'Wherever we want to go, we go. That's what a ship is, you know. It's not just a keel and a hull and sails; that's what a ship needs. Not what a ship is. What the Black Pearl really is, is freedom.'

Critics keep saying that they produced cars that Americans didn't want. Will they someday say of Agriculture that in our focus on 'biotech' we produced foods that Americans didn't want?' /> Beyond Getting from Point A to Point B | Dairy Today

 
Sep 20, 2014
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Economic Sense

RSS By: Matt Bogard, AgWeb.com

Matt's primary interest is in the biotech industry and ag policy.

Beyond Getting from Point A to Point B

May 05, 2009
I keep going back to this because I fear for the future of the agriculture industry, the same fate that the auto industry has suffered at the hand of collectivism and government intervention. Who would have thought that something as strong, independent, and  'American' as the auto industry would be in the state that is today? Who today would think that sometime in the future Americans would no longer be able to produce the food necessary to feed themselves, affordably? As we have seen with the auto industry, and as we have seen everywhere else in the world, when industry becomes overburdened with regulation and control by government, when markets no longer dictate production, chaos ensues.

Given what has happened to the auto industry, we should not be naive to think that it couldn't happen in agriculture as well.  What's wrong with Detroit? One thing we keep hearing over and over is that they built a lot of cars that Americans didn't want. I wonder if will they someday say of Agriculture that in our focus on 'biotech' we produced foods that Americans didn't want?

Regardless of how we got here, the relevant question is how do we restore profitability to the auto industry. What made SUVs so popular? Oddly enough, this reminds me of a quote from the popular movie 'Pirates of the Carribean'.

'Wherever we want to go, we go. That's what a ship is, you know. It's not just a keel and a hull and sails; that's what a ship needs. Not what a ship is. What the Black Pearl really is, is freedom.'

The same holds for the SUV. The SUV is more than just a box with wheels that gets you from point A to point B. The SUV represents the American Dream, it represents individuality and independence.  Freedom. For this reason, Americans were willing to make huge payments and pay huge prices, sometimes taking out home equity loans to get these things. Even if your old car was mechanically sound, the appeal of the SUV was such that you were willing to go out and buy one anyway. It is this behavior by Americans that kept Detroit profitable and kept union workers on the job. They built these things because we wanted them. 

The SUV was antithetic to those with a collectivist worldview. We would often hear that 'Americans need to end the love affair with the automobile.' Well, the collectivists seem to have forced this upon us, and destroyed the auto industry in the process. No matter how many bailouts, if they reduce the automobile to simply a 'box with wheels' like the Prius, Smart Car or something made by Fiat, Americans won't be rushing to buy like they were with the SUV. If getting from point A to B is all that matters, I'd say we'll keep our jalopes on the road as long as possible before we buy something that looks like a go-cart. Until the industry is once again allowed to build cars according to the preferences revealed by the consumer, and we have an energy policy that is complimentary to the profitability of trucks and SUVs, it will never be the same again.

Instead, it seems that congress is doing everything it can not to revive auto sales. Instead of relaxing CAFE standards, they have made them stronger. On the table now is a cap and trade / carbon tax scheme that will increase fuel costs even more. More of the same failed policies. 

What if the same collectivists (progressives?) started saying somehting like: 'Americans need to end their love affair with Beef or Corn or Milk or Pork' etc. The truth is, just as driving an SUV represents more than just getting from point A to point B, eating beef is more than meeting our vitamin and protein requirements. Food is  more than sustenance. Just as freedom dicatates that we are able to choose the cars we want to drive and go where we want to go, it also dictates that we choose the crops we grow and the foods we eat. This liberty we take in our personal lives is also antithetic to the collectivist view, and I look for it to come under more and more scrutiny in the future as this philosophy grips the nation. Once we let our guard down in one industry, all are vulnerable.
Matt Bogard, Economic Sense
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COMMENTS (4 Comments)

Paul
You write: "As we have seen with the auto industry, and as we have seen everywhere else in the world, when industry becomes overburdened with regulation and control by government, when markets no longer dictate production, chaos ensues."

You make an assumption here that is incorrect. Over-regulation is not the problem.

What car makers forgot was they are in the transportation business, as you said, from point A to point B.

An SUV, especially one like the Cadillac or Lincoln model, is about more than that. It's a statement to the world that says "HEY! We make more money than you and can afford to spend money, even if it is wasteful and irresponsible!"

Back to point A and B; Economics and a thorough study of how markets work indicates that over time, products evolve from being new and innovative to becoming mere commodities as competition drives the price down. Autos arrived at that point many years ago and the auto makers forgot that part of reality.

For most car buyers, they need a car that provides safe transportation to and from work and play. It must be dependable and reliable and affordable.

These were the reasons why Hondas and Toyotas took over the market share of GM products and the reason why Detroit was slow to react to the looming threat of economic recession. They were still building profitable SUV's when they should have been investing in better quality, reliable, dependable modes of transportation.

1:53 PM May 9th
 
K G Kimball
-wonderful,insightful article that rings full of truth--to-day its autos and hogs-to-morrow grains--never be so confident that it can never happen too you.....who really is an "independent farmer to-day"--cetainly not in the feather business,very few in cattle ,hogs or dairy and how many grain farms where bought and built with gov't checks...about only free enterprise to-day is your little convenience store
1:46 PM May 8th
 

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