Texas Raising the Speed Limit

Texas is considering raising its speed limit to 85mph. There are people who are saying that this is a bad idea. That is stupid.

They cite "speed-related" accidents. There is no such thing as a speed-related accident. If you are driving well and fast, you won't have an accident. Long stopping distance? That simply means the distance that can be considered tailgating becomes longer. That is why one of the few infractions that is heavily ticketed on the Autobahn is tailgating. Stop ticketing people for speeding, like American cops are prone to doing, and ticket them for asshole driving.

And speaking of the Autobahn, if speed is so bad, why does the German road system, which has many sections with no speed limit at all, have a lower accident rate than us? And why does it have a much lower multi-car accident rate than us?

This gets to the heart of the "speed-related" garbage. Reports cite speed as a factor in any accident where cars were exceeding the speed limit. Do you know anyone who follows the speed limit? I don't. And even under that broad classification, only one-third of accidents can be classified as speed-related. The majority of accidents happen on slow, side-roads and in intersections. And that makes perfect sense.

When you're on the highway, you're going very fast, but you spend most of your time going in, more or less, straight lines. There's very little opportunity for things to go wrong. When do things go wrong? When people are maneuvering. Turns, stopping, starting, etc.

They also spend depressingly little time discussing the speeds at which people are already driving. I think it safe to say that people are driving at speeds that find comfortable regardless of the speed limit. In Rhode Island, there is a two-lane secondary highway with a large grass island in between north and south-bound traffic. The speed limit is 50-55mph. Average speed? Somewhere north of 65, with the left lane always above 70. On the more open stretches of highway, with speed limits that range from 50-65mph, average speeds are over 70, with fast cars in excess of 90.

At the same time, though, we have people who are driving under the speed limit. On the highway, where the limit is 65, I encounter people driving 50 or less frequently. My observations aren't entirely anecdotal, either. I drive a lot, at all hours of the day, in multiple states, and am thus exposed to thousands of other drivers every week. The speed limit seems to have very little effect on the speeds that people drive. The nature of the roads seems to have a stronger effect on people's driving habits. Certainly, they look to the speed limit as advice on the dangers inherent to the roadway, but after that, it's personal desire.

What this means is, that if the law isn't doing anything, then change the law. We do not have laws based on ideals, or on things that seem right. We have laws based on reality! If no one obeys the law, the law is wrong, not the people.

Ad of the Year

A driving safety ad has won YouTube's first annual Ad of the Year Award. Like so many ads for driving safety, it misses the point entirely. People know what the consequences are. They don't need to see another ad showing blood, or crashes, or even very artistic takes on crashes like this commercial. There is nothing in an ad that can get people who will not wear their seat belts to start doing so because they don't think it will ever happen to them.

Why do none of these public service organizations realize that and instead drive home the statistics associated with accidents? You have to convince people that it can and will happen to them, not show them the juicy results of an accident that they don't think they'll ever encounter.

WTF!

Man, Obama just keeps going after all the wrong things.

Everything is wrong with this article. 6,000 killed by driver distraction? So, yes, let's target cell phones. That's obviously the problem. You know what else is distracting? Kids. We should outlaw kids in the car. And reading books. I'm sure some people do that. Ooh ooh! We should also make sure to outlaw putting on makeup and changing clothing while driving. Some people do that.

Now, to pick apart specific aspects.

Transportation Secretary Ray LaHood said. "Distracted driving is an epidemic and it seems to be getting worse every year."

Seems? SEEMS? You fucker. Show me the money! And by money, I mean evidence. If you don't have evidence, DON'T SAY ANYTHING. Stop acting like you know what you're talking about. Stop acting like you're correct because you can use words like seems.

"The meeting gathered experts to examine the potentially deadly mix of driving with cell phones, mobile devices, and other distractions."

And other distractions? Wow. That's a huge "and." Might as well talk about attacking the causes of cancer by listing bad diet, power lines, and other things.

