By on July 24, 2011

14 millions Americans are out of work. The government is facing default. U.S. home prices are at their lowest level since 2003, and Robert Shiller, the economist who co- founded the S&P/Case-Shiller index of U.S. home prices, said a decline in property values up to 25 percent in the next five years “wouldn’t surprise me at all.” From Bernanke on down, everybody is scaling back the rhetoric that economic growth is just around the corner.  Suddenly, automakers aren’t so sure anymore about all that pent-up demand that will bring back U.S. car sales back to their old glory. Reuters asked around and didn’t come back with good news.

Hyundai Motor America Chief John Krafcik is the most outspoken: “When people don’t have home equity, it’s often very difficult for them to pull that trigger and buy a new car. Jobs are still an issue, housing is still a big issue and I don’t think that’s talked about enough in the context of our industry.”

And it doesn’t look like there will be many new jobs from Detroit.

“Our manufacturing folks have been tremendous at squeaking out extra units through improving line rates, adding on extra shifts,” GM’s U.S. sales chief Don Johnson said. Translation: No new jobs.

Ford Motor Co’s global marketing and sales chief Jim Farley said Ford was not making big bets on production.

The big recovery has been postponed for a year or more.

“There’s probably enough pent-up demand to keep us going at this rate for at least another 12 months, by which time we would fully expect the underlying fundamentals of the economy to really start kicking into gear and having those fundamentals drive the industry further,” said Don Johnson.

Uh-oh. “Enough pent-up demand to keep us going?” Even the pent-up demand is not what it used to be.

 

Get the latest TTAC e-Newsletter!

86 Comments on “We Are Sorry To Inform You That The Big Turnaround Has Been Postponed For Another Year...”


  • avatar

    What ‘underlying fundamentals’ are going to be significantly improved by July 2012? Delinquency rates? REO inventory?

    “7/15/11: An estimated 1 million foreclosure-related notices for defaults, auctions, and home repossessions that should be filed by lenders this year will be pushed back until next year, according to the latest report by RealtyTrac…The best-case scenario is we don’t get back to normal levels of foreclosure activity until 2015.”

    Maybe he believes that Apple is going to start paying dividends.

  • avatar
    don1967

    Robert Shiller and John Krafcik understand where real money comes from. (Hint: It does not come from a line of credit, or from the government, or from the government’s line of credit.)

    The sooner everyone realizes this, and starts getting their house in order, the sooner the real recovery will begin.

  • avatar
    Les

    The economy is due for some serious ‘corrections’ after the last boom and bust, some of which the bail-out and recovery plans have stalled and made worse by failing to let the people who made the worst of economic decisions lose their shirts and be ‘opted-out’ of big-spender decision-making, so we’ve got the government piling-on debt while hedge-fund managers who bought useless mortgages still expect to get all the money back that they’d wished into the cornfield. Someone needs to man-up and hit the restart button, but too many of the wealthy and influential stand to lose their shirts if the economy is forced into a hard reboot.

  • avatar
    NormSV650

    Just in time for Presidential relection. :)

    • 0 avatar
      Sam P

      It won’t matter who gets elected in 2012. Republican, Democrat, whoever. The US economy is interconnected into the greater global economy and can’t be easily changed by one politician or even the US government.

      • 0 avatar
        gslippy

        It’s easy to be cynical that way, but if you look at the economic improvements made between 1980 and 1982, it’s undeniable that Ronald Reagan’s election made an enormous difference.

        Trouble is, there is no such candidate running today; we’re surrounded by compromisers.

      • 0 avatar
        Pch101

        It’s easy to be cynical that way, but if you look at the economic improvements made between 1980 and 1982, it’s undeniable that Ronald Reagan’s election made an enormous difference.

        When Reagan became president in January 1981, unemployment was 7.4%.

        By the end of 1982, it was 10.8%.

        Unemployment didn’t fall below the 7% level until 1986, five years after he took office.

        Meanwhile, the inflation fighting policy came out of the Fed. The Fed chairman was Paul Volcker, a Carter appointee.

        We can all have our preferences, but let’s try to avoid rewriting historical facts.

      • 0 avatar
        ihatetrees

        Unemployment is 1 metric and very selective.

        Economists (outside of the Brookings Institution or the Economic Policy Institute) probably prefer the Economic Growth metric. THAT was north of 6% coming out of the 81-82 recession.

        Now it’s near 2%.

      • 0 avatar
        Pch101

        Unemployment is 1 metric and very selective.

        True. But Obama’s opponents like to howl about the current 9.2% unemployment being a sign that civilization is about to end. They conveniently forget that the highest unemployment rates that we’ve had since the Depression occurred on Reagan’s watch.

        If the complaint du jour is deficits, then we should remember that Reagan/ Bush 41 managed between them to quadruple the deficit. Carter left office with a deficit that was about the same size that he had when he started, while Clinton went from deficit to surplus. Bush 43’s achievement was to turn that surplus back into a deficit.

        Economists (outside of the Brookings Institution or the Economic Policy Institute) probably prefer the Economic Growth metric.

        I assume that you’re referring to GDP. I’ll grant you, we had GDP growth coming out of the Reagan/ Volcker recession, thanks in part to all of that deficit spending. As in the deficit spending that people who like Reagan seem to complain about when it’s being done by the opposing party.

        We have also maintained GDP growth for the last 30 years by running enormous trade deficits, which are yet another form of debt. It’s not as easy to use debt to dig ourselves out today, because we have accumulated so much of it. The 2008-9 recession was a balance sheet recession, not the commodity induced inflation-stagflation cycle that we had in the late 70s/ early 80s.

