I was giving a lift to one of my helicopter students from the military side of Hanscom Field back to the civilian parking lot. “I’m driving my [18-year-old] son’s car today,” he noted. I scanned the parking lot for a 1998 Honda Accord or similar. He directed me towards an almost new black Mercedes E-series sedan, the $50,000+ dream car of so many yuppies. “I like all of the airbags,” my friend said. “He’s already had five accidents.” Was it a car that this health care professional had bought for himself and then given to the kid? “Oh no. I was born to be a father and I just love giving things to my kids.”
Christian Europeans at various points in history passed anti-finery laws prohibiting Jews from wearing fancy clothing or jewelry. This incident led me to wonder if we shouldn’t have a similar law for teenagers. We want Americans to work hard and strive to improve their salaries so that they can grow the economy and pay more taxes. If a guy who is working two jobs to improve his economic situation sees a kid driving to high-school in his own brand-new Mercedes merely in virtue of having been born into the family of a doctor/dentist/lawyer/whatever, might it not demotivate him a bit?
Perhaps I have gotten out of touch with the modern world. When I attended public high school in Bethesda, Maryland in the late 1970s, a rich kid was one who had a car of any kind. Has it all escalated to the point where in suburban Boston a kid needs a new Mercedes to hold his head up among his peers?
[Or maybe I’m just envious, driving a 1998 Toyota minivan that smells like a wet dog.]
I lived in Misson Viejo, California from ’72-’79. A lot of trades people starting up their own businesses and engineers from Aerospace firms were the norm. No Cadillacs in the driveways. I returned in the early 90s after a year of grad school, thinking that I wanted to try living in So. Cal. again. Every kid had a BMW. Remember, this was a during a really rough time for just about everyone. Nobody was hiring. To say I resented these kids, as I walked to the store (and nobody walks to the store in Mission Viejo), is an understatement.
For the record, I was lucky to have a vehicle in high school (1983-84). A 1967 Ford pickup in which you pumped the brakes three times and prayed it stopped.
Phil,
I was working at Microsoft during the 90’s, and I drove a Ford Crown Victoria stationwagon with 118K miles on it that looked like it had been through a Bagdad riot. My team lead drove a 911 Carerra. He was three years younger than me (23 at the time). You can be sure that that put in extra hours because of that car.
Seeing kids with wealth does indeed rub it in the face of the have-nots. Many of the people from the dot-com boom realize this and don’t engage in conspicuous consumption, say, like the wall-street crowd did during the 80’s.
However, anti-finery laws are merely a rich-person’s gambit to cover up the true inequality in the US. Perhaps we should have a system to better distribute wealth in this country. Extreme inequality is the real embarassment here.
We could kill two birds with one stone and let progressively higher taxation of gasoline reduce both overall usage and conspicuous consumption. Of course, people who are getting BMWs at sixteen don’t have very high demand elasticity.
If you go over the parking lot of the University of Regensburg you see so many BMWs driven by students it makes you sick. I have the impression by now that a lot of the students do not actually study to build on something, but to keep the status-quo that they’re accustomed to. In fact, I know people that went to high school with me, who after finishing their degree have problems to keep up the life-style they had as a student.
And now you wonder why nobody wants to go out on the street and protest against *anything*, or why political discussion has dried up at least in Germany’s universities where historically all political change had begun… it’s no wonder if you have people scared about their financial future, because they can see them already *loosing* what they have as a student because nobody wants to give them a 60,000€ per year job right out of the university that they’d need to keep their spending level…
Now, of course I presume that there’s a bell-shaped curve, where most people have an average amount of money, but most interestingly the highest concentration of students with high allowances seems to be found in the most economy-oriented fields of study, like law and economics.
Perhaps someone should actually make an informal study about that, there might be interesting connections.
Huge trade deficit, huge government debt and 18 year olds driving Mercedes bought by their heaalth care parents, but they could just as well be lawyers, but not likely to be engineers. America in the 21st century.
The beauty of a free country is that people can spend their money on whatever they wish. Some folks work the live long day so their kid can have a new Mercedes Benz. Others put that money toward retirement, college fund, or other such purpose.
Here in Orange County, I see a countless Mercedes, BMWs, Bentleys, and Aston Martins. I also know (because I’ve taken to asking them) that a lot of the people driving these cars a) lease them, and b) live in a rented apartment. They aren’t rich — they just choose to blow their money on a car. Eventually that sort of thing is going to catch up with them. But in an area were a million dollars won’t buy you a decent freestanding single family home, it seems a lot of folks who don’t own real estate have given up on that dream and put their cash toward a nice car instead.
–Ron
My first car was a 1953 Chevy with 104,000 miles & cost US$400 (about 3 months income when I was in high school).
I eventually figured out I spent US$1,100 to purchase (a total of 4 very used, including the Chevy) cars over the 20 years of my driving life.
What I spent on (3) BMW, (1) Laverda & (2) Ducati motorcycles is classified.
Way more bang-for-the-buck with motorcycles.
One thing I’ve noticed over the years is that teenagers who had to buy their own cars usually took better care of them and got into fewer accidents.
