Sometimes it seems that no matter what the majority of the public wants to have happen, neither side of the political spectrum attempts to deliver it. A great case in point has been the continuous addition of toll roads across the Metroplex and America. Numerous polls of motorists for years have shown that most drivers do not want the addition of more toll roads or “Lexus Lanes” — although it’s sometimes difficult to validate the quality of such polling. On the other hand, four years ago Rasmussen did an extensive survey on the idea of toll roads or express lanes; sure enough, two-thirds of those surveyed were against that idea.
But here come the surprises: The highest percentage against such managed freeways came from those declaring to be Republicans; 74 percent were against it. Democrats, at least in this poll, seemed to like them better; only 54 percent seemed to be against the idea of toll roads. However, of those who claimed an annual income over $200,000, only 35 percent were against tolling, further validating the California moniker of Lexus Lanes.
There’s one thing redeeming about all this. Over the past few years, as the public has begged government to move in a different direction, over half of the states have finally raised their gasoline taxes after years of neglect, in an attempt to get their infrastructure improvements back on track. Of course, on the other side of the equation are the investment bankers, both American and international, looking for long-term reliable revenue streams for their banks and investors, which is how the modern privatization movement started in the first place.
As mentioned years ago in this column, global investment banking firm Goldman Sachs was one of the early leaders in advising states on how to structure these privately-owned highways for maximum gain — at the same time letting states know that Goldman Sachs would also be a major player financially on these roads.
That’s right, advising states to privatize and then offering them the money to do so.
Follow the Money
Of course, with the continuing rise in populism over the past few years was considered something of a rebellion against the norm. Certainly, during the campaign there was reasonable amount of talk about Ms. Clinton and her sky-high fees (and diva-like demands) for speeches in front of Wall Street financiers. Such talk played to the conservative base and seemed to help validate the cries, justifiable or not, of “Crooked Hillary.”
Yet on November 30th of 2016, president-elect Donald Trump was doing the pre-perp-walk interviews for cabinet and administration positions, and in the room that day were Steve Bannon, ex-Goldman Sachs banker Reince Priebus, Jared Kushner and Steve Mnuchin, also an ex-Goldman Sachs banker. On their agenda that day was meeting with Gary Cohn, then president of, you guessed it, Goldman Sachs.
In that meeting, according to Bob Woodward’s book, Fear, Cohn brought up tax reforms and getting rid of more regulations; and he brought up the fact that Goldman made a fortune moving dozens of American corporations offshore to evade taxation. But Cohn also brought up open, fair, and free trade and encouraging open borders because “America is the immigration center for the world” and we’ve got far too many jobs that no one here wants to do.
But then Cohn informed the president that if he were elected to a second term he would be in office during one of the most tumultuous periods in American history, in terms of a shift in economic demographics. As Cohn told the assembled group, computerization, automation, robotics, and artificial intelligence were going to upset much of the balance of our economy, as “we now can create labor with machines.”
Cohn reaffirmed that if Trump made it eight years in office, he could see the first of the fully autonomous vehicles come to market and take away the need for driving. Therein lies the problem. According to Cohn, 25 percent of all Americans “make a living driving something.” Therefore, millions of people are going to have to reenter the workforce in different jobs, which could disrupt the entire economy. Bummer.
Employment as Simile
Well, not to take anything away from Cohn’s solemn and somewhat frightening warning, but over the past 38 years we’ve seen similar disruptions. Automation, computerization, and robots have already displaced nearly one million individuals involved in producing automobiles in America. True, some jobs did migrate to Mexico, but over that period companies like Honda, BMW, Mercedes, Toyota, and others have built factories here in America — all of which use automation heavily. Others, like Jeep Toledo, have experienced numerous expansions, though the 1979 GM Oklahoma City plant was built and deemed disposable within a couple of decades.
Still, it’s a great deal easier to get potential voters up in arms over American jobs being lost overseas than it is to explain how one welding robot plus one system for guiding automotive body parts into place not only created a far superior, more efficient process, but also replaced four to six workers on an assembly line. (Meanwhile, it also created other jobs, such as building robots, writing software, and inspecting, maintaining, and repairing said guidance systems and robots.)
How is this any different from the near disappearance of the professional switchboard operator? She always cheerfully answered the phone, listened to what the caller needed and, in most cases, patched them through to the right person or department. Now her job is gone, replaced by a computerized voice menu; it holds you captive while it details every last possible department in a corporation, none of which sound like the exact place or person that you really need — and often disconnects you after you’ve pushed buttons on the phone for 10 minutes. And that’s called progress.
The Worth-Billions Elephant
Gary Cohn didn’t last long in this administration. Nor do I believe that fully self-driving cars and trucks will start replacing everyone who makes a living driving, within another six years as he told our president. However, Honda just committed another $2.7 billion to Cruise, a self-driving car software firm, General Motors the majority owner, while Toyota teamed up with Softbank to fund companies that would need just such vehicles. (They used hospital shuttles as a potential area of interest, but delivering pizzas is far more likely.) Meanwhile Waymo, Google’s self-driving division, claimed that it will introduce self-driving taxis, without any human inside the vehicle, in Phoenix by the end of this year.
At the same time as Waymo made that announcement, Dara Khosrowshahi, CEO of Uber, said he’d like to see the day when Uber drivers had corporate benefits. And that makes no sense at all, since Uber, like everyone else in tech, or apparently on Wall Street, wants to see self-driving taxis become common, to cut out all the taxicab industry’s labor costs.
Still, in spite of Cohn’s strong belief that these vehicles will completely disrupt the American economy by 2024, there are zero signs at retail that it’s happening. It’s one thing for the trucking industry to push hard for self-driving long distance trucks, as the cost of the equipment when perfected could be covered by not having to pay a truck driver. But it’s quite another situation if those who made a living driving, as Cohn put it, couldn’t care less about a self-driving vehicle.
For two years I’ve asked every great dealer or their management the same question, “How many individuals have come into your dealership and asked about a self-driving car?” The answer is still the same: Zero.
But what if self-driving cars becomes the next Wall Street dream, like privatizing our highways for their fun and profit? Most individuals don’t want toll roads or more of them, yet here they are, and more coming. What if people still want to drive themselves? Are they going to live in a country where that won’t be an option, either? After all, when you’ve got hundreds of billions of dollars on the line for a new technology that no individual buyer apparently wants, at least at this point, the best way to get your money back on your investment is to force everyone to buy it whether they want to or not. That’s right, if demand doesn’t drive it, legislation could force it on the public.
Before you think that’s out of the question, just think about toll roads.
The great irony of it all is that the automotive visionaries tell us that once every car and truck is self-driving and interconnected with each other, there will be no more congestion, speeds will increase in rush hour, and you can spend the drive watching the end of the movie you fell asleep watching the night before. Yet, in that perfect world of no more congestion - every last TexPress and Lexus Lane dies, since nobody needs to use them anymore.
Wonder if investment bankers thought that one out before they placed their newest bets on self-driving vehicles.
Ed Wallace is a recipient of the Gerald R. Loeb Award for business journalism, bestowed by the Anderson School of Business at UCLA, and hosts the top-rated talk show, Wheels, 8:00 to 1:00 Saturdays on 570 KLIF AM. Email: email@example.com