Elkhorn Creek Lodge

Pelosi Motors, Inc.

Posted in economics by Eugene Podrazik on November 18, 2008

Just another 25 billion dollars and GM is going to get over the hump and make cars that are going to have the American public stampeding the Chevy showrooms. Try 25 billion dollars to prop up the UAW.

But, how did we get here anyway. It was once remarked by PJ O’Rourke, at a debate at the Cambridge Union about smoking as to how routine decisions, once personal, are now political. Which is what transportation has become. The simple act of buying a car and filling it up with gas is now at the end of pipeline of some of the most convoluted series of political decisions. Even to the point that you get evil looks and sneers for driving a truck or an SUV.

It’s getting to the point that taking a crap is going to be a political statement. Oh, it is! I’m just plunging my stopped up, federally mandated, low-flow toilet again.

Once upon a time, Detroit made good cars. Cars that people wanted because there was a relatively unimpeded communication between the buyer and producer as to what we actually wanted. 

So let’s do the autopsy. First, America ain’t Europe. Yet somehow, our elites regard the ideal car for the unwashed masses  as a little tin-foil, disposable-diaper econo-box with pie pan wheels. Maybe this works for Europe since population densities are far higher, sometimes approaching 1000 persons per square mile. While this density may be approached in the cores of our major cities, the minute you move out of the central cities things start to spread out.

They spread out in neighborhoods where people live in single family homes with real back yards. Our population density is about 80 persons per square mile; so things really spread out. You will travel longer distances and out of practicality, combine errands. Guess what, you need a bigger car. It doesn’t take some intellictoid at the Department of Energy or Transportation to figure that out. It was figured out, in the free market, through the buying and selling of actual cars. Imagine that people made decisions based on their personal needs.

Back when the space shuttle broke up over on re-entry, it dumped umpteen tons of stuff over Texas and Louisiana. But, nobody got hit by the stuff. Urban Sprawl?

Labor Unions. These are not sacrosanct organizations. Rather, they are organizations where members are allowed to collude in withholding labor to bid up the price of their labor. Anybody else try that stunt and you’d have the FTC all over your butt on anti-trust. All a labor union is is a legal exception to the Sherman anti-trust act. The monopoly exercised by the Detroit Big Three and the UAW in the 1950’s came only because of the lack of auto manufacturing capability as a result of the destruction of WW II. But, even then, I suspect that there was an emphasis to build bigger cars because a larger profit margin was needed to compensate for larger UAW labor costs. The demand for smaller cars was left unfilled and along came the imports.

This also made Detroit a Johnny-one-tune. If you want a big car or truck, Detroit’s the place. It still is. If you really need a large vehicle, you can’t beat the full size pick-ups made by the big three; though Toyota and Nissan are beginning to nudge into that area.

But, capable of only of only being profitable with larger vehicles, Detroit could not hope to cope with the politization of energy.

On one hand, the enviro-elite are conducting a jihad against the internal combustion engine (except for their own SUV’s like the one Obama has). They would like nothing less than $4 per gallon gas like we had last summer. And, if they could get away with it politically, they’d be taxing the dickens out of gas to European levels. So, the tax option out, the act of energy extraction has been politicized to make a shortage of a plentiful commodity. For all the talk of running out of oil, we seen to keep making new discoveries.

On the other hand, we have yet another Democratic party special interest group; the UAW. So, the only way to prop up the UAW and keep the enviros happy is to turn the Detroit Big Three into welfare agencies. None of our domestic automakers have been forced to confront the UAW over wage demands that outstrip any reasonable expectations of productivity. Between, the Chrysler bail out of the 1980’s or the import quotas of a similar era, there have been government interventions to preserve the UAW status quo. You could sort of do the status quo while gasoline remained under $2 per gallon. Then, in the name of global warming, the entire charade was upended since you couldn’t have your cake and eat it–cheap gas for big trucks and SUV’s and expensive gas to force a transition to “alternative,” “green,” and/or “renewable” fuels. And, there’s the simple thermodynamic fact of life that the most efficient was to carry portable BTU’s is a tank of gas.

Solution? Further fund the GM/UAW welfare program. There will always be a demand, and therefore jobs, for large vehicles. Joe-the-plumber will always need a full-sized pickup to deliver and install your designer Toto low-flow toilet. And, Al Gore and other prominent Democratic politicians will always need “rugged” vehicles as props to look “outdoorsey.” But, the carrying costs of the UAW make the production of cars a non-starter. So, we pony up 25 billion dollars to subdize the UAW making overpriced cars no one wants.

And, this is how we have our cake and eat it. We stop exploration of oil and gas to jack up gas prices and force transition to underpowered, very expensive battery powered cars that no one really wants but for the artificially high price of gas. Then we spend a lot of tax dollars to pay overprice UAW members to keep making cars that can’t compete in today’s high gas price environment. 

Thank heavens that the sexual revolution as progressed as far as it has since the late 50’s since “doing it” in the back seat of your father’s ’59 Buick becomes a real contortionist act in the back seat of a Prius. After all, only the missionary position was legal back then.

 

 

 

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