New car habit can cure hard times
By Saul Landau
You know bad times have hit when Illinois budget cuts no longer permit the state to bury dead indigents. A letter to funeral homes from the Department of Human Services blamed “the General Assembly’s failure to approve the revenue plan proposed by Gov. Quinn.” Illinois paid about $15 million yearly to bury some 10,000 impoverished people. “Funeral directors predicted bodies will begin piling up at medical examiner’s offices.” (Chicago Sun Times, June 16)
The living aren’t making well either. Despite President Obama’s generous bank bailouts and auto buyouts, U.S. unemployment rolls rose to their highest levels since the Great Depression, claimed USA Today. (June 12, 2009) In response to economic bad news industry leaders encouraged the public to relapse into a bad habit as the way of saving the economy. Instead of advising people to join CBA (Car Buyers Anonymous), the manufacturers, bankrolled by the government, call for reversion to the car addiction.
According to a New York Times headline, “Industry fear U.S. May Quit New Car Habit.” (May 31) Permanently kicking this addiction could seriously derail key economic recovery. So, we get questions like: “Can American drivers live without the new car smell?” Times reporter Micheline Maynard, wrote that just two years ago “Americans appeared hooked” on new cars. Before the economic plunge sales had reached levels of “more than 17 million a year.”
Top industry officials now hope consumers will resume their habit — one that pollutes the atmosphere with particles, greenhouse gas and noise, occupies vast amounts of space (highways, parking lots and garages, new and used car lots) and results in tens of thousands of annual deaths and many more injuries — not to speak of anthropomorphic obsessions. The hoped-for relapse to new car buying includes the reprioritizing of human behavior: ignore the needs of children for more urgent auto-related tasks — washing, waxing and polishing.
That’s the good habit.
On the same NY Times front page, we get a different take on another habit. “In Heartland Death, Traces of Heroin’s Spread.” The article continues: “groups are…making new inroads across the country, pushing a powerful form of heroin…known as black tar.”
Wait a minute! People get laid off, can’t find new jobs; or face job and pay cuts need some relief. How can they afford a new car? And will a new car help them deal with depression and anxiety?
Compare the habits. The noble individuals on car lots who extol the benefits and beauty of shiny new gas consuming hunks of metal and plastic are called a sales force. They offer satisfaction for a good craving that 17 million people once had.
Carvings change with the times, obviously. Job loss for some means pay cuts for others and reduced work time for even more. The paid work week now averages only 33 hours. Count furloughs and involuntary part-time work for some 9 million other people and the scene begins to reproduce conditions of the 1930s. Bummer!
In some cities, especially those most hit by the bursting housing bubble, joblessness has endured for almost half a year: a post-Depression high of 22.5 weeks. “Baby boomers — 79 million people born from 1946 to 1964 — have been hit particularly hard,” USA Today states. Unemployment rates for workers over 45 have reached the highest level in decades. The U.S. public as a whole had depleted its assets by $1.33 trillion from January through March. Multiply that by ten and you’ll get more or less the total loss in U.S. assets since the down turn began — some $14 trillion.
Numbers and statistics transform themselves into metaphors. To understand poverty, imagine yourself as the “typical American working family.” Your husband works in a factory near Cleveland where manufacturers announced impending layoffs. You work for American Airlines, which has also announced a major cut (1,600 jobs). You call a friend working at Delta, also chiming in with intentions to slash its work force. Try to sell that person a new car by telling him or her it will “answer your needs, improve your sex life and magically produce prestige and status!
In May, foreclosure filings rose 18 percent (322,000) from last year. “There were almost one million foreclosure filings in a three-month period, and that’s simply unprecedented,” said California-based RealtyTrac Senior Vice President Rick Sharga. (USA Today) On TV shows, magazine and newspapers bad numbers abound alongside celebrity divorces, marriages and drug overdoses, to make you feel informed, anxious or depressed? Even that confusion will not easily stimulate the urge for a new car.