      • 0 avatar
        MikeAR

        Pch, you ought to be ashamed of yourself, criticizing others for rewriting history. You have just done that in a most cynical and disgusting way. Cherry-picking is the least of your sins. Do you even have a conscience? Do you have any sense of shame? I wish I had time to go through every one of your deliberate misstatements but maybe I will have time later.

      • 0 avatar
        doctor olds

        @MikeAR-Pch has a distorted world view, conveniently ignoring the fact that Obama and a democrat controlled congress (since 2006) has increased our projected deficits more than all prior presidents in history, most of it in just his first 100 days.

      • 0 avatar
        Pch101

        you ought to be ashamed of yourself, criticizing others for rewriting history.

        Translation: Oops, I don’t have a rebuttal, so I’m just going to spew out more mindless insults and pretend that everyone hates me for being a Southerner, since I’m a one-trick pony and all that I’m capable of doing.

        conveniently ignoring the fact that Obama and a democrat controlled congress (since 2006) has increased our projected deficits more than all prior presidents in history, most of it in just his first 100 days.

        The magnitude of Obama’s deficit increases were lower in percentage terms than those made by Reagan and Bush 41. That’s simply a fact.

        You’ve proven my point for me about you politos and your double standards. You GOP cheerleaders don’t care about deficits — let’s remember that Dick Cheney claimed that Reagan had proved that deficits don’t matter — you only complain about them when your opponents are in charge. All you’re looking for is something to whine about.

    • 0 avatar
      Mark MacInnis

      Man, I am so cheesed off at the way supporters of the Obama regime cherry-pick statistics from the Reagan administration to continue to delude themselves that…”See? Our guy isn’t so bad! Really…he’s not!”

      The TRUTH of the matter is that both Reagan and Obama did in fact come into their administrations facing economies which were severely challenged. The DIFFERENCE is that President Reagan acted courageously and boldly, and LED America back to greatness with guts and sheer will by communicating to America his belief in the soundness of our founding principles. Contrast that with Obama’s utter LACK of belief in the greatness of America. He and his administration have rumbled, bumbled and fumbled and stumbled with the great levers that drive our economy in such ways that have led many to believe that he is doing INTENTIONAL damage, because NO one can be that incompetent on purpose. It would be a hilarious if it weren’t so tragic for the many unemployed, underemployed and discouraged who keep looking to the horizon to see growth in our economy, only to continually hear a litany of excuses from this administration. “It was worse than we thought when we took over.” “The greedy rich aren’t paying enough taxes.” “Republicans want old people to eat dog food.” Look what happened in the past month when the bumblers in the West Wing decided to intervene in the oil markets in a panic that the price of oil was driving down Obama’s poll numbers….since then, what has happened to the price of a barrel of oil? Genius. Pure genius. (=SARC off/)

      American consumers, which are 70% of our GDP, have to feel CONFIDENT in the future before they can sign a 3-year car lease, let alone a 5-year new car note. LEnders have to be CONFIDENT in the future when they lend the money for those things.

      It is hard to be CONFIDENT in a president whose administration flails around like a Tourette’s patient on crack. And I mean no disrespect to American’s afflicted with Tourette’s. Or crack addicts, for that matter.

      So, it looks like AT LEAST 3 more years before the economic climate in the US changes for the better….18 months more of this ham-handed foolishness, and 18 months or so before saner, more rational, prudent and sound economic policies begin to bear fruit.

      Batten down. It probably will get worse, before it gets better.

      • 0 avatar
        psarhjinian

        I will agree with you in that the American economy needs some measure of confidence and that Obama is a startlingly bad leader and very poor strategist, but when you have one side willing to sell it’s soul (not only was most of the much-hated stimulus comprised of—wait for it!—tax cuts, but the Obama administration has put a hell of a lot of sacred cows on the table) only to have the other side whinge and cry about things that, if proposed by a Republican administration (and actually were proposed by Republican lawmakers only a few months ago), would be totally ok, then you’re talking about bald-faced hostage-taking on a national scale.

        Obama has pretty much ceded any and all ground, but his opposite numbers just use that as impetus to move the goalposts, both in this budget debate and in general, all for their own political benefit and to the detriment of the economy. That’s either barely-treasonous hypocrisy, ideological insanity, or both.

        When you have the likes of The Economist calling out the Republican strategy, something is seriously wrong. At this point they’re holding the entire country hostage for corporate jet tax writeoffs and hedge fund loopholes. Oh, and they just added medical care to the list, just a few days ago.

        I won’t be surprised to see a repeal of Roe vs Wade added to the list in the near future.

        If this were about responsible fiscal policy—which it’s not—we’d be talking about jobs rather than the deficit. You’d see something akin to what the Liberal Party of Canada was doing around 1992-1994, which is cutting spending, raising revenue and being painfully pragmatic the whole time, rather than howling about problems (debt and deficits, for example) that only seem to be a problem when the other guy is in charge. What’s happening in the US is strategy and theatre, where one side is deliberately wrecking the economy in such a way that they can be assured of a decent electoral performance, and the other side seems too inept to do anything about it.

  • avatar
    Zackman

    You know, at my age, I’m fortunate just to have a job – and a fairly good one at that, but I won’t be buying a new car anytime soon, even though my car is 7 years old, my wife’s car is 9 years old and we’re paying a quite modest payment on our 2007 MX5 we bought used 14 months ago.

    Perhaps my looming 100 mile R/T commute that commences in about three weeks won’t be so bad after all.

