... you don't live in the right place
The typical new vehicle is now more expensive than ever, averaging $30,500 in 2012, according to TrueCar.com data, and heading up again as makers curb the incentives that helped make their products more affordable during the recession when they were desperate for sales.
Looking to buy a new car, truck or crossover? You may find it more difficult to stretch the household budget than you expected, according to a new study that finds median-income families in only one major U.S. city actually can afford the typical new vehicle.
According to the 2013 Car Affordability Study by Interest.com, only in Washington could the typical household swing the payments, the median income there running $86,680 a year. At the other extreme, Tampa, Fla., was at the bottom of the 25 large cities included in the study, with a median household income of $43,832.
The study looked at a variety of household expenses, such as food and housing, and when it comes to purchasing a new vehicle, it considered more than just the basic purchase price, down payment and monthly note, factoring in such essentials as taxes and insurance.
Do you want the gory details? Go over to interest.com (linked-in above).
This news is not surprising. The true wonder, the most astonishing thing, is that many Americans have failed to grasp that in a declining Empire, much of the wealth and income flows away from them and toward the Imperial center. That is precisely what we see here.
We note that this Car Affordability Study seeks to understand who can afford new car payments (along with taxes, insurance, etc.) based on income alone. However, as all Keynesians assume, future "growth" will depend on lots and lots of new borrowing by "consumers" (beyond the auto loan itself) whose incomes don't make ends meet, and thus do not satisfy the dream of a Middle Class life. I recently described how the miracle is supposed to work in Economic Growth Fantasies. Thus we get extraordinary statements like the opening sentence of this AP story.
Americans stepped up borrowing in December to buy cars and attend school. But they cut back sharply on credit card use, continuing a trend that could hold back growth this year.
Yes, if "consumers" don't continue to borrow and borrow, there won't be any more "growth" because their incomes certainly don't cover all the expenses of "owning" a new car, unless of course they live in the Imperial Capital.
And thus we understand why there has been a surge of subprime auto loans in recent months. Here is what I said on November 20, 2012.
Income is stagnant according to the official numbers, but car sales are booming. You don't need to be a rocket scientist to figure out how this miracle has been wrought—the incomparable magic of easy credit! The very same tragic magic that fueled the Housing Bubble.
Thus we can envision a Perfect Keynesian World—the "consumer" procures a subprime auto loan and then uses a credit card to make the monthly payments! What could be better than that?
The depressing part of all this is its utter predictability. When mainstream economists and policymakers blather on, there are no surprises, no novel approaches, no innovative thoughts—we listen to the same broken record over and over again. We always get another version of the same insightful economic "thinking" which created this greed-ridden clusterfuck so many years ago. There are no exceptions.
But this predictability can not be an accident. Some lethal combination of stupidity, blindness, avarice, self-interest, malice and self-delusion gives rise to it, especially if the person in question lives in or around Washington D.C.
"The depressing part of all this is its utter predictability. When mainstream economists and policymakers blather on, there are no surprises, no novel approaches, no innovative thoughts—we listen to the same broken record over and over again. We always get more and more and more of the same insightful economic "thinking" which created this greed-ridden clusterfuck so many years ago. There are no exceptions."
Doesn't this describe the entire post-enlightenment worldview? It seems the only solutions acceptable to the enlightened west is more of the old solutions. Democracy not working? Well we just need more democracy! Free markets not working? Make it more free! Debt can't be paid off? Just take out more debt! Humans aren't rational? Just some more education and they'll become more rational!
If there is ever to be an attempt to slow the decline (key word being slow) it would start with acknowledging humans are not rational and do not do what is in their best interest. Of course technocrats know no better. Technocrats are likely worse. There's nothing more dangerous then an educated idiot.
Posted by: Adam Noel | 03/12/2013 at 10:46 AM