Life in Hock

Guest Post by Eric Peters

 

We live in a society driven by debt.

Cars, for example, have become hugely expensive (even on the low end) relative to what people can afford – because of the easy availability of credit. Which is the nice word used to speak about debt, intended to encourage us to get into it.

It takes at least $15,000 or so to drive home in a “cheap” new car, once all is said and done. And the “cheap” car will have to be registered, plated and insured.

It runs into money.

And most new cars cost a lot more money. Which most people haven’t got. So they get debt. A loan. Which, when it becomes commonly resorted to as a way to live beyond one’s means as a lifestyle, drives up the cost of life for everyone. Including those who try to live within their means – or better yet, below them.

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When most people (when enough people) are willing – are eager – to go into hock for the next six years in order to have a car with an LCD touchscreen, leather (and heated) seats, six air bags, a six-speaker stereo, electronic climate control AC and power everything – which pretty much every new car now comes standard with – the car companies build cars to satisfy that artificial demand.

Artificial because based on economic unreality. That is a good way to think about debt. It is nonexistent wealth.

You are promising to pay with money you haven’t earned yet.

And maybe won’t.

The car market has become like the housing market – which has also been distorted by debt to a cartoonish degree. The typical new construction home is a mansion by 1960s standards. Not that there’s anything wrong with living in a mansion. Or driving a car with heated leather seats and climate control AC and a six-speaker surround-sound stereo and six air bags and all the rest of it. Provided you can afford it.

Most people can’t.

Normally, that fact would keep things in check. There would be mansions, of course – and high-end cars, too. But only for those with the high-end incomes necessary to afford them. Everyone else would live within their means. We wouldn’t be living in this economic Potemkin village that appears prosperous but is in fact an economic Jenga Castle that could collapse at any moment.

There would be a lot less pressure to “keep up with the Joneses”… as they head toward bankruptcy and foreclosure.

As society heads that way.

Like the housing industry, the car industry has ceased building basic and much less expensive cars because of easy and grotesque debt-financing.

Which is tragic.

There ought to be (and would be) a huge selection of brand-new cars priced under $10,000 were it not for the ready availability of nonexistent wealth (.e., debt and credit).

Cars many people could pay cash for.

Brand-new cars.

Not shitboxes – as the late great Brock Yates christened them.

They would have the build quality/body integrity and quality paint jobs that are now standard equipment with every new car, because of generally improved (and largely automated) manufacturing techniques, such as robotic welding and painting. Part of the reason yesterday’s low-cost cars felt shoddy – and rusted early – was because they were shoddily (and spottily) constructed. By often-aggrieved line workers, who maybe got a little too drunk the night before and so weren’t being very careful the next day, while fitting panels to the car.

It’s not like that today – and irrespective of price point. The humblest new car is built to a much higher standard than top-of-the-line luxury cars once were. Those costs have been amortized; build quality would not regress if debt-financed flim-flam went away. To think it would is like thinking we’d go back to corded wall phones.

They would have reliable, efficient – and not balky/hard-starting/stalling – engines, too. Because the cost of simple (throttle body) electronic fuel injection – an exotic technology back in the shitbox days – no longer is.

It’s everywhere – economies of scale have made it so.

Probably our less-than-$10k-car would have things like power windows and AC, if you wanted it. But wouldn’t it be nice if it were optional?

None of this is pie-in-the-sky.

Such cars are being sold all over the world right now, just not in the Western world – which is  in debt up to its eyeballs.

Because the debt lifestyle has been normalized. There now exists social stigma to live below one’s means. To not give the appearance of wealth one doesn’t have by purchasing – on credit – things one can’t really afford.

That – as much as the regulatory burden of government – is what’s driving up the cost of life for all of us. Including those still trying to live within our means.

 

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Wip
Wip

Does anyone watch Good Morning America? I very much dislike the show but my wife watches it every f’ing day. Anyway, the show is just one big Christmas commercial showing you all the things you can spend your money on this year for Christmas. Did I say I hated the show?

Credit
Credit

which proves that you CAN lead a horse(‘s ass consumer) to water and you CAN make him drink. the Bernaysian inducement to live on debt should be moderated by debt failure, but we can’t let that happen for the sake of the economy. i am actually making money on the 2 cars i drive.

Aquapura
Aquapura

Awww, c’mon Eric….you didn’t mention “uncle” in your editorial. You know as well as anyone with half a brain that kars in ‘merica are expensive because the Fed has mandated things like 25 airbags and backup cameras and electronic nanny’s of every kind. On top of that the insurance industry has forced safety as well, lest you want to spend more monthly on liability coverage than the monthly payment on your 72 month car loan.