    Everyone needs to count their blessings and simplify their life to the extent practicable and live below their means.

    • 0 avatar
      mikey

      + 1 Zackman….Its tough to adjust but you do what you have to do.
      Hey..100 mile R/T commute? For a good job, I would do it,in a heart beat.

      In three years we have seen two good incomes,turn into two pensions. Two annual vacations turned into one, every 18 months. Resturants, and bars went from being, a given, to a rare treat.

      Three cars turned, into two.

      Its not all bad though. We turned our driveway queen, gas pig, of a Jimmy into a gently used 2008 base model Mustang drop top.

    • 0 avatar
      Ubermensch

      “Everyone needs to count their blessings and simplify their life to the extent practicable and live below their means.”

      Unless you are in the top 5%, then just carry on. Everyone else needs to make sacrifices so that the people are really represented by our government don’t have to suffer.

      • 0 avatar
        texlovera

        You make it sound like the simple solution is to just simply tax the rich at higher rates. But it’s never that simple.

        Here’s an exercise for you. Take the total income of the top %2 of Americans away from them. See how much that reduces our CURRENT YEAR’s deficit. (Spoiler alert: Iowahawk already has the numbers – http://iowahawk.typepad.com/iowahawk/2011/03/feed-your-family-on-10-billion-a-day.html)

        Then ask yourself whose income you’ll take away next year, while pondering who will create any jobs in such an environment.

      • 0 avatar
        psarhjinian

        Then ask yourself whose income you’ll take away next year, while pondering who will create any jobs in such an environment.

        Those people and companies aren’t creating jobs now. They’re sitting on cash that they were given, and benefiting from tax cuts that are returning most people nothing. This has been going on for years, by the way.

        Forgive me I’m a little unsympathetic to the plight of rentiers worried about their cash piles who might be forced to pay us back for bailing them out, especially now that they’ve proven they’re not the slightest bit interested in creating jobs or stoking innovation.

        So if the government wants to take back the money it gave them (or close the loopholes that, and I’m paraphrasing here, let them write off their private jet) and use it for mortgage relief and employment programs, I’m inclined to let them. I’m a dyed-in-the-wool socialist, and I’m pretty tired of seeing wealth redistribution in completely the opposite direction.

  • avatar

    +1 Zackman.

    We too have paid off cars. Repairs, even if something big is spit, are still cheaper than sales tax alone on a new car. My car is 8 years old, mom’s is 3…and both are being maintained to go forever.

    Everything wears out, and there are always accidents, but I don’t see myself buying unless absolutely necessary. Likewise, most of my friends and associates feel the same way. I live in a “nice suburb” so this isn’t good for “the industry”-layoffs and other such things, like firing employees but hiring them right back as no benefit “1099” folks hit at the heart of confidence. (quite common here in my NYC information worker suburb) Confidence is what you need to buy, be it a Hyundai or a C63 AMG.

    The other issue is that cars have stagnated…they are a very mature technology and there is no real reason to upgrade. I recently drove BMW and Acura’s new offerings, and while nice, the only tangible difference is the satnav and in car electronics, and no one is going to pay 50k for a better satnav. The driving experience between my E46 and the newer offerings comes down to a few more horsepower, again not worth a 50k note. I was able to install bluetooth and ipod functionality into my 2003 for $250, so there goes even that reason. This is why you’ve seen limited horsepower wars-that is the only remaining selling point left. I’ve been lucky to drive the Nissan GT-R and the Caddy CTS-V, and both are rockets, but you don’t need 500 hp-it is fun, but at the end of the day, even this won’t sell a lot of cars. (bring bail money :) )

    Mobil One and maniacal maintenance are your friends. You’ll see me again when my car blows up or is wrecked….hopefully never.

    I can see the desperation by BMW’s marketing. I get frequent invites to every “event” they come up with-I go drive because I’m a geek and while I’m not buying now (and tell the salespeople this honestly) I want to play with the new toys. Each one ends with a very quiet (even on the M cars !!!) discount voucher, following up a week later in the mail. Suddenly even BMW has “value packages” where they don’t charge for that Aux Input, or toss in “free leather”.

    Cars are discretionary to a large extent above basic transportation. My property taxes have gone up 60% in ten years. My health insurance has tripled. Most of the uncontrollable expenses are way up, so something has to give. I can’t cancel health insurance to buy the S class, A8 or 7 Series (!!!) that monthly payout could otherwise carry-which gives you an example of how out of control that industry is….but that’s for another blog.

    Every Morning, we say the following prayer….We love you….run forever……

    • 0 avatar
      Sam P

      +1. I bought my E46 used, took it to the local dealer for the subframe recall and an aux input installation and I get invites to every Seattle area BMW dealer’s special events. They’re really pushing them.

      I will go to one of the events, one of these days, but although I could easily afford the payments on an E90 328i, I’m not going to run out and buy a new one. My paid for in cash E46 gets me around, is relatively reliable with preventative maintenance thanks to forums like Bimmerfest, and gets over 30 mpg highway to boot.

    • 0 avatar
      texlovera

      Amen. We’re buying the MIL’s 5-year old Civic for our daughter. My car is 7 years old and I’m driving it until it rusts away (hopefully not for another 10 years). The minivan’s only 4 years old, but the same goes for that one, too.

      Staying out of debt is job one…

      • 0 avatar
        mikey

        The experts tell you “do not carry debt into retirement” I am so glad that we took that advice.

        We carried debt all through our working years. Today I get upset if the Visa balance goes over $500.

