By on April 5, 2016

1995 Explorer Limited

It’s just the title of a recent Charlie Hunter album, but it says a lot about life in post-2008 America: Not Getting Behind Is The New Getting Ahead.

Here’s one example: According to Business Insider, the average middle-class family can no longer afford the average new car. Is that true? And if it is true, how and why did that happen, and what can be done to fix this sad state of affairs?

The first thing we have to do is figure out what the average new car costs: USA Today says that it is north of $33,500. But that’s not really the median price, and it’s wildly distorted by the so-called one percent and its indiscriminate purchases from the top shelf of the luxury-car offerings.

A new Camry LE is $23,905. That’s as close as we can come to the traditional American automobile nowadays. The Highlander LE is $29,990, and that’s as close as we can come to the traditional American family wagon today. Let’s split the difference between them and call it $27,000.

Add tax and title to that, subtract a little discount money, and the average customer for that average imaginary Camry-Highlander halfway point will pay $28,000, which at current interest rates over five years is about $510. Figure another $100 to insure it; I pay less in Ohio, but you’d pay more on the coasts. That’s $600 or so every month, rain or shine.

Now let’s figure out what the average middle-class family earns. As it happens, that varies widely by state. Again, we’ll use Business Insider as our source: it offers median incomes ranging from $38,000 in Mississippi to $72,000 in Maryland. Let’s target the middle of that range and say $57,000. If you earned $57,000 in Ohio, you’d take home $798/week.

When you figure the cost of putting fuel in your new Toyota and keeping it serviced, it’s easy to see how you could spend one of your four paychecks every month just on your car. Except, of course, nobody really takes home $798 a week from $57,000. To begin with, there’s Obamacare, which costs most families between $125 and $200 per week for a “bronze” plan that still leaves them open to $6,500 per year of expenses before insurance pays a dime. The true net cost, after you figure out the tax advantages, is probably about $200 per week if you actually use the plan at all. So that drops our $798 paycheck to $598. We’d also like to save something for retirement — say 10-percent pre-tax. That will cost you another $75 or so per week, so now we’re closer to $525 per week.

If you have $2,100/month to pay your mortgage and feed your kids on, you’re not going to be springing for a brand-new Toyota. It’s just that simple. The hype is correct: the average middle-class family is now no longer a candidate for a brand-new midsize family sedan. The only way they can really make it work is if they have some additional savings or income they can use to help during the five-year payment period. Once the car is paid off, they can drive it another five years at a lower cost, while saving some of that missing payment towards the future. When the car is ten years old, it will be worth five or six grand, which along with whatever savings they’ve been able to put together will make the next car significantly more affordable.

There’s your middle-class new-car strategy in a nutshell; buy a new car every ten years and rigorously control your spending at all times. Alternately, you could lease. Right now, Honda will put you in a new Accord for three years and 36,000 miles for slightly under $300/month if you have no money down. That makes the numbers work out a bit better, and — if you can always get a deal like that — it allows you to fix your costs at a level that isn’t much worse than the new-every-ten plan while still giving you three new cars during that same time.

The alert reader will note that so far we’ve only discussed the idea of one car for a middle-income family. In truth, of course, most families will need two cars for a society where both parents have to work just to stay within shouting distance of the lifestyle that their parents created with just one working parent. That $57,000 number, as modest as it sounds, is more often the product of two lower-paying gigs than it is a situation consisting of a $25/hour dad and a stay-at-home mom.

It’s almost too depressing to consider at any length, particularly for children of the ’70s, like your humble author, who grew up in neighborhoods where everybody’s dad got a new company car every year and Mom had some sort of decent station wagon or van with which to do her shopping. When my father was just 35 years old, we had three new cars and lived in a house that would fetch $750,000 today. Plus my brother Bark and I both went to private school. Dad wasn’t a rich man, nor was he unusually successful. The economy was simply different. Maybe it was because we didn’t each have to own a new iPad every six months. Maybe it was because we ate our meals at home. Maybe it was because Mom cheaped out and made me wear Toughskin jeans. Ugh. I wonder how many punk bands were formed out of the seething resentment enjoyed by every young Toughskins wearer.

Hey, come to think of it, maybe it was because we didn’t have eleven million “undocumented” immigrants and close to one million H1-B contract workers to keep wages low and corporate profits high. If only there was a way to make America great again, or some kind of little Birdie who could balance the scales between rich and poor just a tiny amount. But that’s a discussion for another time, and another forum. TTAC is a car blog, so let’s focus on what this means to the auto business.

It’s as simple as this: Once upon a time, middle-class families could buy new cars on a regular basis. Today, they either have to extend their ownership into the 100,000-mile zone or hope for some luck with a manufacturer-subsidized lease program.

This goes a long way towards explaining why the new-car buyer demographic skews old and rich, whether you’re talking Lexus LS460 or Honda Civic. It explains why automakers have ruthlessly “optimized” their equipment package and color choices: it reduces risk for the banks and captive finance companies when lease returns cross the auction lane. It explains the meteoric rise of vehicles that are easier for 40-somethings and their elders to step into, and it explains why manual transmissions and roll-up windows have mostly disappeared from showrooms.

In short, the new-car world still revolves around Old Economy Steve, even though he’s in his 50s or 60s by now. The automakers are dependent on CUVs and SUVs to make the books balance — or do you really think there’s $6,000-worth of extra content in a four-cylinder Highlander as opposed to a four-cylinder Camry? Surely you’ve noticed that the Japanese cars that used to be redesigned every four years like clockwork are stretching to five, six, or even seven years; that’s a cost-cutting measure to try to keep the Camry, Accord, and Altima within distant early warning range of a middle-income family’s purchasing power. It also helps lease residuals when new-model cycles lengthen a bit.

Today’s entry-level family car, as with the famous Porsche-CEO quote, is a used entry-level family car. It’s not as tragic as it sounds, because a five-year-old Camry with 75,000 miles on the clock has more useful life in it than a brand-new 1980 Oldsmobile Cutlass Supreme did sitting on the showroom floor. So while your family is used-car shopping, the manufacturers will stay busy creating new four-door coupes and CUV-alike-thingys with luxury trimmings to milk the last few bucks out of the Boomers.

I tell you this, however: a change is gonna come. Ten years from now, the Boomers will be unable to drive. Generation X will be hip-deep in medical debt and struggling to figure out retirement. The new-car market in this country will have to undergo a complete transformation. Pulled kicking and screaming from the old-people teat, everybody from Chevrolet to VW is going to have to figure out to how to sell cars that 30 year olds with no IPO money or trustafarian fiscal padding can afford.

Such cars already exist, of course. The Dacia Duster is a prime example of a car that is affordable to young families and non-gold-collar 20-somethings. The question is how our society will adjust to a world where their next car has fewer features and less power, not more of everything. Maybe we’ll just have to accept that not getting behind is the new getting ahead.

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449 Comments on “No Fixed Abode: Who Can Afford a New Car, Anyway?...”


  • avatar
    JimZ

    having driven a Renault (Dacia) Duster, I shudder at the thought of such a miserable griefbox being all the average person can afford.

    • 0 avatar
      psarhjinian

      My parents’ first (new) car was an ’87 Corolla sedan with no power windows, doors, locks, steering or brakes. No AC and no radio, either.

      This was for a family of five. A Duster would have been a huge upgrade.

      • 0 avatar
        JohnTaurus_3.0_AX4N

        Our family of five had a (new) 4 passenger 1985.5 Ford Escort 3 door as a family car. Also had a Ranger standard cab, so if we all went somewhere, we took both vehicles (or my brothers and I rode in the bed of the truck if the canopy was on). Car seats? What are those? The car came with seats lol. Why my dad didnt spring for a 5 passenger Tempo, I dont know, unless it wouldnt have worked (payments wise) since he bought the Ranger the same day as the car.

        Aside from the two Blue Ovals, the best part was getting rid of the horribly unreliable G body Monte Carlo Turbo he traded in.

        Eventually, he bought the family a new 1990 Ford Aerostar XL ex-length for the family.

        We didnt get a car with power windows/locks until 1997 (Mercury Sable GS).

        • 0 avatar
          THEjeffSmif

          Growing up, our household (family of 4) had a 1987 4-cyl Mustang LX & 1988 4-cyl Ford Ranger single cab (my dad traded in a 1978 Ford Courier for it) & my sister & I survived & turned out (somewhat) normal! My mom got rid of the Mustang in 1996, right before my 16th birthday because they were scared the insurance was gonna go through the roof & the car was leaking oil by then. She replaced the Mustang with a Ford Contour, which ended up being the worse car they ever owned & made both my parents become Toyota & Nissan people.
          The little Ranger stayed in our family until 1999 & became my vehicle in high school. It’s made me appreciate every vehicle I’ve had since.

      • 0 avatar
        JimZ

        it’s not 1987 anymore.

    • 0 avatar
      Jeff Zekas

      Agreed, Jack. My answer: Boomer dad co signs. Gen Y gets a new car (or a new Tacoma, in my son’s case).

  • avatar
    psarhjinian

    “I tell you this, however: a change is gonna come. Ten years from now, the Boomers will be unable to drive. Generation X will be hip-deep in medical debt and struggling to figure out retirement”

    Generation X is going to get hosed like no generation since the depression was. Boomers will cash out the real estate market and prices will utterly crater. Xers that are mortgaged or invested in the market will see an enormous equity loss.

    They’ll also be tossed, employment-wise: squeezed between Millenials who are younger and more willing to capital-H hustle and don’t know anything other than UberJobs (and who won’t lose homes and put families on the street if they default on debt) and Boomers that Won’t. Friggin’. Retire.

    Oh, and I’ll wager that once the Boomers get their inheritances, we’ll finally see serious increases in estate & inheritance taxes, so forget the possibility of wealth transfer. That ship will have sailed.

    • 0 avatar
      JimZ

      and all the while the Boomers will sit there and moan about how terrible the succeeding generations are.

      All I can say is “thanks for the mess you made, can you just hurry up and die off already?”

    • 0 avatar
      87 Morgan

      Wealth transfer from the boomers? Stop it. They will end as they have lived; spending every dollar. Why do you think motorhome/travel trailer sales are doing so well now and will only improve in the short term.

      The wealth transfer occurring now is the boomers parents are expiring and transferring that wealth to the said boomers are who getting a fresh infusion of much needed cash to continue with their lifestyle. I have a front row seat to this party.

      • 0 avatar
        psarhjinian

        “Wealth transfer from the boomers? Stop it. They will end as they have lived”

        This is actually a huge concern: a lot of wealth, especially in urban areas, is tied up in real estate and it’s predicated on higher and higher selling prices.

        At some point, someone won’t be able to pay. Boomers are going to cash out the real estate market and the last ones there before the lights go out–Xers–will be left massively underwater. Who are they going to sell to, Millenials? They have even less money to buy and even more debt (albeit with less obligation), so they’ll only drive prices down further.

        GenX is going to get bankrupted going into retirement. Sucks, really: the STD crises, Reaganism and skyrocketing divorce rates killed the fun in our youth, and now we’re going to retire on the Freedom Dead plan.

        • 0 avatar
          28-Cars-Later

          I agree, but as to the real estate it will be sold to foreign interests after an initial dive – the fear of the 80s where the “Japanese” own everything will come to pass, only insert another series of people for “japanese”. I don’t think it will crater unless there is some kind of tariff on purchasing it. Look at Vancouver and parts of the US West Coast, all foreign investments.

          • 0 avatar
            psarhjinian

            “I agree, but as to the real estate it will be sold to foreign interests after an initial dive ”

            I’m not sure there’s that many foreign buyers to float a country-wide crash.

            I’d expect that after the dive there will be buyers (Millenials and their successors) who can pick up the pieces, but it will be a long, ugly interregnum.

          • 0 avatar
            28-Cars-Later

            I suppose I could see this, and yes I agree not all regions will be desirable to foreign investors.

        • 0 avatar
          ToddAtlasF1

          How did “Reaganism” kill your fun? Are you dependent on bureaucratic regulations to have a good time? Did you prefer the nihilism of the campus radicals when they believed with every fiber of their beings that the CCCP would crush us with their emphasis on manufacturing goods while we obsessed over consumers? Divorce kills happiness, but it doesn’t kill fun. Female children of divorce had the inclination and lack of supervision to be loads of fun.

          It sucks that we were lied to about AIDS, which really only threatened people who had sex with, shared needles with, or received blood transfusions from gay men. I was mighty annoyed when I learned there was a crop of HIV-positive kids born around NYC to HIV-positive mothers with HIV-negative husbands because the women had slept with ‘bisexual’ men who infected them. If their husbands couldn’t catch HIV from them, then I took a lot of unnecessary precautions over the fifteen years before I read the article. In the fifteen years since, herpes has seemed like a real concern, but the odds are actually stacked in the straight white man’s favor there too. The reality of “STD crises” is that they apply to specific groups, specific groups that identity politicians will never risk stigmatizing with the truth about anything.

          I’m not sure about your dark fears for our generation. Sure, we’re spending far too much of our life paying for social programs that will be gone should we need them. Sure, we’ve paid dearly for our homes and had to work in jobs where management is often(merely often, certainly not always) not even selected for being thought to be capable. If anyone is planning on carrying a mortgage into retirement, that is on them. Your house being paid for is where you should start thinking about retiring, AFAIC. If it goes down in value once you own, you’ll save on property taxes. If your neighborhood becomes a ghetto, you should have moved years ago.

          The future for millennials is far more terrifying. Sure, they don’t have debt related to homes they don’t own. So what? They’ll still need a place to sleep, and it will be on the ground while they take turns staying up to act as lookouts.

        • 0 avatar
          baconator

          The urban areas and close-in suburbs will be fine, propped up by demand from younger buyers who want walkability. The McMansions on the edge of suburban sprawl are the declining assets. My parents’ house is 45 miles outside of Chicago, about 1 hour’s drive with no public transit alternative. They worked for 50 years to afford it. By the time my mom dies I expect it will be worth no more than the cost of the repairs needed to sell it.

      • 0 avatar
        VelocityRed3

        Yeah, I agree with that. My 72 old mother told me (48) & my brother (38) that they were’nt leaving us a cent, several years ago.

      • 0 avatar
        Driver8

        Go long on health care and nursing homes.

    • 0 avatar
      bunkie

      Ah, the evil boomers. Give me a break.

      I have a great deal of faith in the younger generations. Are boomers self-indulgent? At times, yes. But then so is every generation. Are my fellow boomers responsible for some bad decisions? Of course. Are we also responsible for helping to realize much of the change that has helped us to realize a more just society? Yes. I won’t make excuses for my generation, but I also won’t go blaming other generations, as well. The issues are far too complex to assign blame to “generations”.

      • 0 avatar
        psarhjinian

        It’s not so much an “Evil Boomer” thing that reflects on individual people, it’s that there’s a huge oncoming socio-economic trainwreck that one generation (Boomers) is going to neatly mis, while another (X) is going to get crushed by, while a third (Millenials and thereabouts), if it’s lucky, will pick up the pieces from.

        There’s a serious lack of forethought and planning. I understand why it’s happening: the Boomers are a huge cohort with a lot of money and political clout and no one in business or government is going to do well by saying they need to reduce expectations so that others might benefit in a few decades.

        But we need to really have a conversation about this and take action while the needed changes aren’t too painful. We’ve seen what impermanence of employment does to a society and it isn’t pretty.

        • 0 avatar
          dkleinh

          I can think of a couple generations that missed a train-wreck – my parents and grandparents. My grandparents suffered during the depression as young-middle aged parents, but had nice, golden retirement years in the ’50s and ’60s with pensions and government social security that they never paid into. My parents were children during the depression, but didn’t have to fiscally deal with it themselves. They generally got pensions and got social security – they paid into it during their working years. I’m a tail-end boomer and I save for my retirement like there’s no tomorrow as I’m told social security won’t exist or be nearly enough and pensions don’t exist for anybody anymore. Probably the boomers won’t retire, because their 401k retirement plans were 1) underfunded and 2) even if they were, the average Joe will not be able to get enough gain to sustain them in retirement. I’d say the fiscal mess probably began under my parents and continued into the next generation as the wealthier classes couldn’t wait to roll back the depression-era tax rates and eliminate social services.

          • 0 avatar
            KixStart

            The way I understand it, many presently retired people have already outlived their nominal expected SS benefits. Boomers will also outlive their benefits, unless we raise the retirement age. Which we should do… even for people on the cusp of retirement, like me.

            30 years of work and then 30 years of retirement isn’t workable math.

        • 0 avatar
          John

          “Wah, wah, wah, woe is me, it’s unfair, I don’t like my parents AND their generation – they got all the breaks, and all that’s left for me are the crumbs!” types the Miserable Millenial into his $700 smartphone.

          • 0 avatar
            Chan

            “Wah wah wah, those millennials don’t know what it meant to struggle and be poor. And get off my lawn!”

            Said the boomer from his paid-off house with a $60,000 car in the driveway, because his garage is full of antiques. The millennial he derides cannot afford any of those things.

            It goes both ways.

      • 0 avatar
        ToddAtlasF1

        Where is this just society created by the boomers? Identity politicians have created a world where people perceive more injustice than ever actually existed. My peers’ kids are in college now, where many of them think they’re protesting grave injustices against people that were already beneficiaries of preferential treatment when I was in school. Grief is an industry. Its not the sort of industry that creates wealth and improves standards of living for all, but it redistributes wealth and stops new wealth from being created.

        • 0 avatar
          PrincipalDan

          Boomers that Won’t. Friggin’. Retire.

          AMEN BROTHER!

          There should be more jobs (besides commercial airline pilot) that have mandatory retirement ages.

          • 0 avatar
            CoreyDL

            They make a lot of money.
            They don’t get how things work in modern times.
            Can’t use a computer.

            But by god have they got a story to tell you from 1987. And you’re gonna listen.

          • 0 avatar
            KixStart

            The earlier we retire, the worse the worker-to-geezer ratio becomes. It’s projected to hit 2:1. In addition to supporting the geezers, the workers also have to raise the next generation of workers. Better to raise the retirement age.

          • 0 avatar
            nickoo

            P. D.

            And most of them don’t actually work. They sit around the office as dead weight collecting a pay check. Good freakin’ riddance once they are gone.

        • 0 avatar
          bunkie

          “Where is this just society created by the boomers?”

          If you can’t see that social acceptance of the rights fought for in the 20th century is the norm now, rather than the exception and that it occurred on our watch, then we really have nothing to talk about.

          • 0 avatar
            ToddAtlasF1

            Hey, all you had to do was DESTROY, let me emphasize that, DESTROY the black family in the United States to get whatever you thought you were working towards. The biggest predictor of success in the US is growing up in a household with a married mother and father, and boomers were the foot soldiers of the people who took that away from African Americans.

          • 0 avatar
            bunkie

            “Hey, all you had to do was DESTROY, let me emphasize that, DESTROY the black family ”

            I might remind you that hyperbole is a lousy debating tactic. The demographics simply don’t support your argument. But, hey, lets not let some dumb fact get in the way of a deeply-held shibboleth.

          • 0 avatar
            JimZ

            “If you can’t see that social acceptance of the rights fought for in the 20th century is the norm now, rather than the exception and that it occurred on our watch, then we really have nothing to talk about.”

            sorry, but the latent suburban racism among my parents’ generation is quite stark. I’ve overheard the third Monday of January referred to as “James Earl Ray Day” more than I care to admit.

          • 0 avatar
            ToddAtlasF1

            https://en.wikipedia.org/wiki/African-American_family_structure

            In 1965, Daniel Moynihan predicted the destruction of the black family and the economic impacts of said destruction in writing and it came to pass almost as written. This word ‘facts’ that you’re using; I don’t think it means what you think it means.

          • 0 avatar
            Coopdeville

            Bunkie probably rightly walked away from this “debate,” so I’ll reply thusly: exactly what did the royal “you” do to destroy the black family structure? Are you suggesting that prior to the 1960’s the average black family was prospering to a degree they are not today, due to white interference post 1960 with their family structure?

            (Someone should have told Dr. King to not bother with his time, effort, and life, because Black Americans were just fine the way they were.)

            And how is what was done to black families by external forces different then what was done internally? Who can the average white family blame for the destruction of their family post 1960?

          • 0 avatar
            JimZ

            “Bunkie probably rightly walked away from this “debate,” so I’ll reply thusly: exactly what did the royal “you” do to destroy the black family structure?”

            read up on the marginalization of black business owners and the demolition of black neigborhoods in Detroit during the construction of the Interstates. Here, I’ll give you one:

            https://web.archive.org/web/20140706215028/http://www.freep.com/article/20131215/OPINION05/312150060/Black-Bottom-Detroit-I-375-I-75-paradise-valley-removal

            if the powers that be continually push you around and treat you like s**t, eventually you’re going to give up.

          • 0 avatar
            CoreyDL

            I’m reading this now, as I love urban development stories of any sort. Curious the internet tab symbol for the site is a Nike Swoosh, though.

          • 0 avatar
            ToddAtlasF1

            White families are roughly as badly off today as black families were in 1965. Whites now have 25% of kids growing up in fatherless households, just as blacks did before LBJ ‘helped’ them. Today, their number is 72%, so perhaps whites should stop trying to emulate blacks. Isn’t cultural appropriation a bad thing in the eyes of social justice warriors(against the middle class)?

          • 0 avatar
            VoGo

            …and you blame Obamacare because some white dads don’t show up for work?

          • 0 avatar
            JimZ

            his (apparently earnest) use of the term “social justice warrior” should discredit his opinion entirely.

    • 0 avatar
      JohnTaurus_3.0_AX4N

      Gen X’er here, with $0 income, the “marketplace” quoted me $780/month for health insurance. Remind me how this is supposed to be better, please.

      I could get a fairly nice new F-150 4wd crew cab and insure it for that kind of money.

      • 0 avatar
        ToddAtlasF1

        Wait until you get a new job and learn that the only way you can be insured again under Obamacare is to pay for the months of insurance you didn’t have, and that’s if you get a full time job with benefits that can now be denied you. On the other hand, you could also be one of the millions of full time employees who had benefits before Obama and the Democratic congress that were knocked down to part time in order to mitigate increased Obamacare costs. Defending Obamacare in public should void one’s life insurance.

        • 0 avatar
          VoGo

          Attacking Obamacare in public should void one’s Mensa membership.

          Oh wait, not really an issue.

          • 0 avatar
            ToddAtlasF1

            I stated facts that shook your deluded self concept. You insulted me. I’m going to mark that one down as a win.

          • 0 avatar
            JimZ

            “I stated facts that shook your deluded self concept.”

            just a note- if you have to tell yourself things like this, they’re probably not true.

        • 0 avatar
          VoGo

          Todd Atlas Shrugged,
          If it were true that millions of employees lost their benefits due to Obamacare, then why is it that 19 million more people are insured today than 8 years ago?

          If you want to be taken seriously, try using actual facts.

      • 0 avatar
        Pch101

        If you have zero income, then your insurance premiums will be subsidized.

      • 0 avatar
        krhodes1

        Did you ever shop for health insurance BEFORE Obamacare? And if you have *$0* income, the Fed subsidies are going to cover the majority of the cost anyway. Even in a Teabagger run state, my kid brother and SIL pay about $100/mo out of pocket for a decent “silver” level plan (as good as my employer provided insurance) after the subsidies. She is a waitress, he is a self-employed groundskeeper. They make $25-30K in a good year.

        Obamacare is a boon for the working poor.

        • 0 avatar
          JimZ

          *snort* why the hell don’t they get jobs? We all know it’s as easy as going down to the Job Store and picking one off of the shelf.

        • 0 avatar
          ToddAtlasF1

          Obama loves the working poor. His policies have made people earning $50k-$100k members.

        • 0 avatar
          thelaine

          Consider this, teabaggers:

          An auditor for the Government Accountability Office told lawmakers Wednesday that in the next few years the federal government will owe more than our entire economy produces.

          Gene Dodaro, the comptroller general for the Government Accountability Office, testified at the Senate Budget Committee to provide the results of its audit on the government’s financial books.

          “We’re very heavily leveraged in debt,” Dodaro said. “The historical average post-World War II of how much debt we held as a percent of gross domestic product was 43 percent on average; right now we’re at 74 percent.”

          Dodaro says that under current law, debt held by the public will hit a historic high.

          “The highest in the United States government’s history of debt held by the public as a percent of gross domestic product was 1946, right after World War II,” he said. “We’re on mark to hit that in the next 15 to 25 years.”

          Another economic projection which assumes that cost controls for Medicare don’t hold and that healthcare costs continue to increase, shows debt rising even further.

