In 1969 the year started with Marvin Gaye’s I Heard It Through the Grapevine at the top of the Billboard music charts and ended with Peter, Paul and Mary’s Leaving on a Jet Plane in the top spot. That latter song was particularly appropriate for Texans; written by AHHS alumnus John Denver, it topped the charts just as construction started on DFW International Airport, six months after Houston Intercontinental had opened.Meanwhile, the 41,000-mile-long Interstate Highway system was close to being completed, while Texas had all but finished building its Farm to Market roads. North Texas was in a water reservoir-building frenzy as a direct result of the Texas droughts of the 1950s, not to mention the long memories of Texans who had survived the Dust Bowl era.America had 540,000 troops in Vietnam. We landed a man on the moon. LBJ’s Great Society was in full momentum, driving the poverty rate from 23%, in the last year of the Eisenhower administration, down to 12%. The average workweek in America was 39.7 hours, and on average the American CEO earned only 35 times the income of his average employee. And Americans flooded into dealerships in droves, buying a record 11.55 million vehicles. If you worked a minimum-wage job, after taxes you had enough money to purchase a new Ford Mustang. Like the University of Michigan, many universities across the country charged in-state residents only $480 per semester for a full education. Gasoline sold for 35 cents a gallon, and even at that price our oilmen and companies pocketed billions in profits.Oh, and the federal government posted a surplus in that year, something we would not accomplish again until the late 1990s.Paradise InheritedBaby Boomers wanted an end to war, smog and rivers in America that caught fire from the hazardous materials dumped untreated into them. And they couldn’t wait to purchase their first car, which gave them the ultimate sense of personal freedom.The Boomers were blissfully unaware that, solely for our benefit, our parents and grandparents had built a whole new America. Moreover, the very world that we lived in had been paid for, in most cases, by a single-income wage earner in each household. So, as we Boomers entered the workforce, our new freeways stretched across the country with plenty of room to drive, while in most major cities gridlock was virtually unheard-of. Our airports were overbuilt. As a result, all of the pieces were in place to accommodate the massive increase in Gross Domestic Product that 80 million Baby Boomers were bound to cause when we entered the workforce. Did I mention that all of this was done, with a balanced federal budget, in 1969?To say that these were the good old days would be foolish in many ways. Because almost immediately the Baby Boomers started altering the equation of what real economic success and security meant for the country. True, over some issues we had no control: The very fact that 80 million people suddenly started working — combined with the fact that U.S. oil production started falling dramatically after 1971 — changed the equation for oil and gasoline, and did so with relative suddenness. This led OPEC to decide that their oil was seriously underpriced. And that decision would lead to the four-fold increase in crude prices that started in 1973. Likewise, those 80 million people entering the workforce and becoming consumers of automobiles, housing and other goods was primarily what caused the stagflation; the runaway inflation of that period, combined with new jobs creation that often became problematical. “Making a Difference,” All RightIt was also the Baby Boomers who would become the primary buyers of imported automobiles, first Japanese products during the First Energy Crisis and in time, as their wealth increased, BMW, Lexus and Mercedes. By the late seventies, Longo Toyota in Southern California was selling upwards of 12,000 vehicles a year. During that same period, Van Winkle Mercedes in Dallas struggled to sell 60 cars a month; by 1983, however, the next owner would take bragging rights as the largest Mercedes-Benz dealer in America, often hitting 200 sales per month. Of course, just as the Boomers discovered that they often preferred to purchase their automobiles from overseas, they also found that stereo equipment and TVs were best built by Japanese manufacturers. So this was not just the Golden Era for Honda, Toyota and Nissan, but also for Sony, Hitachi, Mitsubishi and Panasonic. What we never considered was that each time Americans purchased 65 more Japanese or German automobiles, we needed one less person on the assembly lines in Detroit. When that trickle of imported car purchases turned into a flood, Detroit would be forced to downsize and reorganize, time after time. The Boomers are not to blame in this regard. They simply had standards for personal mobility that Detroit was not fulfilling at the time, just as neither RCA nor GE was engineering and building televisions to the standards of Sony’s Trinitron.Balance Happens?Then again, while we didn’t realize what we had put into play, the Japanese were well aware of the financial imbalance being created. This is why Sony would come to America to build its amazing TV, and Japan would make our country a global powerhouse for production of its vehicles. And still we moved on, oblivious to the forces we had set in motion. But our youthful passion for quality turned into a passion for cheap in our later years. Auto plants moved first, to Mexico, while parts production also migrated south, then on to China. That does not mean that automobile production isn’t alive and well right here in America, but it does mean that every time a factory shut down in the U.S. and moved south of the border or over to Asia, that left fewer production workers here. The advent of robots on the assembly line trimmed the need for other workers. We were actually exporting our Gross Domestic Product to those countries, while simultaneously cutting our federal government’s tax revenues. To be fair, Germany exported many of its automotive production jobs (along with some of its own GDP and tax revenue) to factories here, as did the Japanese.American consumers, the ultimate winners in all of this, became spoiled for choice. We’ve never had more cars and trucks to choose from, and Japan’s technologically superior automotive products forced Detroit into making the finest vehicles in their history. The automotive market became so competitive that even today incentives, more than anything else, drive the market.But something is still out of balance. We once had the money for Interstates, Farm to Market roads, massive new airports, major wars, inexpensive college tuition, medical care for the elderly, putting a man on the moon, improving our environment and so on, yet could still balance the federal budget. And the change is not because of our GDP per capita, which, starting at $23,221 per person in 1969, peaked at $49,310 in 2007, then dropped to $47,709 in 2010. But maybe it’s just our mindset. We once paid top price for the best of everything. Today we want the best of everything and don’t want to pay much for it. That works well for the car-buying public, not so well for everything else.
© Ed Wallace 2013 Ed Wallace is a recipient of the Gerald R. Loeb Award for business journalism. He hosts Wheels, 8:00 to 1:00 Saturdays on 570 KLIF AM. E-mail: firstname.lastname@example.org, and read all of Ed’s work at www.insideautomotive.com.