A reader asks: Do (car) repo guys have a sense of humor?

A reader asks: Do repo guys have a sense of humor?

Archer replies: Apparently yes. A recent story in The Wall Street Journal (“We Spent the night with the Repo Man, Who’s Busier than Ever”) includes an account of a visit to Speed Kingz, a repo shop in Maryland. The co-owner shows up to a company barbecue with a hoodie that reads, “Helping people get back on their feet!”

Funny. But what does the surging number of repos say about the economy? Nothing good. The Journal story cites data indicating an estimated 1.73 million vehicles were repossessed in 2024, the most since 2009, a recession year.

Not every car mentioned in the piece was a beat up old Camaro. There were BMWs, Porsches, and a Range Rover among other high end vehicles, suggesting a certain aspirational quality among the clientele. Living the dream, waiting for the knock on the door.

But what does this say about the larger economy? Any number of reports have found that things are being held together primarily by the discretionary spending of a relatively small number of people. A recent study by Moody’s Analytics found that the top 10% of earners in the U.S. now account for nearly 50% all consumer spending, with the top 10% defined as those making $250,000 or more. Thirty years ago that number was about 36%, says Moody’s.

A senior yearbook quote from one of my high school classmates sums all this up nicely: “It’s my half of the class that keeps the other half on top.”

Leave aside the stories of individual hardship for a moment and consider this: extreme wealth inequality is socially destabilizing (a subject I visit at greater length in my book, Radical Problems, Simple Solutions: How Markets Can Help Fix the Retirement Crisis and Solve Wealth Inequality). Politically, you get a Trump on the right, a Mamdani on the left. You get a lot of angry people.

We have all been living the dream for a while. Some of that has been on borrowed money. In fiscal year 2024, nearly 25% of federal spending was underwritten by debt. Seems like a classic unsustainable trend, as defined many decades ago by the late economist Herbert Stein (best known as the father of Ben Stein, who played the economics teacher in Ferris Bueller’s Day Off).

As this is being written, the SNAP program is making headlines. What is astonishing about this is not just the callousness of depriving people of food to score political points, it’s the number of families enrolled in the program. More than 40 million Americans get SNAP benefits, or about one out of eight. That’s a lot of people who can’t put food on the table at time when unemployment is low and the economy is growing.

One possible explanation: since the Global Finance Crisis the country has been living beyond its means, piling on debt at every level – personal, corporate, federal. That in turn has left us all poorer. Rising interest rates have made servicing those obligations increasingly painful, and expensive. And more recently there’s been inflation – good for spiriting away debt, sure, but bad for purchasing power. One result: by some measures, gold of all things, has actually outperformed the S&P 500 over the past 20 years.

In his punter’s paraphrase of Ecclesiastes, Damon Runyon (he of “Guys & Dolls” and “Harry the Horse” fame) wrote that, “The race might not always be to the swift nor the battle to the strong, but that’s the way to bet.” In the current stock market, the bet is that capital will continue to displace labor, courtesy of A.I.

But be careful what you hope for – some of those job cuts are hitting the high earners responsible for keeping the economy afloat. The repo man comes for Bentleys, too.

Woof!

(From the author: if you like what you’re reading here, share it with a friend, or friends!)