          “These projections go to 200, 300 percent, and even higher of debt held by the public as a percent of gross domestic product,” said Dodaro. “We’re going to owe more than our entire economy is producing and by definition this is not sustainable.”

          Additionally, the audit found fault with the number of improper payments that should not have been made or were the incorrect amount. The audit found that in fiscal year 2015 there were $136.7 billion improper payments, which was up by $12 billion from the year prior.

  • avatar
    Conslaw

    Excellent writing, Jack.

  • avatar
    Chets Jalopy

    Affordability of autos is tangential to the real argument Jack is making. Free trade and unfettered immigration have their costs. Of course, we’re all racist xenophobes for noticing.

    • 0 avatar
      psarhjinian

      We don’t really have unfettered immigration: you can’t exactly move to a country where wages are better and compete, can you? Nor can people easily and legitimately move to the US from, eg, Mexico or Canada.

      You have to be a millionaire athlete rock star investor to get through the gates.

      We have immigration rules that favour capital, not labour. I’d be all for actual unfettered immigration; where people could up and decide to move as easily as capital can. Good luck with that ever happening.

      • 0 avatar
        thornmark

        A welfare state cannot have unfettered immigration because the system will be swamped by immigrants seeking to access benefits.

        • 0 avatar
          psarhjinian

          “A welfare state cannot have unfettered immigration because the system will be swamped by immigrants seeking to access benefits.”

          Most people actually want to work, but it’s hard to get a good-paying entry-level job and end up using social assistance or goodwill to make up the difference.

          Give people meaningful employment and they’ll stay off the welfare rolls. It used to be possible–only a half-century ago–to get “off the boat”, into a factory, work hard and provide for your family. My grandparents did exactly that.

          The chances of doing so now are slim and, with the likes of Uber depressing wages and permanent employment prospects down further, getting slimmer.

          • 0 avatar
            thornmark

            A half century ago immigrants had to work because their access to programs was limited at best.

            Today there are “navigators” that do nothing but sign up immigrants – illegal or legal – for benefits.

          • 0 avatar
            psarhjinian

            “A half century ago immigrants had to work because their access to programs was limited at best.”

            Really? Because I could have sworn that it was because they could just, you know, get a well-paying job.

      • 0 avatar
        Chets Jalopy

        Millions of illegal immigrants in this country sounds like unfettered immigration to me. Between Sanctuary Cities and the Feds looking the other way, it’s a labor component that’s starting to take its toll on people who are legally here.

        • 0 avatar
          KixStart

          Minimum-wage (and less) hotel maids and tomato pickers aren’t the problem. It’s the H1-Bs taking the good jobs for 30% less, depressing the wages for the citizens and transferring knowledge of the work off-shore, where it will be done for 60% less, that is the real threat to wages. Those people are here legally and that system is fully gamed by both US corporations eager to save a buck (even if it costs $2 to do so) and clever offshore consulting firms.

          I don’t blame the H1s themselves, they’re simply smart people seizing an opportunity. But the Chamber of Commerce set the stage for it.

          • 0 avatar
            hreardon

            KixStart is absolutely right. As a member of the technology workforce, I’ve had a front seat to the offshoring of very high paying jobs to H1 visa holders, if not outright shipping the jobs overseas. Look no further than Disney’s ham-fisted treatment of their IT department a year and a half ago that made national headlines.

            Look, my background was international politics and finance. I get how the system is *supposed* to work. Trade between the US and Europe, on net, “works” for both blocks of citizenry because we share somewhat similar values when it comes to things like intellectual property, labor and environment laws, to name a few.

            In the case of the US and NAFTA or Asia the issue is that we have wildly dissimilar values when it comes to the environment, labor and intellectual property. As such, of *course* it is impossible for the US to compete on price and of *course* manufacturers like Ford want to take advantage of this. It’s easy to say, “toughen up, America”, but we cannot build a cohesive nation on gig-employment ala Uber, or barista jobs at Starbucks.

            America needs to decide if $300 60″ televisions is worth losing hundreds of thousands of jobs that pay a living wage.

            A lot of people looked the other way when blue collar jobs started getting wiped out in the 1970s, but I sense that the technology workers who are now experiencing a similar drain are going to fight back more, if for no other reason than they have a far bigger megaphone and clout than their forefathers.

            I think a lot of people are looking for, and expecting a rebalancing of power in the coming years. Bernie and Donald’s recent success is all due to the system getting horribly out of balance.

        • 0 avatar
          furiouschads

          Illegal immigrant population peaked in 2007.

          BHO known as “deporter-in-chief” in Hispanic community.

          Illegal workers make up 5.1 percent of workforce.

          Source:
          http://www.pewresearch.org/fact-tank/2015/11/19/5-facts-about-illegal-immigration-in-the-u-s/

          Which candidate would fix the H1B problem? #feelthebern

  • avatar

    Over 50 million Americans are having financial troubles.
    Each new generation of college grads buried in debt because they chose $40,000/semester party schools over $2000/semester local schools.
    No jobs/too few jobs that can give them enough to pay back those loans.
    Healthcare costs rising.

    The generations after me have essentially lost 10 years of their lives to the economy.

    Even a $10,000 Versa soul-less econobox is a financial burden when their insurance premiums will look like car notes.

    Childcare? They can’t afford it.

    MORTGAGES? Don’t make me laugh.

    We need to MAKE AMERICA GREAT AGAIN.

    Without factory jobs for our low-skill labor force, we drown in welfare and debt.

    It’s time to put an end to this globalist mentality.

    • 0 avatar
      JimZ

      or the “requirements inflation” that employers have done. posting job descriptions requiring a 4 year degree for a job that doesn’t really require one, so someone has to go into debt to get a piece of paper just to get a mediocre-paying job.

      nevermind the cultural mindset we’ve adopted that more or less obligates people to get *some* sort of degree just so the rest of us won’t look down on him/her as a dumb s**tkicker who’s only qualified for jobs where you have to wear a nametag.

      • 0 avatar
        psarhjinian

        “or the “requirements inflation” that employers have done. posting job descriptions requiring a 4 year degree for a job that doesn’t really require one”

        Forget credential inflation: you have people writing requirements that can’t possibly exist. The old joke in the nineties was “10 years experience in Java” (which would have disqualified Gosling) but now it’s routine way to keep wages low.

      • 0 avatar
        Dan

        A four year degree to answer a telephone is a direct response to how difficult the EEOC has made it to screen for qualified employees. A 20 minute written test that homey can’t pass is racism and illegal.

        But a hundred thousand dollar degree requirement that homey can’t afford is A-OK.

      • 0 avatar
        SomeGuy

        The requirements “inflation” was so tough when I first got out of school (2007). In my field, it was always that stupid 3-5 years of experience for an entry level position. Are you f’in serious?

        • 0 avatar
          28-Cars-Later

          True, but this happened as a result of the erosion of corporate loyalty. Starting in the 80s “downsizing” became an acceptable trend and later in response employees realized they could job hop in order to make better pay increases. Today, the corporations have little incentive to hire you right out of school to only see you leave in a year or two. Nobody wants to babysit children while they are teething these days.

          Depending on the field, your entry level wages are more probably expensive than an H-1B foreigner in any event. While Reagan is dead you can thank his next two living successors for the continuation of the Uruguay Round and GATT. One of them has a psychotic “wife” in the presidential race, can you guess who?

          • 0 avatar
            JimZ

            “Depending on the field, your entry level wages are more probably expensive than an H-1B foreigner in any event.”

            only superficially. it doesn’t account for the time and money spent troubleshooting and debugging software written by people who can hammer out code without understanding what it’s actually supposed to *do.*

          • 0 avatar
            28-Cars-Later

            I agree, but if this were sufficiently taken into account there would be a very small amount of H-1Bs in the first place. I haven’t had the pleasure myself, however a good friend (perm) is surrounded by the Indian subcontinent at his place of employment. His job is to fix the code they create, perhaps one highly paid perm employee and say five lower paid foreign ones works out to be less of an hourly wage than four perm competent employees regardless of finished product/bugs? I’d have to see figures to really make the determination, but I wouldn’t be surprised if someone ran the numbers and that’s why they do it.

          • 0 avatar

            Some use this to their advantage. I don’t know if they still do these but progressive used to use recent college grads turn and burn for claims. Bring them in run em thru a hardcore training session pay them way below market watch them leave in 2-5 years and repeat. The thing was if you planned it that way it actually seems to work except for those stuck working a job that normally pays 50k for 30k.

          • 0 avatar

            H1 B1 can be a real problem the company I used to work for used them to replace their US programmers about 8-10 years ago. I wasn’t directly involved but a relative (35 year employee) was, he explained that they dropped their 80k-100k per year staff for 45k per year h1b1. They did so slowly and methodically to avoid issues but it was planned. His staff went from 15 US programmers (most with the company for 15 years or more) to 16 h1b1 workers over the course of 3 years. we kept monitoring the careers website and found these jobs were never even advertised in the US. Things like this are why we can’t have nice things (well at least us middle class guys)

          • 0 avatar
            319583076

            “we kept monitoring the careers website and found these jobs were never even advertised in the US.”

            That’s illegal and a different issue. As a fresh college grad, I got a job interview and a job offer from a company that didn’t have a position available but had to post one, by law, because they were hiring an H1-B candidate.

          • 0 avatar

            I agree it’s illegal but this particular company employs close to 1,000 lawyers and is a heavy hitter in the local area so I doubt any one wants to step on their toes.

      • 0 avatar
        28-Cars-Later

        Correct, although this was done in collusion with an education cartel which needed to be dismantled during the Carter/Reagan administration.

    • 0 avatar
      Chris from Cali

      Damn, if you aren’t my favorite commenter. Between the Hellcat love and the common sense…. Amen, Brother!

      And Jack, excellent writing. I’d love to know your thoughts on the decline from a socio-political standpoint sometime.

    • 0 avatar

      Most logical post by BT ever.

    • 0 avatar
      Adamatari

      I’m sorry, BigTrucks, but as someone who is likely to work in a factory after I finish my industrial electronics degree… The jobs aren’t coming back, and not because of Mexico or China. It’s because of the PLC. They’ve been automated. Where they haven’t or can’t be automated, factories have actively moved to places where unions don’t exist so they can pay less.

      But that’s okay, because nobody really wants to work in a factory doing one thing all day, or work in a coal mine and die young. What they want and pine for are the wages and dignity of factory work, things like pensions and living wages. Things that came out in the 1950s because of 50+ years of groundwork by the unions, and things that rose up on the back of massive government redistribution to the PEOPLE via the GI Bill and other programs. Programs that helped people own homes affordably, and get education affordably. States used their tax revenue to subsidize education, making state schools very cheap – much cheaper than today.

      You don’t want to hear this, but people didn’t earn their prosperity by doing manly work and having traditional families. They did it by belonging to unions and living in a country with crazy income tax rates that kept the upper classes from hoarding all the resources. A country that had was also alone in the developed world in not being ravaged by war.

      Now, either wages for Walmart workers and McDonald’s workers need to rise a lot or the costs of housing, cars, education and medical care have to fall a LOT. Or we can live with the fact that most people are no longer part of a middle class with power but part of a peasantry that is lucky to drive Dacia Dusters. Let me give you a hint: cutting taxes on the 47% that don’t even pay taxes because they are too poor doesn’t help, and killing the unions that “oppress” these workers doesn’t help either.

      • 0 avatar
        fvfvsix

        One correction – the crazy income tax rates you referred to simply kept average people from ever becoming rich. Everybody forgets that rich people don’t have “income”.. they have WEALTH. (that felt a little BTSR-ish :)

      • 0 avatar
        hreardon

        Adam –

        You’re correct that people really did want to get out of the factories, and “traditional” factory jobs aren’t coming back. But what you’re missing is the entire ecosystem that builds up around production centers to support those manufacturers – that’s almost more important than the factory itself when it comes to building a sustainable economy.

        As for the unions – keep in mind that the “strong unions” were also part of the reason why there was such a push to offshore to begin with. The pendulum had shifted too far to one side and many owners of capital were having a hard time turning a profit.

        Keep in mind that the *vast* majority of business/factory owners in this country aren’t living high on the hog like the 1%ers that we envision thanks to cable TV. The vast majority may have millions tied up in physical assets, but that doesn’t equate to money in the bank. Many of my clients own manufacturing firms that turn between $5mm – $15mm year in revenue. The owners still drive ten year old cars and are the last to be paid when things get slow.

    • 0 avatar
      hreardon

      The H1 system is gamed all the time. Don’t let people tell you otherwise.

      Thanks to technology, the other way to handle it is to simply offshore the labor. We have a client who eliminated their entire legal workforce and offshored the work to a firm in the Philippines who specializes in this kind of work.

  • avatar
    87 Morgan

    This is a very interesting subject you bring up. To your point, one of the reasons I have 4 (one is a complete toy so 3 would be a better measure) cars instead of the typical two. It is cheaper to have a run about for the work/airport, soccer practice normal life car(used Honda accord coupe, thx JB) than to drive my Suburban everyday. God help me if I have to replace it. At 70k for the optioned as the 2008 I have now, I can’t make that math work. It has to last another 10 years and despite DW and some others I am confident that it will. I understand the argument that we don’t need a suburban. But, based on our lifestyle of winter sports, road trips, kids, dogs, camping, we need a larger rig to handle the gear and people safely with a modicum of comfort.

    The next reason for this that I find is not spoken about, is regulation. The cost of manufacturing has gone up. Too many nanny devices, air bags, back up cameras, stop sensors/radar. All of this technology costs money and drives the entry level price/cost north. Yes cars are safer but at some point the cost will be too much for the average ‘Joe’ to bear and Joe is not permitted to ala carte which nanny devices he/she would like. They are regulated.

    Your math for ownership costs JB miss registration fees. Some states (looking at you CO) financially penalize you for a new car after you pay your 8.25% sales tax. A 27k car would cost in the neighborhood of $750 for the license plates for year one. Doesn’t seem like a big deal, but that adds another $60 or more to the monthly operating expense. It is only about year 4 that the fee starts to drop into a level that I would consider ‘affordable’.

    • 0 avatar
      2drsedanman

      Kentucky gouges you every year too with car taxes. It’s as if they are discouraging you from buying something newer.

      Jack touched on leasing. I think it will be interesting in the next few years to see what effect the flood of returned lease cars will have on the used market and subsequently, the new market.

  • avatar
    RS

    All this new technology (CAD, manufacturing, etc.) makes many things cheaper – except autos in the US market. There’s little value in their high margin offerings when they depreciate so fast. Best to find a lease deal or buy a 3 yr old used for 50% of the price?

    What vehicle is closest to the Dacia Duster available in the US today? Jeep Patriot/Compass?

    • 0 avatar
      Quentin

      What “normal car*” segment is 50% after 3 years? I don’t see any used cars that age on the lot for that cheap unless they are salvage title or pulling 20k+ miles a year.

      * non-luxury

    • 0 avatar
      krhodes1

      Cars are ridiculously cheaper than they were 30 years ago. A new basic Camry/Accord/Altima for $19K today is a more luxurious car than the ’85 Olds 98 that my folks paid $20K for in ’85. Not to mention just a better CAR in every possible way. And that is not even accounting for the difference in safety and content.

  • avatar
    Driver8

    Absalom, Absalom, Absalom

  • avatar
    Land Ark

    The pessimist in me loves reading this stuff.

    Over the past 10 years my income level has almost doubled. I got married in that time and our household income is almost double the average level in my County (one of the highest income levels in the country). Combined we put about 1/4 of our income into a retirement investment. We own a house that has nearly 50% equity after owning it for 6 years. We are not having kids. In short, we’re doing pretty well.

    I cannot imagine buying a car for more than $25k. Even that at $25k, when I break it down to the 48 month payment I would take on it, the monthly payments make my eyes water. I just don’t understand how people are able to buy new cars, let alone all the people I see in new luxury CUVs. I guess it’s possible that the people I see in them are all in the upper bracket, but you combine the housing costs and the cars they drive around in with their multiple kids, I am clearly in the wrong business.

    • 0 avatar
      319583076

      Right. What Jack is conveniently leaving out of his “analysis” are the choices people make – mostly financial – that put them behind the 8 ball.

      It’s not a right to have as many kids as you please, it is a responsibility with financial consequences.

      It’s not a right to have a good job that pays well with benefits, there are opportunities available that require something more than showing up and fogging a mirror.

      The United States of America is a land of opportunity, not gifts. Immigrants continue to flock to this nation for the opportunity, not the handouts. Unfortunately it seems that many of us who were fortunate to be born here and received this gift choose to proverbially “look it in the mouth.”

      The opportunities to succeed in this country are as plentiful as they ever have been, but a pearl of great price is not yours for the asking. You still have to work for it.

      • 0 avatar
        JimZ

        “It’s not a right to have as many kids as you please, it is a responsibility with financial consequences.”

        I’ve lost track of how many people online have posted sob stories which included stuff like “we were already living hand-to-mouth, then kids 2 & 3 happened.” No, you idiot, kids don’t “just happen.” If you’ve made it to adulthood and haven’t yet figured out where babies come from, I can’t help you. and using your kids (which you shouldn’t have had since you were already on a shoestring) as pawns to guilt trip people into helping you is offensive.

      • 0 avatar
        Wayne

        +1 to 319583076.

      • 0 avatar

        319——

        To be fair Jack included a best case scenario based on actual numbers for a middle class family he didn’t even add in the cost of childcare etc. It is also well shown in data over the last few years that there is less opportunity in the US not more or the same as there ever was.
        http://money.cnn.com/2015/12/09/news/economy/middle-class/
        It’s also why after decades of somewhat middle of the road politics we have the mess that is our current election year.

        • 0 avatar
          319583076

          One of us has chosen to accept Jack’s work at face value while one of us has not. Can you guess which one you are?

          • 0 avatar

            I may be blinded because I agree with Jack here not that I blindly follow him. This is one of my hot button topics. I agree with much of what Jack says on the subject not all. For instance I don’t think Obama had that large an effect on the economy rather he continued what was already happening.

      • 0 avatar
        NoGoYo

        To be fair, having no kids doesn’t mean you’re magically economically solvent…

      • 0 avatar
        Chan

        “Immigrants continue to flock to this nation for the opportunity, not the handouts.”

        I’m not so sure about that.

      • 0 avatar
        stryker1

        http://www.smbc-comics.com/?id=3474

    • 0 avatar
      TMA1

      I’m guessing you didn’t start out wealthy in life, so $25K looks like a crazy number. And it is, in my opinion, because I started out the same way. I’ve never paid more than $17K for a car, and even that is a paralyzing feeling. Though I know that any new car that I’d want would cost significantly more.

    • 0 avatar
      krhodes1

      @Land Ark

      You hit the nail on the head. It is all about choices. I too choose to not have children. And I chose to buy a house that was far less than I could “afford” when I only made $40K a year. So since my expenses have stayed the same while my income has increased dramatically, I can afford to indulge in my car hobby.

  • avatar
    Jeff Waingrow

    This is a good analysis of the state of things, and having lived through the good times many decades past, I can attest to all Jack observes here. I won’t get into the complicated story of how and why the middle class struggles mightily, but one other thing that can’t be ignored is the phenomenon of rising expectations. The new Camry Jack mentions has feature and amenities that one could only have dreamed of in the past. I remember when power windows were a status item. The radio had one speaker and was AM. Leather was reserved mostly for Cadillac convertibles. You get the idea. Back when, there were still party lines for telephone users of modest means. And of course, there were no computers, smart phones, etc. Few people had air conditioners. (It was a big deal to have an Emerson transistor radio.) Color TV was for the wealthy. Vacations were a few days in a cabin at a nearby lake. I could go on. But people lived much more modestly. It would be nearly impossible to live that way now. That lake is now surrounded by Mc Mansions.

    • 0 avatar

      True Jeff that is the perceived american culture until you actually live with people in the real middle class. Lets say a family of 4 that makes between 40k a year and 90k. I live with many of them and am one of these people. We don;t take vacations on planes we go camping a couple weekends a year. We buy TV’s at walmart for less then a transistor radio cost in the 60’s. We drive 15 year old cars and may buy one new car before we have kids or after the kids move out. We have cell phones but we have the cheapest smart phones you can buy (I have a $40.00 nokia as does my wife). They also live in 1200 square ft homes. While a percentage of america has gone crazy the real middle class living from paycheck to paycheck (about half the population) still lives a modest life but surrounded with more cheap consumer goods from China.

      • 0 avatar
        Jeff Waingrow

        In my rural part of MA, lots of folks who do lawn work, etc., have motorcycles, the latest Apple phone, ATVs, eat and drink at the local haunts, have fairly new trucks, etc. Of course, many are not raising families, but that’s another story. People in the middle class and below trying to raise a family are screwed but good. I’d happily pay more taxes if they would lower tuition in our state college and university system. I’d also pay more for goods and services so people could earn a living wage. Actually, I’d also pay more if they’d fix the damn roads and bridges.

        • 0 avatar

          I agree I think there is an odd split in the middle class itself. I have some neighbors with a lot of toys and some with none despite similar incomes. But I also know one neighbor with toys owes close to twice what his house is worth in mortgages thanks to him splurging before the collapse of the market but he keeps his toys because he can still make the payment.

          • 0 avatar
            hreardon

            mopar4wd –

            Nothing new about this, it’s existed forever. As a kid in the late 70s I always marveled at my cousins who lived in a big house with a lake, a boat, snowmobile, ATVs, etc.

            When I asked my mom and dad why my brother and I didn’t have these cool toys they said, “because you’re going to college and one day your father and I want to have money to retire.”

            Goes back to that whole “choices” thing.

            I have no idea, apart from our collective anecdotal stories, how rampant this kind of silly consumerism really is in America.

            Then again, I’m also of the mindset that most of the people worth employing right now are already happily employed and the people looking for work are bums. So, take my comments for what they’re worth.

          • 0 avatar

            Agree Hreardon,

            I grew up wondering the same thing. My father was more of an upper middle class guy and we did have some toys (a small sailboat and a camper) and Dad also payed for kids colleges. But I had lot’s of friends more in the real middle class with fathers working as carpenters and baggage handlers who had ATVS sportfishing boats etc. And I imagine lots of it was from a heavy debt load.
            Now I see it a bit different Especially when I talk to my kids friends parents in our working class/middle class town. I can’t think of one that has any of the toys, a few with higher incomes or two middle high incomes have a new leased car but that’s about it really. Most of them complain about medical debt and being behind on mortgage payments while driving 10 year old cars.

        • 0 avatar
          mazdaman007

          Good points. Why is this though ? Is it blanket instant communication so today we see all the things everybody else has so we want them too ? You don’t as a rule normally interact very much with people outside your own class so with the dearth of electronic media back then all these gadgets were just stuff “rich” people had and that was that.

          In contrast my kids have never not known fully loaded cars and they are 21 and 19. They can’t fathom cars without air conditioning !!

    • 0 avatar
      slap

      I live in the DC area. For the first 13 years of my working life none of my cars had air conditioning. I bought cars that were at least 7 years old – all made in the 1970’s.

      The base model Nissan Versa or Mitsu Mirage are luxury equipped vehicles compared to those old junkers I had.

    • 0 avatar
      nickoo

      Yeah, but all that stuff is ridiculously cheap now. Cars have gotten cheaper too based on straight up inflation numbers. The difference is, housing/rent, college, and medical expenses, the big 3, are killing the middle class.

  • avatar
    Quentin

    I don’t think that the assumptions are correct. We are a country of 318M. New car sales in the US are around 15M and a decent portion of those are going to fleets, so probably closer to 13M or fewer private sales. That means that less than 1 in 20 people are buying new cars this year. That is why the average household incomes and the average car transaction prices aren’t really comparable. You really have to look at earnings from a distribution rather than doing your calculations using basic averages.

    $57k average household means a lot of different things depending on number of dependents in the household and the location. Single guy living in low cost area? That is excellent money. Married with children in SF is the complete opposite.

    • 0 avatar
      dal20402

      This, exactly. If we do Jack’s math with numbers from my city, things look very different. Median household income in the city (not the whole state) is close to $90,000, or about $6k/month after taxes (no state income tax). But if you have a family in this exceedingly-high-cost area you’re going to be putting $2k of that at a bare minimum into a mortgage. Figure $1k for food. You’ll probably be paying another $500/month for health care (which, by the way, is overwhelmingly likely to be employer-sponsored and not Obamacare). Then put $500 into retirement. That leaves you with $2000 for everything else. $800 of that $2000 for transportation (including gas) is not that unreasonable. The Camry costs the same in small-town Middle America and San Francisco, but incomes and the other costs of living look wildly different.

