Economic Inequality and Supercars

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First, the unequal wealth and income distribution in the good ol’ United States. As the chart above shows, it is much worse than most people think (my personal experience is that everybody thinks they are middle class, a couple of weeks ago, I have a guy making $500,000 a year complain about Obama wanting to increase his taxes when he is really only middle class). The realty is that somewhere between 1.3 million to 1.4 million households – that is about 1% of the total population – have about 80% to 85% of of the total wealth in the United States.

In term of income, the 1% earns something like 18% to 19% of the entire income earned in the United States. That is a huge amount of money per household and it is pretty hard to spend it all – not being part of it, I can’t say for sure, but how much toothpaste can one person buy? – without buying hyper luxuries like supercars. And that is just for the United States; there are lots of Russian oligarchs and oil-rich Saudis who also might like a supercar. It turns out that the actual pool of people who can afford to pay $2 million  – over even $20 million – for a car is pretty large.

(As an aside, when I went to the McLaren dealer last September where – so far – they don’t have supercars, they told me that most of their buyers paid cash and already had a Ferrari. End aside.)

I do want to point out that I am against this inequitable wealth distribution on general principals, even if it were not bad for the country. But, as bad as it is for the country, it is good for supercars.

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Last week was the Geneva Auto Show and Ferrari, Lamborghini, and McLaren, among other lesser known marquis, used the opportunity to unveil their new supercars. Because this large, hyper-rich, class is relatively new, the concept of supercars is also new, even the name supercar is new. Sure, there have always been high performance cars; cars that are more agile and faster than their litter mates and they have always costed more, but not that much more.

When the Ferrari GTO – as close to a supercar as there was in the early 60’s – was made, it cost about $18,000 compared to about $2,000 for a Chevy. Today that Chevy would be about 8 to 15 times as much at $16,000 to $30,000 and a normal Ferrari is about $225,000. The new LaFerrari, Ferrari’s new supercar shown above – with a 6.3 liter V-12 and and electric booster motor (making it an hybrid, I guess) putting out about 950 horsepower to give it o-60 mph times in under 3.0 seconds and a top speed in excess of 217 mph – has a waiting list of about 700 and the price has not been released (but is expected to be north of $2,000,000).

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Meanwhile, the new Lamborghini supercar, the Venenos, with similar specs – but without the electric, hybrid, motors – will sell for about $3,900,000. (The McLaren seems cheap at only about $1,000,000.) It is easy to say that these are nutty numbers, but the cars are not only selling, people are waiting in line (of course it is a allegorical line, at these prices, the future owners send somebody else to put their name on a list, somewhere).

These cars are called supercars because they truly are staggering capable, stunning to look at, and – relativity – exclusive. But, in the real world, what can anybody do with them. Going 100 miles per hour on any California public road – except, of course, an empty road in the Mojave – is pretty hard for longer than 30 second bursts (and, then, only by risking a major ticket). There are places in Nevada where driving very fast is possible but 200 miles per hour – even there – would be a good case for insanity.

At first, it seems that their only purpose is as wealth indicators – and people who are staggeringly wealthy do need to have some way to differentiate themselves from the hoi polloi – however, I suggest that another, greater purpose, is as eye candy for the rest of us. Even if we never see them in real life, just looking at the pictures and videos of these cars causes wonder and amazement to a geaarhead.

To my eye, the Lambo looks a little too much like the Batmobile and the LaFerrari is – by far – the better looking. The Ferrari, with its F16 fighterjet canopy, looks graceful as well as blindingly fast so I have included a promotional video.

2 thoughts on “Economic Inequality and Supercars

  1. Good points.
    The entire promo video was shot on a closed track.
    But, if you’re that rich, you probably own your own track.
    I like the eye candy.
    In another life maybe I’d be lucky/ruthless enough to taste (or drive) it.

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