None of this is right. Two anecdotal stories discussing people who lost loved ones does not negate that the stories are anecdotal at best.

All of the data show that driving deaths are decreasing. Driving deaths peaked in 2005, but the crashes-per-capita and crashes per-miles-driven is the lowest it's been since 1994. Oh yeah, this is one hell of an epidemic. The roads are safer than ever before. Something must be done. Maybe more red light cameras!

The only area that is showing a marked increase is motorcycle deaths, and that heavily involves more people driving motorcycles. Since 2003, the number of registered motorcycles has increased by 19%, 58% since 1998. Moreover, motorcycle deaths have increased as laws about wearing helmets have ebbed. This is fine, since I see it as an issue of personal freedom. Someone who doesn't wear a helmet is an idiot, but that's their right. Moreover, the lack of helmets can't explain a significant increase in just the past ten years.

Perhaps it's just the Fast & Furious culture combined with bad driving? It seems that way (see, I can pretend like I have facts, too). The fact is that people are going to drive poorly. No matter what you do, people are going to try and eat, read, sleep, have sex (more common than you think), talk, and otherwise do things besides driving while driving. It cannot be legislated away, and all more laws do is give cops excuses to hand out more tickets that do nothing more than pack more money into the general fund. Just what we need. An even more parasitic government. Good job, Obama.

By KEN THOMAS, Associated Press Writer Ken Thomas, Associated Press Writer – Wed Sep 30, 6:42 pm ET

WASHINGTON – Driving while distracted is a growing peril in a nation reluctant to put down its cell phones and handheld devices even behind the wheel, the Obama administration declared on Wednesday. Officials said Congress and the public must team up to reduce the danger.

Opening a two-day meeting to find ways to reduce drivers' use of mobile devices, the Transportation Department reported that nearly 6,000 people were killed and a half-million were injured last year in vehicle crashes connected to driver distraction. That includes drivers talking on cell phones and texting.

"To put it plainly, distracted driving is a menace to society," Transportation Secretary Ray LaHood said. "Distracted driving is an epidemic and it seems to be getting worse every year."

The meeting gathered experts to examine the potentially deadly mix of driving with cell phones, mobile devices, and other distractions that divert attention from the road. LaHood said he would offer recommendations on Thursday that could lead to new restrictions on the use of the devices behind the wheel.

While the meeting focused on drivers using cell phones and mobile devices, participants noted that distractions could include reaching into the back seat, applying makeup or eating.

"I have nightmares about the last moments of my mother's life," said Greg Zaffke of Chicago, whose mother, Anita, was killed in May when a vehicle rear-ended her motorcycle at 50 mph. The driver had been painting her finger nails at the time of the crash.

Congress is watching the issue closely. Sen. Charles Schumer, D-N.Y., and other Democrats are pushing legislation that would require states to ban texting or e-mailing while operating a moving vehicle or lose 25 percent of their annual federal highway funding.

"We need every state to put safety first," Schumer told participants.

LaHood said the government would draw lessons from past efforts to reduce drunken driving and encourage motorists to wear seat belts, urging a "combination of strong laws, tough enforcement and ongoing public education."

The government reported that 5,870 people were killed and 515,000 were injured last year in crashes where at least one form of driver distraction was reported. Driver distraction was involved in 16 percent of all fatal crashes in 2008 and prevalent among many young drivers.

Eighteen states and the District of Columbia have passed laws making texting while driving illegal and seven states and the District have banned driving while talking on a hand-held cell phone, according to the Insurance Institute for Highway Safety. Many safety groups have urged a nationwide ban on texting and on using hand-held mobile devices while behind the wheel.

Researchers grappled with the question of whether using a hands-free device was safer than using a hand-held phone behind the wheel. One researcher cautioned that hands-free devices could still cause distractions if the driver needed to dial the phone or handle the device.

"I think it's important that we recognize that hands free is not risk free," said Dr. John Lee, a University of Wisconsin researcher.

