Economic Recovery Stalled in My Driveway

14 Jun

This weekend I thought my 1998 Saturn wagon was about to give up the ghost. After a hard drive to and from northern California, the engine could not idle and stalled without my keeping the accelerator pressed down. I decided to let it rest for a couple nights before calling a mechanic.

But I already knew what would happen if I learned that the car, which I had bought new, needed serious repair work: I’d sell it and not replace it. We would become a one-car family.

Unless you live in a major urban center, one car per adult is the norm in this country. For generations we’ve built our economy around motor vehicles. As someone who grew up amidst California’s car culture in the 1950s and 1960s, the American Graffiti generation, I have a personal passion for driving and an abiding love of cars. However, this year I’ve made a firm decision that our next car will be no car.

Once, having your own car, particularly in small cities without good public transportation, was an utter necessity in this country. But in the early 21st century, it’s an extravagance to be a two-car family. And my change of heart is hurting the economy big time.

If this was just my solo decision, it’d be no big deal. But I’m part of a much broader and deeper attitudinal shift that’s happening in this country. In 2006 and 2007 passenger highway miles driven declined. Not only has such a decline never happened two years in row, it’s never happened even once since the Bureau of Transportation Statistics began publishing the number in 1960.

Fewer miles driven translates to fewer cars built and sold in the United States. According to the International Trade Administration, in 2009 domestic car and light truck production was 5.5 million units, down from 11.8 million in 2003. That means U.S. consumers spent $89 billion less on U.S.-made vehicles in 2009 than they did six years earlier. It’s little wonder, then, that employment in the auto industry has plummeted to 660,000 workers in 2009, down from 1.3 million in 2000.

Worse for the economy, unlike my generation that inherited its seemingly genetic affection for cars from our parents and grandparents, our kids and grandkids don’t have that love of driving in their DNA. According to government data, only 30% of 16 year olds in 2008 got a driver’s license compared to nearly 45% in 1988. Similar declines can be seen in 17-19 year old drivers as well. Needless to say, without a license, it’s unlikely these young adults will be racing to a car lot to get a new ride. That’s bad news not just for those who sell cars. It’s terrible news for cities, where it’s been estimated that as much as 30% of tax revenues come from car sales at dealerships.

As it turned out, my old Saturn wagon just needed a rest. This morning it started with customary ease and purred like a kitten. I guess I won’t be selling it for scrap after all. But the fact remains, I will eventually get rid of it (or my wife’s car) and we will not replace it with a new one as has been our history; a history we have shared with many millions of other Americans that is now evolving into one that is less car-centric.

This change makes sense for us as individuals. But it’s a change that is pummeling the U.S. economy, and is likely to keep this Great Recession rolling along for a few more years.

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