Don't know where he got his information from, but inflation in the early 70s was double digits, not 4 to 5%. And in the 90s pay increases were 2 to 3% and businesses demand the workers to increase stock priced by 12%.
According to friends in the industry and on the plant foors, the UAW members are fighting for higher wages because they think their great health insurance is going to go bye bye if a democrat gets into office. The reason for their accepting lower wages in the past was because of their premium health insurance.
5
If you're really serious about working and you don't have a job, come to Williston, ND and the Bakken oil field.
It's beautiful country, although seriously cold in the winter, so you have to have some physical toughness, even if you work at McDonalds (paying about $16/Hr).
There are LOTS of job opportunities up here, and good paying. They are real jobs requiring real work, not sit at your desk fiddling with your smartphone all day jobs.
5
@Raz Making profits for Big Oil. Every workers dream.
11
@Ray Sipe
The jobs they offer are very well paying.
It's not just for the oil companies, it's for all of us!
I suppose you don't ever ride in motorized vehicles or jet airliners?
I don't think you have any idea of how many companies are involved, or what they do. It isn't just Exxon.
There are companies that service the rigs, provide tools and equipment, cement contractors, construction outfits of all kinds, food and housing, haul the oil and saltwater, welders, pipeline construction, workover rigs, truckers...
Your comment is not only ignorant, but typical of a city dweller who thinks gasoline comes from a pump and food comes from a supermarket.
4
The 1970’s were an awful decade that started with Nixon and ended with Reagan. What happened in between was the twilight of the New Deal’s political alignments, and the mainstreaming of reactionary conservatism. It was also the decade that saw the loss in Vietnam, truly terrible fashion and.... yeah, disco and AIDS.
I fail to see the similarities between 50 years ago and now, save for having another corrupt, clueless reactionary president.
3
The column is just so nebulous. Today's economic environment is not the same as that in 1973. Ok . . . and what? How does it help the reader to know that? I read the "Comments" which were mostly more interesting than the article.
I was surprised to see Comments which supported fossil fuels. I don't see that very often in the NYT. Horse and buggy folks must have been very frightened when cars came along. That renewable energy will replace fossil fuels is inevitable. Electric motors are far, far cheaper to build and maintain. Clean air is critically important for human health. That CO2 traps heat is just scientific fact. (If u don't like science, you can always go down to the seashore and whip at the waves to stop them from coming ashore.)
If the fossil fuel folks were protected from job loss would they be putting up such a fuss? In government driven, i.e., non-market, change folks need to be protected when they lose their jobs. The rest of us have to ensure that folks who work in that industry are not left stranded. Doing that will make the swift change that is needed to renewables possible.
Human survival depends are making this change - because there are so many billions of us now. We are all in this mess together. Let's work together to get it right - for all of us. Votes for Democrats in 2020.
3
The issue is not the level of inflation. The problem is that there are serious imbalances in the U.S. economy and society. Economists worry about the threat of inflation because it is what the feds measure and people can see; it is also the last "war" that the Boomers fought so it is high in their minds.
Despite what the article implies, the economy is NOT a fight between two opposing forces. It is an amalgam of interlocking pieces. And when surprises happen, it exposes the weak points in the economic structure and the financial markets. It is where the next economic disruption springs from.
2
so long as the imperative is to keep the economy growing at any cost, and calculate risks and benefits without considering the impact of economic expansion on climate change, we are willfully living in the past.
a while back, the NYT ran an op ed proposing that we scale back our expectations about growth. that has been a single blip in an otherwise uniform silence from economics and financial commentators about the connection between growth and heat.
economists, like senators, need to read the science and take it seriously.
3
Affording the necessary rate cuts during a period of economic slowdown appears fraught with challenges.As one has the necessary influence of being at the helm of a globally sensitive economic period with significant headwinds ; responsible actions taken without consent remain perilous.
Once an energetic sense of accomplishment becomes fractured ,political stability can become compromised.
Global observers continue to watch for a positive outcome.