  • avatar
    dividebytube

    I make (just) enough money where I could buy your “average” car, but I still balk at a $500/mo payment. That’s a lot of dough that could be spent on something else. With a house to upkeep and a family to feed, I don’t like to spend that kind of money on a plain-jane sedan. So, like many others, I buy used and even then I still try to keep the cost under $10k.

    During the 70s/80s, when I grew up in a middle-class suburb, it wasn’t that uncommon to see the occasional Porsche in the garage, or a built-up mint muscle car, or even the odd Mercedes parked in the driveway.

  • avatar

    I want Jack to know that though I sometimes find myself disagreeing with what he’s written, I registered and logged in just so I could toss a thumbs-up the size of the Empire State Building toward his post. Well done.

    My wife and I are single income. I make good money. This job, in my parents’ generation, would have easily allowed me to live like a king.

    It was very important to us that we emulate what my father did for my mother–he worked while Mom stayed home with us through our pre-school years.

    I have been unprepared for just how challenging this has been. The pressure is intense, from all sides, but the greatest challenge has been being subjected to society’s various punishments for having children. The key difference between my parents’ experience, and my own, is that these punishments are cooked in to the system.

    Yes, there’s the usual pandemic of workaholics denigrating child-rearers and making their lives harder for daring to have kids (especially multiple kids), but I’m not going to focus on that aspect of the coin.

    What really hurts are all the hidden costs hitting the middle class like never before.

    You want to know why the middle class is having to skimp on cars? It’s because we’re being slaughtered by healthcare costs. It’s because everyone from the AMA to the corporate hospital systems are in bed with each other–remember, we had to battle even to get these people to give itemized bills. It’s because your job makes that single-employee plan nice and cheap until you tack on family members.

    It’s because government’s solution to tuition, healthcare costs and mortgage costs was to inject easy credit into the marketplace, removing market forces from each of these and creating massive bubbles that will inevitably harm us–not Boomers–when they pop.

    It’s because Boomers never took care of themselves and the bill is coming due at the local fleece-and-knee-surgery joints.

    It’s because society now glorifies the lifestyle of the childless and because the only people in my age group who can *typically* afford all those new cars are those same people, whose sole opportunity cost for not having kids is going to be relying on strangers to change their diapers in the future, and passing on piddling tax write-offs in the present.

    It’s because food costs are crazy. It’s because utilities are exorbitant. It’s because if I miss ten bucks on a tax return I’ll get hammered if I’m audited, whereas some guy crossing the border in the dead of night won’t even get labelled properly.

    It’s because we have (or are soon going to) mandate tech like backup cameras on compact cars.

    It’s because trade deals have gutted the manufacturing sector.

    It’s because everyone was sold the propaganda on both parents working, and now the system’s accouterments are now priced accordingly, with goodies like thirty year mortgages being the norm and forty and even fifty year mortgages being discussed, an retirees being sold on the nonsense of liquidating their equity for fat stacks of medical-bill paying cash.

    My wife and I, we rage against it every day. How? Well, we’re not buying new cars.

    We happily let others eat the depreciation and swoop in grabbing three to four year old vehicles with 30-50k on the clock. We shop thrift stores almost exclusively for clothes and furniture. I have become a budding handyman at home as opposed to hiring out nearly all my work. I can grow bell peppers on a bowling ball. I am teaching my children personal finance skills, since such subjects are not part and parcel of our wonderful education system.

    In short: We might be broke, but we’re not suckers. And like more and more people every day, our eyes are open, and we’re aware of what’s being done to us.

    Sorry for the novel.

    • 0 avatar
      Jack Baruth

      Thank you for chiming in. It’s important stuff to hear.

    • 0 avatar
      JimZ

      few points:

      “It’s because Boomers never took care of themselves and the bill is coming due at the local fleece-and-knee-surgery joints.”

      that’s not all on them, IMO. ‘cos it was the “Greatest Generation” which raised the Boomers on all of the newest synthetic foodstuffs that science could create. it was their parents who were stuffing trans fats and sugar down their throats. It was Ancel Keys who put out flawed hypotheses about natural fats being bad, and in response the food industry gave us something that was a thousand times worse. For as much as I bristle at hipster foodies, there’s something to be said about it when so many men my dad’s age have such distended guts they look pregnant. I am moderately overweight, but thankfully little to none of it is abdominal fat.

      “It’s because society now glorifies the lifestyle of the childless ”

      I’m not sure I agree… if it does, it’s indirect. I think society glorifies *youth* (especially for women) which sort of implies childless. It’s especially apparent now that we seem to want to keep people “children” for longer and longer portions of their lives. Like referring to 25-year-olds as “kids” because “the human brain isn’t finished developing until then.” Maybe not, but it’s pretty close to done, so please stop acting like adulthood is some sort of “switch” that gets thrown at age 25 and you’re ready to go. I had a degree and a career started when I was 21. My grandfather was earning meaningful income when he was 14.

      • 0 avatar

        Sure, JimZ, of course there’s other factors at work, too, in all of this. I’ll grant you that. Like the fact that Boomers were told to keep huffing those sexy, sexy cigs, because nothing’s wrong with ’em, kids. But I would have been there all day long if I named everything :-/

        As far as glorifying the childless–I dunno, have you been on social media lately? Have you watched the way TV paints child-rearing as this massive ordeal that sucks all the joy, fun and designer clothes out of life? Maybe you’re not seeing it–no offense meant–because you’re not on the inside looking out?

    • 0 avatar
      Drzhivago138

      “It’s because food costs are crazy.”

      …Except that Americans spend the lowest percentage of their paycheck on food
      compared to almost any other country.

      • 0 avatar

        Which doesn’t change the fact that food costs have still trended upward, significantly, over time. The fact that your neighbor’s fire is fully involved doesn’t forbid you from complaining about the gas range going up in your kitchen.

        • 0 avatar
          Drzhivago138

          http://www.npr.org/sections/thesalt/2015/03/02/389578089/your-grandparents-spent-more-of-their-money-on-food-than-you-do

          • 0 avatar

            I’d suggest we not get into the back-and-forth of bringing up conflicting links. I believe neither of us could probably convince the other on this point; I have my data and you have yours.

          • 0 avatar
            ToddAtlasF1

            “Because of the overall rise in income, and the consistent shrinking of food prices adjusted for inflation, we actually have more disposable income than our grandparents did, according to Annette Clauson, an agricultural economist with USDA’s Economic Research Service who helped calculate the data in the chart.”

            If I didn’t know anything, that would be great news! Too bad wages have been stagnant since 1971 and natural foods have had price supports since the depression to assure that they can never become less expensive.

      • 0 avatar

        I have to agree while food is expensive it’s no where near as expensive as it once was. Now utility bills and medical there are some real issues for the modern vs the previous generation of family. Medical is what kills me. If my medical costs has stuck to the rate of inflation over the past 15 years I would be a happy happy man and might buy a new car as it is no way. At least energy costs have come down a little here in NewEngland every kind of energy from burning wood to electricity costs a fortune.

    • 0 avatar
      JimZ

      the third point I forgot to get to:

      “whose sole opportunity cost for not having kids is going to be relying on strangers to change their diapers in the future, and passing on piddling tax write-offs in the present.”

      The last thing I want to do is live long enough to go back into diapers. If/when I start degrading that badly, if I don’t have any legal options then I get on the bike and find the nearest cliff.

      see the thing is, as far as nature goes, once my (theoretical) kids are raised and on their own, I cease to be useful. we’re the only animal on the planet which is expected to care for our ancestors, often while (or shortly after) caring for our offspring.

      I’d rather not burden anyone with that. IMO it’s my *responsibility* to get out of the picture once I can’t care for myself anymore.

      • 0 avatar

        So you’ll know, my plan at age 70 involves a rocket bike, a ramp, the Grand Canyon, and a Mariachi band.

        Visualize wrinkled me halfway across the canyon, mid-air. A P-51 mustang nails the fuel tank. In the same moment the Mariachi band yells “Olé!”

    • 0 avatar
      ilkhan

      “It’s because government’s solution to tuition, healthcare costs and mortgage costs was to inject easy credit into the marketplace, removing market forces from each of these and creating massive bubbles that will inevitably harm us”

      *THIS* is what is killing us more than anything else.

      • 0 avatar
        DeadWeight

        The fast-track treadmill to debt serfdom (tuition – for profit and alleged non-profit, but look at those salaries of professors and university executives, medical care – medications, testing, procedures, etc., loans for homes, autos, furniture and just about everything else bought on “installment”, food – charged on credit cards, like most other necessary consumables) doesn’t grease itself with bought-and-paid-for’politicians who allegedly represent the people who vote, rather than the entities that bribe them.

        CORPOCRACY + OLIGARCHY + CAPTURED GOVERNMENT (REVOLVING DOOR LEGISLATORS + REGULATORS) = INEVITABLE AND PERPETUAL DEFT SERFDOM

    • 0 avatar
      bikegoesbaa

      “It’s because society now glorifies the lifestyle of the childless and because the only people in my age group who can *typically* afford all those new cars are those same people, whose sole opportunity cost for not having kids is going to be relying on strangers to change their diapers in the future, and passing on piddling tax write-offs in the present.”

      Society glorifies the DINK lifestyle because it is inherently glorious.

      You have lots of money and the free time to do whatever you want. It’s rad.

      Not everybody who opts out of having kids is a workaholic. Most childfree people I know did it to maximize their fun rather than to put in more time at the office.

      Even if everything you say is correct and the deck is stacked against parents, isn’t the rational response to just not have kids? You know, the same way you would skip any other hobby you couldn’t comfortably afford?

      I’m not inherently opposed to people (who aren’t me) having kids, but don’t get the complaining after the fact. How do people not know that parenting is going to be expensive and difficult when they sign up to do it?

      • 0 avatar

        To answer the “why just not have kids” question would take us all day, and the fact is they do deeply enrich your lives, even if they are a) expensive and b) a source of challenge.

        But that doesn’t change the fact that the societal and economic pressures on the choice to have children are now intense.

        Further, recognize that even though you and many others want to look at this as simply choosing not to have kids, ultimately that’s not a solution. Kids grow into adults that spend in the economy and pay into our social programs (whether we want said programs or not). Kids become movers and shakers and optomizers and such. If no one has kids, or brings kids into the country, ye olde economy collapses. I’m no economist–I don’t know how we’d move away from a growth model built on having the working young outnumber the old, but I haven’t seen anyone offer ideas.

        I guess that’s the best evidence I can provide about how the winds have changed. The fact that “just don’t have kids” is the solution commonly trotted out regarding what’s clearly unsustainable, systemic issues threatening our economy and our way of life. It’s missing the point.

        • 0 avatar
          JimZ

          “and the fact is they do deeply enrich your lives, ”

          there are plenty of examples to the contrary on the local and national news every day.

          and even for those who go through it, there’s a fraction who look back and wish they hadn’t, though it’s taboo for them to actually admit it.

          seriously, nose-in-the-air blanket statements like yours help no one.

          • 0 avatar

            Look, of course there’s always going to be people who regret their actions, and there’s always going to be bad kids. I thought this was a given that most people understood, as opposed to something that had to be explicitly stated.

            But I’ll make sure to throw a few “for the most part”s and “generally speakings” into my post the next time, so my nostrils remain sufficiently at cruising altitude. Jeeze.

        • 0 avatar
          bikegoesbaa

          I didn’t build the current unfair Ponzi scheme we live under, and I don’t have the power to fix it.

          What I can do it adapt my choices and lifestyle to maximize my happiness under whatever system exists.

          Seems to me that skipping kids is a good way to do that. It doesn’t “solve” the cause of the problem at a society level, but it largely mitigates it for me at an individual level.

          What advantages does society confer to folks without kids that you don’t get? By my count you people get tax advantages, sweet benefits like parental leave, and free education and childcare that everybody is paying for.

          Food and medical being expensive isn’t unique to people with children. You just feel it more because you chose to increase your household size.

          • 0 avatar

            I don’t fault you for the choices you make, understand that. Nor do I blame you for taking steps you deem necessary to deal with our hopelessly broken financial system. I’m just saying advocating the excision of children from one’s life is a solution that might work for individuals, but isn’t tenable for society in the long-term. It’s basic economics. Saying “well, you shouldn’t have had kids” is missing the point.

            Advantages I’ve seen parents miss? Two people are being considered for a juicy promotion at a company. One is passed over, one is promoted. The one promoted does not have kids, the one left behind does. The thinking is that the one with kids can’t as easily treat their time off as corporate-guaranteed flex time.

            I haven’t been in that situation, but I’ve seen it. I’ve also seen managers tell new mothers, to their faces, that “we didn’t choose for you to have a child”. I’ve seen business owners complain vociferously that so-and-so had a child, and now they’re having the gall to ask for those “sweet benefits” like maternity leave. It’s funny how those saying this stuff are often childless.

            What’s federally-guaranteed doesn’t remove what it can do to your career if you take it.

            Tax advantages? $1k / child does not offset the cost to raise a child that year. Not by a long shot. Even if you tack in a few extras, like deducting 529 deposits, you’re still nowhere close.

            I’m assuming the “free education and childcare” comment must be from an overseas poster. Here in the States, I pay just like anyone else.

          • 0 avatar
            bikegoesbaa

            I’m located in the US.

            Children get free public K-12 education, which includes childcare. This is paid for by everybody, regardless of whether they have kids or not.

            The $1k tax credit doesn’t offset the cost of the kid, but it’s $1k extra that the childless don’t get. Hence a benefit. Uncle Sam doesn’t give me a grand because I decided to buy a pool table.

            It’s not nice, but it is rational for a boss or business owner to prefer workers who aren’t busy with kid stuff. I’d expect to get passed over if I took 6 weeks off to “bond” with my new motorcycle or opted to leave early all the time to go to my motorcycle’s swim meets.

          • 0 avatar

            Well they did get it you know when they were kids.

      • 0 avatar
        Zoom

        “Even if everything you say is correct and the deck is stacked against parents, isn’t the rational response to just not have kids? You know, the same way you would skip any other hobby you couldn’t comfortably afford?”

        Kids aren’t hobbies. Isn’t Japan experiencing economic problems due to low birth rates?

        • 0 avatar
          bikegoesbaa

          Then what are they?

          An obligation?
          An investment?

          There are 7 billion people in the world, and a sizable portion of them would like very much to come live in America.

          If someday we find that we don’t have enough people it would be easy to recruit millions more. I think it’s unlikely to be an issue.

      • 0 avatar
        duffman13

        My wife and I did the dink thing for our entire 20s, and we had gotten married at ~25. We had our first kid at almost 32. If I were to describe our 20s in a word? Awesome.

        Being DINKs was a blast. We traveled, we partied, and we bought toys. We did it without being workaholics either, each doing our 40 and not much more.

        OTOH, I’m really enjoying being a dad. yes, disposable income is down, but I managed my career progression so it was just the over-the-top stuff that went away. We managed to live entirely on my paycheck for the last several years, with hers being 100% the fun/emergency/retirement fund, so we were very prepared for the drop in income. In all honesty, not too much has changed financially because the “party” portion of our budget was probably reduced 80% in the process anyway.

      • 0 avatar
        nickoo

        Using the term childfree unironically makes me hate you.

        The worst people on the entire internet belong to the child free subreddit and I hate every single one of them.

    • 0 avatar
      Piston Slap Yo Mama

      Those very same baby boomers, the ones who got shot at Kent State and staged love-ins, the ones who danced in Woodstock’s mud and wore tie-dyed hippie crap to protest a stupid and costly foreign war in SE Asia’s jungles – are the same ones who matured into the “I’ve got mine go F yourself” crowd. They benefited from a more liberal, more prosperous America where the disparity between the moneyed and the struggling wasn’t nearly as pronounced. The hypocrisy is stunning, and to the crowd who’d reply “you’re jealous cuz you’re poor”: wrong, and also: bite me. It’s because I’m old enough to remember an America of greater expectations, an America that didn’t work itself to death just to raise a family.
      I do disagree with you re. “whose sole opportunity cost for not having kids is going to be relying on strangers to change their diapers in the future”. I’m one of three siblings, the youngest by a decade and the one with a conscience who stepped up to help my father, a retired airman dying of Parkinson’s. One brother vanished during this ordeal and the other only made himself known when chiming in to criticize my decisions. Now, five years later I’m doing it again for my mother but this time both brothers are completely vanished. Ironically, both are arch-conservative retired military officers and I’m the tree-hugging black sheep, go figure. My point being: DON’T count on your kids to give a damn. My mom busted her ass and her one-in-three payoff on the gamble convinced me to have myself gelded, ha ha. By the time we’re soiling our adult diapers we’re counting on A.I. and robots, thanks very much.
      On the rest of your points – I’m behind you 100%. I look fwd to your future undoubtedly nuanced commentary.

      • 0 avatar

        “I look fwd to your future undoubtedly nuanced commentary.”

        That’s good. Because I write semi-professionally, so don’t count on me to shut up ;-)

      • 0 avatar
        KixStart

        “My mom busted her ass and her one-in-three payoff on the gamble convinced
        me to have myself gelded, ha ha.”

        You’ve missed out. We had several children and it brought us closer together than would have been possible otherwise. Common enemy and all that. :)

        AI and robots is where the Japanese are headed. I hope it works and we may learn something from it.

        On the other hand, the AI and robots will take jobs away from real people. Could be a problem.

    • 0 avatar

      Wait till the little one (s) go to college. I’m paying more for a well regarded public university than my mom did for me to go private…3x as much. We think that starting one’s adult life with 200k debt is child abuse, so I send to school a monthly payment that would put me in a Bentley. My kid has friends who WILL be out with an undergrad degree and 240k debt (they went private) and they accept this somehow…non dischargeable debt collected by agencies that make the IRS look gentle. My kid has a partial merit scholarship too, so she is fully pulling her part of the load, but that doesn’t change the fact that schooling is now insanely priced even at State U.

      I’m glad I had my kids before Health Insurance went to crap. I pay 3x what it was even 8 years ago. I found some old bills recently….and I’m super fortunate I don’t have an ACA plan, but I still pay $2k per month for a family plan….yea NYC metro area !

      All the young attorneys coming up have staggering debt-we didn’t have nearly as much…it just wasn’t as expensive. My guess is that they know they are selling tickets to upper middle class life, not just education, and you can borrow the money, even if the system is debt bondage…..eek. You still gotta hustle…the internet is full of law grads whining there is no 160k/year job for them…educated but clueless-a law education is all about how Businessman A tries to screw Businessman B…and what the result is….they missed that part ?

      If I survive till the college bills are paid, I’m leasing a 911 Turbo, beating the crap out of it for three years, and giving it back-I’m never retiring in any conventional sense…

      Kids still totally worth it.

      • 0 avatar
        highdesertcat

        Been there and done that.

      • 0 avatar
        Piston Slap Yo Mama

        Hi KixStart: thanks for being highly educated and propagating the species. Usually the first point is ignored and the outcome on the second point is … bad.
        In regards to sky-high healthcare costs, when Obamacare was first proposed its primary goal was the creation of a “single-payer insurance” plan. This would have been a gov’t run nonprofit insurance company that would sell health insurance plans just like Blue Cross or Aetna – but without the overhead of shareholders, advertising, shareholders, marketing, shareholders, CEO pay or private jets for the CEO. Or shareholders. And you know what happened? The health insurance companies of America smiled for the TV cameras and said “we’re not worried because private enterprise and capitalism can ALWAYS run more efficiently than a government program”. Meanwhile their lobbyists, carrying bags and bags of cash went to all our lawmakers on capitol hill cutting deals to kill the single payer option because they knew it would provide cheaper and better coverage than the poison they were selling us, and what was left over was the compromise we now call Obamacare – kinda sucky, but better than nothing for those of us who are self-employed.
        Lobbyists with bags of cash always win. And that’s a large part of the reason why today’s vanishing middle class family can’t afford a new car, and why American ‘democracy’ doesn’t represent the people very well.
        Here’s the least partisan explanation you’ll find on the internet re. why healthcare in America so epically sucks: https://youtu.be/qSjGouBmo0M

    • 0 avatar
      hreardon

      Great rant, Mazda, and not far off the mark.

      We could go on a whole thread about medical costs in this country, but let’s just suffice it to say that there are a few things that really fry me with medical issues:

      1. There’s no way to see prices for medical care.
      2. Open heart surgery in Japan will set me back about $2,000 whereas here the bill will be north of $120,000
      3. Americans subsidize pharmaceuticals for the rest of the world
      4. There is virtually no competition in the medical services field to help push costs down

      Medical care is a massive bubble in the same way as housing and student loan debt. They’re all predicated on ‘the big lie’ that you need these things and cost is no object, as a result, the money pours in without control.

    • 0 avatar
      cwallace

      Well stated, and I might add that situations like yours and mine, that of the working dad for a stay at home mom, is made worse by the fact that guys like us just really aren’t that welcome in the corporate world anymore. Any seat we have would earn more EEOC-compliance points if filled by a woman, a minority, or an LGBTAQ. (Don’t know what the A and Q stand for? You would if you worked for the other big US company whose name starts with General.) We get treated as little more than a liability, and as though moving us out is some sort of social victory. This handily ignores the fact that there are women (and children) depending on us for their livelihoods.

      Maybe it’s a proxy battle between women who choose to pursue a career first, to “have it all”, versus those who prioritize having a family. I’ve been to enough PTA meetings to see this as entirely likely.

      Anyway, what were we talking about, cars?

  • avatar
    Carrera

    The purchasing power of the US dollar has tanked since the 70s. Slowly but surely. I don’t like to call it inflation because I know someone right away will quote bureau of labor statistics and say that no way we have inflation. I’ve lived though inflation in post communist Eastern Europe and I know what it is. Here we mask it in Chinese made DVD players that cost 25 bucks now and were 375 in 2001. If you believe there’s no inflation, I invite you to throw a DVD player on the bbq next time. They are very affordable. They taste better in medium rare.

    • 0 avatar
      Dan

      The components of the CPI basket are published.

      http://www.bls.gov/web/cpi/cpipress2.xlsx

      If health insurance amounts to less than 1% of your annual expenses and you spend as much on beer and cigarettes as you do paying for your kids’ college tuition they’ve got you to a T.

      • 0 avatar
        Carrera

        Don’t smoke ( never did) and don’t really drink Dan ( about a 12 pack per month may be). So, yes, you’ve got me to a “T”.

      • 0 avatar
        ToddAtlasF1

        I wonder if the people who parrot claims of low inflation and the risks of deflation have any idea what they’re defending. What a list! It seems to me that most people I know don’t spend tiny percentages of their after-tax income on three hundred and fifty different things. Most of us spend giant chunks of our after-tax income on a few specific things, like housing, health insurance, transportation, education, and food. Does the CPI apply to the 1%? “Video discs and other media” may be cheaper this quarter, but it isn’t going to save someone who is paying their phone bill with their credit card.

      • 0 avatar

        Wow that seems so far off from real life.

      • 0 avatar
        SaulTigh

        Don’t they use something called “hedonics” to massage the numbers? You eat steak, it goes up, you switch to chicken. Chicken goes up you switch to bologna. I think they also say that cars aren’t more expensive today than 30 years ago because of all the “added features.” CPI is mainly about not being forced to raise Social Security payouts, or any other government program tied to it, and seems to have little to do with the real world and the things we buy every day.

      • 0 avatar
        cwallace

        Good news! Prescription drugs only went up 3.4% last year. Fortunately most people don’t understand how compound interest works, or we’d have some real trouble on our hands. Enjoy your “video discs and other media”!

  • avatar
    kefkafloyd

    As a person who was making around Jack’s example level of income in the past, my every-two-weeks net pay (after my taxes, retirement savings, health plan, dental plan, etc) was something in the $1400-1500 range depending on overtime. And I’m single and rent by myself, I get no tax breaks. Granted, I work for a large, faceless Japanese corporation, but my semi-weekly health insurance premium is $59 and that’s for a PPO buy-up, and that’s pretax. Again, a family plan would cost four times as much, but it’s the only advantage I have as a few years over thirty single male. I also live in Massachusetts, in the US 3 corridor, so that should clue you in on my living expenses. I also had student loans and other debt, just like everyone else, so buying a new car was not something I could spend all of my money on.

    Buying a new C-category sedan or hatchback in the $25K range is very doable, but there’s no way you’d be able to have two new cars. The problem with “sensible used cars” is that unless people are buying new cars, they won’t exist. I just finished paying off my Mazda 3 hatchback that I bought five years ago. I got .9% interest on a $20K out-the-door price. Put MA sales tax on top of that along with the misc fees. I paid a $4K down payment (from selling my Trans Am), and my monthly wound up something in the $300 range. It was, relatively speaking, pretty affordable for a car with just enough frills for me.