Others said laws banning hand-held cell phone use by drivers would be easier to enforce and warned that total bans could preclude technologies such as General Motors' OnStar, an in-vehicle system that alerts emergency rescue officials to a crash.

"You have to be really careful about unintended consequences of just saying we need a complete, total cell phone ban," said Dr. Tom Dingus, director of the Virginia Tech Transportation Institute.

Family members of victims called for a complete ban by drivers and suggested technologies that prevent the mobile device from receiving e-mails or phone calls while the vehicle is in motion could address the problem.

"This isn't just a small problem. This is an epidemic," said Jennifer Smith of Grapevine, Texas. Her 61-year-old mother was killed last year in Oklahoma City by a young driver talking on a cell phone.

Green light... RED LIGHT!

Red light cameras cause more accidents. Speed cameras do the same. They are not about helping you. They are about revenue generation. The police and government are NOT your friends. They might not necessarily be your enemies, but they are certainly not your friends.

Despite All Sorts Of Laws And Automated Ticketing Cameras... Car Injuries Increased In The UK

Obama's Got Gas

The Obama administration has released its new CAFE gas mileage requirements for auto makers, and they're pretty intense. 39 mpg for cars, and 30 mpg for trucks.

As many articles have already posted, this puts the onus on manufacturers, not consumers, which is the problem. We can have manufacturers make small, efficient cars all we want, but consumers won't buy them. They never have. We have always, ALWAYS bought the biggest, most inefficient car we could. It's the American way, seemingly.

In Europe, where gas prices are somewhere around $4,567 per liter, efficiency is very important to the consumer, so cars sell well. Diesel cars, which usually get well north of 40mpg, are unsellable here because consumers have bad perceptions on diesel and we have high taxes on the fuel aimed at truck drivers. Why not just ditch the diesel tax and encourage diesel cars like the SEVENTY-NINE MPG Volkswagen Lupo Diesel. Or the slightly larger Polo which knocks out nearly 60mpg on the highway.

This regulation does absolutely nothing to deal with these fundamental economic problems, which dooms it to failure. Instead, since we're dealing with fleet average, we'll get the same gas guzzling cars everyone wants now, AND lots of crappy efficient cars no one wants to drive. Even worse, the manufacturing of those useless cars will use up MORE RESOURCES needlessly, which is the exact opposite of what everyone wants to achieve. And since those crap cars will be likely sold at a loss, it will drive up the costs of all the other cars, which will simply put a damper on car sales and thus the economy.

I want to be very clear on this, and this is a truism recognized by all the major oil companies, which is why they don't give a rat's ass about alternative fuels: WE ARE GOING TO USE EVERY DROP OF OIL ON THIS PLANET. It is a fait accompli. Environmental issues are immaterial. Every bit of carbon locked up in oil will be up in the atmosphere sooner or later. We want to, nay, we need to target other aspects that can be changed. We do not need to continue using coal, for example. We do not need to continue burning so much natural gas. There are things we can do, but this isn't one of them.

Now, I'm going to go drive recklessly in my 20mpg sports car.

UPDATE: 20 Minutes later

I've been thinking over this a bit more, and the possibility that the Obama Administration is totally aware of everything I said is there.

It's so refreshing to be able to attribute intelligence and wisdom to our president. I forgot how it felt after the past eight years. But as I said, this bill will do little to stop our purchase of gas-guzzling trucks and sports cars, but what it might do is increase funding for all-electric cars. It's the best way to meet the standards. Sell an ∞mpg vehicle.

This would be fantastic. I could have an all-electric for trips to store, cafe, and about town, and my aforementioned 20mpg sports car for longer trips and suicidal moments of bravura. I think Tesla has proven there is interest in electric cars, and even GM's own EV-1 had its own fanatic following. If this is indeed the intent of the bill, it might just work.

Of course, we could also just end up with lots of crappy, 1.2 liter three-cylinder econoboxes that get 45mpg, thus wasting time, money, resources, and people. It's quite a gamble.

