Homelessness "Just Happens"?

How do you go from having a high-paying job to being homeless?   It takes some effort.

A weepy piece in the New York Daily News offers uncritical views about one of its own - a member of the fourth estate - who ends up in a homeless shelter.   How could this happen to one of us?  Homeless people - sainted and benign, in all media articles, of course - are always other people, not cleaned-up newspaper or television reporters or press secretaries!

But if you read the article, it is not hard to see how this scenario played out.   And what is shouting loudly behind the article is not what is said, but what was not said.   Why did this person have no life savings whatsoever?   Why does he get into arguments and fights with the family members he goes to live with (to the point of obtaining restraining orders?).  Why is there no mention of his wife?

What struck me as fascinating about the story - told in his own words for the most part - is how externalization and the victim mentality comes into play.   Everything that happens in this man's life is an injustice!   He has to ride a bus to a new homeless shelter and doesn't get there until 2 AM!   We should all be outraged by this, because, well, homeless people have shit to do.

An apartment is lined up for him, but the "paperwork" never comes through for some reason.  Other people - nameless, faceless other people, labeled "the system" - are always to blame for his difficulties.   And violence and arguments seem to be the common denominator, no matter where he goes.

The article does admit that the majority of people in homeless shelters have mental illness or drug abuse problems (including alcoholism) but never addresses whether the subject of the article might be included in that statement.   Rather, we are told that this guy just "ended up" homeless, and it could happen to anyone, even you, so you'd better watch it!  And moreover, another reason we should pour more money into homeless shelters and subsidized apartments for the homeless.

But as the movie Reversal of Fortune illustrated, you can give a random homeless person $100,000 in cash, and in a short time, it will all be gone.   The reasons for homelessness are not merely "lack of home" or "lack of money" but have more to do with mental state than anything else.

At one time in this country we tried to help the mentally ill and drug addicts.  We had mental hospitals and treatment centers, which were deemed to be "cruel" and too expensive, so we closed them.   We opened homeless shelters instead, which of course are nowhere near as cruel as a mental hospital (the sarcasm light is lit).

And of course, with all these mentally ill people out on the street, we have more mayhem and mass-shootings.  The mentally ill can get guns all-too-easily.   The latest one, this morning, is a young 26-year-old, living with his parents, who decided to shoot at cars on the freeway outside of Atlanta.

Sadly, I doubt we will ever have the money or courage to address this issue.   Rather, we will continue to characterize the homeless as random victims of circumstance or chance, and delude ourselves into thinking gun control alone will stem the tide of violence from mentally ill people.

Has Buffett Lost His Mind?

Has the Oracle of Omaha succumbed to dementia?

I mentioned before that there are really no gurus in the financial industry.  Rather, there are people who get lucky and once they get lucky, more opportunities are offered to them.  People look to the guy who made the lucky picks as being some sort of "Guru" with a special insight into the financial industry and laud him with accolades.  But in reality, he is mostly guy who just got lucky, not someone with special smarts or insights.

As Warren Buffett put it, "the first billion is the hardest" because you have to earn it.  Once you have billions - and control the billions of other investors, as he does, you have weight to throw around, and you can influence the outcome of events, rather that merely investing and hoping to get lucky.   When you have billions, you can buy a stake in a company to the point where they have to give you a seat on the board, and oftentimes, listen to what you have to say - such as to divest the company or sell it.

You and I, with our pitiful 401(k) accounts don't have that kind of voice.   We invest and hope we get lucky - investing (hopefully) in a number of different things and using time to our advantage.

Warren Buffett made history mostly by doing what most people call "Common Sense."  Rather than chasing after the latest this or the newest that, he invested in mostly old line companies that he felt were undervalued, and held onto them for the long term.  Rather than pursuing extravagant short-term profits, he was more interested in long-term payouts. And the strategy has been successful for him for the most part.

In a recent posting, I pointed out that the smartphone market has matured and saturated. The gangbusters sales of the last decades are starting to taper off, as everyone now has a smartphone and conquest sales are few and far between.  At this point it is mostly replacement market sales - people replacing broken or outdated smartphones.  It is not like the old days when no one had a smartphone and they stood in line overnight to get one.

