I’ve been harping on this for years. What we are seeing is the exact same thing that happened over 30 years ago. The economy was good, so we (collectively, the American public) got lazy and stupid. Cars got bigger and bigger, because that’s what was selling. To hell with gas mileage! I’ve got money, so that 10 MPG monstrosity (3-ton sedan then, 3-ton SUV now) isn’t a big deal. Make my car bigger, faster and louder; I want to see horsepower numbers, not fuel economy. So the auto makers follow the money, and for some unfathomable reason think it will last forever. Short-term thinking sets in, no one looks past the next quarter or two, and they keep churning out F-150s and Escalades instead of looking to improve the smaller, cheaper, more efficient vehicles. That market is left (now as it was then) to the Japanese, only now the Koreans are in the game as well.
So, our Arab brothers decide to jack up the price of oil — why? Well, because they can! If you see that your biggest customer will buy whatever you offer, at whatever price you demand, it follows that you’re able to do whatever you want with the prices. Besides, we’re just a bunch of filthy infidel that will eventually be converted or killed anyway (in case you missed it, these people are not our friends). Throw into the mix that China is finally waking up from a 60-year sleep and starting to rub its eyes, look around and see that there is business to be done and money to be had. The cheap labor market has shifted from the Japan of the 50s and 60s to China (along with other places like India), and the standard of living in those places is rising. As a result, their demand for oil, steel, and other commodities is rising sharply.
All the while we’re blissfully cruising along at 80 MPH in a 4-wheel-drive pickup or SUV sucking down gas like there will never be an empty tank. Wind power? Too expensive to develop, coal is cheap (never mind those nuke plants starting to age out). Hydroelectric? God forbid we build any more dams! Solar? Again, why bother when gas and oil and coal are so cheap. Oh, hey, wait. Now they’re not, and now we’re 30 years behind where we should be. We wasted three entire decades when we could have been weaning ourselves off of foreign oil, because we were too short-sighted to see that the oil problems of the early 1970s would be back, without fail. Why? Well, for pretty much the exact same reasons there were back then, I guess.
And where was our government during all of this? Well, I guess we get the government we deserve. Don’t try to lay the blame at the feet of any one administration or political party; not a damn one of them did anything significant to help move us in the right direction. It’s not politically wise to tell people during good times that there will be bad times at some future date, and to prepare for them. We could have had strong leadership pointing the way to energy independence and the use of renewable, ecologically sound fuels and energy sources, but we didn’t. We could have had policies that encouraged American businesses and consumers to think long term instead of short term, globally instead of locally, but we didn’t. We still don’t. I don’t know that we ever will.
I have very little sympathy for American car manufacturers, or for Harley-Davidson for that matter. It should have been blindingly obvious all along that the ride couldn’t last forever, yet all of them have been pretending that it would. Now, when things are looking a little bleak as they were bound to, they act like it’s a huge surprise. Gee, they say, why aren’t people buying our behemoths any more? Must be that pesky ol’ economy, we’ll just make some more Yukons for when things turn around. Yeah, that will work.
And the Harley crew… my God. Did they learn nothing from watching the cigar boom of the last decade? Dealers building new, huge showrooms well after the market peaks and starts to decline? How incredibly obtuse can you be, to not see what is so obvious to even a casual observer? I watched American Chopper last night; the Teutels are building a new plant and expanding their operations. I wish them luck, but my prediction is that in a few years you’ll be able to rent space in that place for indoor tennis courts.
Don’t get me wrong; I think the economy will pick back up. Historically, it always has. I’m not frantically selling off stock right now, I’m buying at cut-rate prices (just not Ford, GM, or Harley). But I do wish that some day we might collectively, as a nation, wake up and remember that we’ve been here before, and maybe figure out that we might want to address some of these problems before the next crisis. If we don’t, these recessions will just continue to get worse.