    If I were to buy that same car today (same trim level, engine, etc) Mazda’s shenanigans have made that into a $25K car. Yes, I would get more creature comforts, and maybe I could live without the 2.5 in a cheaper car, but we’re just talking like-for-like here in terms of hatchbacks. I could get a Kia Optima sedan for a very similar price that has puh-lenty of power and features.

    But now that the car’s paid off, I’m looking over the next five years. My last mistake on car ownership was hanging on to my old Trans Am too long. I couldn’t get very much value out of it because of some of its gremlins, and I should have bought a newer car sooner, even if it meant having a payment, because I would have gotten more value out of selling it at that time.

    Keeping my current car for ten total years makes sense, but I am not going to run it into the ground like I did my TA. Truthfully, selling it three years from now probably makes the most sense.

    My parents only bought one new car every ten or so years anyway (vans) and they were always strippers, never any frills. Our second cars were always used cars that my dad got for cheap. They weren’t great cars, but they got the job done. If you’re a modern family, it doesn’t seem all that different; inflation just makes that van or SUV cost more. Nowadays, since all the children have been gone for a decade, my parents lease their cars. The current argument is whether or not they need two cars. My dad is mostly retired, but he does things during the day, and my mother is a nurse who still works a pretty busy schedule. They could live with only one car, but it would really cramp my dad’s freedom to do things during the day. I think he’s also done screwing around with used cars and is happy to pay a little premium to get a new RAV4 every few years.

    At the end of the day, owning a car is “cost of transportation.” It costs you even if you own a car outright. Does owning a single car (with all of the maintenance it requires) over the course of, say, nine years cost more or less money overall than leasing three cars over that same time frame? Keep in mind that on those leased cars you won’t be buying new sets of tires, doing brake jobs, or other maintenance that would be covered under warranty. On the other hand, at least here in Mass. you’ll pay more in excise tax on those three cars over those nine years than if you bought one car and kept it.

    • 0 avatar
      duffman13

      Interesting look at things.

      I’ll admit I’m in a different station in life than you, but I feel like we’re somewhat similar in income and outlay as a result. I make roughly double the median, and live in Maryland (high cost area). However, I’m also a single earner household and supporting a stay at home wife and baby.

      We’re a 3 car household, but one is a fun car purchased for cash when we were DINKS, and won’t get sold unless there is a severe financial need. I don’t use my S2000 to get to work and it doesn’t cost me a payment, so it is out of the equation in my mind.

      As far as the other 2 vehicles though, my thought calculus is roughly the same as yours. I cannot afford more than one car loan at a time, which puts me on a 10 year cycle for each vehicle. I commute in the same 5 year old Mazda 3 you do, while my wife is in the newer CUV with the kid. I’m going to stay in the Mazda until at least her car is paid off, and likely will end up in another discount C-segment entry when the time comes for something newer.

      I can afford to buy new, at least for a compact or midsize, but there was no way I was ponying up $40k for a tricked out CUV. Jack is right when he calls $30k a fairly hard price cap, necessitating late-model used for the family truckster.

      The way cars are built now though, 10 years is a perfectly fine service life. I wouldn’t be surprised if my Mazda is still doing fine in 2020 when the time comes to finally offload it.

      • 0 avatar
        kefkafloyd

        30K is absolutely a very tough price cap for a lot of people. You can get a CX-5 (a perfectly sensible family CUV) with auto and AWD for $26K sticker. But if you needed a three-row, it gets a lot tougher. That’s where those Dodge Grand Caravans come into play…

        The problem with cars is that most people can’t buy them on their own schedule. You don’t buy a car unless you need to. Even if you have some stash for a down payment, you rarely get to pick things up on your own terms unless you’re very financially independent. Even then, getting a reasonable, but not perfect, used car is not difficult. Neither are lease terms, there are dealers all inside 495 (north and south) who will put you in a reasonable sedan for $149/month, if you’re not too picky. Sometimes, a car is just a car.

        Truthfully the bigger issue here is the real estate and rental market, which is absurd and puts far more impact on people’s finances than cars most of the time. That’s my current problem: I have no way of affording a down payment for a house (i’ve only been making more than $50K for the past two years) and landlords have jacked up rents to insane degrees. I’ve never missed a rent payment in my life and I have cash right now to pay the ridiculous up-fronts people are asking for, but I cannot afford a $1700/month rent. Well, I could, but I’d be eating lousy food and shopping at Market Basket doesn’t save enough money to make up that kind of difference.

        • 0 avatar
          duffman13

          We wanted something we could grow into, meaning 3-row. Hence the lightly used Santa Fe.

          As for those sweet lease deals, they would be awesome until you knew what my commute is. I do almost 25k a year driving to work, 45-50 miles each way and the backroads I take to miss traffic. The lease payment on something you’re putting that many miles on is basically the same as the car note, so it makes zero sense not to buy in my case.

          • 0 avatar
            kefkafloyd

            Yes, those lease deals aren’t for everyone (Your mileage may vary, after all), just an example of a way to get a decent ride if the customer fits the mold and aren’t too picky. This describes my mother to a T, she loves her little white Corolla even though she barely puts any miles on it.

            I totally get the three row thing. They have fat margins for the OEMs, and dealers will try to tack whatever they want on to them. But I imagine trying to get clean used CUVs has to be hard, since kids are in them all the time. Have you seen how expensive Siennas and Odysseys get?

    • 0 avatar
      Land Ark

      “If I were to buy that same car today (same trim level, engine, etc) Mazda’s shenanigans have made that into a $25K car.”

      I ran the numbers on my Tacoma (2009 SR5 4-door Prerunner) based on the window sticker from when my parents leased it (then bought it).
      It stickered for $25,846
      Adjsuted for inflation, today that’s $28,463
      The same truck, optioned the same way, today costs $30,385

      That means the price of a new Tacoma has outpaced inflation by nearly $2,000 in that time.

      • 0 avatar
        kefkafloyd

        To clarify my comments about Mazda, your Tacoma example is very similar. Mazda has put the 2.5L in the Mazda 3 hatchback as a premium option. The cars simply cost more if you want that engine.

        In the recent past, the only engine you could get in the hatchbacks was the old, pre-Skyactive 2.5L MZR. It’ll be a very familiar motor to any Mazda or Ford person. This meant the base entry price for the hatchback was around $20K in 2011 with a manual trans. These were S-level trims, not I-level, which meant they had more standard features, etc, but no frilly options like moonroof, tech package, leather interior, etc. The GT cars would have been $26K back then too. When the Skyactiv engines came out you could get a hatchback with the new 2.0L which cut the entry price by a bit, but ultimately the same level of car would cost about the same.

        Flash forward to MY2016. If you stick with a hatchback and get the 2.0L Touring, you can get out-the-door for $21K and actually get MORE standard equipment than what my car had. The 2016 3 hatchback at that trim level will have the nav screen, a nicer interior, the HUD, and so on.

        Now, the 2.0L Skyactiv motor makes about the same amount of power (a few HP less, but the car’s weight is cut significantly) as the old 2.5L and is so much more efficient that it’s laughable. But if you are dead set on getting the new 2.5L motor, you are paying a premium. Those cars start at $25K and can be optioned up to $30K, which is laughable.

  • avatar
    28-Cars-Later

    So society will simply continue to devolve, as it already has been for some time. Yes we can!

    • 0 avatar
      heavy handle

      Read a great article a few years back that traced “society is going to hell” articles back 200 years.

      It’s just a sign that the writer is getting old (“candy doesn’t taste the same!”).

      Of course, things have gotten worse since I read that article.

      • 0 avatar
        28-Cars-Later

        http://quoteinvestigator.com/2012/10/22/world-end/

        This is not a new topic to on which to write, however I argue most things this society has accomplished will be undone in a few generations.

  • avatar
    jmo

    Did the median family ever buy the median new car? I assume the median new car buyer was (and is) somewhere around the 25th percentile of household income.

    • 0 avatar
      Pch101

      “Did the median family ever buy the median new car?”

      I’m sure that they did on TV.

      • 0 avatar
        28-Cars-Later

        Lol.

      • 0 avatar

        Just did a chart of population vs car sales. You can pick out recession years easily. The highs do seem lower over time but you can look for yourself.

        http://colinism.com/?page_id=261

        • 0 avatar
          KixStart

          Do cars last longer? That would have an effect on how often people buy new. We’ve bought a few new – or very nearly new – and we keep them a long time. Not necessarily until they die but until we’re no longer comfortable with them. That’s a decade or better.

          • 0 avatar
            KixStart

            Another effect here is that the median car is no longer a “car.” The best-selling vehicle is the F-150 or Silverado, isn’t it?

            People are cheerfully signing up for a vehicle that’s going to cost them a lot more than a “car” in the long run.

          • 0 avatar
            Dan

            Trucks have always been the top selling single models because they’re an entire segment compressed down to just four nameplates

            Trucks of any kind were 600K of the 4.1MM vehicles sold in Q1. 100K of them were compacts, 125K more were HD work trucks which don’t really belong in a passenger vehicle count.

            375K half tons are less than 10% of the market.

          • 0 avatar
            thelaine

            Another home run Jack. Great article. Great comments.
            Thank you.

    • 0 avatar
      319583076

      Don’t forget that measures of central tendency are essentially meaningless without measures of dispersion. Although since most people don’t have a solid grasp of “mean” or “median” let alone “variance” or “standard deviation” it doesn’t really matter – this piece is angry venting with a side of thinly veiled xenophobia.

      • 0 avatar
        Jack Baruth

        If I’m a “xenophobe” for pointing out reality, what are you for suggesting that Americans need to simultaneously refrain from having children and permit unlimited immigration? Wouldn’t that make you an “Amerophobe”, since what you advocate will ultimately lead to the wholesale replacement of Americans with Mexicans and Indians?

        • 0 avatar
          psarhjinian

          “Wouldn’t that make you an “Amerophobe”, since what you advocate will ultimately lead to the wholesale replacement of Americans with Mexicans and Indians?”

          Depends. If we let them in and afford them the same opportunity we afforded the Irish and Italians, then sure, why not?

          Thousands of extra citizens working and spending money isn’t a problem—ask Japan why it’s quite the opposite—but you have to, and I know this is hard for people making six or seven figures to admin, actually pay them fair wages. Bringing them over, hiring them via Uber or Handy or on an H1B, and then discarding them next quarter, hurts everyone.

          • 0 avatar
            slance66

            Immigration, even legal, is currently higher than at any time prior. Including the waves that brought the Irish, Italians, Germans and Polish. Add illegal numbers and…well do the math.

          • 0 avatar
            319583076

            Why don’t *you* do the math and I’ll check your work? The burden of proof lies with the claimant. My guess is that you can’t do it.

          • 0 avatar
            stryker1

            Agreed. If you’re competing with an Indian Software Developer for a job, you want them to have strong bargaining power, not weak.

        • 0 avatar
          Pch101

          These nostalgia pieces of yours are only loosely based upon facts. The reality is that there has never been a time when everyone was buying new cars.

          And given how lousy cars used to be, those who did buy new cars had no choice but to buy them a bit more frequently; there was a reason why they didn’t use to bother having odometers with more than five digits. Not to say that we don’t have our own issues today, but the good old days weren’t.

          • 0 avatar
            heavy handle

            “given how lousy cars used to be”

            My Dad didn’t want to buy a new car every four years, he had to! Back in the 60s, 70s and 80s, cars were absolute junk at 100,000 miles, and they were prone to regular breakdowns starting around 50,000.

            On the same topic, my Granddad didn’t build a house using a hand saw and basic tools because he was a hipster! He would have used power tools if he could. That doesn’t excuse the facial hair, of course.

        • 0 avatar
          JimZ

          I don’t buy that. I wouldn’t be here if it weren’t for Polish, Slovak, and German immigrants. back in the 19th and early 20th centuries, people thought the same way about e.g. Slavic, Italian, and Irish immigrants as we do today about Hispanics and Indians. the “migrant farm workers” back then were the Poles and other Slavs stuck getting Black Lung disease working the coal mines.

          • 0 avatar
            28-Cars-Later

            Effectively, 19th Century immigrants were indentured servants doing the most undesirable jobs and services. Here’s a solution, you want to live here? Indentured servitude for seven years. No more Jus soli, no welfare when in indentured servitude. Problem solved.

          • 0 avatar
            JimZ

            yeah, repeal the 13th Amendment.

            I really hope Poe’s Law is in play here.

          • 0 avatar
            Pch101

            28 is not a big fan of either the 13th or 14th amendments. Doubling down on the antebellum routine, as it were.

          • 0 avatar
            28-Cars-Later

            Fourteenth. Let’s nuke it.

            https://en.wikipedia.org/wiki/Fourteenth_Amendment_to_the_United_States_Constitution

          • 0 avatar
            Pch101

            If you’re one of those guys who loves to feel nostalgic about common law, then just remember that jus soli citizenship is straight out of common law. The 14th amendment clarified that it also applied to the former slaves.

          • 0 avatar
            28-Cars-Later

            True

            “Birthright citizenship, as with much United States law, has its roots in English common law.[23] Calvin’s Case, 77 Eng. Rep. 377 (1608),[25] was particularly important as it established that, under English common law, “a person’s status was vested at birth, and based upon place of birth—a person born within the king’s dominion owed allegiance to the sovereign, and in turn, was entitled to the king’s protection.”[26] This same principle was adopted by the newly formed United States, as stated by Supreme Court Justice Noah Haynes Swayne: “All persons born in the allegiance of the king are natural-born subjects, and all persons born in the allegiance of the United States are natural-born citizens. Birth and allegiance go together. Such is the rule of the common law, and it is the common law of this country as well as of England…since as before the Revolution.[27]””

            https://en.wikipedia.org/wiki/
            Birthright_citizenship_in_the_United_States
            #English_common_law

            However, four of the six major nations based on Common Law have restricted jus soli with only Canada and the United States being the exception:

            “United Kingdom: Since 1 January 1983, at least one parent must be a British citizen or be legally “settled” in the country or upon the 10th birthday of the child regardless of their parent’s citizenship status (see British nationality law).

            Ireland: On 1 January 2005, the law was amended to require that at least one of the parents be an Irish citizen; a British citizen; a child of a resident with a permanent right to reside in Ireland; or be a child of a legal resident residing three of the last four years in the country (excluding students and asylum seekers) (see Irish nationality law).[33]

            Australia:[33] Since 20 August 1986, a person born in Australia acquires Australian citizenship by birth only if at least one parent was an Australian citizen or permanent resident or upon the 10th birthday of the child regardless of their parent’s citizenship status (see Australian nationality law).

            New Zealand:[33] Since 1 January 2006 a person born in New Zealand acquires New Zealand citizenship by birth only if at least one parent was a New Zealand citizen or permanent resident (see New Zealand nationality law), or if to prevent being stateless.[51]”

            https://en.wikipedia.org/wiki/Jus_soli

            The intention of Amendment XIV may have been former slaves but the text makes no specific mention which is the problem. The logical thing is to introduce a retroactive time period to Section 1, as the Commonwealth nations have done, so if you/your parents were a citizen as of 1/1/2010? you’re good to go, otherwise SOL. Then the door can be opened for voluntary indentured servitude.

            “SECTION 1.

            All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the state wherein they reside. No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any state deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.”

            https://www.law.cornell.edu/constitution/amendmentxiv

          • 0 avatar
            Pch101

            Aren’t we supposedly better than those furrin countries with their funny ways? The right-wingers keep telling me how exceptional we are.

            Canada has a complicated history of citizenship law that included restrictions on jus soli. (Wikipedia should be used with caution.)

          • 0 avatar
            28-Cars-Later

            The United States is not exceptional, and the future does not exclusively belong to its citizens (if at all).

            Wikipedia is certainly not the best source, but short of delving into deeper sources I find it apt in making basic points.

          • 0 avatar
            Pch101

            You see, here’s the thing: Britain obviously had a history of common law, but it has no bill of rights or constitution. So common law could be tossed aside without much difficulty when Parliament decided to do it.

            The constitution that we supposedly hold to be so sacred doesn’t make it so easy to change fundamental aspects of American law, and that’s by design. This is something that we regard as a feature, not a defect. This idea that citizenship comes from the land is basic to American identity.

          • 0 avatar
            28-Cars-Later

            That’s a good point on Commonwealth legal theory vs that found in the United States.

            I’m not a qualified historian to argue what the prevailing ideas of citizenship were at the time, but I do know whatever we believe today is based on whatever was decided in the past. I wasn’t aware of this personally but evidently President Andrew Johnson actually vetoed the Civil Rights Act of 1866:

            “In 1865, Congress passed what would become the Civil Rights Act of 1866, guaranteeing citizenship without regard to race, color, or previous condition of slavery or involuntary servitude. The bill also guaranteed equal benefits and access to the law, a direct assault on the Black Codes passed by many post-war states. The Black Codes attempted to return ex-slaves to something like their former condition by, among other things, restricting their movement, forcing them to enter into year-long labor contracts, prohibiting them from owning firearms, and preventing them from suing or testifying in court.[6]

            Although strongly urged by moderates in Congress to sign the bill, President Andrew Johnson vetoed it on March 27, 1866. In his veto message, he objected to the measure because it conferred citizenship on the freedmen at a time when 11 out of 36 states were unrepresented in the Congress, and that it discriminated in favor of African-Americans and against whites.[7][8] Three weeks later, Johnson’s veto was overridden and the measure became law.”

            If the veto had not been overridden, there very likely may not have even been a Fourteenth Amendment as is currently codified in the Constitution.

            I realize we can play the “what if” game all day, but my point is the idea of “citizenship comes from the land” may have never played out in law and thus our consciousness if one or two key events would have played out differently. If national/tribal sovereignty were not a natural human concept, most of the world would have adopted jus soli as opposed to jus sanguinis.

            https://en.wikipedia.org/wiki/Fourteenth_Amendment_to_the_United_States_Constitution

          • 0 avatar
            Driver8

            Eh. Back then immigrants were a much larger net benefit. There was a greater demand for physical labor and zero welfare state to pay for *and* life expectancy was short.

          • 0 avatar
            Pch101

            Jus soli was derived from feudalism. The idea is that loyalty came from the land. This evolved into loyalty to the crown and a place in common law.

            Continental Europe outside of France borrowed its tradition from Roman law and took the opposite approach — loyalty came from your blood (read: your parents.) That works well enough if you are in the business of conquering territory and don’t want your new subjects to have the same privileges as the folks back at home, but it doesn’t encourage buy-in, which is exactly what a country that built itself on immigration shouldn’t want.

          • 0 avatar
            28-Cars-Later

            Interesting Pch, I didn’t know the longer backstory. Thanks for sharing.

            Rhetorically, when does a nation built on immigration have enough citizens and introduce some enforced control?

        • 0 avatar
          319583076

          If you were interested in discussion, you would avoid logical fallacies.

          What does an “American” look like to you, Jack? This country’s existence is predicated upon a wholesale replacement of indigenous populations. Why do you think that should stop? What does that say about who you are?

          • 0 avatar
            JimZ

            if “we were here first” was the law of the land, I’d be speaking Ojibwe.

          • 0 avatar
            Jack Baruth

            I’d prefer to not see the world slip back into prehistory, thanks.

            We’re nearly identical to the human beings of 50,000 or 100,000 years ago. The only reason we aren’t living the same way the Picts or the Egyptians or Romans did is because a specific system of thought and behavior appeared in Europe about six hundred years ago.

            That system of thought and behavior reached its apex in the United States of America in the twentieth century, ushering in an era of global prosperity and technological progress that instantly trivialized everything humanity had accomplished in the 99,500 years prior.

            If you want to throw that system away and let Mexican and Indian natives determine what happens in the United States from now on… well, you’ve been to Mexico and India, right? As long as you’re comfortable with that as the American future, then by all means, continue to denigrate American families who make the sacrifice of parenting.

          • 0 avatar
            Pch101

            So the Mexicans should leave their tacos behind and go home, apparently.

          • 0 avatar
            Jack Baruth

            Alternately, they should do what every group before them has done: come to the country in legal fashion, assimilate into the culture, and eventually become part of what idiots who don’t know their great-grandparents’ names call “white people”.

          • 0 avatar
            Pch101

            Every time that I eat in yet another good ethnic restaurant, I thank Vishnu, Allah and the pantheon of gods that not everyone becomes a apple pie burger boy overnight.

          • 0 avatar
            dal20402

            Jack, we’ve made that impossible. The difference isn’t in the immigrants, it’s in us.

            The Mexicans and Salvadorans who are building your house, cutting your lawn, and washing your dishes did *exactly the same physical thing* as the Irish and Italians of the 19th century. That is, they got desperate because there was no work or food, streamed across the border, set up ramshackle communities here, and took whatever work they could possibly find.

            The difference is that we allowed that for the Irish and Italians, while we imposed strict limits on Latin Americans and made the same behavior illegal. The Irish immigrant in 1849 could go straight into a factory and get hired, no questions asked. The Mexican immigrant in 2007 (we won’t use more recent years as since then there has actually been net negative immigration) had to get fake documents and live under the radar, in constant fear of ICE, to do the same thing. You think that might make it a wee bit harder to assimilate?

          • 0 avatar
            319583076

            Hmmm…none of my questions got answered, but there’s an implication that Mexicans and Indians threaten to ruin this great nation with their prehistoric ways.

            Pretty compelling evidence…

          • 0 avatar
            Dan

            “The Irish immigrant in 1849 could go straight into a factory and get hired, no questions asked. The Mexican immigrant in 2007 (we won’t use more recent years as since then there has actually been net negative immigration) had to get fake documents and live under the radar, in constant fear of ICE, to do the same thing. You think that might make it a wee bit harder to assimilate?”

            Spoken as if all immigrants are migrant landscapers. None of that applies whatsoever to the the full million legal permanent residents who flood in every year, a single digit percentage of whom are from Western countries.

        • 0 avatar
          bunkie

          The reality is that the prosperity needed to afford a car is, more than anything else, a function of where you live. Your neck of the woods is a great example. The Columbus suburbs have high incomes and a decent number of good jobs. Go 40 miles east to the space between Newark and Zanesville and it’s a different story.

          • 0 avatar
            Nick 2012

            Jack and Dal make a great points on the distinction between immigration and assimilation that some B&B miss.

            The failure to assimilate – whatever its causes – creates wonderful neighborhoods like Molenbeek, where a mass murderer can live in plain sight and the shambolic law enforcement that allows such things to happen because of the Flemmish vs Walloon split.

            Immigration in and of itself isn’t bad. The failure to assimilate is. The US has done a much better job than most other Western countries, but failed immigration policies, temp workers, etc. now create insular communities with homogeneous populations that do not interact with the wider community or become participants in American society. Being a melting pot is far better than being the ‘tossed salad’ our northern neighbors strive to be.

            Personally, my in-laws arrived in the US in the late 70s from a very sandy land speaking no Romance language. In the next 15 years, they had a family, a house, and citizenship. They are, and their kids are, far more ‘American’ than anything else, and they are very proud of that because they had to assimilate. It is next to impossible to do the same thing now.

      • 0 avatar
        Jeff Waingrow

        Good grief, where did this come from? I thought Jack captured the predicament perfectly. The comments pretty much bear him out.

  • avatar
    HeyILikemySaturnOK

    Much truth in this article. My income is pretty close to what the article numbers are. Basically, I can’t afford to pay the mortgage, support my wife and kids, save for retirement and also have a car payment that is several hundred dollars a month for 3-5 years. There just isn’t the money to do that. Now, I could potentially take on such a payment if I made other things (such as retirement saving) less of a priority but I am NOT going to do that. No way. I buy my cars (used) for cash and they are usually 7-9 years old when I do so. No further debt and so far they have lasted for a good,long while. The best was a ’97 Camry that I owned and drove for over 10 years. I honestly do not see a scenario where buying a new car makes any financial sense for me.

    However, I do take issue with “Obamacare” being singled out as though it’s some new thing that all of a sudden is a drag on middle-class finances. Healthcare costs have been a high and steadily rising (money pit? sequester? commitment?) since before I started working after college (2001). Unless you are really low-income and qualify for Medicaid or something, your health insurance costs through your employer are just as much as someone making 3-4 times your income. I was paying the same insurance costs making above minimum wage as a doctor. At the time, this was approx $ 300+ per month. Now, I definitely make more but my insurance costs per month are still high through my employer relative to my income — $515 (with no co-pays and a high deductible). Retirement savings takes out approx. $822 per month. Anyway, point is–healthcare has been a rising piece of the income pie for awhile, it didn’t “start” or accelerate with the ACA.

    • 0 avatar
      FreedMike

      This.