Supercars

Definitions are critical in the world of science. For all intents and purposes, science is an arbitrary set of rules and regulation used to standardize the world for the sake of easy communication.

As such, I like defining things. It's always so easy. For example, the definition of supercar has been having a hard go, recently. With cars like the Nissan GT-R crushing cars that cost four times as much in performance figures, and the Corvette ZR1 destroying everything ever, what is a supercar anymore?

I propose a definition that can be easily and universally applied. A supercar is a car that,

• Costs in excess of six times the median annual income of a United States household.


• Has 0-60mph times and top speed times in the upper 1% of production automotive performance by model volume and not production volume.


• Is street legal with all performance numbers done on street legal tires.


• Can seat at least two people.

I chose the six-times figure because that results in allowing the Lamborghini Murcielago onto the list, which I see as the baseline supercar. It also eliminates everything Porsche, Ferrari, and Aston Martin make. Porsche is too accessible, Aston is too soft, and Ferrari uses the Enzo as their performance baseline, meaning it's their supercar, so it's mine too.

I figure the most obvious metric for a supercar is its performance. The super-rich are classified as the upper 1%, so why not classify supercars as the upper 1%.

The street legality parameter is flexible since what constitutes street legality changes from state to state, and country to country. For example, the Porsche 959 was never certified in the United States merely because the four cars required for crash testing were never supplied by Porsche. An event such as this should not have any effect on the classification of the car. I like Top Gear's measure of a car must being able to clear a speed bump.

I chose the street legal, two-seat parameter to eliminate street-ready race cars. Race cars are very fast. Of course they are. Supercars should be fast street cars, not slow race cars.

All of the measures must be compared at the time of production. So the Porsche 959 would not be a supercar now, but it certainly was when it was produced in the late 80's.

How Much Does Your Dick Cost?

Men spend a lot of money on women, but trust me, they spend even more on their dicks. This can be explained in any number of ways (Men are peacocks without feathers, so they buy feathers), but all that really needs to be said is that they do.

I set out to try and determine how much of a given product's cost goes to a person's cock. I call it the penis tax. I figure a good place to try and figure an equation for this would be cars, since the penis tax is so painfully, obviously, blindingly apparent.

I propose as follows...

Sale value - Actual Value = Penis Tax

Sale value = MSRP + Average dealer markup

Actual value = MSRP - (MSRP - Average price of cars in category)

Dealers LOVE to vacuum as much money from your pockets as they can, and they know full well when they have a hot product that will cause men to toss common sense out the car window. Because, I would argue, they know that you if you're looking, you probably can't get laid without this car.

To figure the average markup, I hit eBay and searched for an example car and found the highest price for a new example that had bids on it. This indicates the price that men with small pee-pees are willing to pay. To test the equation, I used the Ferrari 599 GTB (drool).

MSRP: 273,845
Sale Value: 375,100

The $375,100 number is the highest amount on which people were bidding. Now, Ferrari's have some penis tax built in. I mean, duh. A car that costs more than the average American home can only exist because a penis is involved in both its manufacture and eventual purchase. So to determine that a car is factory-made too expensive, we can only claim its overpriced if cars that are its competitors are cheaper. So we have to figure the average price of cars that someone in the market might buy.

This is tricky. What constitutes direct competition? Style? Price? Performance? I tried to include all of these in my short list of competition. This is where a little art sneaks into the computation.

1.Porsche GT2: $200,000;
2.Porsche GT3 RS: $124,000;
3.Aston Martin DBS: $262,000;
4.Chevrolet Corvette Z06: $71,275;
5.Nissan GT-R: $71,900;
6.Lamborghini Gallardo Superleggera: $223,040;
7.Lamborghini Gallardo: $185,600;
8.Lamborghini LP640: $334,400;
9.Mercedes CLK AMG Black: $135,000

I debated whether I should include penis tax into the competitor list, as well. I decided against it because I was afraid that the stupidity of men would skew the results and I stuck with the MSRPs of the list. I figure that the manufacturers know how much their friggin' products are worth.

So the averages of the list are...