  • avatar
    hreardon

    The problem with the resolution of the financial crisis is that….it didn’t resolve anything. It’s the painful dark secret that nobody wants you to think about too much because if you did, you’d realize we are not much better off today (on the aggregate) – we’ve simply kicked the can down the road and socialized all of the debts of the financial institutions.

    Nobody wants to accept the fact that recessions and depressions server a vital purpose in a properly functioning economy: it destroys malinvestment and eliminates bad debts, kills bad ideas, bad actors, poor performers and fools. What is left is usually far stronger and more resilient.

    Unfortunately, we refused to take our medicine in 2008 – 2009 and instead we papered over losses and attempted to trick ourselves into believing that this was a regular old fashioned liquidity problem, when in fact it was a “Minsky Moment” where the debt burden officially tipped us over the edge and suddenly, like Wil-e-coyote, realized there was nothing below us but a pit.

    So when Hyundai says that without equity there can be no growth – he is in many ways correct. I have many friends who are at the moment trying to sell homes but cannot because of lack of interest of because they owe more than they are worth. What is worse is that I have three associates who are selling….with no intention of buying again in the near future. They’re going to be renting homes for less than their mortgages currently and with the added benefit of carrying zero of the liability for maintenance, taxes or upkeep. Bravo to them.

    • 0 avatar
      highdesertcat

      Which brings to mind all those, way back when – three years ago, who were violently opposed to the bail outs, hand outs and nationalization of anything. They saw this coming and said so.

      The problem was not just the US auto industry. The problem consisted of a multitude of factors that had run their course and brought us to where we are. It would have been better to let failed companies and industries fail and liquidate instead of bailing them out, and nationalizing their debts.

      All this plays nicely into the forecasts of those who have publicly stated that the entire US economy and industrial base, not just the US auto industry, is in a state of uncertainty and shake-out. A whole lotta shaking going on! And it ain’t over ’til it’s over.

      We’ll be lucky to make it through 2012 in the shape we are in today. Anticipated home foreclosures and bankruptcy declarations could put a huge crimp in that. Is it any wonder that people and companies with money are sitting on it? Who wants to invest in this economic climate?

      It can be argued endlessly who bargained the US auto industry to death or who encouraged sub-prime and NINJA lending in the housing market, but ultimately we are here and better times are not in sight. Some say not for quite awhile. Better for everyone to inventory to see where they stand in this sea of uncertainty, and plan accordingly.

      Further economic distress in the US will cause repercussions throughout the global economy, resulting in even more economic distress in the US. And so on. A vicious circle.

      In the case of the US auto industry, as long as auto makers keep making them in the US and Canada they are going to be saddled with higher labor and operating costs with the result being lower profits. Can’t make any money that way. Better to follow Mazda’s example and move production to Mexico. That has worked for EVERY auto manufacturer, foreign and domestic, who has done that.

      It simply does not pay for employers to have to wrestle with unions and the NLRB. There are enough limitations that have been placed on manufacturers by the government to forestall any kind of growth or job creation for years to come. Brace yourself!

      If you are dependent on your employer to provide you an income, be afraid. Be very afraid! Even you could become a statistic among those who have lost their job, their income and their home.

      • 0 avatar

        I wrote two page letters to my congresscritters, asking that the banks go into bankruptcy and reorganize-let those making bad deals take the hit as it should be in a capitalist society.

        I was a fool. I forgot who owned the congresscritters. It wasn’t me.

    • 0 avatar
      gslippy

      Agreed. I’m amazed at the number of radio ads I still hear offering credit to people with bad credit histories, whether it’s for a house or a car. Didn’t 2008/9 teach us anything?

  • avatar
    Volt 230

    It has gotten so bad around here that not only you barely see any new cars, but those old cars are being kept longer by their owners w/o exactly putting money into them, I have seen a couple of national tire shops with big banners advertising USED tires.

  • avatar
    obbop

    As one human unit immersed within entrenched poverty for most of his life….

    beware.

    Societal breakdown can erupt and the results could be extremely dangerous.

    • 0 avatar
      Volt 230

      the main problem I see is that the gap between the haves and have-nots seems to be widening more and more, reports that say that there are more millionaires and top execs making up to 25% more than just one year ago. That is why this govt cannot touch or mess with social programs like food stamps and medicaid, it will push people out into the streets ala Greece.

      • 0 avatar
        highdesertcat

        America has always been a pioneering nation. No social or welfare programs existed in the days of the pioneers, yet they prevailed.

        The gap is always going to be widening. Everyone in America can start their own business and reap the profits thereof, or fail. Equal opportunity. Employees are just that – employees. They deserve an honest days pay for an honest days work, nothing more, nothing less.

        When I hired in a bunch of unemployed people to help me build my house I didn’t worry about providing them with health-care and social programs. I provided them with fair day wages in cash money. All of them eventually went on to other employment, much of it because of the experience they gained helping me build my house. True story!

        Getting the haves to fund the lifestyles of the have-nots does not instill any desire in the have-nots to become haves.

        Government should institute policies that encourage job creation to enlarge the taxpayer pool. America’s current economic policies are not conducive to creating jobs in the US. Couple that with NAFTA and anyone can see that it is more advantageous to produce elsewhere and import into the US.

    • 0 avatar
      Philosophil

      The fact that the current social, political and economic fabric is so complex, interdependent, and increasingly specialized in its dependence on a sophisticated network of relatively fragile technologies (information technologies, energy technologies, food production and distribution, and so on) doesn’t help matters.

    • 0 avatar
      Zackman

      For you, my friend, if your “shanty” becomes too insecure, I have a suggestion: Used steel corrugated shipping containers, semi-sunk into the ground, keeping the “old coot” safe.

