What Job Openings Tell Us

Casey B. Mulligan is an economics professor at the University of Chicago. He is the author of “The Redistribution Recession: How Labor Market Distortions Contracted the Economy.”

A high ratio of unemployed to job openings means that the unemployed are competing a lot for jobs, many news reports say, when it fact it could indicate the opposite.

It's true that a reduction in labor demand - from, say, a new tax on employers - would motivate employers to get by with fewer employees. As they do, employers would reduce job openings and lay off workers. One result would be fewer job openings and more unemployed people, and thereby more unemployed people per job opening.

But a reduction in labor supply in the form of additional subsidies for unemployed people would have similar effects. Unemployed people would be choosie r about the jobs they accept, especially the low-wage ones. With more help for people after layoffs, employers and employees in struggling industries would do less to avoid layoffs, especially layoffs from low-paying positions. Either way the result would be more unemployed people.

Subsidies for unemployed people also make labor more expensive as low-wage jobs are more likely to end by layoff and unemployed people can be choosier about the jobs they take. When labor is more expensive, employers have an incentive to get by with fewer employees and for that reason may well reduce the number of job openings they have.

In this way a reduction in labor supply by itself, a reduction in labor demand by itself or both together can increase the ratio of unemployed to job openings. It makes little sense to point to a high ratio as proof that labor demand is low, because it could just as easily tell us that labor supply is low. All a high ratio tells us is that the labor market has contracted, and that we could readily and more reliably detect without any data on job openings by just looking at the unemployment rate itself, or the ratio of employed to population.

My conclusion is not new to labor economists, who have long understood that supply factors could increase the ratio of unemployed to job openings. Christopher A. Pissarides, a professor at the London School of Economics, literally wrote the book on job openings and unemployment, and his book explains how more generous unemployment compensation would have these effects (see Figure 9.2 from his latest edition; I thank my colleague Robert Shimer for this reference).

The black series in the chart below shows the ratio of unemployed to job openings. The chart also shows in red the marginal tax rate on labor income (the extra taxes paid, and subsidies forgone, as a result of working, expressed as a ratio to the income from working) for a typic al head of household or spouse based on the ever-changing eligibility and benefit rules for safety-net programs. The ratio increases fastest between the first half of 2008 and the first half of 2009, just when the marginal tax rate series increases the most. Both series peak in late 2010 and decline thereafter. Neither series has returned to its prerecession level.

Ratio of unemployed per job opening is c alculated from Bureau of Labor Statistics seasonally adjusted monthly figures for number of unemployed and total nonfarm job openings, as provided by the St. Louis Fed. Marginal tax rates are as calculated by Casey B. Mulligan in “The Redistribution Recession” (Oxford University Press, 2012).

For the reasons mentioned above, the chart is by no means proof that supply was a major factor during the recession. That proof requires other sorts of analyses, which are shown in my book.

Nevertheless Paul Krugman continues to cite the high ratio of unemployed to job openings as evidence that demand, rather than supply, contracted the labor market: “There are now four job seekers for every job opening, which means that workers who lose one job find it very hard to get another” (see Page 9 of “End This Depression Now!”). He and other economics commentators citing this fact never explain why the very same ratio should not be interpreted as a drop in supp ly, or as a combination of reduced supply and reduced demand. Instead they contend that the labor market would rebound with still more help for the unemployed.

Believe it or not, Keynesian economics is not the only way to interpret the job openings data.

Chevrolet Spark E.V. to Have Debut at Los Angeles Auto Show

General Motors Chevrolet's Spark Electric Vehicle.

Ever since the Chevrolet Spark first appeared in 2009, the nameplate of that gas-powered minicar has seemed a bit misleading. Chevrolet will take a big step toward solving that problem later this month at the Los Angeles auto show, where it will introduce an all-electric Spark that will go on sale next year. The Spark EV will join a short but growing list of all-electric production cars in the United States, including the Nissan Leaf and 2013 Ford Focus Electric.

Chevy also said that its next-generation MyLink system will make its debut in the 2014 Impala.

“The Spark EV and next generation of MyLink demonstrate Chevrolet's commitment to delivering the advanced technologies that today's consumers will be eager to adopt and truly value,” Chris Perry, vice president for global Chevrolet marketing, said in a statement.

