The $3,000 Alternative…..

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I might say I grew up in Los Angeles, but I didn’t. I’m still growing up. To say I grew up would be like the so-called climate scientist saying the science is settled, something real scientists don’t say.

But growing up (I’ll use this term to communicate with non-scientists) in L.A., meant loving cars. I still read Road and Track.

My first car was a $500 1959 VW Bug. I cut out the letters from a Mad Magazine cover and taped them in the back window like the name of a college. At one point I ran it with a dead battery for a month. I could push it myself on level ground and jump in to pop the clutch to start it. Sometimes a rare pedestrian would pitch in to help push. When it needed a valve job my mom said she would donate $500 and my grandparents another $500 for a new car. I have since found that valve jobs on these cars were like tune ups, regular maintenance, and hardly a reason to sell the car.

I bought a 1967 Bug for $2,000 cash. I could have had a 1968 model but that was the beginning of the ruination of cars in America. The ’68 model was full of smog control devices that robbed it of power. High back seats divided it into two rooms. The 5 mph bumpers looked like a retarded afterthought. A Plymouth Roadrunner ended its life at 2,000 miles.

Next was the Fiat 124 Sedan. $1,875 for a 2,000 pound car that carried five comfortably, seemed like a good deal and it was. If my mom and sister and I went on a road trip the Chevelle stayed home because the Fiat had more room inside and took half the gas. Now gas prices are a campaign issue. Back then we just used the better car.

Production of VW Beetles ceased in 2003, at over 21 million units. The Fiat 124 design was licensed to several smaller companies and is still in production, now exceeding 16 million. It is still enabling ordinary people in impoverished countries to live the way Americans take for granted.

All this came to mind because Nissan is reintroducing the Datsun brand as an economy car for developing countries. Starting price could be as low as $3,000.

What could you do with $7,000? That is the difference between the regulated new car and the possible Datsun. You might have to shift it. If it is hot, roll the window down. If you get in a wreck you might be more vulnerable to injury. But the overweight blobs presented by the fascist state-controlled auto industry don’t guarantee absolute safety either. All they guarantee is profits for companies catering to fictional needs.

I remember in my VW and Fiat days hearing of the occasional million mile Mercedes diesel. Being a farmer who loves diesel engines, I could like a car that is like a pension. Buy it, use it forever.

But the numbers won’t work. Diesel is taxed more than gas because there are less truckers voting than consumers (darn democracy!). Emissions are measured as a percentage of the exhaust gases, rather than on a per mile basis. So buying an economical car presents very limited choices. In the rest of the world, where, amazingly, regulations are more lax and taxes are less a regulatory tool than a source of funding for the state, diesels are common. We have a Honda CRV that can’t manage over 22 miles per gallon. The diesel CRV available to the rest of the world gets 28.

The public discussion on this is narrow. What needs to be discussed is free trade. Not free trade agreements as representing free trade. Absolute free trade between individuals is where the American dream began. It has been eroded by an ever-present craving for reduced responsibility that produces profits for private interests who control the government-industrial complex.

Tucked away in the back pages of the Wall Street Journal last weekend was a story about Shell Oil asking permission to export crude oil from the United States. At first, one might consider this a good way to keep prices lower for American consumers, but wait. If Shell doesn’t have to ask the government permission, their ability to respond to market forces increases their profits, which allows them to compete more effectively. Other companies having that same freedom will use it to capture market share from Shell and Shell will have to lower prices to maintain their position. The bottom line is this… non market based signals misdirect resources and lead to higher prices.

The $7,000 saved by an unregulated auto industry is just the tip of the iceberg in cost savings in the possibility of a more prosperous society. One could go that route and buy three cars or spend way more and keep one car forever. If it is our choice instead of the choice of well connected lobbyists, we would have the options to fit the car to our needs in an infinite way instead of the extremely limited way we are allowed.

The Smoot-Hawley Tariff was the protectionist tax that drove our country into the 16 year Great Depression. We might not have one defined villainous bill like Smoot-Hawley, but we have a great change in philosophy that says our decisions can be limited by opinions of people who really are just guessing on what is best for us. It makes us comfortable to blame someone else for the junk that is our only choice.

I haven’t decided if I’d buy the three cheap cars or the forever car. But it doesn’t matter.

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  2 comments for “The $3,000 Alternative…..

  1. Mithrandir
    November 1, 2012 at 11:59 am

    … about Shell Oil asking permission to export crude oil from the United States.

    How will this help lower prices in the US market?

    Otherwise, I like the article. It would be nice if there were more choices in vehicles. Some people would buy a $3-5k basic car. The basic car will not stop people buying cars with more features or larger vehicles.

    • Boothe
      November 1, 2012 at 2:41 pm

      Mithrandir, I think the point the author was trying to make was that genuine free trade, not bogus free trade agreements (like NAFTA)which are designed to protect the market share of the well connected (i.e. mercantilism) will increase profitability by opening up more markets. That will in turn stimulate competition which forces all the players to become more efficient and lower their prices (or go out of business).

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