Saturday, June 14, 2008

Death of the Hummer

Last week GM announced that it would consider selling its Hummer brand. Immediately shrieks of joy could be heard from Hummer haters everywhere. Amazingly there are people out there who think this will have a positive impact on their life. From what I can tell, GM has produced less than 200,000 of these things since they started selling them. This is compared to some mass marketed vehicles that might sell a hundred thousand a year. Sure they get crappy gas mileage and I don't see them as very useful or practical but they don't make up a very large percentage of the vehicles on the road. Where I work there are probably 150 cars in the parking lot each day. There are probably a dozen Camry's, 10 or 20 minivans, a few Ford Escapes, various other compact cars and 1 Hummer. Thats it. Yet, there seems to be an undercurrent of anti-hummer sentiment by people who view them as obnoxious and ostentatious. I don't really care as long as they aren't tailgating me. As a side note though, if you want an example of an obnoxious vehicle, look at Harley Davidson's. When there were not so many of them a person could be seen as an individualist. Now, with everybody and his brother buying one and customizing it to make as much noise as possible, they are just part of a group of loud obnoxious people. Try enjoying a peaceful day at the park without a herd of orthodontists and accountants thundering buy on these things. But I digress.

I think the real thing that gets people is the way Hummer owners seem to defy gravity. Most of us have a hard time paying for a normal car and the costs associated with it. Then they see this huge monster of a vehicle that cost close to 50k and takes 3x the fuel of most cars to fill up and they wonder how are they able to do this. It does not make sense. It upsets their perception of the world. We all get this, especially those of us who live conservatively below our means. When we see someone living so far above our means it gets to us. It makes us wonder what are they doing that we are not. Are we idiots? Then the average person not wanting to believe himself an idiot says no, I am not an idiot, that guy driving the Hummer is and I don't like him. Now many people driving Hummers are living above their means. Not all of them but some are. The free market society that we live in has a way of dealing with people who live above their means so the rest of us should just chill out. By the same token when the market inflicts consequences on people who buy houses they cannot afford either, the government should chill out and not get in the way.

In the past couple months, the free market has demonstrated itself to be far more affective at modifying human behavior than a democratic government could ever hope to be. The number of miles driven is down 4% this year. With the huge plunge in truck and other full size vehicle sales I have to believe gasoline consumption for transportation is down more as many vehicles are being replaced with smaller ones. The free market will never let us run out of oil. It will gradually shift the price to a level that will force it to be used only for applications where it is economical to do so. Too often people expect immediate change by government decree. They ignore the real power of the free market that can do what governments cannot.

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