You can have a smartphone that is two three or four generations old and it's perfectly serviceable. There's no compelling need to change up to a new phone and thus the sales are starting to taper off or at least flattened.  This is not to say sales will tank, only that we won't see the exponential growth we saw in the past.  And we saw this same pattern in the computer industry.  Once everyone had a PC, well, there was no compelling reason to go out and buy one the next day.

Compounding this problem is the migration away from contract plans.  More and more people, such as myself, are subscribing to pay-as-you-go plans, in which you pay a monthly fee for service but are not obligated to a long-term contract.  It's a lot easier to buy your phone separately rather than to pay a monthly fee and get a "free upgrade" for a new phone every so often.  People are realizing that these "free upgrades" were anything but free.  Rather, the cost of the phone is folded into the cost of the plan. Who wants to pay a cell phone bill that is as large as a car payment?

Combined, these factors mean that there is no "must have" need to buy the latest and greatest smartphone.  Maybe you think that facial recognition or fingerprint recognition is a must-have feature, but the rest of us are not so sure.  Certainly, down the road, when I upgrade my phone after I drop it in the toilet, I'll buy a phone that might have these features.  But I'm not really that excited about seeking them out or throwing away a perfectly good phone to get them.

A reader points out that Warren Buffett is buying Apple stock like mad - and wondering why I am so negative about the smartphone business.  After all, if the Oracle of Omaha is buying Apple stock, then they must be doing something right!  But this only makes me wonder whether Warren Buffett perhaps has gotten too old and is starting to lose his way.  I live on a retirement Island and see what happens to older people as they age. And dementia is a very tricky thing. It sets in slowly and you don't even notice is happening until it is too late.

Warren Buffett made headlines today by buying Apple stock - driving it to a new all-time high. Warren Buffett made his fortune by buying low and selling high, not by buying high and selling low.  So is very unlike him to buy a trendy stock like Apple just as it is peaking in price.  Either he knows something about Apple the rest of us don't - such as the introduction of a new "must have" product that will take the world by storm -  or he is losing his mind.

And I'm not sure which one it is.  I'm highly doubtful that Apple has some new "must have" product in the pipeline that we will all run out to buy next week.  I think the days of people standing in line overnight, sleeping in sleeping bags, waiting for the privilege of buying something, might be far behind us.  And in fact, perhaps those lines were seeded by shills and plants from the company in order to hype the product.  You have to be pretty dense, in my opinion, to wait in line overnight just to be the first person to buy a consumer product that will be available on the internet at discounted prices within six months.

And I think you have to be particularly dense to pay two or three times as much for a product than you need to.  And that is sort of the business model of Apple. The Apple iMac computer cost two grand - almost 10 times as much as a comparable PC.  Apple iPads cost easily double or triple what generic pads cost.   Apple iPhones, including the new iPhone X cost 10 times as much as the Samsung Galaxy 4S that I'm dictating this on.

That's an awful shitload of money, in case you haven't noticed.  And an awful lot of Americans are complaining they don't have any money.  American's debt levels are at all time highs, yet their funding of their 401(k)s are at all-time lows.  Unemployment is an all-time low, but wages are stagnating and inflation is increasing.  This is a perfect storm - a perfect shitstorm.  But more about that in another posting.

Warren Buffett said he was going to retire by now, and appoint one of his associates to be his successor.  That was a few years ago, and apparently had a change of heart or lost faith in his anointed heir.  Since then, he seems to have had trouble finding someone to take over the business, and perhaps this is a sign of mental deterioration.  He wants to hang on to the levers of power until the bitter end, even as he drives the entire machinery off a cliff.

Again, living on retirement island, I get to see the effects of dementia up close and personal.  And no one going through dementia realizes they are going through this.  They even have a name for this process, it's called "pre-dementia" - the slow dissolving of your mental faculties as life progresses. When I was a kid we used to call it "hardening of the arteries" or "getting senile" as old men became grumpy and more set in their ways over time.

It is something of a stereotype, but it is indeed true. I see a lot of older men on our island sitting at home, isolated, spending hours each day watching Fox News and screaming at the television.  They become more and more whacked-out as time goes on, and Fox News certainly is not good for your psyche or soul.

