Cars and drivers—in the age of inequality

How many of you read Car and Driver magazine?

Not many of you, I presume. But maybe you should. At least the June 2020 issue.

It’s certainly a sign of our obscenely unequal times that a magazine better known for its reviews of foreign supercars and domestic muscle cars and for an editorial policy that courts controversy only when it attacks SUVs (in favor of minivans and cars) highlights the story of Oliver, Jason M. Vaughn’s family’s 260,000-mile Subaru in a piece subtitled “The Fear of Failure.”

Turning the key has become an act of faith. As the engine grumbles to life on this fine southwest Colorado morning, the yellow check-engine light comes on, as it has every day for the past four years, and the same questions swirl in my mind. Is this the day that tiny head-gasket leak turns into a gusher? Is this the day the catalytic converter chokes closed for good? Is this the day that one speck of sand too many works its way into that cracked CV-joint boot, causing it to seize up at some bend in the road and send me spinning into a ravine, not to be discovered until spring?. . .

I intimately know everything wrong with this car. I feel the squishy brakes and the engine straining to get up a hill, and I hear the ominous grinding sounds coming from under the right-front wheel well. But I can’t afford to do anything to ward off those looming disasters.

That’s because Vaughn’s family is like many American households, who don’t have any emergency savings and therefore can’t cover a surprise $400 expense without borrowing money or selling something. Or they can’t come up with the money at all.

Oliver, purchased new in 2004, is also like many other cars on U.S. roads, in being old (at 11.8 years old, the average age of the 278 million vehicles on American highways has never been higher). One reason is because

many Americans—in a time of stagnant wages combined with soaring consumer debt and a high cost of living—can’t afford to replace their old beaters. Or if they can get another vehicle, they’re only able to replace it with another beater.

As for Vaughn, he and his wife were both laid off from their respective, “and not very lucrative jobs,” last year and they can’t afford to keep up on the current maintenance, much less fix all the stuff on the car they’ve been putting off.

That’s why Vaughn identifies so much with Linda Tirado, the author of the 2014 book, Hand to Mouth: Living in Bootstrap America, an account of what it’s like, day after day, to work, eat, shop, raise kids, and keep a roof over your head without enough money. One of the lessons Vaughn highlights is the predicament of the poor working-class:

One of the hardest ironies of all for the working poor is the often unspoken truth that in America, you usually have to already have money to even get an opportunity to make money. And simply moving someplace with better jobs and higher pay isn’t really an option when you’re broke.

To keep Oliver running, Vaughn has taught himself some basic maintenance and repairs (via YouTube videos, of course) and resorted to cheap fixes that betray “more than a twinge of desperation”—all in the hope that the Subaru can last another 100,000 miles. The fact is,

We’ll probably need another 100,000 miles out of Oliver whether we can properly care for him or not.

That makes a lot of sense. It’s exactly the predicament more and more working-class drivers and their cars find themselves in as economic inequality, already grotesque, continues to soar in the United States.

Clearly the problem of inequality is so serious and so widespread that it has forced its way into a Hearst-owned automotive enthusiast magazine, squeezed between articles on the new Porsche 718 Cayman GT4 (price as tested: $118,600) and a golden-wheeled, Kar Tunz-modified Lamborghini Urus (price: $277,904).

Now, tell me, is there a better illustration of what life is like in the United States in the age of inequality?

 

Cartoon of the day

Cartoon of the day

Special mention

Cartoon of the day

Special mention

Cartoon of the day

Special mention

 

Cartoon of the day

Special mention

  

‘Til debt do us part

Sometimes you just have to sit back and admire capitalism’s ingenuity.

It’s able to make profits twice over. First, capitalists know that, when they keep workers’ wages down—even when there’s “full employment”—they can make spectacular profits. And, second, they can make additional profits by loaning money to those same workers, who are desperate to purchase goods and services and send their children to college, thereby financing the demand for the goods and services industrial capitalists need to sell to realize their profits.

Thus, as we can see in the chart at the top of the post, the amount of consumer credit is once again soaring to record highs. In relation to personal income, consumer credit fell after the Great Recession (to just under 20 percent in December 2012)—as households “deleveraged”—and then it began to rise once again, reaching 23.3 percent four years later.

Is there any wonder bank stocks are expected to show profit growth of 6 percent when the sector kicks off second-quarter earnings season later this week?

Total consumer credit outstanding (which excludes loans secured by real estate, such as mortgages) can be divided into two categories: revolving and nonrevolving credit. Revolving credit (the blue parts of the bars in the chart above) consists of credit card credit and balances outstanding on unsecured revolving lines of credit, while nonrevolving credit (the red portion) comprises secured and unsecured credit for automobiles, durable goods, and higher education.

Clearly, as workers’ wages have stagnated, both loans on cars and trucks (the dashed line in the chart) and student loans (the dotted line) have been rising dramatically, which have in turn fueled new vehicle sales and increases in tuition at colleges and universities.

As I say, capitalism is an ingenious system—until, of course, the house of cards comes tumbling down.

Chart of the day

The folks are Bankrate have calculated, for each of the fifty largest U.S. cities, the affordable price for a new car. Their analysis is based on median incomes, average insurance costs, payments on a new car loan, and sales tax data.

The chart above shows how those affordable price points compare. The lower a city appears on the list, the more difficult it would be for the typical car buyer to come up with the money for what Kelley Blue Book said was the average price for a new car or light truck at the time of their analysis: $33,865.

Thus, for example, the average buyer in San José can afford a new car that was priced close to the national average, while residents of Detroit can only afford a car worth just over $6,000, less than a fifth of the cost of the average new car.

Sure, the average price of a new car continues to rise. But the list tells us much more about what’s happened to incomes in the United States. From 2000 to 2014, the average income of the bottom 90 percent of Americans actually fell by $4561 (from $36,913 to $32,352).*

That’s the real reason why most of the residents of the fifty largest U.S. cities can’t afford to come up with the money to purchase a new car.

 

*The data, from the World Wealth and Income Database, are in real 2014 dollars.

Cartoon of the day

Special mention

  

Inequality on the roads

I’ve considered lots of different dimensions of inequality on this blog, including the fact that inequality kills.

But, I’ll admit, I have never considered the unequal impact of car crashes on the nation’s roads.

As Emily Badger and Christopher Ingraham explain,

Traffic fatalities in the United States have been plummeting for years, a major victory for regulation (strict drunken driving laws have helped) and auto innovation (we have safer cars). But that progress obscures a surprising type of inequality: The most disadvantaged are more likely — and have grown even more likely over time — to die in car crashes than people who are well-off.

The question is, why?

The underlying issue here is not that a college degree makes you a better driver. Rather, the least-educated tend to live with a lot of other conditions that can make getting around more dangerous. They own cars that are older and have lower crash-test ratings. Those with less education are also likely to earn less and to have the money for fancy safety features such as side airbags, automatic warnings and rear cameras.

The number of trauma centers. . .has also declined in poor and rural communities, which could affect the health care people have access to after a collision. And poor places suffer from other conditions that can make the roads themselves less safe. In many cities, poor communities lack crosswalks over major roads. The residents who live there may have less political power to fight for design improvements like stop signs, sidewalks and speed bumps. As a result, pedestrian fatalities in particular are higher in poor communities.

Yep. Capitalist inequality kills in more ways than even I had been able to imagine.