Richard Wolff on Auto Loans in Increasing Default

Richard Wolff on Auto Loans in Increasing Default


Last update I’ll have time for today has
to do with auto loans in the United States. Auto loans are again
in increasing default. What do I mean? People who borrow money to buy an
automobile discover two, four, six, eight months in that they can’t come up with
the monthly bill to pay for the car. And so the car is repossessed, taken away
from them. What’s interesting this time are two things I want to bring to your
attention. First, the biggest sufferers, the biggest defaults, the biggest
repossessions of cars are cars that are ten years old. Eight, nine, and ten years
old. So the first thing I want everyone to understand (because it was news to me)
is that more than ever before used cars, even old cheap used cars, cannot be
afforded by Americans unless they borrow the money to buy them. Number two: nine
and ten years ago was the worst of the crash of 2008. So bad was that crash that
American car companies cut back production of new cars drastically, which
is why nine and ten-year-old used cars are now in (you guessed it) very short
supply. So the dealers in them jack up the prices forcing the buyers who want
them to go into debt which they can’t carry. So they lose the car which is
their only way, in our society that has such poor public transportation, for them
to hold on to their jobs. Ten years after the crash of 2008 we’re still producing
personal tragedies based on the instability of the capitalist economic
system.