Member Brief: The New “Compact Cars”


First thing is first, the inflationary effects of the pandemic are no longer transitory by most economic analyses. Some of these changes are likely around for the long haul. The best analog to this, at this point, is the energy shocks of the 1970s that were influenced by, both, the 1973 Arab oil embargo and the Iranian revolution that followed six years later. I found this New York Times snippet from 1974 to be mildly amusing:

Smaller cars, slower cars, gasoline misers—the type of cars that Detroit disdained for decades—are in demand. And it does not matter if the oil is flowing again or that gasoline stations are open again—even on Sundays.

It could be said that without that 1970s oil shock rewrote demand, a consumer behavior that lasted. Now, trade “smaller, slower cars” for “eCommerce.”


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