1
This Upshot ignores the elephant in the room: Trump's disastrous trade strategy, which is weakening the global economy. The Fed has lowered rates twice to keep the economy chugging, but it's fighting a losing battle with Trump. The Fed should not be bailing out the administration's foolhardy trade tactics, nor should it have to deal with the irresponsible fiscal problems caused by the 2017 tax cut.
7
'low pay' of auto workers? $31 per hour in an area where a house can be purchased for less than $200,000 is not 'low pay'.
4
@Ed Wasil .
A high percentage of those bargain basement houses are very old and in need of a tremendous amount of repair. Lead paint, plumbing and electrical 75 yrs. old. Take a whole look and you'll see quite a few houses at prices just as high as in most other places in the country. Utilities are high as well in an area with cold winters.
4
The U.S. is far wealthier than it was the forty years earlier, there is low unemployment, there are ever-wider wealth disparities within the population, and there's global deflation.
The 1920s-30s is a closer analogy.
4
Yes, the risk factors and variables are different than in the 1970s.
However, in the chance game of Russian Roulette there is more than one bullet in the chamber, and Trump is holding the gun.
Things could go south fast.
6
How can you write an article about stagflation and not mention employment rates? Big difference between the 70s and today.
4
When you have decades of stagnant wages and the cost of goods and services continue to climb, the country is ultimately left with a shrinking middle class. Just ask any parent from a dual-income household with kids...after you pay rent/mortgage, daycare for your kids, a car payment, utilities and groceries...there's really not much money left to work with. It's not like the writing isn't already on the wall, now is it? The average cost of a car is at an all time high, home prices and rent have spiked beyond 2008 values, student debt at $1.5 trillion, and the average credit card balance a person carries is something well over $5k. It is clear to see that the middle class are simply leveraging themselves just to stay in the middle class. Meanwhile sedans don't sell...only pickups and SUVs. There will be a tipping point, if it isn't here already...we as a country are just in denial about just how over-leveraged we are.
13
Their "employers success" is on the back of the workers themselves and our federal tax gifts aka bailout after 8 years of Bush.
8
Why Fed increases or decreases interest rates without any change in economic conditions? Because, they react to prevent inflation or recession based on economic forecasts. The economic forecasts are notoriously bad. The Fed should act after the fact rather than act on unreliable predictions. That way, the Fed can avoid being called boneheads.
3
@Kodali
But Trump wants a rate cut.
Old NYC photos like the one accompanying this article are always intriguing. The Gulf station was on the southeast corner of Second Avenue and East 63rd Street, a busy location for traffic coming off the Queensboro Bridge. The white brick apartment building at right is 1191 Second Ave., which then housed a Manufacturers Hanover branch and a Japanese restaurant. It's still there, with a giant Duane Reade at street level. The gas station site was taken by the MTA for the 63rd Street Tunnel ventilator; the row of tenements across the avenue came down in 2011-2013 and are being replaced by a 28-story tower.
7
The Upshot's Irwin begins his essay with a highly provocative claim: "General Motors workers are on strike, seeking more of the spoils of their employer’s successes."
The unions want General Motors' "spoils"? It's just a demand for some sort of booty of war? And the workers want the spoils from their employer's "successes"?
If that doesn't smack of anti-union snark! These workers are not looking for "spoils." They're looking for their fair share of the profits that the company makes from their labor, from their hard work. And let's keep in mind that auto workers' wages, healthcare and retirement benefits, have deteriorated for decades. Indeed, American wages have barely moved since the 1970's, while the profits, or should we say "spoils", of American businesses have skyrocketed to the highest percentage of GDP in a century.
Auto workers aren't looking for "spoils," they're looking for middle class wages and middle class benefits, and some semblance of stability for their families from the profits that their toil created for the stockholders.
American workers deserve respect from The Times, not condescension and snark.
19
Wouldn’t it be nice if our response to the Saudi oil infrastructure attacks was “Meh, we decarbonized our economy years ago, after Al Gore was elected president.” (Dreaming of an alternate history of 2000)
16
@Michael F
Yes, it would not hurt if we had listened to President Carter about going easy on oil. The 80s would have been good but not as robust with Carter - but no crashes either.