      Most middle class people do NOT have to go through Obamacare to get covered. My employer covers me for about $200/mo for my family. Yes, it’s a high deductible plan, but I also get a $2,000/yr HSA deposit from the company. That kind of arrangement is not uncommon.

      So, I’m stuck for about $2,000/yr in out of pocket above and beyond what my employer provides, and that’s not tragic with my income. Would I rather go back to the days when I could take my kids to the emergency room for an earache and cough up $50? Of course. But that kind of thing is what put us in the mess we’re in now health care-wise.

      • 0 avatar
        Jack Baruth

        I’m a contract employee, like the growing majority of Americans.

        My healthcare expenses for the past few years, approximated:

        2013: $12,000
        2014: $18,000
        2015: $15,500

        And that’s with GREAT NEW COST-SAVINGS OPTIONS like electing to have two major surgeries done on an outpatient basis.

        • 0 avatar
          dal20402

          You are also a person with some exceptionally high-risk hobbies that are responsible for some (by no means all) of those costs.

          My employer has the DREAD HMO as one of the health insurance options. My out-of-pocket costs for my whole family are limited to a $450/month premium and $200 annual deductibles for each person. In 2014 my wife had a child and a major invasive surgery in the same year. Our out-of-pocket healthcare costs as a family that year? About $6000. I’m a giant fan of the HMO model.

          • 0 avatar
            jkross22

            I’m a mid 40’s low risk desk jockey who gets to the gym a few times a week, but my rates were bumped by 35% from 2012 to 2013, bumped 14% above that in 2014 and bumped 19% for 2015.

            During those increases, my deductible went from $2500 in 2012 to $6500 in 2015.

            Anyone who believes ACA is reducing healthcare spend likely has their medical mj card and uses it prodigiously.

          • 0 avatar
            dal20402

            What state are you in? I haven’t heard of average increases nearly that high anywhere.

            My premium (in WA) went up by about 6% in 2015.

          • 0 avatar
            jkross22

            CA

        • 0 avatar
          FreedMike

          I’m assuming you’re 1099’d, Jack?

          • 0 avatar
            Jack Baruth

            For the most part, yeah, but my W-2 employer canceled their employer-sponsored insurance in 2011 and cited ACA as the excuse.

          • 0 avatar
            FreedMike

            You should be able to write off at least part of your health care premiums, then. I’m guessing you probably knew, tho.

            I think the case you’re unwittingly (or perhaps wittingly) making is for single payer. Health insurance for self employed people has ALWAYS been a clusterf**k. My ex and I owned a company for a while in the 2000s, and the premiums for lousy plans were horrifying.

            I think the entrepreneurial spirit is too muffled in our country, and one of the things that does that is fear of not having health benefits. It’s a valid fear. If single payer existed, it’d probably be a boon for productivity and achievement. Instead of having to work for some large company out of fear of losing your benefits (as so many of us do), you could strike out on your own with considerably less risk.

          • 0 avatar
            VoGo

            “My W-2 employer canceled their employer-sponsored insurance in 2011 and cited ACA as the excuse”

            Oddly enough, just about every right leaning person and firm has blamed Obamacare for everything from high unemployment to high inflation. A pity their rhetoric is so divorced from reality.

            Jack,
            Do you know what a pre-existing condition is? It’s the reason every insurer you would ever talk to for the rest of your life would never insure you, until passage of the ACA.

        • 0 avatar
          Pch101

          You’re blaming Obamacare for medical costs that were high before Obamacare.

          Just because you didn’t personally experience those costs doesn’t mean that everything was a bargain before ACA came along.

          • 0 avatar
            FreedMike

            It wasn’t that anything was a bargain – it was that because health insurance covered everything with a minimal co pay, no one noticed what anything really cost. I mean, seriously…I use the example of taking kids to the emergency room for minor stuff, but I did it. Did I care what was on the bill besides the part that said “pay your fifty buck copay”? No. All I cared about was MY bottom line.

            And for a while, that worked, until costs got out of hand.

            Part of our problem is that we have a cost structure in health care that was built around ever-increasing insurance payouts. Now we can’t afford the payouts without higher insurance premiums.

            The key is to fix the cost structure if it’s to remain a non-single-payer enterprise.

          • 0 avatar
            Pch101

            “it was that because health insurance covered everything with a minimal co pay, no one noticed what anything really cost.”

            Those of us who have had our own businesses knew that we were getting 20% annual premium increases for policies with fairly high co-pays and deductibles, assuming that we didn’t have pre-existing conditions that would keep us out of the insurance market altogether.

            This is akin to comparing your rent today with the rent that you paid when you were a child living at home. Just because you didn’t get an invoice doesn’t mean that it was free.

          • 0 avatar
            FreedMike

            Well, that’s the problem, PCH – those of us who weren’t self employed and didn’t own a business only saw what we ended up paying out of pocket.

          • 0 avatar
            Pch101

            One of the basic issues with ACA is its emphasis on providing insurance for those who otherwise would not have it instead of getting healthcare for everyone. It requires average people to understand insurance, when most of them won’t.

        • 0 avatar
          319583076

          You know very well why your rates are high and why they increased. Many of us know, too. You have written quite a bit about it.

          • 0 avatar
            CoreyDL

            Jack’s what you’d call in the insurance industry a “bad risk.” Likes motor sports and other speed pursuits, gets into accidents and breaks himself, contract employee which implies instability (real or imagined) etc.

        • 0 avatar
          Arthur Dailey

          So Jack maybe the USA should institute what every other civilized first world nation has, which is universal, national health care coverage.

          And while doing it, maybe add in rationale form of gun control?

        • 0 avatar
          mburm201

          As an office worker with a wife and three kids, my healthcare costs aren’t much different. The small company I work for has struggled to keep offering decent health insurance as the costs skyrocketed. The first year after Obamacare, the plan we had been on rose 60% and the lesser plan we ended up with was still an increase of 30%. They’ve had to increase the employee contribution a couple times. I now pay about $200/mo for coverage, but my employer ends up paying over $18k/yr and also contributes $2k/yr in my HSA. If rates continue to rise, they may be forced to drop coverage completely, forcing everyone onto Obamacare. They investigated just paying everyone more to find their own insurance, but the tax consequences make it unworkable.

        • 0 avatar
          VoGo

          Jack,
          How do your costs for health care compare to how much your insurers paid on your behalf? It’s time you woke up and were thankful for the deal of the century you’ve been getting.

          • 0 avatar
            krhodes1

            So much this. Just the accident in the Lincoln had to have cost an utter fortune, between Jack and his friend.

            I got my professional start working for a non-profit health insurer, and even there I saw things that absolutely horrified me to the core, and made me the biggest proponent of putting that industry out of business. Jack should be thanking his lucky stars for the ACA, because without it he would probably be uninsurable at this point, as opposed to merely paying a lot. He should be thankful he pays as little as he does on an individual basis – my employer pays nearly as much for me on a group plan! And that is with me being relatively healthy and making very little use of my insurance.

    • 0 avatar
      28-Cars-Later

      Start? No.

      Accelerate? Yes.

      http://blogs-images.forbes.com/theapothecary/files/2014/10/PremiumIncreasesKowalski.png

      http://www.econ.yale.edu/~ak669/research.html

    • 0 avatar

      Yes, it did accelerate with the ACA, for many of us, even if it had been trending upward prior to the legislation’s rollout. I’ll give you just one example: the 40% tax on “Cadillac” plans. Said tax was supposed to shore up the ACA’s budgetary costs.

      Now, within the halls of government such requirements are levied in a vacuum of optimism. The reality on the street is that no corporation is going to suddenly take a massive tax penalty on a health care package. We were told straight up by my employer that our 90/70 plan (a 100/70 when I started, by the way) was going to go the way of the dodo if that tax penalty went live. As a result, even though Republicans punted the tax penalty down the road a few years, I went ahead and jumped ship to an HDHP now, while I can.

      I have a very nice gig and my health insurance costs are lower than most, but when I crunch all the numbers the ACA’s implementation led to a noticeable hike in my premiums and co-pays. That’s because it’s terrible legislation that is more like a hand-out to the insurance companies. In striving to be this weird mix of capitalist and socialized policies, it’s managed to achieve the worst of both. It would have been better if it had either been straight socialized or gone full-tilt free market.

    • 0 avatar

      Agree medical costs have been on an uncontrollable rise since the late 90’s my own costs were going up 12% or more a year back in 2005. I have insurance thru an employer cost me $85.00 a week (after my employer pays 70% on a family plan). I get to pay $45.00 copays and have a 3k a person deductible ($6500) max per family copay does not count towards deductible. The things is while this is high back in 2006 at a different employer it was even worse similar deductible lower copay but $150 a week. Healthcare is very major drag on the middle class.

  • avatar
    daro31

    I am 65 years old and have worked in auto manufacturing, starting on the line at Ford building Pintos, Mavericks and Fairmonts. I have kind of used the measure that I could buy the car I built with so many pay cheques. In 1971 I was still single and I wanted a new Volkswagen Super Beetle. $2235.00. I was still living at home paying room and board so I cashed one pay cheque to last me for the next 5 weeks until my car came in. We were on mandatory 56 hour work weeks so the over time money made a good take home pay cheque of $475.00 I cashed 5 weeks checks and was able to put 22 $100 bills on the desk at Volkswagen. Pretty good for a 21 year old guy in 1971. Now it would take most autoworkers a minimum of everything they made in 6 months to buy the low end car they build.

    • 0 avatar
      stingray65

      Your Super Beetle did not have power steering, power brakes, automatic transmission, stereo, A/C, power windows and seats, airbags, or stability control and required 20 seconds to hit 60 mph while returning 25 mpg. Entry level cars today hit sixty in 10 seconds and get 30+mpg while providing all these feature and many more, and will easily and reliably go 10 years or 100,000 miles with only 5 to 10 services, while your Beetle was likely a rusty hulk in need of a major mechanical rebuild after 50,000 miles – and need oil changes every 6 months to even get that far. I think we have it better today.

  • avatar
    Fred

    Close to retirement, stock market is messed up, Cruz threatening Social Security and Medicare…bottom line is I probably bought my last new car. Hope this Acura holds out longer than me.

  • avatar
    mmdpg

    Don’t most people who buy new cars have something to trade? Even if it’s an older used car, that will give them $3,000 to $5,000 off the price and cost of a loan on the new car. If you trade every 4-5 years you could have closer to $10,000 worth of trade. Your monthly payment for a $15,000 loan should be in the $350-$375 range for 4 years.

    And if you want to, keep the car for 6 years after the loan and bank the monthly payment so you can afford the next car. Isn’t everyone saying cars can run for 150,000 to 200,000 miles without major repairs these days?

  • avatar
    seth1065

    Ye has no faith in how Americans will manage Good old marketing will find a way, say a 40 year note on a house and a 100 month note on a car and a 36 note on the new iPhone 12, that every kid must have. Folks say house are to high but you got to live somewhere. It may not be pretty , and it is not pretty now but people will manage just as they always have in the past. Not everybody will be able to buy a new car just as it always has been.

  • avatar
    PeriSoft

    I’m sorry, but this is utter tripe. Put it on Breitbart where it belongs, not TTAC. I come here for cars, not thinly-veiled political hit pieces – and incorrect ones, incorrect in ways so manifold as to resist any counter in a comment, at that. I usually preface my criticism of Jack with a bit about how much I respect him – but this article has gone a significant distance toward eroding that base level of respect.

    Disappointing.

  • avatar
    Arthur Dailey

    Just as the Clarkson, May, Hammond Top Gear was a show about people, places and ideas with autos thrown in as the connector, articles like this make TTAC an interesting site about more than just cars and not beholden to the ‘corporate line’.

    Well done J.B. and also to the B&B for their enlightening discussion.

  • avatar
    RetroGrouch

    An undeserved amount of attention is paid to the couple decades of massive growth spurred by massive tax rates (as in 70% top bracket with fewer loopholes) and politically unsustainable government spending (in the modern political climate) after WW2. Why the hell does anyone think they can live like that almost a century after the war ended? Start living like it is 1937 again and you will be much better prepared for your future.

    The Dust Bowl is your future. Accept it and move on.

    • 0 avatar

      Because a lot of us look at our GDP (not including the shadow money) and see that a lot more of us could keep living like our parents did if our overlords choose for us to have those opportunities. Not to say there won;t be some none boom times but lets face it the US is becoming more and more unbalanced at a very rapid rate.

    • 0 avatar

      Retro,

      Here is a link to GDP per capita adjusted for inflatainon you tell me if we shouldn’t be living better in the middle class then we used too.
      http://www.multpl.com/us-real-gdp-per-capita/table/by-year

  • avatar
    sportyaccordy

    Age of the average car/truck on the road continues to increase. I think we are at 11+ years. People are wising up.

    Realistically the prospect of selling 17 million mostly private cars a year in a country that already has more than ~130 million private cars already registered is a bit ridiculous. And I think younger people are already used to driving used cars, perpetually. If I were a manufacturer, I would be SCRAMBLING to come up with some kind of autonomous ride share program ASAP, because in 20-30 years that is about the only place they are going to get any meaningful revenue and growth.

  • avatar
    laserwizard

    Many people have car payments – those that do, are more likely to buy another new car than those who are payment free; you see, being used to paying that payment makes you more likely to swap out a ride.

    I don’t have a payment and am most certainly not going to buy something new; I might buy a used vehicle but I’ll research like heck the price range that a low mileage unit should command; but since my last new car purchase was almost 20 years ago (and I still have that car), I am in no rush to go into debt.

    • 0 avatar
      SaulTigh

      I used to be like you, then I got married to a great woman, our careers and credit scores took off, and we got tired of driving old hoopties. Payments don’t seem too bad when you don’t break down, or spend precious time on preventative maintenance to prevent it. Not all of us are skilled shade tree mechanics doing it in our garages on weekends.

  • avatar
    FreedMike

    Jack, point taken about how new cars have become less affordable, but I have a couple of quibbles.

    1) If you have employer sponsored health care coverage – and this is the case for most people in the middle class, you do NOT have to go through Obamacare and pay $800 a month. My plan is $200/mo and covers me and my kids. My S.O. pays about the same amount. Both our employers also toss in a $2,000/yr HSA payment to me to cover deductibles, which is commonplace.

    2) Yes, a Camry is $25,000 new, but lightly used with 20-25,000 miles or so, CPO, you can pick one up for around fifteen grand. Figuring my county’s sales tax rate (if you want to finance it), that works out to about $300/mo for five years, assuming you have decent credit. At the end you have a six year old Camry with something like 80-90,000 miles that will still be in nice shape. You’re right that the “new new car” is a used car, but used doesn’t mean what it used to, as you say.

    Hell, my main barrier to new car ownership is alimony.

  • avatar
    TOTitan

    Damn the pessimism here is mind boggling. Ive never had a problem affording two car payments, a 3K house payment, medical insurance, etc and Im not exactly a genius who never finished college. What I have done is learned more skills in more areas than anyone else I know. This has made me very valuable to developers and construction companies. I think too many people get stuck in a particular field and are afraid to take a chance on trying something else. Both of my neighbors are examples of this. They are both very good at what they do but neither of them can do anything else. When I was a kid I read somewhere that knowledge is power which is something Ive always remembered and has served me well.

    • 0 avatar
      JimZ

      ” I think too many people get stuck in a particular field and are afraid to take a chance on trying something else. ”

      there’s more to it than “taking a chance.” If you work full time and have a family, it’s going to take a long time for you re-train for a new line of work just due to time constraints alone. And in which case you run the risk that the skills/education you’re getting may no longer be in demand once you’ve acquired them. If you’re *out of work* and have a family, then your money is spoken for. Simple adolescent platitudes like “knowledge is power” don’t inherently mean anything useful.

      • 0 avatar
        HeyILikemySaturnOK

        THIS. If taking a chance means potential financial ruin and possibly ending up with an even worse career than what one is trying to escape from, then such a choice not viable.

        • 0 avatar

          Yeah I moved up the income ranks rapidly until I got married and had kids. It’s really risky now to change jobs when you have steady work and healthcare and other depend on you.

          • 0 avatar
            TOTitan

            In 2000 I was in a job that paid 75K but I didnt like what I was doing and there was limited chance to advance further. I had two kids in high school etc but I took a calculated risk and completely changed careers at age 48 even though most thought I was crazy for doing so. It was the best move of my life and it wasnt long until I had more than doubled my income. Now all those who said I was crazy now say I was lucky. My response is that luck is not coincidental it is created by those who position themselves to take advantage of opportunities when they present themselves.

          • 0 avatar
            28-Cars-Later

            “…luck is not coincidental it is created by those who position themselves to take advantage of opportunities when they present themselves.”

            Just thought I would highlight this.

          • 0 avatar
            JimZ

            you’re both doing that “bootstraps” nonsense of believing all options are all equally available to everybody all of the time.

  • avatar
    hf_auto

    You might as well mention child care in this discussion. We’re paying $2,500/month per child for daycare. That’s a freakin’ mortgage, not much left for a car after that.

    One family at our daycare has 2 children and is paying around $6,000/month!!! WTF!!!

    • 0 avatar
      e30gator

      We pay about $500…for a a great one. Do you live in New York City or are you just easily ripped off?

      • 0 avatar

        Depends on where you live here in CT my daughters 3 day a week (4 hours a day) preschool is like $350 a month day care would be about $1300.00 a month and I have 3 kids much cheaper to have my wife stay home with the kids (and I feel better for the kids)

    • 0 avatar
      FreedMike

      That child care credit, tho…

    • 0 avatar
      Dan

      “We’re paying $2,500/month per child for daycare. ”

      The costs of daycare are mind boggling to me, but they’re just a symptom of the even more mind boggling underlying problem which is how few people have extended families anymore.

      Who knew that being dropped off with grandma for the day quantified to 30,000 bucks a year.

      • 0 avatar
        JimZ

        that’s another product of the post-WWII U.S. mindset. You’re expected to get a job and get the hell out of the house once you’re 18. Yet another thing that works when there are plenty of decent-paying unskilled manufacturing jobs available, but doesn’t work so well when there aren’t.

        Other cultures often have multiple generations living under one roof. Do that in the United States and you’re considered poor uneducated trash.

        and it’s not like the “golden age” of the United States lasted that long. It didn’t take but a decade or so for the automotive industry to start contracting. Nash-Kelvinator had to merge with Hudson (forming American Motors Corp.) in 1954 just to survive, and Packard and Studebaker just up and went bust in 1958 and 1967, respectively.

    • 0 avatar
      dal20402

      Seattle here, and any daycare worth being in is in the $2,000+ range, and that’s with them paying less than survival wages to staff. The economics of 100% free market childcare just don’t work.

  • avatar
    e30gator

    This article made me throw up in my mouth a little bit.

    First of all, thank you for turning an automotive blog site (something I usually enjoy reading) into an obviously one-sided political rant.

    Secondly, I’m sorry that Jack earned a “D” in 10 grade economics class, but 2008 (or 2012 for that matter) was not some kind of bleak turning point in the US whereby everyone became poor because they elected the black guy. On the contrary, it was the point where our economy began to recover from the biggest economic low point since the Great Depression.

    Also, so far this morning I have visited my local supermarket, pumped and payed for a tank of gas and bought a coffee, taught 70 high school students world history, and just got back from running an errand to Home Depot on my lunch break. Do you know how many illegal immigrants I encountered so far today? Zero. Know why? Because they’re washing dishes and picking strawberries. Not one to be found bagging groceries, swiping cards, or answering home improvement questions in any of the low-paying establishments I visited. So I doubt they’re the ones keeping wages low.

    In the 70’s those high-paying, long term (and unsustainable in a true capitalist system) factory jobs were sent to China, India, and Mexico were the labor is cheap so that corporations could maximize profits. And that’s okay. Has that stopped the American public from being able to buy the cheap, imported crap sold here. Hell no! One glance at the local Target parking lot should be able to answer that question.

    And as a Gen Y-er, I will say that my family currently lives waaaayyyyy better than my parents did growing up, despite the fact that they enjoyed good-paying factory jobs, powerful labor unions, cheap, government-sponsored healthcare (thanks to LBJ), and public schools that were flush with government cash.

    As someone who is the very definition of middle class, I will say that things aren’t as bad as the naysayers would have you believe. As a working family (who did not come from money or privilege like the author of this article), we can easily afford our two new-ish cars, a mortgage on our nice home, and healthcare costs and still manage to save for retirement, our kids’ college funds, and take several vacations each year.

    How do I do it? Go to college (or learn a trade where there’s demand), spend wisely, and avoid debt. It’s not rocket science. Rest assured, your grandparents and great grandparents had to work for every penny they earned and did not enjoy the quality of life the average American enjoys now. Just read a history book.

    Say, did you see all those old geezers lining up to pre-order their new Tesla Model 3’s yesterday? Pffffft.

    • 0 avatar
      Jack Baruth

      Thanks for bringing race into it, I think?

      And Mr. Obama is biracial, not black. Calling biracial people “black” is racist, reductionist, and completely ignorant of intersectional issues that affect the biracial POCs in various and diverse manners that are not precisely identical to those faced by African-Americans.

      • 0 avatar
        e30gator

        “Calling biracial people “black” is racist…” I think you’re missing the point.

        And let’s not kid ourselves, Jack. As someone who undoubtedly reads as many blog comments as I do, can you really say that that’s not the exact reason why many people have a problem wit Mr. Obama?

        Is it really because he’s destroyed the country? Are we not, as a whole, better off today than we were in 2008? Look at the stats, man. The numbers don’t lie.

        And who really began the “war” on the middle class anyway? Yes, there was once a lot less wealth disparity than there is today. Know when that gap began to widen? In the 80’s, when trickle down economic policy was adopted, slashing taxes for the 1% at the expense of funding for programs that once benefited the middle class. And no, the private sector has not stepped up to fill the void.

        That being said, an educated person with enough common sense to make sound economic decisions still does not have to be poor, even in today’s sad state of affairs.

        • 0 avatar
          Jack Baruth

          Too many people have race as a single lens.

          I don’t care about Mr. Obama’s momma and her proclivity for kicking it with African dudes at short notice.

          I DO care that his decisions have increased my cost of living.

          I don’t care how many black people or biracial people hold elected office.

          I DO have concerns about the complete failure of American foreign policy since 2002 or thereabouts.

          When you say that Mr. Obama is a target of criticism primarily due to his race, you’re also implying that he should be given a pass because of it.

          • 0 avatar
            e30gator

            I don’t care about Obama’s momma either. I’m not in middle school, and neither are you.

            And the fact that my healthcare costs have went up 10% due to the fact that there are now millions less uninsured is also of little consequence to me.

            That’s why I choose to live in the United States instead of Somalia.

        • 0 avatar
          Driver8

          The war on the middle class?
          I’ll take Clinton for NAFTA and Gramm–Leach–Bliley, for $400, Alex.

        • 0 avatar
          an innocent man

          >can you really say that that’s not the exact reason why many people have a problem wit Mr. Obama?<

          So, you'll be writing in Ben Carson's name come November?

          • 0 avatar
            e30gator

            I’ve always voted for whoever is the best candidate for the job. In ’08 Obama was a better choice than McCain/Palin. In ’16 it is Trump……just kidding! I love my country way too much than to see it collapse under the sort of mindbogglingly stupid/dangerous policies being touted by that um, reality show host.

        • 0 avatar
          dal20402

          How, exactly, have Obama’s decisions increased your cost of living?

          He cut your taxes, unless you make WAY more than I think you do.

          He passed ACA, and your health care costs went up. How do you know ACA was responsible for the increase, when across the society as a whole increases post-ACA have been slower than increases pre-ACA? People have a tendency to look at pre-ACA as some amazing world of perpetually low-cost health care when in fact costs were increasing 10% or 15% every single year.

          Also, don’t believe your employer when they blame ACA for canceling your health insurance. ACA changed almost nothing for employers who were already sponsoring plans. They were just too cheap to pay, and thought they could get away with not paying and not have all their staff leave. End of story.

      • 0 avatar
        FreedMike

        Race is more than your genes, Jack. It’s how you see yourself. Obama sees himself as black.

        Certainly makes more sense than him thinking of himself as white because his mom was.

      • 0 avatar
        sportyaccordy

        Oh please. In the face of racism this is an academic distinction at best- Obama is getting the purse clutch + frantic street crossing, disproportionate profiling, arrests and convictions, and tossed resumes with the rest of us. Biracial, black…. in the eyes of the American system, all that matters is whether or not someone is 100% white. Everyone else has a significantly higher chance of getting the systematic shaft.

        • 0 avatar
          Jack Baruth

          You mean to tell me you would cross the street if you saw Barry Soetoro limp-wristing his way down the sidewalk at you?

          Me personally, I’d be thinking about taking that wallet and equalizing the race-based crime statistics a bit.

