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Publick Occurrences 2.0

August 28, 2009

A Match Made in America

Filed under: Conservatives,Economy,Missouri — Jeffrey L. Pasley @ 7:00 am

I can’t say this connection had occurred to me consciously, but it made only too much sense to see that in one suburb, at least,  two outsized, fearful items of modern conspicuous consumption have converged: Hummers and assault weapons. It does indeed seem to take a similar mentality to think that suburban personal safety requires driving to the supermarket in an armored personnel carrier and that personally acquiring enough munitions to capture Iwo Jima is a good idea. And to regard living that way as somehow cool and manly. But let the St. Louis Post-Dispatch tell it:

Chesterfield Hummer dealership fights declining sales with guns


Like many of his competitors, Hummer dealer Jim Lynch is fighting for survival.

Unlike the rest of them, Lynch reached for a gun. Lots of them, actually.

Faced with declining sales and an uncertain future, his Chesterfield dealership has expanded in a direction that’s drawing national attention. It’s what happens when you replace some of those pricey Hummers with dozens of Glocks, Sig Sauers, Colts, Berettas and Brownings.

For Lynch, those guns are the solution to a problem that’s been hounding him for months.

“We’ve got a beautiful building with a big mortgage,” Lynch said. “The Hummers weren’t going to cover it.”

In the good old days — way back in 2005 — Lynch’s dealership could sell 70 Hummers during a strong month. But high gas prices, a sour economy and the auto industry’s ongoing struggles have wreaked havoc. These days, he’s happy to watch 10 of the gas-guzzling sport utility vehicles leave the lot. But the money he pockets selling guns makes up for the profit on about 15 Hummers.

But why guns? Why not flowers? Or lawn mowers? Or jewelry?

That’s easy. The people who like Hummers also tend to like guns.

The story goes on rather matter-of-factly from there, with the dealer, his customers, and even a Marketing professor from Philadelphia treating guns-n-Hummers as the most natural thing in the world, which I suppose it is, at least in this part of it.

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December 11, 2008

Fridge Magnates

Filed under: Democracy,Economy,energy,Obama Administration — Jeffrey L. Pasley @ 8:16 pm

Via Josh Marshall, who got it from a New Yorker blog post, comes an argument from Steven Chu, Obama’s pick for Energy Secretary, that seems very consonant with my Thanksgiving weekend post about the role of excessive “democracy” (of the interest group lobbying kind) in the ruination of the U.S. auto industry. It seems that at least one sector of U.S. manufacturing greatly improved itself when government stopped heeding its wishes.

Consider, Chu said, the refrigerator.Refrigerators consume a lot of energy; all alone, they account for almost fifteen per cent of the average home’s electricity use. In the mid nineteen-seventies, California—the state Chu now lives in—set about establishing the country’s first refrigerator-efficiency standards. Refrigerator manufacturers, of course, fought them. The standards couldn’t be met, they said, at anything like a price consumers could afford. California imposed the standards anyway, and then what happened, as Chu observed, is that “the manufacturers had to assign the job to the engineers, instead of to the lobbyists.” The following decade, standards were imposed for refrigerators nationwide. Since then, the size of the average American refrigerator has increased by more than ten per cent, while the price, in inflation-adjusted dollars, has been cut in half. Meanwhile, energy use has dropped by two-thirds.

It is unclear whether the American refrigerator industry is better off economically than the automakers, but it would be hard for them not to be.

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November 30, 2008

Degradation of the Democratic Dogma: Automotive edition

Filed under: Congress,Economy,Environment,Government,Political culture — Jeffrey L. Pasley @ 11:37 pm

Regular readers should not worry about the title too much — I am not turning against democracy or trying to ape Henry Adams. What I do think is that democracy as it tends to be defined in modern American government has become a major problem, and a serious contributor to the current economic crisis.

