Governments everywhere are confronting the collapse of the global automobile market in different ways, with loans, bailouts and sometimes cold rejection. Rear Vision looks at the history of the car industry in Australia, which has always relied on government support, and in the United States, where the Obama administration is trying to work out whether more government aid could make its car companies viable.
Tagged with “cars” (61)
First an aside and then a longer post on an issue touched on in the podcast.
Arnold Kling stated that health care costs appear to be excessive compared to health outcomes given that longevity in the United States is the same as in other countries that spend less.
Longevity is not the only measure of health outcomes.
Many other goods are purchased as well (e.g., time/convenience and the ability to remain active).
Now the main point.
I have always thought that auto mechanics are a good analogy to doctors when thinking of solutions to one of the possible sources of market failure in health care:
the suppliers of the goods (the doctors and auto mechanics) effectively demand the goods (by instructing the patients/car owners as to which tests and treatments should be provided).
I was glad to hear the podcast discuss this issue, but don’t think it went far enough (although Russ Roberts almost came back to it at the end with a discussion of car insurance for oil changes).
Russ Roberts indicated that the way he solves this problem is to find a car mechanic he really trusts.
The transaction costs to that solution are fairly high, and the market has found another (and I think better) solution.
The car makers have internalized the cost of repairs, and the consumer pays for that cost in the price of the car.
My experience is that vehicle warranties (on both new cars and used "certified" cars and used cars purchased through the national vendors) have become much more comprehensive and extended warranties are much cheaper and more comprehensive (I used to never purchase them, but have with my last two cars).
At least one car maker I know of (BMW) has even internalized the routine maintenance (oil changes) given that the failure to obtain that maintenance may cause more costly warranty claims.
Perhaps the pervasiveness of third party payment systems is due to the high transaction costs of educating medical consumers or finding trustworthy doctors and providers.
The internet may reduce some of those costs, but my guess is that most consumers only do the research after obtaining a diagnosis (and not research on whether or when to obtain tests and care in the absence of a diagnosis).
Ultimately this analogy would suggest that HMOs (providers who both provide care and take on the insurance risk) as being the best solution to the transaction costs of finding trustworthy providers.
And yet, my experience (I am an attorney who works with employers on their benefit plans, including medical plans) is that HMOs have dramatically declined in popularity (to the point that many employers do not offer them as an option).
What’s going on here?
Is the analogy wrong?
Interested in the thoughts of others on this point.
Steve Crandall brings a new perspective as a guest. Steve’s analysis of complex systems has given him a huge pool of wisdom into which we dip our dainty spoons.
We survey the interlopers seeking to replace many jobs that cars have traditionally done, from horses to bicycles, planes, trains and buses.
We dive deeper into a few earlier Asymcar topics including energy, regulation, infrastructure, power train evolution, societal changes, distribution networks, urbanization and consider the promise of electric bicycles.
Several innovation timing lessons temper our expectations for immediate improvements.
Finally, we revisit the emerging transportation information layer and how such services may change public behavior and the auto-ecosystem.
Podcast 2: Is Tesla Disruptive? Also Segway, Multiair, Winglet, Organ Donors & Regulation Ãber Alles | Asymcar
Horace Dediu and Jim Zellmer discuss the odds of disrupting the present automotive club via Tesla. We further dive into the regulatory and cultural environment that sustains the current players, while reflecting a bit on Segway, Toyota’s Winglet, organ donors and the Fiat “multiair” engine. Finally, we preview a larger discussion on apps in and around the car.
Horace Dediu and Jim Zellmer discuss how to think about cars in this 57 minute podcast. http://www.asymcar.com/?p=21
On the streets of early 20th Century America, nothing moved faster than 10 miles per hour. Responsible parents would tell their children, “Go outside, and play in the streets. All day.”
And then the automobile happened. And then automobiles began killing thousands of children, every year.
Top Gear presenter metaphors. Back-in parking FU. Why John likes Hondas so much. Visibility and a lower-back-friendly seating position. Our three most boring Ferrari stories. Fond memories of ancient and less-ancient Volvos. Designing for safety. LED daytime running lights as tacky "eyeliner", our modern Altezza-like design fad. Casey says "braaaands." How Audi, BMW, and Mercedes compete. Toyota and Scion.
In the final episode of Neutral:
Casey and Marco drag John through the story of their European Delivery vacation picking up Marco’s M5.
BMW Welt, the BMW Museum, and the factory tour.
Driving on the autobahn.
Finding and driving the Nürburgring.
German drivers, food, culture, and hospitality.
Sponsored by Squarespace: Use code NEUTRAL4 at checkout for 10% off.