          • 0 avatar
            e30gator

            This….coming from a journalist who would lecture someone about referring to Obama as a black man (who by the way, self-identifies as one).

            Jack, please take whatever shred of credibility you have left and go back to pretending to know something about cars. I DO usually enjoy your articles, but c’mon…be better than this.

          • 0 avatar
            sportyaccordy

            No, I personally don’t cross the street for anybody. My point was in the face of systematic racism there’s no distinction between biracial and black. Barry O would get his head cracked by the NYPD with the rest of us.

          • 0 avatar
            marc

            ” Barry Soetoro limp-wristing his way down the sidewalk”

            You’ve reached Bertel lows with that one. Ugh.

      • 0 avatar
        05lgt

        what about the point that 2008 was a positive turning point in this nations economy? Are you hoping that waving your PC speak flag makes that solid point go away?

    • 0 avatar
      ToddAtlasF1

      “taught 70 high school students world history”

      Now I threw up in my mouth. The people involuntarily paying for you to spread your indoctrination to ignorant youth like a virus aren’t doing so hot.

      • 0 avatar
        JimZ

        what presumptuous horsesh*t.

      • 0 avatar
        e30gator

        I keep my political leanings to myself at work, unlike say, automotive journalists.

        And the “ignorant youth” I teach can probably already think circles around you.

        • 0 avatar
          ToddAtlasF1

          Do you actually use any metrics to measure intelligence, or would that be enabling the wrong sorts of judgements? Thinking in circles sounds like a decent summation of what passes for intellectual activity in our schools though.

          • 0 avatar
            e30gator

            So, presumably you know more about me, my job, and the education system in general, despite all the evidence to the contrary?

            Maybe you should reconsider the quality and quantity of conservative radio bumper sticker politics you keep regurgitating back onto the internet and bring something new to the discussion other than Obama/immigrants/education/taxes/government = bad.
            Really, I’ve heard it all before and it’s as irrelevant and misinformed coming off your keyboard as anywhere else. Probably more so.

    • 0 avatar

      I assume both you and your wife work?
      I don’t know it seems a lot harder to have the things our parents had to me. I’m also right in the middle class. I don’t take vacations I don’t own new cars and I live in an ok 1,000 sq ft house. Part of my issue is I live in a expensive area (Connecticut) , but most of my issue is with declining paychecks and skyrocketing housing and medical costs.

  • avatar
    DeadWeight

    Jack (and thus TTAC, at least for now) is back.

    :-)

  • avatar
    PentastarPride

    Thank the Federal government for the state our country is in. Between market, economic, social and trade intervention, regulations on anything and everything and slavery by never-ending taxation, our country will never get anywhere. What’s worse, politicians seem to think that socialism and more government vigilance are the antidote to the woes of the less fortunate or the middle class. It is not.

    Fortunately my wife and I are doing well financially. However, I’m not blind to the big trouble our country is in. It’s not the corporations or the most wealthy as the Bernie/Hillary crowd likes to crow about. Yes, they’re not perfect but the government is ultimately to blame. So what if they lobby for tax breaks? I don’t blame them the least for doing so. In matter of fact, kudos. The Federal government doesn’t deserve more of anyone’s hard-earned money just to squander away.

    The Affordable Care Act is only affordable for those on public assistance. The middle classes and the rich are subsidizing those on public assistance and illegal immigrants. There’s nothing affordable about it. My healthcare insurance now cost more due to the “Affordable Care” Act. It’s not a dealbreaker financially but I find it ironic and kind of funny in a different way. I was happier when the grubbymint didn’t have their hands in my healthcare.

    Nothing is being done with our skyrocketing taxes. Even so-called conservatives are voting for tax hikes instead of getting to the root of the problem and cutting taxes and spending. It’s not just personal income tax, it’s other kinds of taxes too. Personally at this point I don’t care if the government has to make “yuuuuge” cuts–in fact, I think it would be a very good thing for the middle class.

    • 0 avatar
      e30gator

      I wonder who’s responsible for the sad state of things…Obama or the conservative majority held congress that actually makes the laws?

      I’ve visited places where the government doesn’t offer basic services for their citizens (no taxes either). Trust me, you wouldn’t want to live there…unless shanty towns are your thing.

      • 0 avatar
        PentastarPride

        Almost all of the Republicans in Congress aren’t really conservative. Just because they have the stereotype of fearing God, owning a gun and despising the LGBT community doesn’t automatically make them a conservative. When it comes down to it, most of them spend and grow government like a Democrat.

        For the record, I have nothing against the LGBT community, in fact, I am all for it and I feel that the whole thing is a non-issue. The “conservatives” rallying against this are not really conservative because the small-government principle goes out of the window when they push so hard to put a stop to gay marriage by using legislative power.

        Anyways, budget cuts won’t cause our country to become third-world. Of course, there will be some people affected by it. However, over the long term, we will be better off because of it.

        • 0 avatar
          e30gator

          Sounds great. Can you give me at least one real example where massive budget cuts to public programs that has been been beneficial to the masses? Just one.

          • 0 avatar
            PentastarPride

            Social Security has been outlived. I’m not saying that we should cut it right here, right now, but that over the long term we need to phase it out and evolve it into a standalone, voluntary retirement finance system; people pay in and their money is invested in a manner of their choice.

            Welfare assistance is a colossal failure. What was intended to be a hand up is now a hand out. This program is being taken advantage of; there are examples of recipients blatantly cheating the system just to avoid working for a living. That’s not the case for every welfare recipient, but it’s something that society shouldn’t be forced to pay for–especially when the government has established time and time again that it simply cannot administer this function responsibly. Again, we can’t slash this all at once, however, we need to gradually phase this out until an established nonprofit can take its place.

            I won’t bring up cuts to the alphabet soup (IRS, Dept. of Ed, Dept. of Energy, FCC, FAA, NASA, and so on). Make big cuts to those and the public is none the wiser. In the grand scheme of things, they don’t really matter to the average American anyways.

            So, you can see that cuts can be made, albeit slowly. If done properly, there won’t be as big an impact as you might think.

          • 0 avatar
            sportyaccordy

            The massive cuts you speak of went swimmingly (read: horribly) for Kansas and Louisianna.

            Just because you don’t like the govt doesn’t mean it doesn’t serve a purpose or demonstrate its value.

          • 0 avatar

            After working for a fortune 100 I would say almost any big organization is awful and corrupt. At least there is some minimal transparency with government unlike the crazy wild west of our current corporate overlords.

        • 0 avatar
          stryker1

          “Almost all of the Republicans in Congress aren’t really conservative.”

          No TRUE scotsman…

    • 0 avatar
      thelaine

      Yes, pentastar, the chickens do come home to roost. Some of the hated evil “get off my lawn” fiscally conservative old folks have been warning for years about what you have said.

      Now some of the righteous youngsters have discovered that massive debts must be paid by someone. We have a massive national debt, massive unfunded mandates and massive unfunded government employee pensions. Young people keep voting for the politicians who put these policies in place.

      Meanwhile, old people with money are on the gravy train, getting their benefits paid in full by the clueless young.

      Young people, you screwed yourselves and got exactly the government policies you voted for. More subsidies, programs, regulations and government. Now the economy has lost its dynamism and ability to provide for all who are willing to work.

      Why risk everything and bust your ass to start or expand a business when “experts” from the government and justice warriors from the internet will come tell you how to run it and then take your profits.

      You guys fked yourselves. It is now your job to fix it. You can still clean it up if you learn some basic lessons that contradict your “education.” Simply put: 1. The government is not your friend. It is necessary, but should be as small and weak as possible.

      2. Business is not your enemy. Businesses provide jobs.

      3. Rich people are not your enemy. No poor person will ever give you a job.

      4. You are not special.

      • 0 avatar
        sportyaccordy

        Young people didn’t “fk” anything up. Old people loaded up the system with debt to pay for their lavish benefits and footed young people the bill. This was in motion long before young people today were even born, let alone able to vote or understand what was going on. But go ahead and blame this on left leaning youth as you have been instructed to. Maybe your thought overlords will give you the pat on the head you are dying for.

        • 0 avatar
          JimZ

          yeah, it’d be like blaming Rick Wagoner for GM’s bankruptcy. GM’s crawl towards insolvency was set in motion in 1974.

        • 0 avatar
          thelaine

          Young people enthusiastically vote for the people who put these policies in place Sporty.

          We have a massive national debt, massive unfunded mandates and massive unfunded government employee pensions. Young people keep voting for the politicians who put these policies in place.

          Old people with money are on the gravy train, getting their benefits paid in full by the clueless young, who will never see the benefits.

          Obamacare is another perfect example of a massive wealth transfer from young to old which you and your fellow youngsters enthusiastically supported.

          I did not say young people fked anything up. I said they fked themselves. Perhaps you should read more closely, although I know you don’t really care to understand.

          Your comments regarding “thought overlords” are just a personal attack, which is how leftists respond to opinions they do not like. It is always personal with the left, and always about control. The power to do good is also the power to harm, and there is a nasty little facist in every do-gooding leftist. They tip their hand every time they attack a person for expressing an idea. These are the same do-gooders who control governments. Concentrated government power is not rendered harmless by the good intentions of those who wield it.

      • 0 avatar
        nickoo

        1. The government is not your friend. It is necessary, but should be as small and weak as possible.

        I am the government, you are the government, everyone is the government. We are a government of ordinary citizens, and to pretend otherwise and make the goverment out to be some evil entity is the problem. REAGAN was the problem when he destroyed the relationship of the people to the government made up of those people. Everything he predicted became a self-fulfilling prophecy because he and his successors set out to fulfill it.

        2. Business is not your enemy. Businesses provide jobs.

        Businsesses don’t care about you and they don’t provide jobs because they like you, they only provide jobs because they have to. That is why Unions and government regulations looking out for workers is so important, we can’t all just become independent businessmen in this day and age in society and therefore someone such as government or unions are absolutely essential to protect workers.

        3. Rich people are not your enemy. No poor person will ever give you a job.

        Wrong, wrong, and wrong, DEMAND gives you a job, nothing else matters. Demand is the only thing that drives business, and without it, coming from the millions of middle class jobs which raise wages so that consumers can buy things, there is no demand and there is no jobs, and it is a self-defeating cycle.

        Rich people sit on their money and preach about how investing in imaginary worthless stock certificates drives the economy, which couldn’t be farther from the truth.

        4. You are not special.

        I am special. You are special. Every human being is special. Each human has intrinsic value and worth simply for being a living breathing human. It is time we started recognizing this fact, the social darwinism embraced by the edgy teenagers has gotten us no-where.

        • 0 avatar
          JimZ

          ” we can’t all just become independent businessmen in this day and age in society and therefore someone such as government or unions are absolutely essential to protect workers.”

          witness how s**tty companies like Uber treat their drivers… Oh, I’m sorry, “independent contractors.”

        • 0 avatar
          thelaine

          Economic freedom is an essential requisite for political freedom. By enabling people to cooperate with one another without coercion or central direction, it reduces the area over which political power is exercised. In addition, by dispersing power, the free market provides an offset to whatever concentration of political power may arise. The combination of economic and political power in the same hands is a sure recipe for tyranny.

      • 0 avatar
        stryker1

        let’s see here…

        1. The government is not your friend. It is necessary, but should be as small and weak as possible.
        Somalia

        2. Business is not your enemy. Businesses provide jobs.
        Carrier

        3. Rich people are not your enemy. No poor person will ever give you a job.
        Rich people don’t spend much of their income, poor people do. No jobs without poor people either.

        4. You are not special.
        You are a tool for Capital, which is vaguely better than being transported feudal Europe in a way that get’s harder and harder to articulate.

    • 0 avatar
      FreedMike

      Whatever. At one time the “gubbmint wasn’t in my healthcare” but then again, I could take the kids to the emergency room for a hangnail, run up a $2,000 bill, and just pay $50 for it through employer-paid health coverage.

      And that, multiplied hundreds of millions of times, is why we can’t pay $50 for a $2,000 service anymore. The lack of spending discipline caught up with us.

      Therefore, given this high cost structure, the choice is between a) gubbmint being in healthcare and people at least getting some of it paid for, or b) reserving health care for only those who can pay. The latter is a non choice, both morally and economically.

    • 0 avatar
      JimZ

      I can’t conceive of the level of cognitive distortion one would have to employ to believe taxes in this country are “skyrocketing.”

      guessing just another person who doesn’t quite grasp what marginal tax rates are.

      • 0 avatar
        PentastarPride

        It doesn’t have to be just Federal tax, though we need to scrap the tax code and make do with a 5-10% flat tax. My effective tax rate is 20%. Ridiculous.

        State sales tax, property tax, state income tax, FICA tax (I’m a Millenial so Medicare will be insolvent by the time I reach eligibility age), tax on this, tax on that.

        Taxes are high. Plain and simple. Spending and raising taxes is unsustainable.

        • 0 avatar
          JimZ

          Globally, we’re in the bottom third as far as effective tax rates go. Truly, the world’s smallest violin plays for you and your 20%.

        • 0 avatar
          e30gator

          You act like we’re living in Sweeden or something. Collectively, our taxes are not that high. If you’re earning a typical middle class salary and still paying 20% in taxes, you need to fire your accountant.

        • 0 avatar
          sportyaccordy

          Effective tax rates are at record lows in the US. They reached all time lows in 2009 and have not come anywhere near close to rebounding back to norms let alone highs. You have no idea what you are talking about.

          Good God let us get back to talking about cars. It’s frustrating enough when people are clueless about them… it’s downright infuriating when they are equally clueless about taxes.

          • 0 avatar
            nickoo

            “You can’t get blood from a stone”

            In other words, if people aren’t making money, they aren’t paying taxes…

            Having said that there needs to be 2-3 more tax brackets at the top, inheritance taxes need to go up drastically, remove inhertiance schemes such as trusts, and tax the holy crap out of capital gains.

            the tax structure as-is mis-allocates capital and is why all the wealth went to the top and stays there.

          • 0 avatar
            JimZ

            capital gains tax cuts have been one of the biggest con jobs sold to the American public in its history.

          • 0 avatar
            sportyaccordy

            Capital coalesces at the top because of cronyism, not taxes. Tax system has problems but it’s not an effective tool for curbing inequality.

      • 0 avatar
        redmondjp

        Then you haven’t lived in Seattle/King County. Local voters can’t get enough taxes and vote YES on every tax increase imaginable. We have free preschool programs just voted in, paid for by increased property taxes.

        And Sound Transit 3 is on the ballot this fall, $50 BILLION tax increase (more property taxes, and annual auto registration ‘fees’ going from $50/vehicle to $80 per $10K of non-depreciated MSRP of the vehicle) which will cost the average household in King County over $1K per year.

        • 0 avatar
          JimZ

          people are much more receptive to paying higher (local) taxes when they can see for themselves what it’s paying for.

        • 0 avatar

          Welcome to southern new England levels of property tax. I actually would prefer they bump my income tax then more property tax.

        • 0 avatar
          sportyaccordy

          No, and I don’t plan to. My property taxes are ~1%, crime is non existent and the school systems are excellent. It’s very easy to move about the country if you are doing well enough to have property taxes.

          • 0 avatar

            I find the phrase doing well enough to have property taxes odd. If you lived in Hartford CT and bought a house for $130,000 you could be pretty much working poor and then be hit with the 74.29 mill rate on your cars and house. And I doubt you would be in much of an economic position to pickup and move.

        • 0 avatar
          dal20402

          And with all that plus ST3, thanks to the lack of state income tax, our tax burden will still be lower than every other place with comparably high incomes… unless you’re very poor.

          Seriously, try living in DC and paying 8.5% income tax together with property tax about the same as ours and sales tax that’s only slightly lower than ours, and it will reorient your perspective.

    • 0 avatar
      DeadWeight

      “Thank the Federal government for the state our country is in.”

      The federal government is incredibly wasteful, with an army of workers doing what 1/2 to 1/3 of private sector workers could do better, and the federal government probably buys 2x as much as it needs to at 4x to 8x the cost that an efficient & rational private sector company would buy/pay, also (the Pentagon literally buys 2 billion dollar per copy nuclear submarines because a certain senator in Massachusetts just has to bring home the bacon for U.S. Boat Company, even though the Pentagon doesn’t want any of these relics, as just one example)….

      …but…

      …spending at the state, county and city/village/township level has increased at a rate 2.7x higher than federal spending since 1977, annually, on average, and is the unspoken of elephant in the room that is helping to really suck taxpayers dry, and additionally, is the last bastion of the Union Worker (AFLCIO, UAW, AFSCME, etc.) Stand (where overtime is plenty, hack workers are rarely fired or disciplined, retiring government execs get lush pensions and then go and get another cushy gov’t job at the ripe age of 54, only to stack on another pension, etc.).

      • 0 avatar
        Arthur Dailey

        Throughout history the government has proven better at providing many services than private enterprise. Firefighting, policing, military, the provision of waste/sewage removal and clean drinking water and health care. It can also be argued that it is better at providing education and insurance.

        Where the American government has been most wasteful over the past 20 years is in getting involved in military ventures that have brought no benefit to American citizens but big profits to some corporations.

        The military incursions into the Middle East have been more wasteful, futile and were far less necessary than the one in Vietnam. Yet for some reason this generation of Americans largely refuses to debate its merits rationally.

      • 0 avatar

        I think you mean Connecticut on the Nukes.

        Only two places you can build here or Newport News.

        • 0 avatar
          DeadWeight

          No, Seawolf submarine ( a dozen at 2 billion USD each).

          But that’s pocket change compared to the perpetually defective F35:

          1.5 TRILLION USD

          http://usuncut.com/politics/how-the-f-35-could-provide-23-years-of-free-college-for-everyone/

          How This $hitty Jet Could Provide 23 Years of Free College for Everyone

          Tom Cahill | November 13, 2015

          One failed jet vs. providing higher education to two generations.

          1.45 trillion is a lot of money. That’s the estimated total cost of the F-35 Joint Strike Fighter, which can’t even fire its own gun until 2019 due to software issues. It’s also the estimated cost of providing tuition-free public higher education for every student in the US until 2039. Which one would you choose?

          • 0 avatar
            28-Cars-Later

            Neither but instead order up a gross of Seawolf submarines.

          • 0 avatar

            I’m confused the Seawolf and Virginia class were or are both built in Connecticut by Electric boat. Only Newport News and Groton are approved shipyards for Nuclear subs in the US. I should also note they just announced a new Ohio class replacement also to be built in Groton. At 4 billon a piece. (sorry for the correction if there is a Senator from Mass advocating I would like to know who. there are some General dynamics offices there but I didn’t think it’s that important as it is to CT and RI.

          • 0 avatar
            TOTitan

            They only built 3 seawolf subs

  • avatar
    Master Baiter

    I guess I’m lucky. My $400K/year income allows me to lead a mostly middle class lifestyle, with three kids, in the Bay Area. And I still buy my cars used.
    .
    .

    • 0 avatar
      indi500fan

      No doubt the smart deals are:

      Nice 3 yr old used stuff. (you’ll see more of these as baby boomers begin to fade…I got a 5 yr old Caddy from an estate sale with 15,000 miles and it looked as good as ones in a showroom). But this often takes work, Craigslist, eBay, annoying phone discussions, driving around to find the rare but available screaming deal, etc).

      or

      Seriously subsidized leases. You won’t get the currently popular car but you’ll get a transportation module pretty cheap.

    • 0 avatar

      http://money.cnn.com/infographic/economy/what-is-middle-class-anyway/
      Not sure I would consider that middle class your a wealthy man by most measures.

    • 0 avatar
      Chan

      You mean “middle class” if you only survey the residents of Atherton, the top of the Los Altos Hills or downtown SF penthouses?

      People making less than half of that are considered very affluent, even in the Bay Area.

  • avatar
    indi500fan

    Assuming gas remains around 2 bucks a gallon, and the escalating govt fleet mileage standards stay on the books, there should be some very attractive future deals on new smaller cars. That should help some folks.

  • avatar
    Kendahl

    Is a Dacia Duster worse than a Vega or Pinto from the 1970s or a Falcon or Chevy II from the 1960s? We now have street cars with as much power as a Can-Am McClaren from the late 1960s.

    Although I spent my youth dreaming of 911s and XKEs, they were out of reach. My first two cars were 40 hp and 53 hp VW air cooled Beetles. By the time I dumped the first one, it idled on three cylinders and leaked or burned a quart of oil every hundred miles. My first decent car was a three year old 1973 BMW 2002. My first fast car was a one year old 1984 RX-7 GSL-SE that I bought at age 40. I replaced the RX-7 with a new Infiniti G37S at age 62. I plan to keep it until I am too old to drive anything but a wheel chair.

    • 0 avatar
      JimZ

      no, but a 2016 Dacia Duster is not competing against a 1974 Pinto or Vega.

      • 0 avatar
        Kendahl

        Actually, the Duster is competing against a BMW 2002 or 320. Performance is similar but the Duster gets better fuel economy and pollutes less.

        There are several reasons why automobiles cost more than they did fifty years ago. Inflation is part of it but so are higher performance, greater comfort, better fuel economy, lower emissions and greater safety. All of these make modern cars better than old ones but they unavoidably raise the price. When it came time to buy my automotive retirement present to myself, I started by looking at classic high performance imports. I quickly learned that decent examples cost as much as their brand new successors but performed no better than a CamCord.

        Residential real estate has changed in a similar way. Our first house in 1977 was 1,000 square feet. Today, the average size of a new house is 2,500 square feet. Fifty years ago, air conditioning was uncommon even in southern states where summers are miserable. Today, no houses are built without air conditioning and most old ones have been retrofitted.

        Those who complain about the plight of the middle class forget that the middle class standard of living has been redefined upward to a level that only the 1% used to be able to afford.

  • avatar
    Rday

    I am a ‘war baby’ so I know how things were back then. We were promised as Muricans that we controlled the world and would therefore be able to live much better than the rest of the world which had been pretty much destroyed during the war. So the rest of the world worked hard to rebuild their economies and the people did not own cars and but rode bikes and buses, etc. while we stuck our noses in the air and felt superior to these people.
    We went on spending sprees and ‘sold the farm’ to pay for it. Now people my age have to work harder or longer unless you are one of the privileged people with generous government pensions/ health care or a UAW member with great benefits thanks to Bush/Obama who screwed everyone but the unions members. Or if you are a member of the 1% elite that own most of the country and are now our new ‘aristocracy’. Someday there will be a big revolution and they may have to get out the guillotine to separate the ‘elite’ from the average citizen. We are really starting to see the corruption that exists from all the special interests trying to destroy our democratic form of government. It has always been bad but this is much worse. time for everyone to see just how undemocratic our country is.
    Will be interesting to see how the auto industry survives all of this mess. I am sure we will go back to simpler cars as did Europe.Japan after WW2.

    • 0 avatar
      Chan

      It would be wise for those in charge to remember that post-war ‘Murica (up until the past decade) was an unprecedented economic anomaly.

      When else has the entire developed world been blown to bits, with the exception of one country that happened to be far enough away from everyone else?

  • avatar
    tomLU86

    I love the commentariat–because most writers here have a point most of the time.

    I think it is harder for Americans, in general, to make ends meet now than it used to be. And therefore, there is less money for a new car.

    The commentariat has above has covered 95% of the reasons for this.

    IMO, the biggest are: the “transition” (really outsourcing) of manufacturing jobs that paid well; the transition from a manufacturing economy (with all the side effect, such as pollution) to FIRE that has burned us (Finance/Insurance/Real Estate); the undermining of the the nuclear family unit by society and govt policies; the nanny state, where regulation (10 airbags) has replaced personal judgement (just wear a seat belt); the end of America’s energy independence in 1973; the completely phoney paper money we have been using since 1971, which was needed to enable the govt to spend beyond its means for entitlements (hand-outs = bad) and wars (EVEN WORSE – Vietnam/SE Asia, Iraq/Afgh SW Asia, wasting our limited resources on war, instead of fixing our roads, keeping schools going, cancer research, space travel, etc — we needed an “inflatable currency” to do this). The dissing of our cities and unchecked suburban sprawl, giving us living arrangements that won’t be sustainable….

    That said, the fact is, we have more “rich” Americans than ever. And most of the world aspires to live like Americans.

    However, due the above, most of the middle class is sliding backwards. 50 years ago, many Americans would “live like Americans”. Today, without a lot of debt, most cannot. What happens if the debt can’t be paid, or won’t be extended?

    • 0 avatar
      DeadWeight

      Rumsfeld, Cheney, Feith, Wolfowitz, Perle and the neocons told CONgress that the Iraq War (II, in 2002) would cost 5 billion USD.