With outliers included: $178,579
With outliers removed: $188,273

So, amazingly, the actual value of the 599GTB ends up being the exact average of competitors. I swear I didn't plan this. That ends up with a penis tax of a stunning $196,521. The cost of many people's homes, going to some dudes member. I don't know about you, but that's fucked up.

More About Cars

In questions about "Cars of the Future," people ask designers about the future of automotive design, the designer than proceeds to lie. For exahmplay, here, Mike from Ohio asks why all cars look the same. This question is directed at Hyundai, who have been one of the most laughably blatant rip-off houses in recent memory. And, oh, lo and behold, one of his answers is CONSUMER ACCEPTANCE. When in doubt, blame the consumer as opposed to your own crap product.

"In regard [to consumer acceptance], one can look at a number of cars in the recent past with styling that was markedly different but was not accepted by the public." Recent past? What cars is he talking about? The Pontiac Aztek, which was selected as one of the 50 worst cars ever made? It failed because it was a piece of crap, not because it was hideous. For all the failures he can mention, I can mention weird-lookin' cars that succeeded. BMW's Z4, the Honda Ridgeline, and the absurd Scion xB were all great successes. They looked different. Don't confuse bad design with different design.

Cars, Again

As I posted a few days ago, I was thinking about automotive design. I was also kind of thinking about “futurists,” or arrogant jackasses who think they know how the world works. I'm a real playa' hayta' when it comes to futurists. Futurists love to talk about cars and if one of them opens their mouths you can rest pretty well-assured that they're wrong.

I wrote about how we need to re-boot design, and the auto industry is a good microcosm to discuss a lack of innovation in industry on the whole. The New York Times has a good slide show on “visions of the automotive future-ture-ture-ture!” and showcases all these hot (literally, they're all quite attractive), young designers and their concept cars as though these cars will ever be made. These are a facade to make people think that real design is taking place. As though real innovations are happening. Ha. A lie, I say!

None of these cars will be made. None. The only one that stands a chance is the Toyota A-BAT because it's quite obviously a sad rip-off of the Honda Ridgeline. There is very little innovation in its sad, pathetic lines. The Dodge Zeo not only stands little chance of being made, there's a good chance Dodge itself won't be around for much longer.

We've been waiting for the cars of the future for sixty years. Every car show, every magazine, every company PR release discusses the future and how “we're working towards it with you!” Bah. It's all shit. The words and the designs. Cars have been nothing more than a constant and measured evolution. Go back 15 years, a round number, and the “future” cars are just as futuristic and unfulfilled now as they were then. They say the concepts tell you where they are “going” with their designs. Too bad they never get there.

Look at the Mustang Mach III concept in the above photo. AMAZING car. Now look at the sad shadow of itself that it presaged for the 1994 model year. They have nothing more than a passing similarity. We need a car company either ballsy enough or desperate enough to really try something new. To actually push the envelope, as opposed to simply using cliched phrases in the brochure to convince you that this family sedan is practically the Enterprise. Do that, and I'll buy! And if you do it, and it's just a half-baked piece of crap, don't blame it on being ahead of its time. Just blame your own sad lack of skills.

Seeing Life From a New Angle

Well, I'm not dead. I've been concentrating on my food blog. I think about cars a lot. I'm a man and I figure that this is genetic. One of the things that strikes me is the rut that automotive design is in. I'm not talking about concept designs, those are frequently amazingly inventive, but about actual production cars.

I actually hate concept cars for that very fact. The incredible ideas and designs almost never make it into production. No matter how avant-garde or on-the-edge a car company claims to be, the designs end up derivative. The production cars are always pale shadows of the wondrous concept cars. I also hate how there's this phenomenon is explained by company insiders as a result of fear, fear that a car will be ahead of its time. The examples they inevitably cite are the Cord 810 and Ford Edsel.