Don’t get me wrong, I LIKE those things because while my driving abilities might be awesome I cannot predict the 20yr/old driving on that intersecting road in a 20 year old shit box paying more attention to some titties on snapchat than the red light straight in front of him. I see it everyday while I’m out driving or watching the nightly news…I will pay for safety over and over and over again.

The question is should you have a choice. Of course you should and people in the 3rd world do have those options. Go south of the border and take a quick look at what you can buy down there. Shit, wasn’t that long ago you could buy an original 1960’s style VW beetle…brand new build, 40 year old tech. If there is a market for those in the US they should be allowed to sell them here.

Credit does pull demand forward…so I get your point. That said a quick look at my 2013 vehicle compared to the 1998 model it replaced 90% of the advanced tech is safety stuff…more airbags, backup cameras, automatic braking, collision warnings, blind spot minders, etc. By comparison the heated seat cost is insignificant.

Dutchman
Dutchman

I do about 40-50 miles of freeway driving (Minneapolis) everyday. The lane departure (blind spot warnings) is a great feature. With an SUV (Volvo XC90) the backup camera comes in handy in busy parking lots. As for automatic breaking – when congested, it can be difficult to change lanes, glance left in your mirror, looks OK to change lanes, then as you move forward, the guy in front hits the breaks, or worse some asshole cuts in front of you – the automatic breaking is worth every penny.

These safety features can prevent an accident, property damage, injury (or death). But Eric doesn’t care – he’s going to take his chances – however he’s also taking chances with our lives.

Anonymous
Anonymous

Our money is debt.

No debt = no money.

That’s why we live in a society driven by debt.

Iska Waran
Iska Waran

i haven’t taken out a car loan in over 25 years. If can’t pay cash for a car, you shouldn’t be buying it, in my judgmental opinion. The exception is a 23 year old who should be buying the cheapest reliable small car they can get – and do a small short-term loan if absolutely necessary. What kind of insecure person buys a car because of peer pressure?

Dutchman
Dutchman

Iska: “The exception is a 23 year old who should be buying the cheapest reliable small car they can get ”

This sounds like the thinking of old Soviet Union. Maybe they should all buy those tiny shitbox Fiat’s or Smart Cars?

Dutchman
Dutchman

Although Eric brings up some good points, he’s living in the past.

Cars are now meant to be purchased and driven off the lot. Gone are the days where you pick your options and wait for the car to be built. Virtually all cars have A/C, heated seats, rear window defrosters. Backup cameras and airbags are a great safety feature. These safety features cannot be optional. It’s like saying: “I’m building a new home, I’d like to save some money, I don’t want circuit breakers or fuses.”

“Wouldn’t it be nice if power windows and A/C was optional” You gotta be kidding.

Anonymous
Anonymous

Some people like choices.

Freedom…get ya some.

Dutchman
Dutchman

“Some people like choices. Freedom…get ya some. ”

You guy’s don’t get it. Of course I want freedom. But a car really isn’t your personal property in the same way as table saw or a sewing machine.

Just because there weren’t airbags in 1965, doesn’t mean that is the ‘standard’. All sorts of standards are continually upgraded, building codes, air quality, medical care.

I remember in the 60’s when some people bitched and moaned about the added cost of seat belts, who cares about physics. There were no standard’s for construction (crash worthiness) – this has all changed.

Cars are unique in that they can do a lot of damage, and the operator’s have a wide range of driving skill and judgement. These safety features are for the driver, passengers, and the people in the other cars. So you don’t want air bags? – so you have made the decision for all the other members of your family (or passengers) that they don’t need them either.

EL Coyote
EL Coyote

Dutchman is an engineer. No gadget is too much.

I was thinking of your pimped out pad and now I see that your car has all the gizmos as well.

It made me think of the tiny house we all get if we are lucky, nice satin padding, muzak pumped in, a small flatscreen to keep up with the Kardios (how is Kanye doing?), a heat selector knob and maybe an internet link to TBP.

Dutchman
Dutchman

You want the white woman in the black caaar? Maybe the black woman in the white caar? Fiffy $dolla. Or you can have the white woman, and da black woman in da red caar – $100 dolla? For $120 I help you pick da wimmen.

As heard on the 30 blocks of squalor – about 40 years ago.