And I wonder if the same thing isn't happening to Mr. Buffett.  Perhaps he feels isolated in his own Fortress of Solitude.  You would think he would be anointing a successor to take over the business, and transferring power by this pint, but perhaps everyone around him appears to be a toady or perhaps even a threat.  The guy who seems to want the job the most probably is trying to pull a fast one.  Paranoia sets in.

In this background, I wonder where he's going with this Apple buy.  Does he think Apple has a lot of headroom in this business to make increased profits above and beyond what they are already making? Does he think that the stock price is poised to inflate even further?  What new product do they have in the pipeline that we all have to buy in order to make this stock pick worthwhile?

Or has he merely lost his mind?

I guess time will tell. But from a personal standpoint, I can't afford to risk my future and my retirement on tech stocks and what-if scenarios.  So, I won't be buying Apple stock anytime soon, and quite frankly I'll likely be liquidating the remainder of my Berkshire Hathaway Class B shares shortly (I already sold half, when the stock went up 100% in value).

I just don't see how Apple fits the "Buffett way" of doing things - finding undervalued companies that can be turned around and increased in value for the long term.   Apple already is at the peak of its game, and at best, will stay even over time.   I doubt their market share will eclipse that of other smart phone makers, and in fact, it sort of has remained flat for some time now.

Sorry, Warren, I just don't see it!

UPDATE:  Maybe this is what Buffett sees in Apple - not phones, but services.  We'll see.  My gut reaction is that Apple Pay might be a thing, but others will likely (and are already) joining in the fray.

WSJ is Off the Leash!

Rupert Murdoch must be on vacation this week (with Hillary, no doubt), as the Wall Street Journal reporters are actually printing facts.

A recent article in the Wall Street Journal tells - in part - why big SUVs and Pickup Trucks are so popular right now - and why the "Big 3" have all but abandoned the car segment.   And it has a lot to do with government policy, particularly EPA mileage and emissions requirements.  Sadly, the reporter missed others aspects of this, which I will go into later - that has to do with our tax laws as well.

The article begins with this tongue-in-cheek observation that went under the radar of the WSJ editors:

Last week Ford announced that it would wind down U.S. production/sales of passenger cars—excepting its Mustang and the sort-of-sedan Focus Active—in favor of more popular and profitable trucks, SUVs and crossovers. By 2020, 90% of Ford’s North American sales will consist of larger vehicles with lower fuel economy, because nothing bad ever comes of that.

Touché, my friend, touché.  The article goes on to explain how laxer standards for "light trucks" allowed carmakers to produce huge and profitable vehicles.  SUVs and pickup trucks have fuel economy, emissions, and safety requirements, far laxer than for passenger cars.   As a result, this basically incentivized the US automakers to convince customers to move up to an SUV or pickup truck, as they were far more profitable, and ironically, cheaper to make, as they didn't have to comply with so many standards.

Take bumpers.  The WSJ article missed this as well.  You hit a parking lot post with the plastic bumper on your Camry, or the steel bumper on your Tahoe.  Which car comes out better in the deal?  If you thought the rough-and-tough Tahoe, think again.  The urethane bumpers on cars are rated for 2.5 mph collisions without any damage.  And even if dented, they can be pushed back into shape from behind, sometimes helped with a hair dryer or hot water.

The steel bumper on a pickup truck or SUV?  Dented, permanently.  And usually the only way to fix this is to replace the entire bumper, because you can't even pull the dent out at a body shop.   Truck bumpers may look strong, but they do not have to comply with 2.5 mph impact requirements.  As a result, they get dented and look like crap after a few years - much as our cars did in the 1960's (and you'd remember this, if you lived in that era - everyone's car looked like a crumpled beer can after a year or two).

But the same is true for emissions standards and mileage standards - all more lax, as the article points out.  Designing a sedan is hard.  Meeting mileage, emissions, bumper, and impact standards is tough.  You have a small car and have to have a small, efficient engine.  But it has to survive an impact with a giant SUV and not kill its occupants.   It takes real engineering talent to design a sedan these days.

Oh, and people don't want them.   And since they are smaller, people expect to pay less - even though they are often more technically sophisticated that their larger brethren.  So the sedan designer is the unsung hero at the car company.  He gets no accolades for doing a good job, as all the profits are in the SUV and Truck departments, where design problems are often solved simply by adding more weight.

