Sunday, September 3, 2017

The Politics of Car Prices

The $150 car

These dollar amounts help to explain how Trump was elected:


Cheap cars were a key to the economics of my working class family growing up. In the absence of public transportation in our town, Dad drove to work and carted the family around in cheap, rusty, high-mileage used cars. I commuted to the nearest state university in a 1973 Mercury Comet that cost me $350; when that died, I splurged on a 1972 VW Beetle--$650.

I saved even more money by doing a lot of my own repairs, or exchanging a six-pack for a day’s labor from one of my more mechanically-inclined friends. That’s how I got the transmission replaced in my first car, a $150 Chevy Townsman. But cars have become so complicated that even the simplest repair is beyond most backyard mechanics, and even professionals have had to fight the car companies to get the computer codes they need to repair modern cars. And the complexity of those cars has led to skyrocketing repair bills. Have you had your ignition key duplicated lately?

About a year ago, the Car Connection reported that more than half of American families cannot reasonably afford to buy a new car. In 1977 the average new car went for $4,317 ($17,000 in today's dollars); today the average new car goes for more than $30,000. Edward N. Luttwak (whose TLS essay is well worth reading), sees in these statistics an explanation for Trump’s electoral victory last November.
Had journalists studied the numbers and pondered even briefly their implications, they could have determined a priori that only two candidates could win the Presidential election – Sanders and Trump – because none of the others even recognized that there was problem if median American households had been impoverished to the point that they could no longer afford a new car. This itself was remarkable because four wheels and an engine might as well be grafted to Homo americanus, who rarely lives within walking distance of his or her job, or even a proper food shop, who rarely has access to useful public transport, and for whom a recalcitrant ignition or anything else that prevents driving often means the loss of a day’s earnings, as well as possibly crippling repair costs.
The $150 key
Luttwak tells the story of how the back-up camera came to be mandated for all 2018 vehicles thanks to a campaign by a “wealthy driver” and “Barack Obama’s enthusiasm for more regulatory decrees.” Undoubtedly, backup cameras will save some lives, but they will also place new cars out of the reach of a few more families.

When liberal Democrats pushed for more and more safety and environmental regulations that have pushed up the prices of cars, they did nothing to mitigate the impact on family budgets. Just like when they promoted free trade and did nothing to mitigate the impact on blue collar workers who lost their good union jobs in the manufacturing sector. All of this comes down to a powerful example of how, contra Thomas Frank, working class people might not be voting altogether against their economic self-interest when they support Republicans who want to reduce regulations on industry.

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