      Better able to withstand the coming breakdown.

  • avatar
    creamy

    “Everyone needs to count their blessings and simplify their life to the extent practicable and live below their means” – that’s not the optimistic ‘can do’ American Spirit that got us through the last 200+ years.

    If we sit and lick our wounds then we are going to end up like every other formerly great nation wondering why our economy sucks/our jobs get outsourced to up-and-comers like China (who is running like gangbusters while we mellow in our own mediocrity).

    Innovate and expand or die!

  • avatar

    Yes, but the race to the bottom, begin by Clinton and accelerated by Bush, means that the US worker gets to “compete” with a $2 per day employee with no benefits in a factory with little worker safety and no real pollution regs. Google “mexican truckers” for a microcosm of that argument and yet another assault upon a previously stable middle class career.

    Dem vs. Repub is a diversionary tactic at this point. We’ve been eaten by the Fortune 500 and neither party cares one whit about the lower 97% of society.

    • 0 avatar
      Ubermensch

      +1 Exactly. We have a single political party with two factions, the Business Party.

    • 0 avatar
      gslippy

      Newsflash: It’s not ‘Big Business” that is responsible; they are simply responding to consumer demand.

      Do you really want to pay 1.5-3X for the same quality product just because it’s made in the US? Why would I look for a custom-built PC when I can get an awesome Chinese-built version for $500?

      I’m all about flag-waving, but for most of us, it ends at our wallet.

      I say this as a person whose engineering job could be outsourced in the next few years.

      It can even be argued that outsourcing saves US jobs due to lower costs of doing business.

      • 0 avatar
        MrBostn

        At times my when wife wants to buy something at a local “boutique”. Almost always it cost much more than at other places. I sometimes say “It’s not my job to buy the owner another boat/car/house”.

        I hardely ever shop at Walmart-but then again how much better is Target/Sears.

        Lets just say I spends my $ as I see fit and where I think I’m getting a what I need for a reasonable price. If it’s US made, great, if not, so be it.

      • 0 avatar
        golden2husky

        Since everybody seems to have a few sound bites, I’ll add mine: America should manufacture most of what it uses instead of importing. I’m not talking wine or a BMW, but when the fundamental building blocks that go into building our infrastructure and homes/factories come from China, America and Americans lose. It may seem cheaper, but as more and more people become unemployed, or more commonly, underemployed, who will have the money to buy things? It becomes a death spiral. If your neighbors are not properly employed, how long will it be before you are thrown on the scrap heap of “globalization”?

      • 0 avatar
        rnc

        I remember a conversation with a group of German’s about why walmart failed there, and the gist of was “If you do all your shopping there you’re condemning your kids to work there”

    • 0 avatar
      APaGttH

      +1

      We are a country of the corporations, by the corporations, for the corporations.

      Here on TTAC you read post after post about greedy UAW workers squeezing Detroit for all its worth – but I’ll bet most have banking relationships with Citi, Chase, BoA, et al. Billion dollar bonus checks from taxpayer dollars to the Wall Street architects of our near 2008 collapse = good. Some guy named Terry screw driving together Chryslers while making $35 an hour = bad.

      I get the whole competition thing but we have a nation cheering the top 1% on, even rewarding them for failure, while at the same time cutting their own legs off, and wondering, “what happened.”

      This is not meant to be in defense of the UAW or even unions, which are mostly as corrupt the corporation sticking it to the average American every day. But if the pendulum swings to far the other way there will be no middle class, and we’ll be a nation of do you want fries with that making rubber novelty eggrolls for the Chinese market at minimum wage.

      • 0 avatar
        eldard

        This is what I’ve posted on a conspiracy forum just over a week ago:

        “As I’ve said, jobs are created elsewhere from the amount saved avoiding overpriced US shoes (yeah, go buy that and support a handful of employees and lots of robots). The same is true for the car industry. If carmakers don’t employ UAW idiots at $55/hour, new cars would be more affordable. Used car prices would drop like a rock making them more affordable to the poor. As additional cars hit the road, more roads would be needed. More carwashes would be built. More mechanics would be hired. But the small minded, non-enterprising, pro-tax, pro-regulation, pro-benefits folks can’t see that.”

      • 0 avatar
        psarhjinian

        If carmakers don’t employ UAW idiots at $55/hour, new cars would be more affordable

        Oh, really? So that explains why a Toyota Camry costs half of what a Chevy Malibu does? I hate to break it to you, but union workers aren’t the reason cars are so expensive, and magically cutting wages

        How do I know? I live in Canada, and I see what happens when the exchange rate changes relative to the US. Supposedly prices should change, but what actually happens is that margins are maintained. Price cuts? Are you kidding?

        What is actually happening is that, as we pressure wages for the bulk of society lower, we find that consumers spend less, which pushes prices down. So we extend them more credit to keep the market, and offshore more production to keep costs down since we can’t do much about materials. All this has fueled a positive feedback loop that technology has been able to moderate to a degree, but bursts every once in a while, only to see another jobless recovery, more underemployment and further hollowing out of the middle class.

      • 0 avatar
        eldard

        That’s why it’s best to buy Korean instead of those overpriced crap from Japan, USA and Germany, silly! :) A 33 grand Genesis can give a 55K Lexus a run for its money. Ditto for the 22K Azera vs the 33k Avalon. And we all know about the Equus.