Specifically, it seems to me that the increasing debility of American business institutions partly stems from the permeability and responsiveness of American government. That is to say, in our system, it appears to be a little too easy to get the concerns and interests of various constituent groups a hearing in the halls of government. Wealthy campaign contributors and corporations may jump to the front of the line, but the most powerful argument for any lawmaker is jobs back in their state or district. Maximizing employment in his or her constituency is nearly every legislator’s top priority, which in practice means protecting and promoting the perceived interests of the major industries in that constituency. This is the door that interest group and corporate lobbyists use most effectively to gain influence over senators and representatives, but it is also very close to what most lawmakers see as their most basic democratic mission: being their constituents’ advocate before the government, especially their constituents’ businesses and employers. This is also why so many former lawmakers have few qualms about becoming lobbyists for industries they once legislated on: the two jobs are really not that different. As political scientists have found, and any significant amount of contact with congressional offices will tell you, “constituent service” is the one thing that even the worst legislators tend to be pretty good at, if they survive for any length of time.

In the case of the U.S. automobile industry, both the companies and their workers have received all too effective representation over the past four decades. The Big Three automakers have become addicted to political protection from market forces that have been signaling them for many years to build smaller, more fuel-efficient, more reliable cars. (See this capsule history of CAFE standards from Pew for specific examples.) GM, Ford, and Chrysler avoided mandates to make any of the necessary changes as quickly or thoroughly as they should have by relying on their friends in Congress and the executive branch to block or blunt every new law or regulation that came along. This process operated even at the state and local level, and not just on environmental matters, as today’s NYT piece on the dying out of American car dealerships showed:

Car dealers are not entirely blameless for their fate. Auto analysts say they did not push Detroit hard enough to build better-quality, more efficient cars. They note that the dealers lobbied hard in state capitals for laws to protect their franchises from the Detroit manufacturers who wanted to limit their numbers and determine their locations.

Mr. Thomas lays some blame on the unions that drove hard bargains with the automakers, some on a news media that “glorified” imports, and some on the Big Three for being “slow to react to the market and what the public wanted,” especially when gas prices rose in recent years.

In other words, a certain kind of “democracy” (and “federalism,” for that matter) limited the possible changes to the automakers’ basic business model.

For a long time, cheap gas and the continuing Middle American penchant for overcompensatingly large, powerful vehicles allowed Detroit to keep making money in its familiar way. Meanwhile, outside the Detroit-Washington-exurban street tank driver feedback loop, the American auto industry inexorably lost market share and reputation to foreign competitors. The point at which Detroit could have acted decisively to rescue its image and become known as a producer of reliable, modern, environmentally sustainable vehicles passed almost imperceptibly some years ago. In a bit of painful poetic justice, the industry’s constant, usually successful battles against effective environmental regulations probably contributed to the deterioration of Detroit’s “brand” in the marketplace.  The incessant quasi-jingoistic commercials on sports broadcasts and local TV news probably did not help much either.

Waking up in the crash of 2008, the Big Three found Toyota, Honda, and Nissan occupying their old position as the American middle class’s default vehicle suppliers and foreign automakers generally having built a sufficient number of plants across the U.S. to undercut some of the jobs-based political support Detroit had always enjoyed. The three CEOs’ disastrous last private plane trip to D.C. earlier this month revealed a shockingly changed political atmosphere — the shock showed on the executives’ faces — and it immediately precipitated the fall of Detroit’s strongest redoubt on Capitol Hill, House Energy and Commerce Committee chairman John Dingell of Michigan. Now the abyss really seems to loom for the American automakers, and one can almost feel the country mentally preparing itself for the coming bankruptcies, at best. Former Rust Belt senator that he is, President Obama will probably step in do something for the auto industry early next year, but by that time he may only be refilling a largely empty shell.

Clearly, the auto industry has been a case where Big Business needed a Big Government to get tough with it, with no John Dingells to cry to. Contrary to its own ideology, what American business needs is more regulation and less input. By the same token, our elected representatives need to think a little more about what would be wise policy, and less about what makes their local industries happy.

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