Car sales drop, manufacturing contracts amid credit crisis (Roundup)

BobinNov 3rd, 2008 - 20:33:00

In 1964, my dad bought a Ford Fairlane 500, and paid about $2000. For that era, it was a reasonably good car for the money. The Fairlane was about one-eighth of his yearly income. Today, the average vehicle is about one-half to one-third of the average annual income. At those ratios, don't expect people to be buying cars every 2 or 3 years.

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Web SmithNov 3rd, 2008 - 23:01:04

Too much of consumers' money is going to pay interest. Government legislation, the Fed, and the banks have stripped consumers of their wealth. The economy will not recover until consumers do. Lowering the interest rate and throwing money at banks and other corporations is not going to fix the problem. It is only going to make matter worse when the resulting inflation sets in. Banks are going to have to take their lumps along with everyone else. To reduce the severity, banks need to lower interest rates on credit cards, mortgages, personal loans, and lines of credit. Congress also needs to stop fooling around with things that stimulate the economy like tax credits for renewables and they need to stop bringing cheap foreign labor into the country.

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