As the WSJ article points out, our EPA policies - which Trump is likely to slacken even further - will lead to the same situation we had in 2007.  Back then, US car companies made little else but SUVs and Trucks - and when the price of gas shot up, they went bankrupt.   Human economic memory being what it is (about 18 months) the car companies promised to do better, and GM dumped the Hummer line and came up with the Volt.   Today, they are wishing they kept the Hummer around - it would sell like hotcakes today.   But again, people don't remember gas prices from more than 18 months ago - and people assume that conditions today will remain static in perpetuity.

But the EPA policies are only part of the picture.  The IRS is also encouraging us to drive monster trucks.  Under Section 179 of the IRS code, any vehicle with a Gross Vehicle Weight over 6,000 lbs, can qualify for a 50% depreciation deduction in the first year.  So if you are self-employed, and you can write off the cost of a vehicle in your business, it could be advantageous to buy a Suburban or a Range Rover and get this tasty deduction.   It is why BMW designed the X6 - a 6,000 lb GVW sedan designed to the tax code, not to "German Engineering" specifications.

Sadly, we have a long history of this nonsense.   During the "gas crises" (plural) of the 1970's, a lot of people switched to diesel vehicles for better economy.   The IRS, again (actually, Congress, the IRS just enforces the rules) gave a deduction or tax credit if you bought a diesel vehicle.   I took this credit in 1981 when I bought my diesel Chevette.   Others took it buying a diesel Suburban.   A friend of mine in Arizona told me that his State also had a tax credit, and he was thinking of trading in his Mazda GLC on a new Suburban (talk about a switchup!) because, as he put it, "between the Federal and State tax credits, it pays for half the vehicle!"

I'm not sure he every bought that or not, but he was thinking about it, and that illustrates how tax credits and deductions serve to incentivize people.  As I noted before, chasing deductions is often fruitless, unless you wanted to do whatever it is you get a deduction for, in absence of that deduction.  What to buy a house?  Fine, take the deduction.   But don't buy a house simply to get a deduction - rarely does that work out in your favor.

The problem with these government incentives, of course, is that it does skew marketplaces.   And I find it odd that we have a government incentive program that on the one hand, mandates high gas mileage for sedans and other cars, but on the other hand, basically encourages people to buy a house-on-wheels to drive around.  The whole point of the CAFE mileage requirements was to prevent our country from getting into a situation where we were dependent on foreign oil and the whims of antagonistic foreign governments.  It was a matter of national security.

So, given that the government has created a "loophole" (which is another word for "law") that encourages the production of monster trucks and SUVs, should you go out and buy one?   Well, on a personal level, it makes no sense. You don't get a tax credit for buying a Tahoe - and even the depreciation deduction, which is available only to a select few self-employed people - doesn't really make the deal more profitable.

Buy the vehicle which best fits your needs (not wants).   And bear in mind that while gas seems cheap today, it was only about $1.99 a few months ago, and is already pushing $3 a gallon as the "summer driving season" approaches.   A few pipeline glitches, a trade-war (or a real war) with Venezuela, or an embargo from the Middle East, could cause prices to skyrocket overnight.   Yes, we are pumping more oil in the US than we have in decades - but the price of oil is irrelevant as to where it is produced, as it is a world market for this commodity.

After living through five or six oil price spikes and corresponding "gas crises", I can only assume that more will occur within my lifetime, and one will occur before I decide to sell my current vehicle.  So yes, gas mileage still matters.  It always will.

And our government policies are often short-sighted.

New Paradigm? Maybe.

Can social, technological, and economic conditions change to the point where what we thought was right is now wrong?  Perhaps.

A lot of what I harp on in this blog is what I think is "common sense" and based on my personal experiences.  It doesn't mean I'm right about everything - or indeed anything - and I make no guarantees.   But suffice it to say, saving money and spending less usually ends up working out better than trying to clip coupons, acquire mileage points, leasing a car, or racking up high-interest credit-card debt - or chasing "deductions" by purchasing an oversized mini-mansion.