Annalisa Bluhm, a spokeswoman for General Motors, said in an e-mail 
that she could provide no details on the Spark EV's driving range or pricing.

At Tesla\'s Party, Superchargers and Delivery Dates

The Tesla Motors party in Manhattan on Monday night was loud and crowded with company supporters and would-be owners. The reason for the gathering was initially left mysterious, but a loud partisan cheer went up in the room when it was announced that the Model S sedan had been chosen as Motor Trend's 2013 Car of the Year. Earlier in the month, Automobile magazine named the car its Automobile of the Year.”

There was other news to be had around the edges of the Tesla gathering. The company has already unveiled its California network of 480-volt “Superchargers,” but Christina Ra, a company spokeswoman, said Tesla would soon announce a similar Boston-to-Washington corridor, with the first station to be opened in Milford, Conn., “in the coming weeks.” In a meeting with editors of The New York Times on Tuesday, Tesla's founder and chief executive, Elon Musk, and George Blankenship, the vice president for worldwide sales and ownership experience, said another stat ion was planned for Wilmington, Del.

In a news conference at the Monday evening event, Mr. Musk said of Supercharger networks, “We expect all of the United States to be covered by the end of next year.” He also promised “three hours of driving for half an hour of charging,” and said that Tesla owners' use of the network will be free “not for a little while, but forever.”

It is unclear just how many Model S cars have been delivered to customers. In its third quarter shareholder letter earlier this month, Tesla said it had delivered “over 250 Model S sedans.” Asked to clarify at the event, Mr. Musk said, “Substantially more than 250.”

Tesla has said it is now producing 200 cars a week, or about 10,000 a year, but it wants to double that figure quickly. At the event, Franz von Holzhausen, the company's chief designer, said, “I'm not worried about our short-term goals - we're focusing on quality - but getting to 20,000 cars a year is a big ger challenge.” Tesla has taken more than 13,000 reservations for the Model S, and Mr. von Holzhausen said that the company was now experiencing “its best quarter for orders.”

Jeremy Snyder, general manager for Tesla in the Southwestern region, said he thought the company's production has “crossed the Rubicon,” with deployment “on a really good track.”

Although reservation holders have been assigned waiting list numbers, Ms. Ra said their cars have not always been produced in sequence, because it makes sense to manufacture them in batches with similar option packages. She said the sequence will be more closely followed in the future “because it's so important to our early customers.”

One of those early customers who attended the event Monday night is Tim Waire, who works in technology at Quest Diagnostics. Mr. Waire is waiting for a red Signature Performance version of the car with the larger 85-kilowatt-hour battery, and is number 737 in line. He plans to commute weekly in the car between Baltimore and northern New Jersey, a distance of 200 miles each way. Mr. Waire's Tesla was originally promised for delivery in September, but he appears to be patient. “It doesn't surprise me as an early adopter that the date slipped a little bit,” he said.

Mr. Snyder said Mr. Waire would get his car “any day now.” Mr. Musk said it “literally should be on its way to him.”

Ford Introduces Transit Connect Wagon and a Bit of Category Confusion

Ford Motor Transit Connect is the first wagon to exceed 30 m.p.g., Ford says.

DEARBORN, Mich. - Ford introduced its 2014 Transit Connect Wagon in a news conference here on Tuesday. A people-mover based on the small Transit Connect commercial van that has been available since 2009, it shares that vehicle's distinctive high-roof shape and will be offered with either a 120.6-inch wheelbase and three rows of seats or a 104.8-inch wheelbase and two rows of seats.

With three rows of seats, the Transit Connect Wagon can hold seven passengers, just like a minivan. Both second- and third-row seats fold flat, creating an abundance of cargo space behind the front seat, just like a minivan. Sliding doors on both driver and passenger sides of the vehicle, just like those on a minivan, provide easy access to second- and third-row seating and, in combination with a liftgate at the rear, make for easy loading of whatever one might wish to transport.

“How is it not a minivan?” one of the assembled journalists asked after the presentation.

“It's a smaller package,” said Tim Stoehr, Ford's commercial truck marketing manager.