  • avatar
    Andy D

    Aux barricades!! I’m fixing up a 600 $ Ranger 4×4 . I t will enhance my dumpster diving capabilities. Or make a 1/2 way decent technical. Dem or Rep, a pox on both their houses. When a congressional campaign costs a couple of million to finance, the campaigners by necessity have abandoned their constituency to seek that kinda money from other sources. Sources whose needs are counter those of the constituency

  • avatar
    eldard

    Even if there’s a real recovery soon, us folks here in ASia are gonna outbid you there in the West anyway. Which would drive up the prices of all things needed to be consumed. Guess who’s got more cash on hand?

    Though I expect lots of “good news” as next year’s election rolls around. The puppet masters need their puppet to be reelected. ;)

  • avatar
    MrBostn

    Not car related but nearly every restaurant I go to around the Boston area is full-dinning room is busy, along with the bar. Every sports bar/lounge is full. But $6 beers, and $12 martinis keep us in most weekend nights.

    The Wife and I share one car. A 98 Accord with 120K. It’s running pretty good but we’re in the market for an additonal car. Looking to buy used, but prices for a 2008+ vehicle are so close to a new car. Especiallly so since we’re looking at Rav4s or CR-Vs.

    • 0 avatar
      ihatetrees

      There are people with money and jobs.

      Regarding unemployment…
      I know firms that can’t fill open tech and CNC positions – jobs that can pay north of $60K. Maybe that’s not high enough and they need to adjust.

      At the other end, after I admitted I enjoyed driving, an acquaintance offered me a $15/hour part time truck driving gig (free training and license upgrade). He desperate – he can’t find full timers who qualify (aka can pass the license/drug screen)…

      • 0 avatar
        mazder3

        @Mr Bostn

        Have you tried looking north of the Mass border for your next ride? For whatever reason NH hasn’t had the severe used price upswing that many other places have experienced. Is $16k too much for a ’08 CRV awd?

        For others that may be looking for automotive work, dealers in NH are hiring sales and service positions. Housing is cheap in certain areas (80-100K single family). No sales or income tax. Just look out for property taxes ($40+ per $1,000 in some areas).

  • avatar
    MrBostn

    @Mazder3

    A 2008 CRV awd for $16K is fine with me. Do you have one? Or did you see one?
    I only briefly looked at craigslist NH for used CRVs/Rav4s. I’ll look again this week. I’m in Somerville, so NH is only 30min or so away. I often go to NH for larger purchases to avoid MA tax ;).

    Today I found a 2010 Rav4 base with 7k-a lease take over for $250/month with 24 months remaining-a buyout of $15198 in Sept of 2013.

    • 0 avatar
      mazder3

      Just a very quick scan of Craig’s List:

      Honda CR-V LX 4WD
      24k mi
      $16,695
      Private sale in Bow (just south of Concord)

      http://nh.craigslist.org/cto/2499638572.html

      There’s another in Kingston but the mileage is high and they want $500 more.

      And a quick scan on Cars{dot}com brought up some nice ones at decent prices but NOT at Honda dealerships. Ira has an ’08 EX in a beautiful ruby red, moonroof, 32k mi, clean carfax, local history for $19,988. I’m not one for CUVs but this rig looks sharp.

  • avatar
    MrBostn

    Nearly every student/Cambridge type ejaculates over any product Apple produces but as far as I know, the only thing Apple produces in the US is their IP. All mfg is in Taiwan/other parts of Asia. Yet nobody’s hating on Apple. Only Walmart.

    • 0 avatar
      thirty-three

      Nobody competes on price as aggressively as Walmart does. Walmart squeezes every last penny from their suppliers, and pays their employees as little as they can get away with. Walmart is accelerating the race to the bottom.

      Lots of people hate Apple – you’re just on the wrong website. Go to slashdot.org and read the comments on any Apple-related story to see what I’m talking about.

      • 0 avatar
        mazder3

        No, this is the right website. We hated on their sales model in a thread three days ago. :)

        http://www.thetruthaboutcars.com/2011/07/will-online-car-sales-ever-take-off-should-they/#comment-1770275

  • avatar
    ravenchris

    Protect yourself and the future, do not reelect incumbents.

    • 0 avatar
      aristurtle

      When I have a car problem, sometimes my problem-solving method will be to swap out a component for a new replacement, on the hypothesis that that’s the broken part.

      Generally, when I make this swap and the problem persists, I figure that continuing to replace this part probably won’t have any effect.

      How many times will the voters switch the current representative or party in charge before they realize that it doesn’t seem to be fixing anything?

      • 0 avatar
        geozinger

        @aristurtle: Like someone else further upstream noted, we are beholden to the “business party” with it’s two warring factions.

        Back when Ross Perot ran for President, I felt the surge (I hoped) of a new political party, that would compete with fresh ideas against the current Janus twins. It was not to be, nor with any other political movement since then.

        What this country needs is a serious, third (or even fourth) party to keep the others honest.

        Let’s use our legal, constitutionally guaranteed mechanism to un-entrench power, and vote independent whenever you can.

      • 0 avatar
        psarhjinian

        You needs two parties, or rather one new and one empowered: First, you need to siphon either the Libertarians or the populist proto-fascists off of the Republicans so that the mainstream people can be the corporatists that they really want to be without all this “freedom” or “Jesus” baggage, and you need to get more than a few Democrats to defect to Nader’s banner so the mainstream Democracts can do the same.

        At that point you might get a reasonably dialogue; something beyond “Red Vs. Blue”

        The problem, though, is that a) the money will always follow the corporatist line, and b) syndicalists and libertarians who actually have more in common with each other than with the mainstream parties* hold their noses and vote for the corporatist who happens to be sorta-kinda on their team. It’s kind of sad, really.