With a second term for President Carter, there would probably have been no 9/11 attacks and subsequent Iraq War. And the American economy would look much fairer and less debt loaded.
Oh by the way, Paul Volcker the man who whipped inflation was a Carter appointee, not Ronald Reagan.
7
Trump's comments and ideas about interest rates and his "tone" are not "ünconventional." They are outrageous. No president (including Nixon) has ever talked about a Fed chairman with such insults and name calling. No president before Trump, in fact, was ever given to gross insults, bullying and name calling.
12
Thanks,but please remember the history of the Fed in the late 1970's. Then the Fed increased interest rates in the last two years of a Democrat Administration to 18% by election day and to 21% by inauguration day to defeat President Carter.
Historically the Fed has decreased interest rates in the last two years of a Republican Administration to help re-elect Republicans.
Is that what is happening now?
To assume the Fed is apolitical is ....
10
The missing link in this is the connection between inflation and wages. The theory espoused here makes the incorrect assumption that well paid jobs dominate the economy and that pay raises for those jobs are directly related to inflation.
In 2019 most industries for which labor cost is a primary driver have shipped whatever labor related activities they can offshore.
Industry won't invest in new labor intensive American manufacturing because the costs are too high to compete with Asian labor costs.
Thus, give American industry a windfall with tax cuts or low interest they "invest" in stock buybacks and dividends. That makes the stock market go up artificially. Same profits divided among fewer shares means more value per share. It is not higher manufacturing output.
It is bizarre that Paul Krugman has described this disparity, but others in the economic community continue to believe that lower interest rates will buoy the economy.
That measure would have that result, per the textbook reasoning, if and only if easier money meant more investment in jobs and higher wages. It did in 1970; it doesn't in 2019. Using the 1970's logic is flawed.
Trump is lobbying for lower interest rates because it helps his real estate business and helps him sell suites in his buildings which are said to be running half full. As with tax cuts, this IS for Trump and not for the middle class or the economy.
33
The FED pumping $53 Billion into banks yesterday alarmed me. Last done in 2008 in Recession. $53 billion hand out!!. Talk of $75 Billion more today!! What is going on!! Why are the financial "experts" silent? Is this Normal?
14
@Ray Sipe
China is not buy in the Repo market. Europe is not purchasing as well.
Banks are stuck with repo paper they can't unload and the Fed had to bail them out. Or there would have been a collapse in the overnight term market.
7
It is sad but perhaps not entirely surprising that the economics correspondent of the New York Times believes in the long-discredited cost-push theory of inflation. He also neglects to mentions that the gasoline shortages of the 1970s were the results of federal price controls not any lack of availability of oil on world markets.
5
@Richard Langlois Federal price controls on gas? Hmmm. . . I was a young man then and I don't remember that. I thought the generally understood reason for the "gas shortage" in 1973 was that the oil companies along with the OPEC created a phony "shortage" so that Americans would wait in lines to fill their gas tanks and accept a 100% increase in the price of gas from 25 cents per gallon to 50 cents. No?
1
@HipOath You do miss the Iranian Oil Embargo at the time, when we were getting all of our light sweet crude from Iran, and then provoked their Revolution by destabilizing them to control their oil. They rightfully cut us off and we could not get supply from Saudi quick enough and the quality of oil was worse.
Reagan played fast and loose with that, something like Trump and Ukraine right now.
Every decade and every generation has produced its assets and liabilities.
The universals remain necessary ballasts for guiding one's ship to enjoy the good and then weather the bad: get an education; get a job; don't go into debt, especially over depreciating assets; don't make babies until those prior conditions are the core of one's life.
4
"... there is evidence that Fed interest rate increases in 2018 have slowed the global economy in 2019 in ways that are reinforcing these deflationary forces."
"Evidence?" Goodness, there's "evidence" that Earth is flat: Just look out your window! Or ANY window (that's called "pseudoreplication," and it's rampant in economics). There's very little substantive, discoverable and hard "evidence" in the dismal science, and I sure wish economists would stop pretending otherwise. It's making my life difficult.