It makes more sense to buy a car you can afford, that meets your lifestyle requirements (as opposed to your ego requirements) and keep it for as long as possible - as opposed to leasing a new luxury car every three years.   Unless of course, you have millions in the bank - they go for it.  Only have a million?   You're a plebe like me.  Don't think you can afford it, even if the bank says so.

But could that advice change?   Suppose this new era of self-driving cars does indeed occur (hopefully before I lose my faculties and driver's license.  Well, I still have my driver's license, anyway) and we have Uber cars or whatever to take us from place to place?   Would it make sense to own one of these highly complex cars, or would it be better to lease one?   Or would you just call one when you need it and forget about owning a car entirely?  Maybe, if that turns out to be cheaper, or at least more convenient, than owning a car.   I think, perhaps, that actually driving your own car than you own will remain cheaper than autonomous cars, for a long, long while.  And I doubt the citizens would allow for traditional people-driven cars to be outlawed anytime soon.

These are interesting questions, but since it hasn't happened yet, and since I suspect it will take longer to implement than people think,  we shouldn't get ahead of ourselves.   But it is true that cars are far more complex these days and can be harder and more expensive to service down the road.  A car with "all the toys" is nice, until those toys break.   One reason you can buy an older 7-series BMW for nearly nothing is that even minor repairs get expensive.  And if something like the A/C evaporator needs to be replaced (which usually means removing the entire dashboard) it can cost more to service than the book value of the car.    So cars like that, looking like new (other than a few scratches here and there) and running "fine" for now, can be had for as little as five grand.

It's like the Porsche Cabrio that a friend of mine just bought for ten grand.  He's put that much into it in repairs already - something he expected to do.   It is a nice car, and since he doesn't drive it much, it may last him a long time - as long as he wants to run it.   And since it didn't cost much....   But as a daily driver to commute to work?   Probably not a good choice.

So, I suppose you could argue that it "makes sense" to lease one of these highly complex cars, as the repair costs could be extensive.  Or maybe get one of those "extended warranties" to cover these kinds of repairs.

You could argue.  I would still not be convinced.

You see, there are other alternatives.  You could buy a less complicated car.   Buy a simple front-wheel-drive four-cylinder, four-door sedan, made in mass quantities.  They are cheaper and since they make so many of them, parts are cheap and most mechanics can work on them.   And since they don't cost a lot to buy, well, you can afford so simply throw them away, when something expensive breaks, as opposed to throwing money down the rabbit-hole of the German Car Repair Shop, until you throw in the towel and just sell the car to the mechanic.

I used to have BMWs.  They were nice cars, but they depreciated quickly, once they were out of warranty.   And the reason was simple - the parts cost was high and labor for repair costs was high.  And few people knew how to work on them.   It is sad, but I see fewer older BMWs on the road than more plebian cars -  the latter of which you would think would be junked sooner, as they are worth less.   But many a BMW can go to the crusher, simply because a "minor" repair exceeds the book value.

But what about other paradigms?   When I worked for the odious big law firm (briefly) we handled these "dot com" startups, which are not unlike the "app" startups of today (which are also poised to crash).   The wild-eyed entrepreneurs would tell me things like "Profits are a thing of the past!  It's a new paradigm!  A sea change!"   One friend of mine - a Patent Attorney, actually - was also a software engineer and started his own "dot com" company.  He explained to me that the higher the "burn rate" of the company - the rate at which they squandered their capital - the more the company was worth.  A Venture Capitalist wanted to buy him out, but told him his "burn rate" was too low.   He finally got an offer for the company and turned it down, thinking it would be worth even more down the road.

Oh, the siren song that lured the mini-mansion, gold, and bitcoin buyers onto the rocks.  "I can make money now, but why sell?  It can only go up!"    A year later, the dot-com thing crashed and my friend sold his company for a pittance.   He's still a Patent Attorney, last I heard.

It turns out that profits are not a thing of the past, but of the present and future.  And this is not something that is based on human emotions or government regulations, but rather a law of nature.  You cannot sustain an enterprise indefinitely without paying the bills at some point.  Elon Musk may discover this inflexible rule later this year - we'll see.   It can take a long time for this sort of thing to play out - look at Sears! - but eventually, well, you run out of capital.

