,000. Those regulations prescribe that American cars must be very, very safe, and steadily more demanding safety requirements have been forcing up manufacturing costs: the latest addition is the provision of rear-view cameras in all cars that will be mandatory in 2018, the result of an Obama decree prompted by the campaign started by a wealthy driver who had suffered the tragedy of killing his own young daughter while reversing. Because of his suffering, and his energetic lobbying, and because of Barack Obama’s enthusiasm for promulgating more regulatory decrees, in 2018 the additional cost of those rear-view cameras – only a few hundred dollars – will deprive thousands more households of the chance to buy a new car.
Also costly are the ever-more stringent fuel conservation norms and pollution restrictions that mandate pricy engine ancillaries, and that strongly favour inherently more expensive hybrid cars, as well as drastically more expensive all-electric cars. And both those purposes are much more costly to achieve than they could have been because they are subverted by the safety norms that prohibit the much lighter vehicles I happily drive in Japan, whose K-cars merrily drive up steep mountain roads in spite of their minuscule engines, and that also prohibit the several small cars sold in Europe for much less than the $12,825 of the cheapest US car.
What, one may ask, is wrong with the pursuit of automobile safety, fuel economy and pollution control? Only this: mandatory regulations that prohibit choices between better and cheaper cars force the average household in too many parts of the United States to drive second-hand, third-hand or simply very old cars that are drastically less safe, less fuel efficient and also more polluting than the prohibited cheaper new cars would be.
It’s not hard to see how the people who might want — might need — a newer, better car would get frustrated by the situation, and politicians ignore those people at their peril. And when it results in the election of folks like the Current Occupant, at ours. As for Luttwak’s article? RTWT, as the kids say.