Saturday, March 24, 2012

Crazy Car Talk

Wordle: crazycar
 Every now and again I read something that seems so crazy it leaves me dumbfounded.  That's what happened with this article in the New York Times the other day.

The factual premise for the article is that US young people now are less interested in cars and driving than those of the same age a few decades ago. In 2008, 46.3 percent of potential drivers 19 years old and younger had drivers’ licenses, compared with 64.4 percent in 1998, according to the Federal Highway Administration, and drivers ages 21 to 30 drove 12 percent fewer miles in 2009 than they did in 1995. Forty-six percent of drivers aged 18 to 24 said they would choose Internet access over owning a car, according to the research firm Gartner.

These statistics perhaps give some reason for hope that the world's richest society is beginning to emerge from its addiction to huge, heavy, fossil-fuel-depleting, atmosphere-polluting personal transportation machines, whose use led directly to well over 30,000 fatalities  (US Census Bureau data) in the most recent year for which information is available.

Needless to say, that is not how General Motors views the matter.  The article is written from the perspective of one Ross Martin, from MTV, who is "trying to help General Motors solve one of the most vexing problems facing the car industry: many young consumers today just do not care that much about cars." High gas prices and environmental concerns don’t help matters, we are told. “They think of a car as a giant bummer,” said Mr. Martin. “Think about your dashboard. It’s filled with nothing but bad news.”

To neutralize those pesky environmental concerns, Mr. Martin's strategy is "to infuse General Motors with the same insights that made MTV reality shows like “Jersey Shore” and “Teen Mom” breakout hits."  No, I am not making this up.  "THE NEW CHEVROLET - NOW INFUSED WITH CRAP TV INSIGHTS." Doesn't it just make you want to rush out and buy one, kids?

Classical economic theory treats consumer demand functions as given a priori.  If consumers call for giant SUVs rather than gas-sipping compacts, GM, in building them, is just "giving customers what they want". But the hollowness of this theory is on full view here: since the demand curve is too low, Mr Martin and his "creative" team are called in to puff it up.  I can't believe that they will succeed.  As one commenter wrote, "When you call in the guy from MTV, you know the game is up."

Here is the truth. Most of the world's easily accessible oil reserves are gone. In terms of absolute quantity there is plenty of oil left, but it is increasingly difficult and costly to extract - "costly" both in environmental and in financial terms - and burning all of that "tough" oil would contribute to global warming on a scale far exceeding anything anticipated from human-induced carbon dioxide emissions so far.  For a simple analogy, thinking about squeezing a wet sponge to extract water.  At first the water flows easily - you hardly have to squeeze at all - but later on you have to squeeze harder and harder to get less and less water out.  At some point you give up.  There is still plenty of water left in the sponge when you stop squeezing - it is far from bone dry - but it is no longer worth your effort to squeeze any more.

And it's a problem that young people are not contributing as much as GM had hoped to burning that oil up as fast as possible?  

1 comment:

Russ deForest said...

Why aren't they thinking of investing in the next generation of public transit, where young people can stayed glued to their iPhones watching MTV and following their twitter accounts while someone else does the driving?