In the first quarter of 2009, foreclosure filings exceeded 300,000. In 2006, less than 100,000 filings occurred per month. May also saw a rise in bank repossessions and RealtyTrac forecasted that some 4 million foreclosure filings will be made this year — 900,000 more than the record number in 2008.
Couples huddle in their kitchens as news reports flash that delinquencies on bank credit cards also rose in the first quarter of this year — by 11% over last year. Will they be able to make the monthly payment on their Visa or MasterCard? Does the story imply they should all pity the poor creditors? Or does it signify they will join the growing number of deadbeats? Such news more than dampens the car buying spirit, it could infringe on the nation’s larger spiritual values: daily shopping and new car waxing and washing.
Luckily, the USA Today reader discovers, retail sales rose in May (0.5 percent from April). But — here comes the bad news — so did gas prices, which accounted for much of the rise. May retail sales remained almost 10% percent lower than last year.
The labor market — another wonderful euphemism — remained weak with wages “flat or falling.” The Fed’s report also stressed that commercial real estate was in crisis; in much of the United States vacancy rates continued high and rising. So where are the dispossessed living?
Deutsche Bank, reported the NY Times, offered a new report on residential real estate in which its experts predict a sharp drop in home prices in metropolitan New York City (Westchester, northern New Jersey and other nearby areas). The German Bank foresees a fall of 40% from March prices. More numbers!
The New York resident who just received notice that his work week had been reduced cannot afford to pay inflated home prices (which peaked in the second quarter of 2007 at $552,000); nor can he rent at current prices. What will he or she do?
In Chicago, sales fell, manufacturing and capital spending declined. Dallas business was “bouncing along the bottom.” St. Louis area manufacturers announced shutdowns and permanent layoffs.
The Obama administration’s recovery means the gross domestic product must rise by 1-2 percent later this year or early in 2010. If this happens, workers will not necessarily recover jobs or wages.
The jobless rate might hit 10% percent by Christmas 2009 and the Wall Street Journal’s experts foresee the possibility of one million more jobs disappearing by summer 2010.
In such a climate, Americans should at least compare the two habits. The NY Times presents new cars offered by great companies that manufacture them to “Mexican drug cartels” who “pushed heroin sales beyond major cities into America’s suburban and rural byways.” As Fiat buys Chrysler, the Times reports disparagingly about how Mexican cartels, “the greatest organized crime threat in the United States,” are “taking over heroin distribution from Colombians and Dominicans.” As car sales fall, the cartels are “making new inroads across the country.”
The bad habit bears, however, introduced a new product into the heartland of the country that is selling like proverbial hotcakes. Heroin, peddled by “illegal immigrants,” killed Dana Smith, of Grove City, Ohio. Her two brothers are also addicted. The story elicited pity for the mother and blames those immigrants who sell dime bags on small town streets because they lost their jobs and couldn’t get new ones. It didn’t report how doctors and pharmacists make available similar, albeit legal, items to people who need sleep, euphoria, more energy — escape from reality.
Nor did the Times compare the effects of each habit. 1999 statistics show some 43,000 people died in auto accidents compared to 19,000 who perished from drug abuse (not only heroin). (http://www.wrongdiagnosis.com/lists/deaths.htm)
The UN reported global drug business grossing $320 billion annually, the 21st largest economy — after Sweden. Some 200,000 die each year as a result of the illegal drug trade; five million die from tobacco and 2.5 million from alcohol.
Lousy habits — all of them. But the Times doesn’t ask: why should the premises of our society provoke so many destructive habits? Instead, like a stenographer, it reports industry’s attempt to extol the virtues of one bad habit, while morally demeaning another one that causes less death and environmental destruction.
Bad times can encourage worse habits. Addiction to drugs — or alcohol — produces disastrous results. But this should not become a reason to try to re-hook people on cars, as our environment warns us to make drastic changes in just such a habit.
Saul Landau is an Institute for Policy Studies fellow. His films are available on DVD from roundworldproductions@gmail.com.