Teenagers who were given cars by their parents were far less concern about maintaining them and tended to be more careless drivers.
It would be wise for parents who truly care about the safety of their driving teenage sons and daughters to let their children help pay for at least some (if not all) of the cost of their vehicles (besides the gas).
Maybe if your friend’s son had to pay the insurance for his Mercedes, he would be a lot more careful driver.
5 accidents.
If he’d not been in such a sturdy car he could well be dead.
Maybe you don’t think a father should value his son’s life and health at $50k?
I’ll do exactly the same for my kids.
The luxury is now the mainstream. Or hadn’t you noticed?
That’ll be the Bush economy!
Instapundit has a link to a video story about parents that threw a lavish “Sweet 15” party to give their daughter a brand-new BMW convertible (that she can’t even drive), a year early, because next year BMW apparently won’t be producing it in the color she wants next year. http://web.knoxnews.com/special/1001sweet15/
The party appears to be in the high 5 figures as well. (Catered, with gowns, professional entertainment, etc.)
Fast forward 30 years, and compare the lifestyles of those who bought BMW’s at age 25, and those who chose to save their money, and then we’ll see who’s having fun.
Life is a marathon, not a sprint. Especially considering the continuing advances in longevity.
Although my family was working-class, I had a car. I think my Dad paid $250 for it. I was so cool in my ’66 MG Midget! But I also learned car repair, since it was an everyday thing. Now that I have daughters, I think I’d prefer them to have a station wagon, or something even uglier, but only if they contribute to the cost. AND drive me around! My cheap little car was just too cool for a high school girl.
5 accidents in ~2.5 years! Why is he driving at all?
>> If he’d not been in such a sturdy car he could well be dead.
That’s great. By him a tank. What happens when some other driver is killed by the Bumper-car-Kid?
With all that cash that seems to be flowing, Dad should send him to a real driving school.
“I was born to be a father–”
If he wants to be a father who teaches his kids the importance of thrift, patience, and hard work, he’s not doing a great job.
Forget about the impact this kind of conspicuous consumption will have on other people’s motivation–what kind of impact will it have on his son?
When I was in highschool, and it was a private school, my peers who were much wealthier than I drove the finery and put my 85 blue Cav to shame. Nothing’s changed. The wealthy generally don’t know what it is to impart value to their children. They mistake giving as an act of love (or maybe a repayment for them not being there?) and don’t see or grasp the fallout it can cause.
Like we’ve mentioned in previous posts this is the trick to having wealth and teaching your children. It’s a difficult proposition but one that I believe can be worked at.
[quote]But in an area were a million dollars won’t buy you a decent freestanding single family home, it seems a lot of folks who don’t own real estate have given up on that dream and put their cash toward a nice car instead.[/quote]
Amen brother – here in Northern VA $600-650K will by you a half-decent single family – just old and not very big. (might as well be $6 million to those of us who don’t have a house to sell for a down payment)
I think the main difference is the sheer amount of credit some of these folks have. Back when I was in highschool …. 81-84 the rich kids may have had a Porche here and there, but they were never new and most just drove whatever was Mom/Dad’s last car. The real difference was back then they just had nicer cars (or cars period) and bigger houses. You could pretty much assume that if you had a 25″ console TV/ fridge- washer dryer – it was as good as any the richest family had, they might have one or two more and could beat you in property value and size. (I remember being invited to a friend’s vacation house once for the day and realizing that they had mildewing furniture, ratty rugs too in some rooms) Now it seems that the truly wealthy have it all over some of us – tutors on any and every subject for their kid (specialized to the hilt), access to extra luxury at sporting events (remember when you just went to a ball game and sat in the stands not luxury boxes?), birthdays with entertainment that rivals the best professional entertainment – or that is the best professional entertainment.
Of course not all of it is easy – just about everyone I know with a little money (or credit) has it because of a home refinancing (only after your house triples in value) and every professional I know well save for a couple exceptions, both spouses work full time – and need to for those heavenly bills that come in every month.
It really is amazing how the luxuries have become commonplace (and my god don’t we love to show them off!) – what ever can they find to spend money on tomorrow – whole body altering surgury? I know I was probably happier when I was younger than some of the kids I see today.
Americans have been trading in increased value on their homes for cars and shopping. As home values drop, forclosures will be the order of the day. There are two lessons from this. 1) There will be a lot of used BMWs available in good condition – so don’t buy new, and 2) The Asians will own a lot more of the USA than they do now when this all starts to blow over in 5 or 10 years.
–Tom
I had been given a 2000 Mercedes S500 for my high school graduation (Valedictorian). I was in the family and the dealer couldn’t give enough cash to purchase it. My uncle didn’t want a trade as he purchased an Aston Martin. He sold the $110,000 car to my parents for me at a reasonable price. I cannot tell you how sick I feel every time I drive it; it is a reality that should not be. I get terrible looks from students and adults (especially older adults). I do not deserve it and feel very superficial when driving it. Honestly, I’m ashamed. I’ve recently begun to think about selling it and putting it towards my next two years of college and get a puddle-hopper. Teens should have to work for like previous generations. No exceptions.