11
The parallels (in rhyme) to the early 70s aren't just economic. We have an abrasively fraught political scene, a presumed criminal in the white house, a war overseas we cannot win....and the list goes on.
What strikes me as sad -- criminally sad -- is that here, with the most wealth in human history, with the greatest stretch of access to global resources we have ever known, and with technological innovation available to us that would have been unimaginable just a few years ago we have been able to achieve....urban America, circa 1972.
10
There is no comparison between then and now.
In 1973, US workers were in the driver’s seat, and today, consumers have taken that position, and that’s why there really are no similarities. Meaning, for example, GM and the UAW do not decide how much autoworkers make today or if they even if they get to keep their jobs or their plants, their customers make those decisions.
This is what supply driven economies look like. More supply and more choice yielding better quality, lower priced goods and less worker power.
6
Ick
3
There are so many differences between then and now that I wouldn't know where to start. Irwin gets an A+ for Creative Writing.
11
@John in the fiction category
2
The stagflation of the 70s gave our leaders license to do some horrible things, imo. Chief among them were the clobbering of the personal savings function for most households by doubling FICA withholding overnight and blunting our more eco-friendly view of the world and American consumption. Over half the atmospheric CO2 ever released into our environment has occurred over the last 40 years. We have let chase for short-term gain blind us to the full impact of our behavior.
10
I live in Canada and even though interest rates on loans are cheap (which account for unprecedented levels of debt) this past winter, I refused to fork out 7$ for one single celery! If you can't see the inflation and what it's doing to our economies then I have a condo I would like to sell you. Safe returns on money are a joke, the only people making money are CEOs with exorbitant salaries, the rest of us are looking at our money slowly disappear. I am in my sixties and if my house loses value in the next downturn, heaven help me!
21
"Mr. Trump’s methods and tone are unconventional, and the scale of the interest rate cuts he seeks is out of line with what most mainstream economists think would make sense."
Once again we learn this would-be king has no clothes.
18
All this begs the question: why are we doubling down on using a resource that is destroying the habitability of our planet and dependent on a fuedal and brutal monarchy and theocracy when we should be decarbonizing our economy entirely? Maybe it would just be best for the planet to let the theocracy and monarchy obliterate their means of production, take the bitter shock of reduced supply, and make the jump to existing alternatives once and for all?
18
@Multimodalmama Ever hear of the Clovis people? Scientists state that they were the first to arrive in America (not the "native" Americans) and were able to do so by a waterway through Canada that was created by melting glaciers. The Clovis people lived 7,000 years ago and didn't have cars, planes, cows (probably), so what caused the glaciers to melt? Mother Nature. And, think about it - if it wasn't for an unfriendly asteroid, we wouldn't exist - at least as we do now (both physically and intellectually) because I'll take bets that the dinosaurs wouldn't let us become the superior species.
2
@Multimodalmama
Do you drive a car? Ride a bus? Fly in jet airliners?
Or, do you do your part and ride a bike?
4
Not one Democrat said that they would turn off the air conditioning in their homes and offices this summer.
1
“Spoils”? The only ones plundered in this story are the workers who have made concession after concession without much to show for it. They want a (partial!) return of what’s been plundered from them — from them and the US treasury. Why would you use such a loaded, in-apt word?
12
You can find similarities between any two time periods if you look hard enough. It doesn't mean anything.
3
@Will
You're absolutely correct. But if economists stopped cherry-picking history, they'd be left with nothing but noise, statistically speaking. That would suit me just fine -- I'll take honesty any day.
4
In 1970, the national debt as a percentage of the GDP was about 34%. Today it is 105% There are massive unfunded liabilities on top of that. Family and business debt is massive. We are running trillion dollar federal deficits.
At some point this financial illusionist trick of zero and even negative interest rates will collapse, to everyone's astonishment. Who knew? You can't really saw the lady in half! Magicians can't really levitate! We will see stagflation again on a scale unseen since the days of Weimar Germany.
24
@Stan Frymann
Yes and yes again.
