The MLK Ad

During the Super Bowl, Dodge hawked pickup trucks by using the voice of Martin Luther King.

As Phil Klinkner points out, King actually used the speech to denounce advertising, specifically auto advertising. "The Drum Major Instinct," February 4, 1968:

Now the presence of this instinct explains why we are so often taken by advertisers. You know, those gentlemen of massive verbal persuasion. And they have a way of saying things to you that kind of gets you into buying. In order to be a man of distinction, you must drink this whiskey. In order to make your neighbors envious, you must drive this type of car. (Make it plain) In order to be lovely to love you must wear this kind of lipstick or this kind of perfume. And you know, before you know it, you're just buying that stuff. (Yes) That's the way the advertisers do it.

I got a letter the other day, and it was a new magazine coming out. And it opened up, "Dear Dr. King: As you know, you are on many mailing lists. And you are categorized as highly intelligent, progressive, a lover of the arts and the sciences, and I know you will want to read what I have to say." Of course I did. After you said all of that and explained me so exactly, of course I wanted to read it. [laughter]

But very seriously, it goes through life; the drum major instinct is real. (Yes) And you know what else it causes to happen? It often causes us to live above our means. (Make it plain) It's nothing but the drum major instinct. Do you ever see people buy cars that they can't even begin to buy in terms of their income? (Amen) [laughter] You've seen people riding around in Cadillacs and Chryslers who don't earn enough to have a good T-Model Ford. (Make it plain) But it feeds a repressed ego.

You know, economists tell us that your automobile should not cost more than half of your annual income. So if you make an income of five thousand dollars, your car shouldn't cost more than about twenty-five hundred. That's just good economics. And if it's a family of two, and both members of the family make ten thousand dollars, they would have to make out with one car. That would be good economics, although it's often inconvenient. But so often, haven't you seen people making five thousand dollars a year and driving a car that costs six thousand? And they wonder why their ends never meet. [laughter] That's a fact.

Automation Gains Momentum

Evan Halper at LAT:

Driverless vehicles threaten to dramatically reduce America’s 1.7-million trucking jobs. It is the front end of a wave of automation that technologists and economists have been warning for years will come crashing down on America’s political order. Some predict it could rival the impact of the economic globalization and the resulting off-shoring of jobs that propelled Trump’s victory in the presidential election.

“This is one of the biggest policy changes of our generation,” said Sam Loesche, head of government affairs for the Teamsters. “This is not just about looking after the health and welfare of America’s workers, but also their livelihoods.”

Washington isn’t ready for it. The Trump White House already has indicated it sees it as some future administration’s problem. Silicon Valley remains in shock over Treasury Secretary Steven T. Mnuchin’s remark in the spring that economic fallout from this type of automation is 50 to 100 years off and “not even on my radar screen.”

“I don’t think anybody there is thinking about this seriously,” said Martin Ford, author of “Rise of the Robots: Technology and the Threat of a Jobless Future.” “They are still looking at this as futuristic and not having an impact and not politically toxic. … Once people start seeing the vehicles on the roads and jobs disappearing because of them, things will quickly become very different.”

The arrival of that reckoning is getting accelerated by Washington’s bipartisan excitement for self-driving technology, one of the few policy issues advancing. New Trump administration regulations don’t require industry to submit certain safety assessments, leaving it voluntary. And legislation — already approved in the House and expected to pass in the Senate — strips authority from states to set many of their own safety guidelines.

At Reuters, Lisa Baertlein and P.J. Huffstutter explain that immigration crackdowns are creating more jobs ... for robots

 Convincing big U.S. dairy owners to buy robots to milk their cows - and reduce the farmhands they employ - used to be a tough sell for Steve Fried. Recently, his job has gotten easier, he says, in part because of President Donald Trump.

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 Trump’s crackdown on illegal immigration through stepped-up arrests and border enforcement has shaken the U.S. agricultural sector, where as many as 7 in 10 farm workers are undocumented, according to the American Farm Bureau Federation.

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A 2014 report by WinterGreen Research forecast significant growth in the use of robotics in “every aspect of farming, milking, food production” and other agricultural enterprises. The report put the market for agricultural robots at $817 million in 2013 and projected that it would reach $16.3 billion by 2020.

Halftime in America

Chrysler's Super Bowl commercial with Clint Eastwood is getting a lot of attention for its patriotic theme. One problem: an Italian company -- Fiat -- has a majority ownership in Chrysler. This bit of information illustrates a point from our chapter on economic policy: the line between "foreign" and "domestic" companies may often be blurry.


 

Romney and the Auto Industry

The Detroit News reports:

A conservative Republican slammed Mitt Romney — on a campaign swing Wednesday through his native Michigan — for not supporting the auto bailout.

Rep. Thaddeus McCotter, R-Livonia, who supported the government intervention for General Motors and Chrysler, met constituents and the media at E&E Manufacturing in Plymouth to blast Romney, and tried to link the Republican candidate to President Barack Obama.

"Motor City hospitality dictates a Michigan message to Mitt that our struggling families, entrepreneurs and workers think Mr. Romney and Mr. Obama are not rivals, they're running mates," McCotter, who is considering his own run for the White House, said in a statement.

In 2008, as GM and Chrysler, on the verge of collapse, asked the federal government for a bailout, Romney argued in a New York Times op-ed piece headlined "Let Detroit go bankrupt" that any government intervention would hasten the decline of the industry as a whole.

…

Romney won Michigan's 2008 primary, beating out Sen. John McCain, R-Ariz., by more than 80,000 votes, largely driven on the name recognition of his father, the late George Romney, the former Michigan governor and head of American Motors.

Those deep connections brought Romney's anti-auto sentiments as somewhat of a surprise to some, but political observers say the candidate is trying to balance the needs of Michigan's electorate, and the labor-dominated culture of Metro Detroit, with a broader appeal needed to successfully negotiate a path to the presidency.

"The Republican primary electorate is certainly not labor-dominated and I would say of mixed opinions, on how much the auto industry should play into Michigan's economic future," said Matt Grossmann, an assistant professor of political science at Michigan State University in East Lansing.

In a personal communication, Professor Grossmann adds: "In a general election, it might be a good issue to challenge him on. In the primary, I don't think one of his major opponents is going to bring up his opposition to the auto bailout as a reason not to vote for him."

This story illustrates ideas from the textbook. Why does McCotter continue to support aid to the auto industry? Because many of his constituents have an economic stake in it. As Madison wrote in Federalist 57. "the House of Representatives is so constituted as to support in the members an habitual recollection of their dependence on the people."

Our chapter on parties discusses the presidential nomination process. Whereas labor plays little role in Republican primaries in Michigan, people in agriculture do play a significant part in GOP Iowa caucuses -- which may explain why Romney supports the ethanol subsidy.