      They were only off by 2 trillion USD.

      It’s not like that 2 trillion USD could have helped rebuild U.S. infrastructure and modernized our data and transportation systems, producing hundreds of thousands of technical jobs in the process!

      No harm, no foul! /s

      • 0 avatar
        Piston Slap Yo Mama

        DeadWeight: you’re forgetting that the Middle East, thanks to our invasion of Iraq and Afghanistan is now a utopia of peace & prosperity where they’re endlessly thankful that we, the U.S. of A. was willing to politely march in and dispense some tasty, frothy Democracy. You can’t put a price on that.

        • 0 avatar
          DeadWeight

          Yep – AWESOME FOREIGN POLICY!

          Liberty, Free-dumb, Democracy, with Justice for all!!!

          Iraq, Egypt, Libya, Syria, Yemen, etc.

          Right on! Right on!

          ‘Murica! F*ck Yeah!

  • avatar
    FreedMike

    In 1972, my dad had made it. He had grown up dirt poor, but at age 34, amassed enough income to buy a huge, 4500-square-foot house in the nicest neighborhood in St. Louis. And that summer, he was taking us all to Iowa, to visit his mother. And we were all in his brand-new, brown on brown Cadillac Sedan De Ville. Dad and I had shopped literally for years for this car. We saw so many early-’70s Cadillacs that I can even tell you from memory what features they had, what engines they had, even where the wiper controls were (attached to the driver’s side door). I remember the way they sounded and the way they smelled. They were a symbol of my father’s aspirations. So when he pulled into his mother’s driveway, this was more than him simply visiting his mother – it was his “hey, ma, I made it” moment.

    He got out and proudly gestured at the Cadillac. And she ignored the car and walked right up to us kids instead.

    In 2007, I traveled back home for my maternal grandmother’s funeral. Dad picked me up at the airport in a brand new Lexus SUV, which the dealer had let him borrow it for the day to see if he liked it. On the way to his house from the airport, all he could talk about was how awful business was, how things were bad and getting worse. With all the good stuff in his life – a business that was obviously making enough money to buy him a $60,000 car, a wonderful wife, and two of his sons working with him – he was still defining himself by what he bought.

    A year later, he was gone.

    And as much as I admire my dad, and appreciate the things that his success bought me, I can’t help but be haunted by the spectre of a highly successful 69-year-old man who got everything he ever dreamed of as a kid, but wasn’t happy a year before he died.

    This kind of experience is, I think, not uncommon among people in my generation. We watched our parents chase money and things for their entire lives, only to find out that in the end, that kind of success is nice, but it’s also illusory.

    As the old man in “Citizen Kane” said, there’s no trick to making money when it’s all you want to do. And I think for the most part, that’s all that kids in my generation saw their parents doing.

    Is this part of the reason why successive generations are less affluent? I think so. Certainly the economy’s different now than it was when I was a kid, but speaking for myself, I never wanted my father’s life. For me, being less affluent than my dad was, in fact, a choice. I think many other people in my generation made the same choice.

    So, yes, the economy has changed, but so have the values of the people participating in it. Materialism is less of a deity than it was when I was a kid. Does that affect consumer industries like automobiles? Absolutely. Mainstream buyers obviously still want cars, but are more concerned now with what they do, versus pure style. Thus, the rise of trucks and SUVs – say what you want, but these are extremely versatile and functional vehicles. There’s nothing they won’t do, and they cost more because they do more. But aside from being able to style and profile, there’s a long list of things you can’t do in, say, a ’70s era Cutlass Supreme coupe. Back then, those cars were sold to people who bought into the idea that looking successful validated their need to be successful.

    What automakers need to realize is that succeeding generations may not just be less outwardly affluent – they’ll have different values, like my generation did.

    • 0 avatar
      Chocolatedeath

      Not disrespect to Jack but I actually enjoyed your writing more than his this time. Your story actually kept me interested as well as made me aware of my own. I realized that you and I are opposites but alike in alot of ways.

      I grew up in rural eastern NC rather poor. My dad never finished high school and both he and my mom worked in an Hamilton Beach Factory most of my childhood. They both made 2.25 per hour in 1976 and I was 9 years old at the time. We had a new car once in 74 it was a Fury III. It broke down three times in one year and since warranties then sucked we could not afford to keep the car payments and repair payments together.

      We had several cars over the years and all of them were junk. Even went 8 -9 months at at time with out one due to not being able to afford one.

      In 1990 after being downsized with no perks he and my mom worked at another factory but in 91 he was hit by a woman driving a Jeep Cherokee Pioneer 4 door. He hurt his back so badly that he could even work on cars anymore which was his hobby. He got about 20 grand for his trouble. Paid off the house and bought my mom a car.

      I am not self righteous enough to say that I grew up with nothing. What I will say is that I lacked at times basic things that people take for granted like electricity, heat and clothes that dont have wholes in them. Nor am I complaining. My dad died at 50 years old in 98. Now in one year I will be 50 and between me and my wife we make probably 20 x what my mom and dad did.

      I able to save alot of my income for retirement but I buy things that I want all the time. I have only had one new car, my 08 CX9 that I will keep for three more years then buy used again.

      My dad didnt die all that happy either. He was always focused on what he couldnt do for us and just thinking about it now saddens me.

      By the way we had a 70s era Cutlass Supreme coupe as well but it was 86 when we got it.

      Very good right up and thanks.

    • 0 avatar
      VoGo

      Thanks for sharing, FreedMike,
      That was poignant and thoughtful.

  • avatar
    stingray65

    I enjoy Jack’s writing, but he is wrong this time – we have never had it so good as today. Even the poorest 10% of the population typically has a car, air-conditioned home, big-screen TV, microwave oven, smart phone, etc. and is more likely suffering form obesity than starvation – all things that only the top 10% possibly had 50 years ago. Cars may have been more affordable 30-50 years ago, but they were also awful. Your typical 1966 Impala with 327 2 barrel Powerglide was lucky to hit 60 in less than 14 seconds, would not get better than 15 mpg, and have swiss cheese body in less than 5 years – and likely did not have A/C, power windows, seats, cruise control, stereo, or tires that would last more than 15,000 miles. Health care was also more affordable in 1966, but if you got cancer all your doctor could do for you was ease your pain as you died, and if your knee wore out all you would get was a $5 cane and an aspirin. Most people also didn’t have much of a pension, but then again most were dead by age 70 from heart disease, cancer, car crashes, or a war, so it didn’t matter than much. I got my first bicycle in 1966 – a 1 speed coaster brake cast iron Schwinn – made in Chicago and costing $45. Today I can get a much better children’s bike for less than $50 at Walmart, but it is likely to made in China, which is one reason that fewer people around the world are living in poverty than ever before. We are living in the golden age of all time, and most of use don’t realize it and appreciate it.

    • 0 avatar

      I think the argument is more that we peaked in the 60’s and kept most of it going until the late 80’s but have since been back sliding. In that time period, Unions peaked, company provided pensions peaked, healthcare was still affordable, Interest was high but housing was reasonable in most of the country and wage growth was still an actual thing. Don’t get me wrong we live easier lives in many respects but most of it was from selling out our future, massive debt and cheap over seas manufacturing rather then America becoming a better place. I would argue that niceties have become incredibly inexpensive where as everything else actually required to live (other then food and clothing) has become more expensive.

    • 0 avatar
      nickoo

      One income household father who had a stable respectful job that he knew would be there for him, who could buy a house on a 10 year mortgage and raise a family with a stay at home wife, while having full medical coverage, a new or newish car in the drive-way, afford to put 2-3 kids through college, save up wealth with bonds that paid a realistic interest rate, afford to take a family vacation every year, and retire with a fully funded pension. You tell me if we’re better off.

      • 0 avatar
        krhodes1

        @Nickoo

        I grew up in a relatively wealthy suburb in the 70s and 80s, and I can tell you that the picture you are drawing is largely a TV fantasy. Anyone who lived that life was simply not middle-class, they were upper-middle class at worst, and more likely just plain wealthy. Doctors, lawyers, top execs lived like that. The middle class had two working parents, 20+ year mortgages (at 15% interest!) and used cars.

    • 0 avatar
      JimZ

      yeah. the problem is that too many people look back on the ’50s and ’60s through rose-tinted specs (everyone thinks things were perfect when they were kids) or if they weren’t alive back then, seem to think Leave it to Beaver re-runs are documentaries. the 1950s weren’t all malt shops, aw gee whiz Wally, sanitized pap. We were in a recession, the manufacturing base was already starting to contract (as above, Nash and Hudson had to merge as AMC, Packard and Studebaker were limping along and would soon die,) and we were about to embark on the first of our many futile proxy wars against the Soviets (Korea.)

  • avatar
    01 Deville

    Great Piece Jack,

    Just for statistics, it would have been good to see median car price as a fraction of medium house hold income for each decade.

    I am slightly above the national household median on a single income with 3 kids living in Midwest and can theoretically afford a new Toyota, If I don’t financially support my parents or send kids to private school, both of which are more important than a new car to me of course.
    On the other hand, my brothers both of whom make 6 figures and drive new Toyotas (sienna and corolla) lust after my used cars from my deville, to v70 to E38 and now W220 S Class. I do have a 12 yr old Town and Country that faithfully serves me as I figure out one disaster after the other on my “lux” cars.

    • 0 avatar
      taxman100

      Yep – I’m in a similar situation, only with two kids; my wife has stayed home for the past 8 years, and I took my small inheritance in 2009 and invested it in income producing investments to supplement my income.

      I make a good salary – close to six figures, and by using careful budgeting, we manage to go to the beach every summer. My church helps us with the tuition for the Catholic school my kids attend, so I spend a lot of time volunteering there to help make up for it.

      Cars? Wife has a 2011 minivan, and I am driving her 196,000 mile 2000 Corolla she bought new, and I kept my 2002 Grand Marquis I bought in 2005 as a back-up car – it only has 140,000 miles. We have no plans to buy another car in the next 5 years, and if I can stretch it to 10 years, I’d be even happier.

      The killer for me (besides health insurance)? Property taxes on a $230,000 home runs almost $500 a month just to pay for all of the government leeches in the various agencies and school systems that can tax property in Ohio. What percentage of employees in my school system actually are teachers?

      Then again, I’d home-school my kids if we could not swing Catholic school – not just the socialists that run our education system, but their peers would not be cut from the same cloth, so to speak.

      • 0 avatar
        TOTitan

        You are paying almost 6K/yr property taxes on a 230K home? Thats crazy. Mine are $4460 on a 1.1 mil home in Ventura county CA. Maybe CA is not so bad after all…lol

  • avatar
    CoreyDL

    “That $57,000 number, as modest as it sounds, is more often the product of two lower-paying gigs”

    Really, this figure? $57K combined when two educated parents are working? That doesn’t sound quite high enough.

    • 0 avatar
      FreedMike

      Well, you know, putting up real life figures doesn’t stimulate discussion.

    • 0 avatar

      https://www.census.gov/hhes/www/income/data/statemedian/

      It depends on what data you looking at. It’s really hard to tell. I belive across the US your looking at $57,000 per household median. But you can go more in depth I would guess with two educated adults your looking at more like 68,00 to 75,000 but it’s hard to say but the actual numbers are $57,000 per household median. I do know alot of people raising families with a combined income of around $65,000. I did with around $52,000 for a few years. I also know people where I lived in rural Maine raising families on 2 x 12/hr salaries.

    • 0 avatar
      nickoo

      The median income per family is about 57,000. He’s spot on with his numbers.

  • avatar
    slance66

    Good piece Jack. I too was forced to wear toughskins, mostly because they came in “slim”. Oh to have that problem today.

    Ultimately the changes we’ve seen since the 1970’s are largely the result of globalization. I’m not anti-trade or globalization, but when the workforce used to consist of people in the U.S. or Canada, and expands to include almost literally, everyone, change happens. In our case, it means that lots of stuff is indeed cheaper than it was, including most clothes, certainly including all electronics and appliances. On the other hand, we now “need” stuff that didn’t exist. My internet/phone/cable bill runs over $200 a month. Everyone has a mobile phone bill too. So while the prices of those luxuries generally decline, the real issue is that we cease seeing them as luxuries. Dishwashers, washer/dryers, color TV, computers…those all used to be luxury items and now many see them as necessities.

    The downside of it is that we don’t make any of it here anymore. Clothes, furniture, appliances…almost all of it is gone. The incentives are perverse, including the highest corporate tax rate in the world and the only country that taxes foreign corporate earnings. That sends capital and jobs overseas. It’s one tiny example. It will take a lot to pull us out of this mess, but it can be done.

    • 0 avatar
      PrincipalDan

      HAH! I was stuck in the Sears brand HUSKY jeans, mostly made of corduroy which meant I made a funny sound as I walked.

      Thank God I improved my diet over my childhood.

    • 0 avatar
      FreedMike

      “Ultimately the changes we’ve seen since the 1970’s are largely the result of globalization. ”

      Exactly, but given that in the years after WWII, we were pretty much the only functional economy left standing – all our competitors were either communist, bombed into oblivion, or left prostrate by the loss of their overseas empires – wasn’t “globalization” inevitable?

      • 0 avatar
        Pantherlove

        Ding Ding Ding…also production of manufactured goods in the US is at an all time high but the jobs involved in doing so is at an all time low. The automation of repeatable tasks will eventually put an end to the type of high paying, low skill jobs that fueled 50’s-80’s America.

    • 0 avatar
      Russycle

      Yep, Toughskins were all my mom would buy. Cheap, and I think the knees were reinforced. Then we found a concrete embankment sloped at 45 degrees that was great fun to slide down on our butts. Not even Toughskins were tough enough…

  • avatar
    Astigmatism

    I’m late to the party, but the shocking headline seems to be based on some pretty bad statistical analysis – not Jack’s (in fact, Jack sort of calls it out, but then drops the point), but the underlying article’s. The BI piece, and the Interest.com piece it links to (both of which are from 2014, incidentally), compare the _median_ income to the _mean_ new car transaction price. If you actually look at the interest.com map, you’ll see that the median family in most of the cities sampled can afford to spend comfortably into the $20,000s on a car, which may not pay for a median new car but sure as heck pays for a nice, shiny new Accord, which looks like a palace compared to a typical car from 20 years ago.

    BTW, illegal immigration _still_ doesn’t drive down wages, as much as you’d like to think otherwise: http://www.jstor.org/stable/2523702 http://www.forbes.com/sites/artcarden/2015/08/28/how-do-illegal-immigrants-affect-american-workers-the-answer-might-surprise-you/#1cc16e936b10 http://blogs.wsj.com/economics/2015/06/01/does-immigration-suppress-wages-its-not-so-simple/ etc.

    • 0 avatar
      FreedMike

      Exactly.

      Illegal immigration HAS driven down wages, but not for the “middle class” – unless, of course, some guy who just swam the Rio Grande can walk into XYZ Corporation and get a $60,000 a year office job.

      It can be hard to assess the real impact of illegal immigration because it is, by its’ nature, part of a shadow economy, driven by lawbreakers. Folks like that tend to shy away from keeping records.

      • 0 avatar
        jkross22

        Construction jobs, especially roofing, used to be an industry dominated by the black community in Los Angeles. This changed over the last 3 decades as illegal immigrants were willing to work for much less to do this work.

        Those used to be middle class jobs paying middle class wages.

    • 0 avatar
      e30gator

      Imagine this: They deport all the illegal aliens in California and hire Joe Blow off the street to pick those tomatoes instead, paying him minimum wage to do so.

      That’s now going to be $15/hr…to pick fruit.

      Now, I hope you are a picky eater who shys away from greens, because you’ll no longer be able to afford them.

  • avatar
    Robbie

    Jack, that Camry is the same dollar price now as it was in 1990. Yet, in 2016 dollars, that corresponds to $50,000. Surely more families own two or more cars than ever now. Also, the H1B visa holders contribute a lot to the US economy, which we all benefit from; their net effect on ur wealth is surely very positive.

    We have never been as wealthy as we are now. Yet, we don’t seem to realize it.

    • 0 avatar
      FreedMike

      That’s because the proportion of people who aren’t making it is growing. It’s not the wealth, it’s the inequality thereof. And the gap is definitely growing.

    • 0 avatar
      e30gator

      This.

      Apparently, no one bothered to pay attention in history class. The average American now has a higher standard of living than ever before.

      Granted, things are not always fair or perfect, but to these folks who do nothing but complain about their taxes, immigrants, and government programs, I say take a long look at Somolia and see how well that’s worked out for them.

      Be careful what you wish for.

      • 0 avatar

        There are also less of us in the middle class then since pre WWII. The country is splitting there are more wealthy alot more poor and fewer in the middle. This will eventually cause some serious issues or some serious reforms in our current version of capitalism. We also got more stuff my having 2 members of most households working. In the end the middle class are more productive but worse paid per out put then ever before.

      • 0 avatar
        jkross22

        e30, You’re presenting a false choice of extremes. It’s not a choice between overbearing, corrupt government or none at all.

        As Mike said, we are seeing a higher percentage of people simply not making it. That disparity is growing and the barriers to a middle class life are getting higher (tuition increases being the primary driver).

    • 0 avatar
      Russycle

      I don’t want to get into the weeds over H1Bs, but if an H1B is hired to replace an American worker (google Disney H1B), sure he’s “contributing to the economy” while the person he replaced collects unemployment. It’s not a net gain.

      • 0 avatar

        That of course assumes a whiny loser who prefers to collect unemployment instead of doing something useful for the society.

        • 0 avatar
          Chan

          You assume every unemployment recipient is a loser who doesn’t want to look for a job.

          Here in CA you need to submit proof of job search to receive benefits. While you could theoretically make something up, most would rather look for a real job than look for an excuse to fill out unemployment forms. I’ve been there and I can tell you my mind was not thinking, “Great! Free money!”

          I could extrapolate your statement to something like “If you’re not a billionaire like me, you’re not working hard enough.”

          • 0 avatar
            FreedMike

            True, and most states don’t hand out unemployment to people who hadn’t been working.

            I went “on the dole” with it for a pretty long period during the recession. But the reason I was able to do that was my long and unbroken history of pay-ins to the system for probably 10-15 years prior.

            You pay in when you can and get paid out when you need it. Very different than welfare.

  • avatar

    I wonder how typical Jack’s 35 year old father with 3 new cars was. I’m guessing I’m a decade or 2 younger than Jack, and my parents had kids later than his did, but growing up my parents didn’t buy new cars every year or couple years – they typically got 8 or 10 years out of a car, sometimes much more (like the ’72 Gremlin that made it until 1989). Heck, their current daily driver is 14 years old (but has less than 50,000 miles). Many of the other kids in school may have had parents with newer cars – but not “new car every year” newer.

    They spent money on other things – my brother and I both went to Catholic school and we took a yearly vacation – and they had a paid-off house thanks to some heroic thriftyness before I was born.

    And I’m not sure that much has changed – different people spend money on different things, based on their preferences and life situation. I’m a 35 year old with a much nicer daily driver than anything they owned – but I also don’t have a spouse or kids, live in a not-paid-off-townhouse, and don’t travel much.

    • 0 avatar
      dal20402

      Yeah, this. Growing up… my relatively successful dad bought an ’82 525i (Euro market) new and kept it for 12 years. My mom built a successful career for herself after the divorce, but it was lean in the early years. In ’83, right after the divorce, she bought an ’81 Chevette. She kept it until ’91, when she bought an ’88 Accord that was her last car before she went carless.

    • 0 avatar
      Kevin Jaeger

      Yes, from the brief stories Jack has told about his family I think we can conclude his father was pretty successful indeed. Perhaps not part of the 1%, but very likely in the top 2 or 3%.

      I’m old enough to remember those days well and actually was part of a family with a father that worked a typical factory job at the time. We certainly didn’t have three new cars, nor did any of my friends’ families.

      We had things like crappy Chevettes, Citations, Omnis, Mavericks and K-cars of various flavors, not 5 series BMWs.

      While I have sympathy with some of his points, the overall standard of living has risen vastly since those days.

      • 0 avatar
        Dynasty

        I feel somehow like I had a privileged childhood since my dad would not under any circumstances ever stoop low enough to buy Chevettes, citations, Omnis, or any Chrysler product for that matter. We had Hondas. And no we weren’t rich.

  • avatar
    Edgy36-39

    An important article lessened by the political scapegoating. Buying a brand new car just seems dumb unless you’ve got loads of discretionary income. The current total vehicles sold tide can’t keep rising, and there will be a huge need for lower priced options.

  • avatar
    SCE to AUX

    “The question is how our society will adjust to a world where their next car has fewer features and less power, not more of everything.”

    I remember people having this concern during the Malaise Era of 1974-84.

    The “must-have” culture which parallels the cable/computer/internet age means leases will become more popular, and a car payment will be treated just like any other utility cost in life. The notion of paying off a car will become obsolete.

    And another thing: I pay $20/month for Dish Network TV and $35/month for unlimited Virgin Mobile talk-text-data.

    I’ll never understand why people ‘must have’ $200/month cable bills, and they ‘must have’ $400/month in cell phone bills for the whole family, including their pre-teen kids who couldn’t survive without it. Try cutting back on that stuff, and maybe you could afford a new car.

    • 0 avatar
      bikegoesbaa

      Yeah, Virgin Mobile is the cat’s ass. Less than $50 a month for everything with inexpensive phones and good reception? Sold.

      I have little sympathy for anybody who is short on cash AND paying $100+ a month for their phone.

    • 0 avatar
      Dynasty

      It’s not the kids so much who need a cell phone. It’s mom and dad who needs a leash for their kid. Besides, everyone else they know has a cell phone for their kids, and by not doing so they wouldn’t be good parents.

  • avatar

    You complain of Toughskins and Husky pants. I have a 28″ inseam. I haven’t found a store that stocks any men’s pants in an inseam shorter than 30″ in decades.

    • 0 avatar

      As someone with the proportions of a weeble, I tend to buy pants from LandsEnd.com, because they do custom lengths for no additional charge.

    • 0 avatar
      psarhjinian

      If you think that’s hard, try looking for a 36″ inseam with a 36″ waist. At least you can hem longer pants.

      • 0 avatar
        SCE to AUX

        psar: We wear about the same size, and both had an xB1 – no coincidence there.

        At least Big and Tall clothes are easier to find and slightly more affordable now than they were when I was a beanpole teen.

        But finding cars that fit? Tougher than before, especially with today’s styling trends.

        • 0 avatar
          psarhjinian

          “But finding cars that fit? Tougher than before, especially with today’s styling trends”

          It’s the low windscreen height that kills me. I can’t even _see_ streetlights if I’m at a stop

  • avatar
    Spartan

    So, a thinly veiled political hit piece (post 2008, Obamacare, immigration) quoting averages that don’t take into account the cost of living in different areas throughout the country and focuses on the author’s viewpoint.

    This is click bait, but I’ll bite.

    I’m married with a 9 month old and another kid on the way. Our income has doubled since 2008. We have no issues owning two cars, paying for our mortgage, insurance, food, and two vacations a year, among other things. Our combined income is just over $200k.

    Things aren’t as bad as they seem. We live better today than I did growing up and I grew up in a middle class household. My dad was a supervisor at a plastics distribution center and my mom was a nurse. Both retired, house paid for and between SSI, retirement and my mom’s pension, they live extremely well. The wife and I won’t have any issues being able to at least attain that lifestyle in retirement and leave plenty of $ for our kids once we’re taking our dirt naps. My parents gave me great guidance growing up. It doesn’t matter who’s in office because they’re all the same (but vote with your interests) My parents steered me towards STEM related fields because they saw how technology was changing and becoming a “thing”. Education was extremely important in my house growing up and while my parents crushed my dreams of becoming a musician, they helped solidify my dream of living comfortably and being able to raise a family, with the latter bringing more joy that I could have ever imagined.

    The problem with so many Americans today is that their parents (the boomers were terrible mentors of their children for the most part) aren’t preparing their kids for today or tomorrow’s economy. Things will get tough at some point. They always do. But to sit around and complain that immigrants and Obamacare are ruining everything is exactly why those same immigrants are building wealth and will benefit from it in the future. The same Gen-Xers and Millienials that are complaining are pissing away money on trivial things, high risk hobbies and don’t save a dime for retirement. They’d rather be inundated with consumerism as if life is a big sale and they need to buy everything they can before the stores close. Many aren’t even willing to make any sacrifices. They aren’t willing to get the required education. I worked for three IT firms for minimum wage and once for free during my college years. My parents supported me during that time and recommended I get as much experience as I could BEFORE I completed undergrad. Some of the best advice I could have gotten.