This is what worries me about Liz Warren (Bernie doesn't exist in any sane fiscal world): How will Warren pay off the $22+ trillion national debt AND fund all those nearly $34 trillion new free things that poll well but cannot be paid for, certainly not without raising taxes on everyone, especially the shrinking middle class who already is picking up the tab of the last 18 years of great ideas that weren't - if not the last 60 years of such fiscal unfunded extravagances.
1
Strikes fuel inflation, 'huh?
So does greed for profit.
32
An interesting choice by Irwin to use long gas lines as a measure of economic instability. Those long lines were less a reflection of actual gas shortages than they were of sheeplike mass hysteria. When allowed to buy gas only on odd or even numbered days, based on the last digit of their license plate number, people lined up every other day to top off their tank whether they had used ten gallons or less than one in the intervening day. In the age of the confluence of know-nothingism, the credulous reading of internet “information”, and the Trump-Russia-Fox axis 24-7 drumbeat of fake news, the next wave of mass hysteria is likely to be far more dangerous and destabilizing.
12
@Renee Margolin I remember the city I lived during the 70s had long lines for gas and then we found out that the tank farm out side of town was full to the brim with gas and diesel that the oil companies were trying to hide so they could get higher prices during the “ crisis “ sometimes history does repeat
7
@Renee Margolin
You're right about December 1973. I was an 18-year-old working at the local Gulf gas station back then. "Sheeplike mass hysteria" sums up my recollections nicely.
Now I'm 64 years old, and I'm very worried that you could be right about our near-future, too.
7
According to a story from yesterday interest rates are trying to rise on their own. https://www.nytimes.com/2019/09/17/business/economy/fed-interest-rates.html
" (T)he Federal Reserve stepped into financial markets on Tuesday to keep short-term interest rates from rising — the first time the central bank has had to carry out this type of “market operation” since the global financial crisis.
The Federal Reserve Bank of New York had to spring into action to keep the effective fed funds rate in line after it rose to the very top of the Fed’s range of 2 to 2.25 percent. "
I'm not smart enough to understand what all of it means, but something tells me the Law of Unintended Consequences is going to bite us little people when it kicks in.
6
@Vanessa Hall
Re: "I'm not smart enough to understand what all of it means, but something tells me the Law of Unintended Consequences is going to bite us little people when it kicks in."
Neither are "they" smart enough to understand what it all means. Economic prognostication is built on Just-So stories, which "they" make up (or revise) as they go along, as needed. Don't believe the hype -- you're smarter than you think!
3
And the word "fracking" is conveniently missing from the article. The reason why there is no oil shock is because of fracking. And of course the leading Democratic candidates want to ban it (for both oil and natural gas). Imagine the consequences of that ban.
4
@Erik
"Fracking" is a money-losing proposition, sustained by government interventions. At least at today's oil prices. Not to mention the external costs, which will be paid eventually and which are enormous. Fracking is a geopolitical strategy: Flood the world oil market with "cheap" oil and gain market control. It's a way of keeping other oil-producing countries in line. Yeah, it works great until it doesn't, and then it'll be time for ALL of us to pay the fiddler. Well, not ALL of us -- this is America, after all.
9
There will not be a gas shortage in the USA; we have plenty
5
You need to do a little more homework with regards to the causes of inflation during the 70's.
7
I was in college during the 1970's when we went from the gold standard and went on the petro-dollar standard.
There is no comparison between the two
9
“Labor strife”? PLEASE! Labor isn’t even a ghostly remnant of what it was in the 70s. Labor actions have virtually no impact on the economy. Arab oil was embargoed in the 70s. We’re not even remotely close to that condition, and there is no, zero, zip “energy crisis”. The ONLY similarity to the 70s is we have a criminal president in office. The air was filthy and everyone was skinny; we had great music and movies with messages - not corporate drone tunes and film of never-ending superheroes that obliterate and smash our minds and senses. We had a semi-responsible Republican party and a Democratic Party that got things done. We had demand side economic policy not trickle on us supply side bullhockey voodoo. We had a progressive taxation system, not socialism for corporations and the ultra wealthy. We could afford our doctors and prescriptions. We had publicly funded hospitals, clinics, and colleges and universities. No one even heard of student debt. No, this is almost absolutely nothing like the 70s. C’mon!