        * Seriously, I have no idea how the Democratic banner can include Obama, who is arguably right of Reagan, and guys like Dennis Kucinich.

      • 0 avatar
        Jellodyne

        The two party system is more or less a result of being unable to vote for a third party out of fear of the worst guy of the 2 major parties getting in. There needs to be instant runoff balloting, which allows you to vote for the guy you want, rather than voting against the other guy. Of course, the trick is getting the established parties to adopt something which undermines the two party duopoly.

      • 0 avatar
        geozinger

        @psar: I guess that’s the beauty(?) of the Democratic Party in the US, and a similar situation exists with the Republican Party, too. Consider Arnold Schwarzenegger and Pat Buchanan, for example.

        However, considering those extremes in each party, there’s not enough representation of the aggregate US public, which is why I firmly believe and vote for third parties to break us out of this stalemate.

        @Jellodyne: You have a winner! None of these folks will ever willingly vote themselves out of power.

        For example, 20 years ago, the political mode of the moment was term limits. It seemed to have little impact, as we really haven’t gotten a government that is truly more responsible. They’ve managed to clone (a la the Stepford Wives) more politicians that were like the old ones. Old wine in a new skin, so to speak.

        Not once, but several times have I heard elected pols (at all levels) say that they were against term limits recently, which is a signal to me that the term limit legislation will soon be discredited, then dismantled.

      • 0 avatar
        Pch101

        I firmly believe and vote for third parties to break us out of this stalemate.

        Long story short, that isn’t going to work. The nature of the electoral college system skews all of our federal elections toward a two-party system, which then largely filters down to the state level.

        Unless you are content with just making symbolic complaints from the sidelines that don’t go anywhere, the best thing that you can do is to affiliate with one of the two major parties and try to get your preferred party to reflect some of your agenda. We don’t have a parliamentary system with proportional representation, so a multi-party system can’t work here.

      • 0 avatar
        geozinger

        @pch101: “Unless you are content with just making symbolic complaints from the sidelines that don’t go anywhere, the best thing that you can do is to affiliate with one of the two major parties and try to get your preferred party to reflect some of your agenda.”

        Refer to my earlier comment that no one will ever relinquish their power.

        “We don’t have a parliamentary system with proportional representation, so a multi-party system can’t work here.

        Granted a parliamentary system WOULD do what I’m wanting. However, there’s nothing here that prevents more than two parties from working. Or for that matter, less than two.

      • 0 avatar
        Pch101

        However, there’s nothing here that prevents more than two parties from working.

        The electoral college pretty much makes it an impossibility. The combination of winner-take-all voting with most of the states, combined with the need for a majority win in the college and the tiebreaker being resolved by the House, prevents it from happening. The math just doesn’t work.

        The founders didn’t want parties at all. The country experimented with third parties in the 19th century, but things gravitated toward a two-party system because the college ultimately pushed things in that direction.

      • 0 avatar
        geozinger

        @Pch: “The electoral college pretty much makes it an impossibility.”

        It’s been about a 100 years since I took middle school civics class, but I thought the electors were supposed to vote for the party that put them there. If a Republican candidate won, they voted Republican, etc., and (hypothetically) if a Green Party candidate were to win, then the electors would be from the Green Party, no? I don’t recall us being locked into Dem/Rep in the electoral college. It may be defacto now, but it hasn’t always been. If that were true, how did any Whigs get elected?(/humor)

      • 0 avatar
        Pch101

        thought the electors were supposed to vote for the party that put them there.

        They do. That doesn’t change the fact that the numbers don’t work.

        A winner needs 270 electoral votes. With three strong parties, no party would be likely to win 270 electoral votes.

        Without 270 electoral votes, there is no run-off election. Unlike some parliamentary systems, we would not just form a minority-led government. Instead, the House picks the winner, so the president would be appointed, not elected.

        The only way to make a third party successful in the US would be to dethrone one of the existing two main parties. Anyone who has a serious interest in running the system knows this, and joins one of those two parties.

        The usual result of third-party candidates in US elections is that they serve as spoilers. They help the candidate who is most different from them, since the vote on their side of the spectrum gets split. Hence, Nader helping Bush 43, and Perot helping Clinton.

      • 0 avatar
        geozinger

        @pch: “The only way to make a third party successful in the US would be to dethrone one of the existing two main parties.”

        That would be the idea.

        However, we get the government we deserve. Since everyone is more interested in their flat screen, this is the government we have.

  • avatar
    Cabriolet

    Mr Boston

    Who ever signed that lease should not sign a lease. My Father in Law purchased a new 2010 base RAV4 2 wheel drive automatic for $19,500.00. My son in law walked in told the dealer that his father will pay $19,500.00 for the base car and if he wants the sale he can have but that is all his father will pay. The salesman tried a few tricks but my son in law stepped in and said take it or leave it to the salesman and the deal was cut for the above price. They made the old man wait a month for delivery but he got the car. At the time they must hace had at least 25 base models in stock. But what can you expect from some of these dealers. In NYC most of the Toyota and Honda dealers are the only ones advertising new car sales. Their lots are full of new cars. Every week the sale stick, so much off, so much for your trade etc come on down. No down paymnt 0% finance etc. The amazing thing is people fall for this crap and we wonder why the country is in trouble.