    While I’m on this rant, you know what’s sucking the life out of America? The people that the complainers are putting in office because they’re the reasons for the income inequality in America. So many of the whiners, on both sides of the aisle, vote against their own interests because they believe that America will change overnight if they’re favorite guy or gal is in office. Guess what, it won’t.

    I’ve prospered in America under Republican and Democratic administrations. I vote, but I don’t get inundated with politics because that’s not the problem. The problem is that most Americans haven’t figured out that you need an education in an in-demand field, preferably STEM related, for the best chance of success. The problem is that parents are raising their children to set themselves up for two generations. I think about my non-existent grandkids fairly often because I want my family name to be around in the future. That’s what we have to change. But it won’t, because Americans are too stupid to think beyond an election cycle.

    You want a new car? You need a skill that pays well. Don’t get an interdisciplinary studies degree with a concentration in basketweaving and expect to make $60k. I won’t even hire someone with an IDS degree. As for manufacturing, it’s done in the US and it isn’t coming back. It costs too much to build here when there are billions of people in Asia to do it for less and millions in emerging markets that will do it for less. If you were in charge of a billion dollar company and you needed to increase your bottom line, would you build here? No, you wouldn’t.

    Politics has taken over much of the US general population. The politicians don’t control the money nor do they control the majority of the jobs in this country. So many of you author included, are pissed off at the wrong people and putting faith in the wrong people.

    You want change, drive the change yourself by adapting to the economy and if you have children, prepare them for tomorrow’s economy. Your political overlords aren’t going to help you. They’re too busy taking money from the same people that won’t pay you enough to buy a new car.

  • avatar

    One thing I don’t get is why focus on Camry for $27000 when you can get Fit for $16000? I know that price is real because I bought one. It has about the same space and you can easily transport a kid in it, maybe two. And if you have three, Camry isn’t going to save you eiher. The point is, they already make cars that are better than cheaper than Duster.

    • 0 avatar
      sportyaccordy

      Because you can get a lightly used CR-V or RAV-4 for $15K. And as marc below noted, unless you are buying your first car ever, you have equity in your current car, lowering the actual amount financed that much further. Very few people are putting down + financing 100% of their car purchases outright.

  • avatar
    marc

    The devolution of TTAC into Lies About Angry White Men continues. Without even going into the potential xenophobia and racism of the original post and many subsequent comments, just looking at the fuzzy math is enough to reveal why we have become a nation of Bernie bros and Trump bros.

    You don’t make $57,000 and buy a new car every 3 years. You keep it 6 or 7 years and use the residual as trade in. Therefore the $28000 figure is wrong, at least when talking about purchasing. Leasing gets people into a lot of these cars. And if you’re not leasing, you’re still not paying $27000. Trade-ins and down payments keep that payment below $400. Leasing will keep it below $300. And at $57,000 a year, unless you do have a good trade-in or want to lease, you should be looking at $18000 Civics anyway, not Highlanders and Camry XLEs.

    Housing costs. A family at 57K is not paying a $2100 mortgage/food payment. Their $200,000 home costs more like $1200 a month. Families shouldn’t be spending $900 a month on food. Anyway, they’re probably renting for $900. And if they are buying, there’s always the interest deduction to offset the cost. (There’s a nice down payment on your next car.)

    Healthcare. If the family doesn’t have subsidized care from employers (which the majority do), the ACA is not going to cost $800 a month. With subsidies, it’s likely half that.

    There are real concerns about income inequality and loss of good-paying working class jobs. But this typical Angry White Man rant using bad Math and scare tactics doesn’t help. It just gives rise to the bros.

    • 0 avatar

      Marc
      Here is my real world costs for housing and groceries.

      Mortgage with Property tax 1080 Sqft 1950’s house bought in 2002 during start of the bubble
      $1295.00
      Electric bill
      $165.00
      Cable internet phone bills (combined)
      $150.00
      Food
      $750.00 (sales and coupons 5 people)
      Water bill
      $45.00
      Natural gas
      $75.00

      Also health care my employer subsidized plan is $390.00 a month

    • 0 avatar
      nickoo

      Angry white men? Bernie Bros? Trump Bros? You need a reality check.

    • 0 avatar
      JimZ

      What “devolution?” “No Fixed Abode” is almost always an opinion piece. Jack gives his opinion (just like on the editorial page of any newspaper) but unlike with newspapers we have the ability to discuss our agreement or disagreement (civilly.)

  • avatar
    mustang462002

    I was here 4/5/2016.

    Part of history at TTAC.

  • avatar
    Zykotec

    People today don’t need to be able to buy a brand new car, because even many 10 year old cars are at least as good as anything you could buy brand new 50 years ago.
    BooHoo, the world is changing and I don’t want it too and all that.
    I wanted to write more about the politics, but this is the internet, and I’m further left than most of you could understand anyway, despite living in Europe which is about to go full Nazi on the coming Arab ‘invation’. (which imo, even if it was true could not possible change Europe into a worse place than it already is)
    the harsh truth is that in our(the western worlds) quest to make everything cheaper than it was before, we have sent most our money to previously poorer countries, and at the same time we have been constantly telling them how much better our countries were to live in than theirs, while also making it a truth by f**king up a lot of things in the 3rd world either in search of cheap resources or because of an absurd fear of political systems that differ from ‘our’ norm. It was always inevitable that change was coming, and anyone who didn’t see it coming should totally learn how to read or watch TV.
    With some luck we will end up with a world without insane made-up things like ‘borders’ or ‘countries’ and everything will be fine (the transition will probably not be pleasant for most ‘rich people’ though)

  • avatar
    e30gator

    You know, let’s just blame Mexicans and the government for all our problems.

    Can’t afford a new car? Obama’s fault.
    Working at a crappy, dead-end job? The Mexicans.
    Oh, you had to pay taxes this year? Must be the blacks!
    Your kid failed his geometry test? Got to be those gays!
    You got the clap? Blah, blah, blah…

    If people put this much effort into making sound economic decisions and career choices, maybe this auto blog would sound less like a self-pity fest and more like, I don’t know….a car enthusiast website.

    Thanks again for the non-example of professional journalism.

    • 0 avatar
      Jack Baruth

      What’s it like to be so stupid that you are literally incapable of seeing anything but race?

      Stop being butthurt and read something besides Salon for once.

      • 0 avatar
        e30gator

        What’s it like to be so stupid that, as a “journalist”, you can’t recognize irony and sarcasm, let alone your own hypocrisy as you apparently have NO problem calling the president’s mother a whore in an auto blog and spouting off about “equalizing the race-based crime statistics a bit.”

        BTW, I came here to read about cars, so do us a favor and just go back to pretending to know something about them and write accordingly. Leave your political rants in the toilet where they belong.

        • 0 avatar
          Kevin Jaeger

          I’m here to read Jack and certainly not you.

        • 0 avatar
          Jack Baruth

          I certainly did not call Obama’s mother a whore.

          Nobody paid her.

          She posed nude and had a lot of sex partners. It’s a documented fact.

          Stop being such a prude and a tool of the ciswhite patriarchy.

          • 0 avatar
            VoGo

            I have no idea what drove you to insinuate what you did about the mother of the President of our country. It has no relevance in a car blog. None.

            I see that you are desperate for views, but this is a new low for you and for TTAC.

          • 0 avatar
            e30gator

            You’re right! Sorry, Jack.

            You just made yourself out to be too easy of a target with your middle school-level of maturity and reasoning skills, though I’m sure you’ll soon forget all about how liberals have ruined standard of living and go right back to vomiting out humblebrags about your collection of Porsches and track day hijinks next week.

            I look forward to trolling you there too, unless I decide it’d be more fun to just sit and watch funny cat videos instead.

          • 0 avatar
            Jack Baruth

            Dude you are a master troll. I celebrate the way you expose my intellectual inadequacies while at the same time paying for me to buy new motorcycles.

          • 0 avatar
            e30gator

            Thank god I’m “paying you to buy new motorcycles.” I’m glad to see that the supposed cost of living increase you’ve been whining about, and the point of your entire article, was nothing but an utter crock. I knew it was. ;)

  • avatar
    AoLetsGo

    My 2 cents on social issues is similar to a lot of what most have already stated.
    The grandparents were dirt poor immigrants who worked hard and did okay, the parents worked hard and did much better, we have worked hard and done almost as well (except for the pensions and health care bits), and the kids are hard workers and have just landed their first good career jobs and they will be fine.
    The common thread is hard work, fiscal conservatism and looking after our own in the next generation.

    Now what should I do with my 3 year old Ford Edge, 80,000 miles, not one problem and should go for another 150,000 easily. But I have the new car itch and it is still worth some money.

  • avatar
    Chan

    Each generation takes the opportunities present at the time, and this economic model lasts for a certain period. Two things highlight the end of the Boomer economy:

    1. Most of the world was rebuilding when Americans started cruising the Interstates in their 20-foot-long Cadillacs……for fun. The explosive growth of post-war USA was a historical anomaly, and this country (along with the rest of the world) is slowly realising that.

    2. The monetary value of information is trending in opposite direction of the value of living necessities. But modern sensationalist media and its lazy customers are convinced that “information” is the future. Investors are more interested in the next first-world “disruptor” than solving the country’s healthcare, education and political plutocracy. For the US government to believe that trap is to lead our society to a very rude awakening.

    The money won’t fix itself; money is managed by 3-year-ROI investors against any form of regulation. This is on the government. What use is YouTube or your favourite Silicon Valley start-up of the moment when the masses can’t afford to feed themselves?

    • 0 avatar
      Kevin Jaeger

      Jeez, despair is one of the historical sins society used to try to discourage.

      No one in the western world is starving – obesity is a much bigger problem in reality.

      Yes, America enjoyed a golden period of absolute prosperity, but more than that enjoyed a much more significant RELATIVE prosperity while the rest of the world was suffering under communism or other problems of underdevelopment.

      Now many sectors of the economy are exposed to competition and that undeniably makes things tougher for some. In economics this is called creative destruction – overall the economy benefits on net, but there is no getting around the fact that some simply suffer under the destruction side of economic development.

      • 0 avatar
        Chan

        We’re not really in disagreement here, as automation will permanently take a chunk of jobs that haven’t already been outsourced. Outsourcing is a natural result of free trade.

        But I was a little more focused on the healthcare, education and financial problems. You mention obesity; how is this going to load our healthcare system in the coming decades as a generation of obsese diabetics retires? How will the government tackle the root causes–the inability of the middle class to buy better foods, the awful substances like HFCS allowed in processed food and drinks, etc.? How will we tackle pharmaceutical monopolies inflating US drug prices?

        And how about education? Sure, that $40k/yr liberal arts program is a questionable investment, but why is it $40k/yr to begin with, along with the more practical STEM majors? More importantly, why are ostensibly “public” schools in, say, the University of California network charging $20k a year?

  • avatar
    tresmonos

    The more I think about the state of our economy and nation, the less I want to have kids.

    I can’t believe I’m letting Jack Baruth and the B&B actually be an input into my decision making process. This has been a truly depressing read.

    I should have knocked up that hot little Mexican when I lived south of the border.

    • 0 avatar
      nickoo

      Yep, same. I’ll probably never have kids, firstly because there are fewer and fewer women out there the older I get, as I’m reaching my mid 30s, I woke up one day after pulling my head out from the books I was studying to make something of myself and realized all the good women were gone. And the realities of today’s world means I can’t keep a career and a family, I have to choose one, as I have had to move every 3-5 years to keep my very good job with very good pay and benefits.

      Jack is right, people like me, who might just be able to bring something valuable to the next generation, won’t pass along their genes, and instead it will be the less desirable segments of society raised by welfare single moms and immigrants that make up our society in 2-3 generations. It certainly won’t be how I remembered it growing up.

      Hopefully I’ll be dead so I won’t have to live it by then.

      • 0 avatar
        JimZ

        same here. socially inept to this day, and I’m at the age where I don’t think I’d want to be with anyone who’d settle for me.

        Louis CK put it very well: “Being single at 40 is like having a ton of money from a country that doesn’t exist anymore. Like having 500 million Prussian Francs.”

      • 0 avatar
        tresmonos

        don’t give up, nickoo or JimZ. I’ve found a few good ones. I have also modified my expectations and started dating women who already have children. When I’m not working, I’m working out. Eat healthy, live well, spend your money on something that makes you look forward to escaping for the weekend. For me, it was a reasonably priced older boat and a new truck. Someone else will eventually want to tag along.

        As for being socially inept – that can always be changed. When I socially degenerated, I sought a therapist. I spend most of my free time with friends I’ve met by shooting in a pool league or doing stupid sh1t like kickball leagues… and binge drinking with fellow masochist coworkers.

        • 0 avatar
          JimZ

          “don’t give up, nickoo or JimZ. I’ve found a few good ones.”

          feh, I gave up by the time I left high school.

          “I have also modified my expectations and started dating women who already have children. ”
          out of the question. my experiences being a kid have put me off of ever having any of my own. I know first hand how vicious and evil they can be towards each other.

      • 0 avatar
        everybodyhatesscott

        Yep, same. I’ll probably never have kids, firstly because there are fewer and fewer women out there the older I get, as I’m reaching my mid 30s, I woke up one day after pulling my head out from the books I was studying to make something of myself and realized all the good women were gone.

        The older you get, the more women there are. I’m going to let you in on a little secret. You can date 25 year olds. You’re mid 30’s, not mid 50’s.

      • 0 avatar
        28-Cars-Later

        @nickoo, JimZ, Tres

        I am in a similar situation. Call me crazy (because I probably am) but I hope to find a decent woman with foreign citizenship to a country I think will survive the next forty years intact (which is tough to do). I may end up stuck in this nation as it implodes during my lifetime but I want any children I may have to be able to escape. This level of thinking is the only thing which keeps me from extreme depression about the future, or lack thereof.

        @JimZ

        You’re better than that kind of thinking about yourself. Nobody’s perfect and believe me the current crop of females by and large is FAR from perfection no matter their physical appearance. Irrational self confidence is key, this for some is difficult since most men are rational thinkers. I tell women about what I have accomplished, my future plans, and then say yeah and I’m working on that whole flying thing like superman – because I can. You have to believe you can do anything you put your mind too, and then do it to prove it to yourself. Life is partially about making sh*t happen because for the most part random good things just don’t fall out of the sky into your lap. *Be* the force of change in your own life. *Be* the person you want to meet. Put yourself out there and make sh*t happen.

        @Tres

        That’s excellent, keep up the good work.

    • 0 avatar
      AoLetsGo

      Far be it for me to tell people if they should have kids or not. However, personally my kids have been the most expensive and challenging thing in my life and also the most Joyful. I find it sad that some of my childless friends best photos are of their cars and boats, but they seem okay with it so c’est la vie.

      Jack said it better than I ever could so look up his writing about Father’s day if you are so inclined.

    • 0 avatar
      SCE to AUX

      I have 5 kids, and my wife has stayed at home most of the 29 years we’ve been married – and she’s not a desperate housewife.

      There have been sacrifices, but we’re also fortunate to be middle class, whatever that means. We also share similar values in matters of money, faith, friendships, recreation, and childrearing, so we have no regrets at this point. Some years have been harder than others, though.

      But I’ll tell you one irrefutable truth: You can never afford kids. So don’t let money be an obstacle to having the first one.

      • 0 avatar
        FreedMike

        SCE is 100% correct.

        Having kids isn’t a rational act. But that doesn’t make it crazy.

      • 0 avatar
        tresmonos

        I hear all of y’all. I am an uncle to many and my gf already has a daughter. Lots to think about and consider.

        The majority of the B&B have reflected on the ‘childless life’ as being put on a pedestal. I find that hilarious – everywhere I turn, social media, friends, TV, my brothers, parents, grandparents – there is social pressure on having a family. Society almost demands family creation to the point where it was OK in the poverty stricken textile belt to pump kids out when you didn’t have income, proper faculties (age mostly) or a house and a car to raise a child. “Praise be to God, look how blessed you are” sort of thing. Dating in the south was awful.

        I bet nickoo can relate – you are almost an outsider. When you’re dating and don’t have a kid, you get speculation about what’s wrong with you. When all I can do is look around and wonder WTF is wrong with everyone else diving in w/o being ready. If I get blessed with a child, I have their college savings already in the bank. If I don’t, I’ll have one sweet twin big block boat to take to Jobbie Nooner and maybe take my future step daughter with me.

        I thought I was readying myself for life after experiencing a lay off in 2008 and a divorce shortly after. Once I found myself in a financially sound situation, I have found that society doesn’t reward that behavior. The majority of single women I can’t relate to, and the ones who are single are cannon fodder to failed marriages or poor life choices. A woman w/o baggage at my age is rare (granted, I have plenty of my own). I’ve adapted and am dating a single mother.

        Baby boomer expectations of life are not compatible with the modern world/economy. nickoo and I understood that. It’s why we can afford a new car AND a family (and a child’s ‘current priced’ college bill). But alas, here we are.

        Edit: to avoid sounding totally pessimistic, I appreciate all of your input. I value the majority of everyone’s opinion in the B&B and thank you for the time you took to reply with encouraging responses. :)

        • 0 avatar
          Quentin

          No matter what you do, people will find something to complain about. Have 0 or 1 kid, you’ll get flack about being selfish (in general) or being selfish about giving your child a sibling. If you have 2 or more, there will be a time when you are overwhelmed with them and people will judge. Solution: be honest about what you want and do what you want/can afford to do.

  • avatar
    honda_magna85

    Having grown up in the 1990s in a not so affluent part of the rust belt, i feel a need to chime in.

    As a young child my parents had, in order:
    1966 plymouth valiant
    1966 ford falcon wagon (vague memories of this one)
    1980 plymouth colt (fond memories of sitting in the drivers seat and pretending i was driving the twin stick)
    1990 dodge colt (which ended up being handed down to me)
    2000 hyundai elantra (this car was a big turning point for my mom. The first car they ever had with power windows and AC, but it was still a manual transmission)

    They never went beyond their means, and every car except for the 2000 elantra went well over 100k. Mom traded in the 2000 elantra for a 2011 elantra (also manual trans) in 2012.

    Now I’m 30, and in a well paying job. Last year i finally upgraded from my 1996 honda civic DX (the rust was getting bad underneath, clutch slipping, check engine light on due to bad exhaust manifold/cat combo) and got a 2014 mazda3. Yes, i paid quite a bit for it but i intend on keeping it for 10 years or so. I cringe when i hear about friends/acquaintances financing new vehicles we both know they can’t afford.

    And if i feel like having some fun, i get on my 20 year old honda motorcycle and feel some acceleration.

  • avatar
    VoGo

    An entire article, and 360+ comments on the “fact” that the middle class can’t afford to buy cars anymore. Which explains why car sales in the US are currently at an all time high.

    Can we get Jack to apply his copious writing talents to whining about something that is real?

    • 0 avatar
      Chan

      Car sales are at an all-time high, driven by the moneyed older generations and a small affluent subset of millennials.

    • 0 avatar
      SCE to AUX

      With car loans extending past 7 years and leases becoming an option even for used cars, I’d agree that new cars are moving out of reach of the middle class.

      The surge in car sales matches the creative financial measures used to put people into cars. Low interest rates give people the false sense that they can afford a new car. What they don’t realize is that a few percentage points in interest only amounts to a few dollars’ difference a month on the loan.

      Higher interest rates would force people to pause and count the cost of buying a new car, and sales would be more in line with people’s means.

      There have been numerous articles here at TTAC and elsewhere documenting the vehicle financial picture. It’s bleak, and headed for a correction someday.

      • 0 avatar
        DeadWeight

        The artificially low interest rate environment engineered by central banks in an exercise of coordinated monetary insanity (near 0% for 7 years now and negative interest rates on excess reserves in Europe and Japan) has everyone and every entity starved for yield, hence even junk-credit auto backed loans are now being bundled as fast as sub-600 FICO score buyers can purchase vehicles and sold off to institutional “investors,” which will ultimately result in heavy losses and a systemically bad outcome (this is why monetary policy should not be used as an attempted stimulus replacement for fiscal policy).

    • 0 avatar
      FreedMike

      But a better question might be this: is this phenomenon necessarily a horrible thing? Not really.

      Yes, it’d be nice to have a new car every couple of years. Expensive, but nice. But at the same time, there is a whole universe of good, lightly used iron out there that a middle class family could afford. Perhaps that hypothetical family making $57,000 might not be able to afford a brand new $25,000 Camry, but they could probably swing one that’s a year old with 20,000 miles for $15,000, and there are tons of them out there.

      Nor is having a used car the crapshoot it used to be. That hypothetical $15,000 Camry will run for a good ten more years if properly maintained (as would most contemporary cars). And that car has all the latest safety and tech gadgets to boot. Given all that, is the inability to buy new really such a big issue? I’d say it isn’t.

  • avatar
    Kenmore

    So much angst and kerfuffle here…

    Virtual Reality systems with complete lines of fragrance modules will solve this and many other pesky problems of postindustrial decline.

    Looks like Japan has even debuted a sex-suit model. Talk about Rinse & Repeat!

  • avatar
    raph

    Hah, I figure my next Mustang will be my last new car purchase amd,from there on out I’ll drive it till I die and just make Factory 5 roadsters my “new” car purchase or something like that. Then again maybe by then Google cars will be a thing?

  • avatar
    Jagboi

    I find it interesting that so many comments mentioned medical bills as a barrier to buying a new car. I’m Canadian and there is no such thing up here, medical costs would never bankrupt someone. We all pay for it in our taxes, and health care is available to all on the same basis.

    Before anyone mentions how sky high my taxes must be, A friend of mine works in Houston, and we are in the same industry (oil). Have similar jobs at companies that do the same thing.

    We did a comparison of our gross and net incomes, after everything was paid for – taxes, both income and property; healthcare costs, utilities, groceries etc. Basically everything that was necessary to keep our families fed and a roof over our heads and the lights on, but nothing more.

    After the math was done, I had a greater percentage of my income left over than he did in the USA. Sure, there is no state income tax in Texas, but all the infrastructure has to be paid for somehow and he was paying for it. His property tax and utility costs were over 10 times what I was paying, while Federal income taxes were actually reasonably similar.( I paid Provincial tax and he didn’t pay state tax) Heath insurance was a big chunk too, and his employer paid quite a bit of it, while I paid nothing additional.

    So I am baffled at those who are resisting universal single payer healthcare in the US, it seems like it could bring care to all and eliminate the threat of bankruptcy if you need hospitalization, while the overall cost of the system remains the same or is cheaper. I suppose it comes down the vested interests have not been slain, like they have in all the other developed nations with universal healthcare.

    • 0 avatar

      Jagboi,

      Preaching to the Choir here. Back in 2000 I was living on the border in Maine (I could see New Brunswick from my front window). I had several friends that lived on the other side of the border that were very big on their form of healthcare. At the time I had a very free market conservative view of financial things but, they started to convince me.
      The first point was mobility, here in the states many people stay with one job due to health care benefits and things like starting a business (especially with a family) seemed unduly risky because your healthcare costs would become unmanageable and pre existing conditions would prevent you from ever leaving a job where you were fully covered unless you double checked your next employers coverage.
      The 2nd was just what you described. I sat down and ran the numbers if I recall the added tax in Canada vs paying for average healthcare in the US plus our taxes (I used Maine and CT as examples at the time as I had lived both places) came out in favor of Canada up until an income somewhere near $75,000 a year. In the time since then our medical costs have skyrocketed and I would bet the break even figure now is closer to $150-175k.

      So in short one boring half drunk afternoon with a spread sheet and altavista (remember that) I started my transformation from financial conservative to the much more liberal views I have now.

  • avatar
    stryker1

    Read your Marx.

  • avatar
    ericb91

    Yep, that’s it. When my wife and I needed a family hauler we bought a 2010 Honda Odyssey LX with 61,342 miles in April of 2014. We paid $13,440 (retail would have been $15,999 Honda Certified; I worked at a Honda dealer at the time). $3,000 down and $1,000 for my paid-off 2003 Saturn Ion and our payment is just shy of $195 for 60 months. We’ll keep it until it doesn’t run anymore and probably replace it with a 3 or 4 model-year old SUV or van.

    My daily driver is my wife’s old 2001 Toyota Camry LE, owned free and clear. With 133k miles on it, it should give us another couple of years of cheap ownership. Then I’ll probably get a Ford Fusion or Focus (I work at a Ford dealer now and my allegiance has moved!).

    TL;DR buy used, save big.

  • avatar

    — The hollowing out of the middle class has occurred even as the income needed to meet Pew’s definition of the middle has declined. A three-person household had to earn $45,115 in 1999 to qualify as middle-class. Now, that figure is just $41,641.

    http://abcnews.go.com/Business/wireStory/pew-study-sees-shrinking-middle-class-major-us-39049118


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