87
Quality comment.
13
I think President Warren will make an excellent sequel to Jimmy Carter, unfortunately for her.
2
@DRS
I don't think Warren would be a very good president but Jimmy Carter was. It's just that his common sensible policies got sideswiped by the massive mistakes and debt racked up during the Johnson and Nixon military/Vietnam economy follies, as well as insider Washington corruption that was determined not to let in anyone to clean up the place. It's pure bad luck that Carter got diplomatically slammed with the Iran hostage crisis (its Islamic revolution) instead of Ford.
5
I just ran something through an inflation calculator. If gasoline prices had stayed exactly the same, adjusted for inflation, a gallon that cost $1.00 in 1970 would cost $6.79 today. It makes current prices look better.
7
@Chuck
OR, it makes current prices look ARTIFICIAL. That should be a warning sign.
There are several kinds of artifice at work in the world oil market, not the least of which is the fracking boom in the U.S. At current market oil prices, fracking is a money-losing enterprise. Instead, it's purpose is (1) to give the U.S. more control over the global market, and (2) to keep American voters happy in their gas-guzzlers. We (or our children or their children) will pay for this eventually, and the costs will be HUGE.
6
@Chuck
Gas in 1970 was ~ $0.35/gallon
Adjusted for inflation equals $2.26/gallon today.
9
Why make the comparison if you're only going to conclude the comparison is inappropriate?
The problem we face today is completely dissimilar from 1970. Wages aren't rising therefore we can't generate inflation no matter what the Fed does. Meanwhile, energy plays little if any significant part in the equation.
The most striking similarity is the one which goes unmentioned. The US government is wasting tons of money on economically useless endeavors. In 1970, we're talking specifically about Vietnam. Now we're talking about tax cuts and endless wars.
The true danger we face is expending all government resources prima facie in light of a danger which doesn't yet exist. What happens when an external shock truly does disrupt the current expansion? If the fiscal budget is already buried in deficit and interest rates are subterranean, there's not much room to maneuver from a public policy perspective.
Forget "stagflation;" we're talking about economic "retardflation."
16
Why do practically all economic writers parrot the government position that there is minimal inflation. Every ordinary person knows that prices are going up very rapidly. Rents and housing prices have skyrocketed. Everyday consumables have either gone way up or the quantities in a package have decreased markedly. Maybe computers have dropped, but ordinary people have trouble making ends meet because of rapid price increases.
50
@TF
Correct! Pay attention to the Consumer Price Index (C.P.I.), and especially too how it's "adjusted" over time. It's a sham.
Computer prices may have dropped, but how much did you pay for TV signals in 1970? For internet access (no longer a "luxury" good)? It goes on and on.
13
@RR
CBS/ABC/NBC/FOX/PBS are all free over the air, just like in 1970. It's your choice to line Comcast's pockets.
In 1970 local phone service cost ~$8/month for a single AT&T-owned phone --more if you wanted a Princess Slimline phone ($52.90 in 2019 dollars). Long distance was a lot more. Overseas calling was very expensive.
Housing / Health Care / College are the main drivers in cost of living increases. Everything else follows CPI more or less. Check out MIT's billion prices project.
1
@TF, the main problem is "decontenting". They lower the content and charge you the same price.
Do the CPI and PCE numbers account for that?
1
This column is jumping to conclusions before the story has finished. Stagflation was the result of the issues in the 1970's, not the cause. Excessively easy monetary policy and high resource prices caused by interrupted supplies could still set off a fresh bout of stagflation.
4
70% of our economy is dependent on middle-class consumerism, so a statistically normal distribution of wealth is key in making it work. 100 billion dollars equally distributed into the economy will generate more demand for consumer products than it will sitting in some billionaires offshore account. With so much wealth, in so few pockets, sitting on the sideline rather than washing around the economy creating demand, it's not supersizing the Fed can't get inflation to 2%
17
One area I might suggest be added to this narrative. There were many more good paying union jobs in the 70's, particularly in the manufacturing and industrial sectors. You can deal with inflation a whole lot better when you have a well paid middle class.