  • avatar
    FreezingD

    This one was different. This truly was The Big Reset. And guess, what? It is far from over. Corporate layoffs are beginning again. The last economic “boom” was paid for with consumer debt, and it is coming due. I look forward to having my debts paid off, and nothing else. College for my children is looming. My day-to-day costs are out of control, including gas for my vehicles, food and shelter. Congress is dysfunctional, and businesses refuse to hire in the USA; note that they have no problem increasing hiring in “low cost regions”. Well, corporate America, you’ll have to sell your wares to those countries. We’re tapped out.

  • avatar
    anchke

    Problem was that in the early oughts people didn’t know they were broke, because of easy credit. Their homes and credit cards were piggy banks. Minimum payments made instant gratification painless. Doesn’t matter whether you’re Joe Blow, Bill’s Burger Stand, the state you live in, Greece, the Eurozone or the USA — if the incoming doesn’t exceed the outgoing, it’s just a matter of time. Good times are not right around the corner, alas!

    My neck of the woods is filled with people driving 10-year-old Japanese sedans. They’d rather have no car payment than a new car.

  • avatar
    Nick

    FreezingD, sadly, speaks the truth.

  • avatar
    BoredOOMM

    @FreezingD, companies are uncertain how BAD the new taxes are going to be, and how severe the remainder of the ride will be. Some companies that outsourced have come back to the US finding the taxation of places like California make them rethink even their corporate headquarters. It will not be recovery like in the late 80’s when we saw S&L scandals rewrite banking.

    The fact that GM has over 200 days of trucks says at some point, we will see a huge drop in the price factor again to release pent up supply. This will eat at the profit in the build and that will eat at corporate. Bean counters don’t watch trends, they slash and burn and the worst example was Chrysler in the 80’s when R&D disappeared.

  • avatar
    MrBostn

    @BoredOOMM,
    What might help is the increased labor and shipping costs in Asia. As China prospers labor costs will increase lowering the gap between them and the US.

    This MIGHT bring back some mfg to the US or mfg may just shift to parts of South America.

    All this bad news has me thinking about adding a 2nd car. Being a one car family really has saved us lots of cash over the years.

    It’s slightly emasculating, but I don’t care. I like hoarding my money :)

    • 0 avatar
      eldard

      MFG will move to Vietnam or Bangladesh first before it ever returns to the US.

    • 0 avatar
      azmtbkr81

      Until our leaders have the courage to stand up to China’s currency manipulation, working conditions, and other dirty trade practices it is unlikely manufacturing will return to the US in a significant way.

      Much like a pusher can’t sell heroin to a corpse we are going to have to go completely broke, without the ability to borrow an additional cent, to end our addiction to $300 flat screen TVs and $39 DVD players.

      Globalization is a bitch and I don’t see a stop to the erosion of our standard of living until all countries compete on an even playing field which will most likely not happen in our lifetime.

      • 0 avatar
        eldard

        So you want China to stop manipulating their currency and give them a bigger…purchasing power? And gobble up all of the world’s resources even faster than they do now?

      • 0 avatar
        azmtbkr81

        China won’t have much purchasing power if they can’t sell their exports.

        A realistic and fair currency valuation combined with high transportation costs may be enough to move some manufacturing back to the US and help stanch the bleeding from our deplorable trade imbalance.

      • 0 avatar
        eldard

        If China can’t export, their economy will weaken. If they have a weak economy, no one would buy their currency. If no one does that their currency will lose value. If their currency loses value they’ll be able to export again. US will be in a quagmire again. And it goes on and on…

        People who don’t know about economics should really just shut up and stop talking out of their behinds.

      • 0 avatar
        azmtbkr81

        Likewise armchair economists shouldn’t make petty jabs on car forums; it’s rude and smacks of insecurity.

        If your theoretical situation were ever to occur the US could always place tariffs on Chinese imports…I don’t have a PhD in economics and I was able to figure that one out.

      • 0 avatar
        eldard

        EU is China’s biggest trading partner so it wouldn’t matter much. They still overtook Germany in exporting despite the financial crisis. Besides, tariffs will only hurt the American consumer.

  • avatar
    BMWnut

    “…by which time we would fully expect the underlying fundamentals of the economy to really start kicking into gear and having those fundamentals drive the industry further..”

    Newspeak is getting harder to understand all the time. Can somebody translate? Are they expecting a big upswing in a year from now? Or is that when thing will REALLY go south?

  • avatar
    Mark MacInnis

    Wow…B.S., I think you’v hit a nerve.

  • avatar
    George B

    Here in the Dallas, TX area we missed out on most of the insanity in the housing market*, but economic growth is still slower than I would expect comming out of a recession. I blame government inflicted damage in the form of regulatory uncertainty. Nobody is quite sure what economically destructive action a flailing government will take next.

    * In Texas, when demand for homes increased, home builders built more houses. No shortage of land, lumber, or Mexican labor to drive up prices. When demand dropped, home builders quit building more houses. Memory of the S&L crisis may have also helped keep both borrowers and lenders somewhat sane.

  • avatar
    cheezeweggie

    Stop your pathetic American Whining. Once the financial overlords devour the middle class just pray you are on the side driving the cars instead of polishing them. While you’re at it make sure you teach your children Spanish & Chinese.


Back to TopLeave a Reply

You must be logged in to post a comment.

Subscribe without commenting

Recent Comments

New Car Research

Get a Free Dealer Quote

Staff

  • Contributing Writers

  • Jack Baruth, United States
  • Brendan McAleer, Canada
  • Marcelo De Vasconcellos, Brazil
  • Vojta Dobes, Czech Republic
  • Matthias Gasnier, Australia
  • W. Christian 'Mental' Ward, Abu Dhabi
  • Mark Stevenson, Canada
  • Cameron Aubernon, United States
  • J Emerson, United States