So while the economy changes, jobs change, technology changes, and people change, some things pretty much stay the same.   People can't just vote themselves a raise.  You can't pass a law rounding Pi off to three.  You can't run a company forever losing money.   And no matter how "advanced" our society becomes, some things remain the same - perhaps get worse.  The con-man of days gone by has not become obsolete, he's moved to the Internet.

So the same old adages are still true today, tomorrow, and always.  "If it sounds too good to be true, it probably is" and "a sucker is born every minute."  We like to think we are all modern and sophisticated, what with our smart phones and Internet and whatnot.   We thought we were smart and sophisticated back in 1970 with our television and moon rockets.  My parents thought they were smart and sophisticated, what with the radio and talking pictures.   Each generation looks back at the last as primitive and simple.   How did people live back then, in the days of infant mortality, polio, and early death?

Funny thing is, they lived.  And often they did great things, like forming a democracy, as imperfect as it was.  But I digress.

The laws of nature don't change over time, no matter how smart and clever we think we now are.  And the laws of economics - which are the laws of nature - remain static as well.   We cannot defy economic gravity for very long, as much as we might try.   We can call it a new paradigm or a sea change or whatever, but it really is the same old shit in a different package.

And the bottom line always remains the same.

Why They Don't Make Them Like That Anymore (The Recession of 1958)

The 1958 DeSoto Adventurer Convertible.   Why does Detroit not make cars like this anymore?  In a way, they still do - it's called a Cadillac Escalade SUV today.  But economics is what drove the befinned monsters off the roadways by 1960 - Economics and changing tastes.

If you like to watch old car videos or read about old cars, the Internet is a treasure trove.  And no cars are more iconic American than the "forward look" Chrysler products of the late 1950's.  And if you watch some of these videos, you will inevitably see, in the comments section, some lame comment from an ignorant know-nothing, whining about "how Detroit got greedy and stopped making great cars like this!"

It is an ignorant comment on so many levels - and probably something planted by our Russian troll friends.  You know, the folks who made the Lada and the Trabant back in those days.   They want to run us down and make us hate our own country.  And sadly, so many people in our country are willing to go along with this.

First of all, Detroit still makes these cars - rear-wheel-drive 20-foot-long monsters with big V-8 engines, seating for six, and all the bells and whistles.  Today they are called SUVs or Pickup Trucks, and they became popular as EPA mileage requirements for cars meant that if an American wanted a "traditional sized" car, they had to look at a Tahoe or a Suburban, or an Expedition or a pickup truck (with four doors, of course).  They might not have fins and gaudy chrome, but they are the same layout, same technology (in the case of GM, the same damn engine), and the same size, weight, and gas mileage.  The Cadillac version even has truncated fins!  So you can still buy a car like the one shown above today, it just looks slightly different.

But speaking of fins, one reason they went away is that styles changed.  The fins were looked upon as gaudy even at the time, but within a few years, tastes had changed so radically that having a befinned car was seen as tacky.   The "new frontiers" of the Kennedy Administration and the neat, tailored look of the Lincoln Continental were in, and the chrome jukebox look of the 1950's was definitely out.   Of course, the car companies love it when styles change - they sell more cars that way.   And this has been the case throughout history.  In the 1980's, everyone "downsized" to boxy American sedans that looked like a child's drawing of a car - with industrial grills that looked like air conditioner registers.  They made the whale cars of the 1970's look antiquated.   But by the 1990's, the "aero look" took over, and suddenly, driving a box-shaped car was out.

But economics, more than styles, are what doomed the finned cars.  Bear in mind that back in the 1950's, each car division basically sold one size of car.  If you wanted a Chevy, you could have it in several flavors - Model 210, Deluxe, Bel Air, or whatever, but it was basically the same body shell underneath.  Not only that, but each division of the car companies were basically selling the same car.  The DeSoto shown above was largely indistinguishable from the Plymouth, the Chrysler, or the Dodge, other than in fin shapes.  Often, they came off the same assembly lines.

All that changed with the recession of 1958.  People stopped buying huge cars, and the "Big-3" were forced to offer downsized versions of their cars.   The Chevy II, the Valiant, and the Falcon, all came on the scene, to go after the market share of Studebaker and Rambler - who quickly folded their tents.  These were smaller, more affordable cars that got better gas mileage.   Shortly thereafter, the "intermediates" came out in the mid-1960's, thus effectively offering three sizes of cars for each division.