They talk as though the Edsel was ahead of its time. The Cord was too fancy-looking. The public just wasn't ready and highlight all these futuristic aspects of the cars to support their idea. Well, no. The Edsel failed because it was ugly, poorly built, and aside from the flying vagina on the front, was a thoroughly conventional car. The Cord would have been a success if not for some serious quality problems, poor funding and terrible dealer support.

No, they were not too tomorrow. In fact, I don't think there's such a thing. Actually, yes. I totally agree with myself. I declare that there is no such thing as "ahead of its time." I say that there are half-baked ideas that become prescient in retrospect, but they failed not because their time hadn't come. They failed because they were irreparably crappy in some important way.

I think the auto industry and industry in general is in desperate need of fresh eyes. People who look at a situation and come up with wildly divergent ideas about providing product to that situation. Imagine a family car with three wheels, the doors consist of the entire side of the car, two seats in front, one in back, and powered by electricity. Or imagine a car that starts life is something the size of a Mini Cooper, but allows for the purchase of modules that simply snap on to the base, extending utility.

And while I say that automobiles triggered this thought line, I mean to extend this to ALL areas of design and life. This is innovation in its purest sense. Apple did a good job of this with the iPhone, but they didn't take it nearly far enough. They completely rethought the cell phone and made their eventual product purely Apple. The iPhone is also a fabulous example of innovation because it was a monstrous success because, surprise, the company actually thought it out and backed it fully! My god! What a novel concept! If it had failed, people would have undoubtedly called it ahead of its time.

This is a cry out to major corporations, not the microscopic, poorly funded ones full of edgy designers fresh from RISD or IT. The little guys are great thinkers but they suck balls at doing business. That's why none of them are successful. Edison had it 100% right. You take your profits and plow them all back into making more inventions. You innovate and you never stop innovating. His electric light was certainly ahead of its time, but he knew business first and invention second. If you make something, figure out how to sell it. If you can't sell it, you're doing something wrong.

What the hell happened to that spirit? We have wide-eyed innovators who couldn't sell fire to Eskimos because the block-headed businessmen are too busy selling them ice cubes. We are in desperate need of a complete re-thinking of our design and engineering in pick a subject. Personal computers need it, rather badly I might add. Housing and architecture is in such desperate need of it the world is now aware of it.

The businesses that develop these technologies get into such ruts that, whether they mean to or not, they never seem to get out. They become locked into a particular rule set that forces them to continue making a product according to what has come before instead of injecting re-thinks into the equation. We're limited by what we can reasonably do, for sure, but even if we dance dangerously close to the limit of practicality, what results can be a reasonable success, foment future innovation, and build strength; e.g. the original Macintosh, Frank Lloyd Wright, and the self-parking Lexus. When innovation is applied to brutal practicality, the result can be so simple it's a wonder that it isn't applied to everything, such as the environmental advances done in the Bank of American tower in New York.

For an object that was not ahead of its time, just stupid, I look to the Segway Human Transport Device. This two wheeled badge of geekiness has been an utter failure. It was hyped to the point of pain and ended up being a complete and total let-down. It's not because Dean Kamen was living in the future, it's because he has a great idea that he just can't package correctly to make it important. It's interesting that two great salesmen, not engineers, were the ones to rip the Segway a new one well before its release: Steve Jobs and Jeff Bezos.

To move the world forward, we need a massive meeting of salesmen, to figure out what to make, engineers to figure out how to make it, and designers to package it in a way that truly impresses. If we could do this once a year, technological advance would probably accelerate.

Well Sir, That Will be $55,535. Enjoy Your Mini Cooper!

Jalopnik.com, a favorite read of mine, has an interesting short on how expensive one can get a car on a company's "Build Your Own" section of their website. A few standouts include a V6 Porsche Cayenne at nearly $165,000, a Porsche Boxter clocks in at $118,000, and a Smart FourTwo, one of the crappiest cars I have ever driven, at a hair under $29,000.

The rationale of these cars and whether they're worth it aside, it made me think about the disconnect between cars prices, inflation, our parents' generation, and the credit economy... I read into things.

