By Dave Anderson:
Karl Smith at Modeled Behavior argues that the short term destruction of American vehicle capital stock is an aberration and is a primer for a boom in the intermediate future:
Well, because as of the last few years the auto fleet in the United States has begun to shrink. That is, we are scrapping cars at a faster rate than we are producing them. Unless something changes in the next 18 months, our scrappage rate will begin to exceed new cars sales by the millions of units per year. In a country that is still growing in population and still adding drivers every year its hard to explain why the optimal path is suddenly for the vehicle fleet to shrink.
This analysis assumes long term trends are still the relevant comparison. That usually is a good bet.
However the other option is to assume that we are in an error of austerity. The Reagan and post-Reagan era economic paradigm has assumed that the non-elites have had it too easy, and that whenever there is any inflationary pressure of any sort in any sector, the key is to exclude more non-elites from consumption.
American teenagers are delaying their first driving licenses and more Americans do not own cars. A car is an expensive capital investment and an even more expensive ongoing expense. In a few areas in this country, it is quite plausible for an adult to fully function as a citizen, an employee and an adult without one car per adult. However most areas of the country are not dense enough nor interconnected enough for carlessness to not be a major ongoing expense.
This interpretation would say that more Americans are being forced out of the fully involved middle class because they can no longer access cars. Without a car, non-urban core employment opportunities are severely restricted, consumption opportunities are restricted, and energy consumption, which is the limit on American economic growth, is minimized.
It is from this interpretation that the 99ers demands that the American Dream that we have been sold on, and we have been indebted to either be made to work for most of us, or the debts forgiven as we had been sold a bill of counterfeit goods.
I drive by the local high school daily. Over the last couple of years I have noticed that there are fewer and fewer cars in the student parking lot. People are moving back to the city center of Portland and since Portland has a good mass transit system many of them have given up cars.
ReplyDeleteThis is one of those areas where I can see things getting quite ugly in the not-too-distant future, particularly given an increased likelihood of oil scarcity to add to the difficulties of regular car ownership and operation. The simple fact is that far too much of the infrastructure in North America has been built with near-universal car ownership in mind, and the layout of cities is not something you can change near as rapidly as can the economic conditions of the people who have to keep buying the cars to travel around them. That discontinuity is going to leave a whole lot of people a whole lot worse off during the transition.
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