People actually had choices in car size now, and many chose compacts and intermediates instead of the traditional "full size" American car.   But even before the gas crises of 1973, the "Big 3" had in the works to build (or import) these new "subcompact" cars, such as the Vega and Pinto.  Demand for smaller cars was great, and got greater when the price of gas doubled overnight.  Suddenly, the big "muscle cars" of the 1960's were not only unafforable because of their high prices and insurance rates, but because of the high cost of gas.   Styles changed, overnight.

But there is another factor as well.  I say people are ignorant for pining for the days of cars like the one shown above, because they are ignorant.  Cars like that had horrible bias-ply tires, poor suspensions, fading brakes, and quality control of a third world slum shack.   They weren't meant to last more than a few years, and most rusted through within 2-3 years in the Northeast.   No one kept a car much past 50,000 miles, and by 80,000, most were in the junkyard.   When Jay Leno shows an "original unrestored survivor" from the 1950's with "only 60,000 miles on the odometer!" I have to laugh, because the car was less a survivor and more of a car simply abandoned at that point in the past as being old and worn-out.

Today, cars - even American cars - have much better quality, rustproofing, brakes, suspensions, transmissions, tires, engines - and just about everything.   I doubt many people would tolerate a scratchy AM radio with one speaker for their daily commute, or bumpers that dent when you touch them.   Or the fact that cars of that era were just so damn unsafe.  Even wet pavement was enough to send them into a spin, with the shitty tires they had in that era.   Nostalgia is always suspect.   Looking at a carefully restored car from the 1950's is not the same as having to live with that car in that era.  Cars always smelled like gas back then - because the tanks vented to the atmosphere, and the primitive carburetors ran super-rich all the time.

So what's the point of this?  Well, tastes in vehicles change and change abruptly.  And economics often force people to make changes in their lifestyles.   The chrome cars of the late 1950's were not only poorly made and sucked gas, they also were very expensive, and many people, after years of "trading up" every three years, found themselves saddled with expensive payments that were harder and harder to make.   It is the same old equation - the same one happening today - of people mortgaging their futures to have more today - to impress people they don't even know.  Status rears its ugly head once again.

In the late 1990's and early 2000's, there was a resurgence in the popularity of the big SUV - the Suburban and Tahoe for example.  Up until that time, the Suburban was something that only highway departments used to ferry work crews to a job site, which is why they originally only had three doors.  Very few ordinary citizens bought them, unless they were towing a very big trailer.  GM didn't update the design but once a decade.  It was a slow-seller.  But with the demise of the traditional American station wagon and the demise of the "full sized" sedan, the big SUV took off and became the new de facto station wagon of the suburbs - usurping the minivan from that role.

But its time in the sun was short-lived.  By 2008 you couldn't give them away because of the gas crises and the recession.   GM and Chrysler went bankrupt.   Suddenly, everyone wanted to buy a Ford Fusion.   Fast-forward a decade and once again styles change.  Gas is cheap, and of course, always will be, right? (even as oil slowly creeps up to $70 a barrel).   So everyone is buying big SUVs and pickups, once again.

How many times do we re-live this pattern before we learn?  The answer is, of course, we never learn.  Each generation has to re-learn the same painful lessons of their ancestors.  For example, many young people today are going to learn than Nazism isn't really the answer to anything - something that my generation assumed was a settled issue in 1945.

Will big cars ever come back in a form other than the SUV?  Perhaps.  Ford has shown prototypes of a new Lincoln Continental, but they really can't sell it, as EPA requirements for cars are stricter than for SUVs and trucks.   As a result, they can sell a big car, but it has to be an SUV, and you can't make a Continental as an SUV.  Or can you?

Will we see another sudden shift in car tastes and styles as we did in the past?   Well, one could assume so - all it takes is another recession or another gas crises, before the desirable SUV becomes something that is unsalable.   The sad thing is, this next time around, the "Big-3" will be stuck with nothing but Tahoes on the lot, and nothing that people can actually afford to buy.