Jul 22, 2009

Economics Are Everything

All Rights Reserved © 2009 Thomas W. Day

Before and at the Really Boring Rally II, last summer, I ended up in a trio of conversations that reminded me of how critical it is to have a basic understanding of economics and human conditioning. There is a political tactic that attempts to remove economics from every important and complicated discussion. Without economics as the basis for analysis, every argument is left without substance and its meaning can easily be diluted. This is the equivalent of a grifter pointing at some unimportant activity while slipping his hand into your pocket. Economics is everything; every single human pursuit is economically motivated.

The first recent economic motorcycle moment, for me, was when Kevin Cameron said in our interview last year, "It may be, as some propose, that motorcycling in the US was a one-time, non-recurring phenomenon." His argument is that motorcycling, possessing the two major faults of low utility (in our application) and high risk, saw a brief moment of interest in the 60's and 70's and has been in decline ever since. I don't know how anyone who has been involved in motorcycling can refute that description of US motorcycle history. It remains to be seen if $4-and-up gas revives motorcycles as a means of transportation. The other possibility, which Cameron has also proposed in his Cycle World column, is that motorcycling becomes a hobby of the idle rich while the rest of us ride the bus. Motor vehicles began as toys of the rich, Cameron and others suspect they may end the same way.

The second economic moment came at the US Observed Trials portion of the Very Boring Rally II as I joined (uninvited) in a conversation with Steve Ahlers and others associated with running the trials. First, they attracted my attention discussing a Beta trials bike with a list price of $12,000 and the associated logic that with a "cheap bike" priced at $5,000 and the Beta at the high end, trials was leaving the realm of working class motorcycle hobbies. I don't know about you, but, for me, a $12,000 230cc single-purpose bike is out of the question. What am I saying? $5,000 is more than I spent on my V-Strom road bike and my around-town KL250 Sherpa, combined. If a $12,000 motorcycle was the only biking choice available to me, I'd be through with motorcycles and back to riding a mountain bike for my 2-wheel yah-yahs.

For a while, we talked about the shortage of US professional competitors In past years, nearly 30 competitors were on hand for the US observed trials championship competition. Now, fewer that 10 were fighting for the title and one of those is a South American competitor. He is being subsidized by his home government, another economic fact, which enables him to compete in the US championship. Only a few years ago, the US trials championship consisted of a dozen events. This year, it was one two day event in Colorado and three days in Duluth. Steve pointed out that all local off-road events were "down 60%" from the previous year's participation; all off-road events, not just the obscure ones like observed trials. Two other people pointed out that equestrian events were just as hard hit by the current economy.

A little later, my grandson and I were joined at a trials section by Martin Belair (who I interviewed in 2002 for MMM). Martin used to be the US Montesa-Honda distributor and was a world-class trials rider in the 1970's heyday of the sport, when the US could brag about its one and only world champion, Bernie Schreiber. In 2007, Honda decided to quit bringing the Montesa-Honda motorcycles into the US because they were no longer economically viable, selling less than a half-dozen units a year at the end. That put an end to Martin's distribution business.

Martin commented on the poor exchange rate and increasing fuel costs and said, "it's all about economics." Martin commented that, at worst, it only costs $30-40 more to get to an event with today's fuel costs.

I replied, "$30-40 is a lot, if you aren't sure you'll have a job when you get back."

For economically-motivated reasons and personal reasons, Martin was planning to move back to California (which he has done), which is a big loss for Minnesota motorcycling and for me, personally. We talked about the high cost of keeping up with trial's technology for riders and the even greater cost of self-financing a run at the national championship. Corporate sponsorships have vanished. Transportation and maintenance costs are exponentially higher. Spectator attendance is down. It feels a little like the end of an era. It's all about economics.

1 comment:

Anonymous said...

What was really a big change was that from motorcycles as a basically working class activity (based upon young men in good industrial jobs - welders, tool-and-die, mfg, &c.) to a new identity in the late 1980s and 90s as something more and more for men and women of means.

Part of this was the "CEOs on Harleys" movement, in which persons of means who had previously been constrained by their social position later took charge of their lives, bought Harleys, and boldly rode 300-600 mile a year. For a time it seemed every sunday newspaper supplement in the country was running stories about execs on bikes.

Meanwhile away went all small-displacement bikes save for a very few, replaced by bigger and bigger-ticket machines. Now it almost appears that the "entry-level" bikes of each maker are purposely made ugly in order to redirect buyers' attention to the $10,000 level.

With the recent economic woes this means a bike is no longer seen as saving fuel, as the usual $10,000-level bike gets equal or worse fuel mileage to a small economy sedan. But back in 1973-4 the usual car had a 700-pound cast-iron V8 in it, of at least 350 cubic-inches, getting a realistic 12-mpg around town. If you hopped on a Kawasaki 90 or similar for the run to work, you were saving something.