It made me think about how car prices have increased so exorbitantly. Yes, I can see where much of the money goes, cars today are vastly superior to cars of thirty years ago, but I find it interesting and telling that car prices have increased so out of line with inflation. For example, a base Mustang in 1965 cost $2,368, which works out to about $15,000 grand in today's dollars. A base Mustang today costs $20,000. A five-thousand dollar difference is not insignificant. In fact, it's bloody huge.

I was also thinking as I looked at the listing for a BMW 1-Series costing nearly $60,000, or a Honda Accord at $38,000, that the disconnect between advertised prices and what the cars actually cost betrays the sort of financial gymnastics that accountants must play to get their cars advertised at the prices they need. It reminds me of an experience I had with my parents years ago. They wanted to buy a Hyundai Sonata. They saw a flier from a local Hyundai dealer advertising a price of, I think, $14,000 for new example of last year's model. After some talking, and revealing the flier, the man looked at us and said, flatly, "we can't sell you a car for that price. No one can."

After my mother stormed out, and ran, she had to use the bathroom, we were about to leave when the salesman chased after us and, well, we made the purchase. So happy ending. But the guy we were dealing with said that the advertisement was a lie, and frankly, so are all the other advertisements for every other dealer. They all lie. It's the only way they can sell cars. Dealers lie. Manufacturers lie. And can you imagine what dire straits the auto industry would be in if they hadn't invented leases? Thirty years ago, leases (almost) didn't exit. Now, a huge chunk of the American population rely on leases to just get around.

It's not that cars have outstripped inflation, it's that inflation numbers do not represent actual inflation. Inflation, much like car prices, is also a lie. It's a lie that has, as the economy has evolved over years, required ever-more complex bouts of gymnastics from economists to keep the economy on the perceived golden path of 2-3% inflation. Unfortunately, income has NOT kept up with inflation. Your parents earned more than you, on average, than you are earning. Which means the cheaper cars thirty years ago were more easily affordable on sheer income than the more expensive cars of today.

Basically, what this means is that people can't afford cars. Well, I should say that people can't afford the cars they want. They can afford the cars they don't want, like, say, the Honda Fit or Hyundai Elantra. Most people with average incomes can afford these cars. But what cars were selling like hotcakes over the last fifteen years? SUVs! Granted, as gas goes up they go down, but I'm talking about the last decade or so, not just the last three years. And of course, how could they buy all these expensive cars that no one can actually afford? Credit! Yes, credit.

The American economy is as insane as it is because of credit. Good, bad, we'll see what the ramifications of it are in a few years, but it cannot be argued that most of what we see are because of the credit economy. Starbucks, Audi, McMansions, and Coach Bags all exist on the credit economy. It's a strange thought, but much more than cars, we haven't been able to afford life for decades, and it's only getting worse.

I mentioned that inflation lies. Well, I seriously doubt there's an economics professor out there who would disagree with that (I say professor because professional economists also lie. Remember, they make money from your perceptions). Places like Wal*Mart have sent the prices of packaged food and televisions down. In the case of things that can be outsourced to China, the prices have plummeted. Just sit back and think about the immense processing capacity in your cell phone. It's all because of China.

But things we can't outsource have done nothing but go up. Cable service, for example, has increased immensely. Take a look at these diagrams lovingly stolen from The Mess That Greenspan Made.



Man does not live on clothing alone. That apparel category is nothing but clothing and jewelry. Nothing else. But "Other Goods and Services" is loaded to the gills with service and not goods. You can see these subcategories in detail below, at the Consumer Expenditure link. And, lookie lookie! That category is through the roof. Transportation follows the ups and downs of gasoline. Recreation goes up steadily. And housing... housing is a laughable number. It doesn't actually include house prices, instead it includes a statistic called "equivalent rent."