31
I went to the gas station this morning. Monroe County, NY. The price on the pump for regular gas was $2.59 as I pumped. As I finished an employee had just came out and was changing the price placards to $2.69 - a 10 cent (nearly a 4% increase).
I don't believe I've ever seen it go down by that much in one price change.
4
While inflation is nowhere near the level of the 70s, you fail to factor in the rapidly escalating costs of climate change. The economy may well be broken by that, whether we choose denial and pay to clean up and rebuild or accept the science of the situation and change our ways. Huge costs either way but addressing climate change would at least spur new industries and some economic growth. Denial is a dead end street.
44
I was very fortunate that in 1973 when I was a resident of Brooklyn, I would take the BMT to work. The gas shortage did not really affect me that much. But I do remember when prices went from less that a dollar to more.
There were also many funny things occurring like the man who drove past his neighbor's home in Long Island for years suddenly he had to walk and the neighbor's dog did not recognize him without his car and ran him down. The other funny thing was the person whose name was NOGAS and had his license plate with his name on it. These were humors at a very bad time for many who were unable to obtain gasoline for their cars. The government did the right thing in having prices checked to ensure that we were were not overpaying for gasoline.
3
@Tonjo no, the government’s price controls are what caused the shortage.
2
This seems like a forced analogy. The major volatility in energy and other commodity prices over the past 5 years seems to be the bigger factor in global economic instability more than the snapshot of today's oil price (which while high is not nearly how high it was at the start of the decade).
13
If gas prices go up, there should be more support for alternative energy initiatives and for California's car mileage requirements. Not Trump's goals of course.
47
@Eero Yes, but Trump's larger goal is to increase US oil company profits. And sadly, that goal is being met.
7
Well written at least for the GM part.
In the 1970s, the unions were greedy now it on the other foot here and in general, corporate greed is at an all time high.
History does repeat itself. Sometimes the players are different or reversed but history does repeat itself.
Learn from it or forever be condemned to repeat its' worst mistakes.
21
“[History] repeats. The first time as tragedy, the second time as farce.” Karl Marx.
5
Wages in the motor vehicle industry have fallen over the past decade because they were too high ten years ago. Wages and benefits in the early 2000s were out of line with economic reality, because of globalization and competition from nonunion, lower paid, more productive workers. Both the unions and the companies that agreed to their demands were at fault. Today cars are more expensive than ever; a new car costs an incredible amount of money. Why should consumers pay even more to benefit some of the highest paid blue collar workers in the world?
7
@Jon Harrison I dont think the workers are arguing for higher car prices. More likely reallocating some of the C-suite millions to line workers; that's what's really our of line with economic reality.
31
@Jon Harrison
Automobiles could be manufactured with less equipment for use in specific markets. A 1998 trip to the southern Chile showed dirt roads that limited possible speeds to 10 mph. Consequently, air bags were pointless. Radio transmissions were non-existent. Consequently, automobile radios were pointless.
@Jon Harrison ~
You are wrong.
In February: "But today, the Bureau of Labor Statistics, when it released its Consumer Price Index (CPI), explained that prices of new vehicles, per its CPI for new vehicles, showed 0% inflation in January compared to January a year ago, and that in fact, confusingly, prices have been essentially flat over the past 22 years:"
Yeah, let's just cut their wages to minimum and eliminate health care benefits.
I am sure that will make car prices you like.
Should do the same for all manufacturing people. And doctors. And .... you.
3
Wages in the motor vehicle industry have fallen over the past decade because they were too high ten years ago. Wages and benefits in the early 2000s were out of line with economic reality, because of globalization and competition from nonunion, lower paid, more productive workers. Both the unions and the companies that agreed to their demands were at fault. Today cars are more expensive than ever; a new car costs an incredible amount of money. Why should consumers pay even more to benefit some of the highest paid blue collar workers in the world?
6