IndenturedServant

Does the same apply to firearms? They do a lot of damage. Should you have the “option” of buying a gun that requires the use of a unique decoder ring/bracelet worn by its legal owner before it can be fired or should you be able to buy a stripped down model of five years ago? That technology is either available or on the horizon.

Peaknic
Peaknic

There is a big difference between Safety features and “power” options.

Every car I have owned with power locks and windows have had those features break and cost me hundreds of dollars to fix. The only car I ever bought brand new was a Saturn (1996) with NO power windows, NO power locks and NO power steering and guess what, all those mechanical systems worked perfectly through 200k miles. I would take those 3 features (or lack thereof) every time if I had a choice.

Card802
Card802

A report out shows that a record high one third of car buyers are underwater when they go to purchase another car, and the amount they are underwater is also at record levels.

My neighbor, and friend, is a car dealer, he told me yesterday he had a new customer come in looking for a car. He was underwater by $8,000.00 in his last three car purchases, and thought it no big deal to add more debt.
Roger told him at some point he would have to pay the debt, the guy told him there was no way that could happen.
Roger told him he would not sell him a car, the guy was pissed.

Suzanna
Suzanna

Eric makes some good points both about the lack of choices for car buyers
and the high cost of cars/trucks with countless accessories. And debt.
Dutch wants a powerful car that has safety features and he has it. What is to
argue?

Dutchman
Dutchman

“Dutch wants a powerful car that has safety features and he has it. ”

You don’t get it – car’s should have always had these safety features – there wasn’t the technology. At one time there were no seat belts.

What has happened is the standards in auto construction have changed over the years. You want the standards optional – well it doesn’t work like that.

When you build a house today, it must be according to the building code. Even if you own the land – the city will not let you build unless it meets code. It’s no different with cars.

IndenturedServant

Regarding home construction. I can understand the need for special hurricane straps to attach the roof trusses to the rest of the structure……..in hurricane country……but why should I and the rest of the country be required to use them?

It’s like men being required to purchase health insurance that includes lactation training and abortion coverage.

Everything on a car should be optional. Modern car manufacturing systems could very easily accommodate options or not with very little to no disruption in production. The part that pisses me off is that someone invents some doodad to improve safety……tens of millions of dollars are wasted greasing already slimy palms to “mandate” said doodad BY LAW and then manufacturers charge you hundreds more than the doodad actually costs because you have NO FUCKING CHOICE but to pay for it if you want a new car.

James the Wanderer

Back in the 1950s, my Dad, Uncle Gene and Pa Garrett, along with my grandfather and possibly Uncle Jim, built three houses in a rural part of NE Texas. None were certified “carpenters”, none were licensed and bonded and none were contractors as such. They built Gene’s house, Dad’s house and my grandparents’ house in a row, thirty or forty yards apart, over a period of a couple of years.
They still stand. If there was a code, they would have more than met them. They had hardwood floors, regular electrical wiring, plumbing and central heating (relatively rare in those days), and more.
People who knew how built houses in those days. And all three were paid off before I got to elementary school. And they are still standing – Dad’s has some problems from lack of occupation and break-ins, but is still structurally sound – and could be easily restored to occupancy. But the local steel mill, where Grandpa and Gene and many others worked, is down to one shift per day five days per week now – and may not last the decade. One family’s experience with NAFTA, Democratic administrations and Wall Street economics in a nutshell.

Montefrio

My own experience is similar: rural village, no codes, no regulations when I arrived here nearly 13 years ago and built my house, then the one my son & family now occupy. They’re both bale houses and while I have no architectural or engineering training, I flatter myself that I have some common sense. Everything in these houses is “overbuilt” for safety, every screw and nail, wire and pipe was bought by me after careful research. Everything paid for in full at a per-square-foot cost low enough to astonish the local folks who all believed I was nuts for building such a house. A few years later, national public television did a show on “natural” homes and mine was one of those featured. The brain police hate this sort of thing because after all, we need them to guide our every step and if we tell them that they actually aren’t the arbiters of all that’s good and true, why, they might need to flee to their “safe” space, built to code of course.

KaD
KaD

What would the brainiacs at TBP recommend as a good, reliable, NOT top of the line in price car these days?

Ticky Toc
Ticky Toc

For $7500 you should be able to pick a good used car with less than 100,000 miles. If you maintain a vehicle (regular oil / filter changes / tune ups) there should be no problem getting at least 200,000 miles out of it.

