Sunday, April 06, 2008
Motorcycles and the credit crisis
The Wall Street Journal's Herb Greenberg points out repeated references by the Northern Trust's Paul Kasriel to the motorcycle as an indicator that Americans are living beyond their means:
"There is no consumer purchase more discretionary than a Harley-Davidson hog," [said] the chief of economic research at [NTC] in Chicago.And from what I see here in West Texas, it's not just Harley buyers. I personally know at least a dozen people who are currently hanging it out for everything from touring bikes to rocketsled hyperbikes -- one in particular having financed for 60 months on an eight thousand-dollar purchase. Let me tell you something, if the only way you can afford an 8 thousand-dollar bike is to finance it for five years, then buddy, you can't afford it at all.
As we all know, he was right ... as is evidenced by Harley's U.S. retail sales, which have hit the skids, falling 14 [percent] in the fourth quarter alone. Harley is hardly the only consumer-products company feeling the pain, thanks in large part to the credit and housing meltdowns.
What ever happened to planning ahead and saving for this kind of stuff? Come to think of it, what ever happened to planning ahead and saving for anything? We're a spoiled, selfish lot here in the US, and our 'gimme-gimme' philosophy is finally coming home to roost -- just like it did in the late '80s.