Equivalent rent is, roughly, the amount of money that it would cost to rent a place of similar amenities to a place you want to buy. For example, I want house A, and a mortgage would cost me $1,000 per month. Equivalent rent seems like it would say what kind of house could I rent for $1,000 per month, but it actually means that I could rent a house similar to house A for some amount of money. It is almost always lower than the cost of owning since ownership provides many bonuses not apparent in the numbers, and is thus worth it. But, as recently happened, if a housing market explodes, housing costs go way up, and since equivalent rents are lower than mortgage costs, and houses that were once available for rent instead go up for sale, the equivalent rent statistic becomes corrupted.

This happens because the equivalent rent statistic is heavily weighted towards other rental properties, and if those are all now for sale, and other houses that are being rented are being lived in by people terrified to give up their comparably low rate, there is NO WAY to determine an equivalent rent. House A would now cost $2,000 per month to own, but still appears as $1,000 per month comparable rent and inflation is unaffected. Equivalent rent can also be massaged based on who is doing the analyzing. Two financial firms can go into an area and run their "algorithms," and come up with wild divergent data. These data are almost always skewed towards some agenda. So on that chart, where the line says 'housing,'considering that housing costs nearly doubled in some areas of the country, increasing over 30% in good ol' RI, imagine it far and away on the top of the list.


To further illustrate the disconnect between reality and the easily digestible numbers we see on TV, look at the spending for recreation in 2005. Toys and televisions are plummeting thanks to those helpful, slanty-eyed slave workers over in the land of Pandas and rice, but most everything else is going way up. Data gathering for movie tickets didn't even begin and even that is a skewed number. Average movie ticket prices include everything down to 45th-run theaters. I instead go on data from my local megaplex. In 1998, I paid $5.25 to see Godzilla. And that had been a brand new $0.25 price increase. It now costs $10.25, with another $0.25 increase planned for the summer. That means from 1998 to now, a prime-time, megaplex ticket has seen a 100% increase. That's a shit-load of inflation and data that aren't included in the publicly available charts.

These data do not show the economy as progressing in a healthy way. They show two totally different sets of data that exist on the extremes of a spectrum. If anything, they show the economy as deteriorating. The public, joyfully encouraged to do this by the government and financial institutions, only pays attention to the happy average and is consequently oblivious to our sorry state. And how the hell did all of this happen? The credit economy and the desperate need for that $55,000 Mini Cooper.

Once you factor in the again-exploding credit card debt, it gets worse.

The average American household is carrying somewhere between $8000 and $10,000 in credit card debt alone. That doesn't even include other forms of debt like small loans and cars. Just plastic. $8,000. The only reason, the only reason your neighbors have that Mercedes is because of credit. If it wasn't for credit, you wouldn't even know what a BMW is. A BMW? A motorcycle? You want a motorcycle? Ohhh, they make cars, too?! We now live on credit. Nearly 50% of all households are spending more than they earn in a year.

I, for one, think we're crusin' for a bruisin'. The fact that are unable to afford life itself anymore means that the economy must suffer a correction. I don't know how bad it would be, but I suspect it would be bad. That's not to say we can't afford life, but we can't afford the life of an American. A Honda Civic, a TV, a computer, a night out once a week are all well within the means of most Americans. Too bad our economy is based on us spending far more than those seemingly simple things.

The credit economy is something our parents didn't have. They dreamed of owning a house. They dreamed of no debt and savings. Hell, that wasn't even our parents, that was our grandparents. The dreams of an ideal age, fresh out of winning the greatest war the world had seen, everyone could own a slice of paradise with some hard work. Where the hell did those dreams go? Washed away, I guess, by a torrent of easy credit, and $55,000 Minis.

Data and junk:
Consumer Expenditure Data (Bureau of Labor & Statistics)
Equivalent Rent Nonsense (The Mess That Greenspan Made)
Benign Inflation (The Mess That Greenspan Made)
The Truth About Credit Card Debt (Ms. Weston makes good points here, and I thought it important to include, but the problem is that the "most" she cites is only 55%, and the economy is heavily based on the remaining 45%. And, of course, credit card debt is the smallest part of the problem.)
Money 101: Controlling Debt