IndenturedServant

A Subaru Outback or Forester. Get a used one. Or, just about any low mileage Toyota.

artbyjoe
artbyjoe

a used Mercedes diesel sedan. about 12 to 20 years old. less than 200,000 miles, for $2,500 to $6,000.

i forget
i forget

wimpy’ll gladly pay ya next tuesday for a fully loaded burger today. bags of seawater (people) “building” sandcastles at the seashore, in flood plains. but you left out legal legal tender depreciation. didn’t hit artificial interests rates too hard, either. is why all the alpha alpha chasers have bought up all the alpha cars of old, resto’d ’em, put ’em into portfolio collections.

but i think calling features creep “code” is code for “A customer can have a car painted any color he wants as long as it’s black.” fordian fascism, iow.

let features progress amongst competitors for the customers. let customers choose their own codes.

& let pigs fly.

& let it be (speaking words of wisdom).

NickelthroweR
NickelthroweR

Greetings,

The problem, as I see it, is that few people work for themselves anymore. I work for myself and because of this, credit is often not the easiest thing to obtain. That said, when I want something like a car, I must go out and pay cash for it. I’ve been working this way since the 1980’s. It works great.

That people go into debt for a car baffles me. Having a note on a car means that you must buy full coverage insurance on top of the payment and the interest. Worse still, that car really isn’t yours until the very last payment. Why would someone do this?

If I am going to buy something nice then I want it to be something that I do not have to park on the street. I do not want the freeloading public to have access to my nice things. Also, the roads here are crap and full of texting teenage girls. Again, why go into massive amounts of debt for the privilege of experiencing everything the roads of California have to offer? Seems silly to me.

Note: I drive a 1989 Chevy s-10 pickup with extended bed that I bought from the city of Phoenix 6 years ago for $1400. It only had 44k miles and was meticulously maintained. My previous car was a former police car that I picked up for $400, drove for 8 years and then sold for $300.

Untypical
Untypical

I heard that. Cars are a depreciating asset so it seems silly to finance and pay interest no matter how low the finance rate. Even a new car at 0% financing will usually sacrifice the factory rebate and then you will still experience a 40-50% loss of value from Manufacturer’s Suggested Retail Price (MSRP, or “window sticker”) within two years time.

I have four rigs raging from 7 to 14 years old. Pay cash for them used from private owners, drive them, take care of them, keep all service records to show the next buyer and then sell them for $1,000 to $2,000 cash when your done with them.

Doing this can keep your driving expenses as low as hundreds per year on average (including maintenance and sometimes even gas depending upon how much drive annually).

Anyway, everyone I know driving smartphones with four wheels today just think I am silly and old fashioned as they live paycheck to paycheck while maxing out their credit cards buying shit they can’t afford this x-mas.

EDIT: Plus I never have to sweat minor door dings, dents or scrapes. Except on my own vehicle, where I always park in the most remote and wide-open areas of any given parking lot. 🙂

BB

Cheap sluts .No wondering why the economy is in stand down after reading these posts.

James the Wanderer

Second Admin’s Honda Civic recommendation. As long as you change the timing belt / water pump / whatever at 60,000 miles intervals, they might run forever.

todd
todd

if you buy toyota you don’t have to worry about the timing belt so much…i threw 3 of them on a old ass camry…i was pretty good at changing it by the fourth time.

IndenturedServant

My daily driver is still a 1986 Toyota 4Runner I bought used for $1500 in July 1999. Damn thing is bullet proof, butt ass ugly and goes anywhere in any weather. If I looked out in the driveway right now and it was gone I’d only laugh because you’d have to be pretty hard up to steal that piece of shit! I was prepared to buy myself a nicer car and pay up to $600/month when that 4Runner fell into my lap so I paid cash for it and paid myself $600/month every month since then.

It’s funny, when I couldn’t afford a new car I really wanted one. Now that I have the cash to buy ten brand new cars the idea never even enters my mind. I’m perfectly happy with my model POS 4Runner.

Debt is scientifically programmed into our monetary system from the very first dollar created by the fed and reinforced through advertising, propaganda and literal mind control. Check out Century Of The Self on youtube if you have any doubt about the power of these tools. I’ll bet that most people today don’t have any idea how they are herded around and compelled to do things a thinking person would not. It used to be that people asked themselves if they could afford an object like a car or TV or a house. Over the last 30 years or more they have been conditioned to ignore price in favor of whether they can afford the “payments”.

It’s only when people are staring at a pile of unpaid bills that reality sets in for a few fleeting moments and that’s only because that unpaid pile of bills is not surrounded by a sparkle box. Once that person turns back to the sparkle box all is forgotten until next month.

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