The journalist pointed out that the subcompact Mazda5 is called a minivan.

“They can call it whatever they want,” said Mr. Stoehr.

In truth, Mazda avoids the supposedly offensive minivan moniker as well, saying that the “Mazda5 refuses to be categorized.” Both automakers perhaps believe that consumers find the M-word so offensive that applying it to a product would be suicidal. They could be right.

While the Transit Connect Wagon is clearly a minivan with a high roof, unlike other seven-passenger minivans available in the United States it is expected to deliver at least 30 m.p.g. on the highway. E.P.A. fuel-economy estimates are not yet available.

Engine choices will include Ford's 1.6 liter EcoBoost turbocharged 4-cylinder and a naturally aspirated 2.5-liter. No engine specs were provided, but in the Ford Fusion the 1.6-liter EcoBoost delivers 178 horsepower, while the 2.5-liter generates 175 horsepower - with the turbocharged EcoBoost having a stouter torque curve and slightly better fuel economy.

Mike Levine, a Ford spokesman, said the cargo space of the long-wheelbase model with both second- and third-row seats folded was over 100 cubic feet. That makes it only slightly less cargo-capable than the Nissan Quest, which measures 108.4 cubic feet. The maximum cargo area of Chrysler's Town and Country minivan is 143.8 cubic feet.

The Transit Connect provides ample legroom for all passe ngers, even those in the third row. The third-row seat has 5 inches of adjustment built in, and when slid all the way forward, 19.8 cubic feet of cargo space is available behind the seat.

Several trim levels will be offered, and options will include leather seating surfaces, a touch-screen display, a rear-view camera, the MyFord Touch communication and entertainment system, and a full-glass panoramic roof.

Mr. Stoehr said no production estimates were available, but the mix is expected to be 80 percent long-wheelbase and 20 percent short-wheelbase models. The vehicle will be built in Ford's plant in Valencia, Spain. That plant builds a number of vehicles on Ford's C1 subcompact platform, so according to Mr. Stoehr, production is flexible and the mix can be adjusted to meet demand.

The Transit Connect Wagon is expected to arrive at Ford dealerships in late 2013. No pricing information is available at this time.

Ford Motor In the longer-wheelbase version, Transit Connect seats seven people.

Aftermarket Industry Showing Renewed Strength

Jerry Garrett This year's SEMA show in Las Vegas set an attendance record

LAS VEGAS - The aftermarket automobile accessories industry is showing more strength than it has since the most recent recession, judging from the Specialty Equipment Market Association trade show that concluded earlier this month at the convention center here.

The sprawling show, which has a footprint of more than 2.5 million square feet, was the biggest in its 45-year history - attracting a record 135,000 overall attendees, including 60,000 buyers and 3,000 media members, according to Della Domingo, a SEMA spokeswoman.

“Our industry generated $29.8 billion dollars of retail sales in 201 1,” said Peter MacGillivray, a SEMA vice president. “We're optimistic about 2012, we're projecting as much as 4 percent growth this year. And that is just in the United States. We are also experiencing explosive new growth in China, the Middle East and other developing countries.”

The industry's heyday was 2007, when United States sales topped $34 billion, Mr. MacGillivray said. Sales dropped drastically in 2008 and 2009, then started a long, slow climb.

“We are not quite back up to pre-2008 levels,” Mr. MacGillvray said, “We are still in recovery mode, but where we are as an industry right now is an indication of how far we've come since everything bottomed out.”

Organizers had high hopes for this year's SEMA show, but worries crept in that attendance might suffer from flight cancellations and weather delays caused by Hurricane Sandy.

“We're relieved that it didn't have much of an impact,” Mr. Ma cGillivray said. “This show is so important to the small businesses, they'll do just about anything to get here.”

He added that less than 10 percent of the exhibitors and attendees were from the northeastern part of the United States, where the storm hit the hardest. And many of those attending from that part of the country had departed before the storm hit.

“Despite the storm, it was an amazing year for the SEMA show,” Ms. Domingo said in an email. “The highest number of exhibitors and attendees in all show history.”

The SEMA show, which specializes in aftermarket parts and custom accessories for the transportation industry, is divided into 12 sections: business services; collision repair and refinish; a global tire expo; Hot Rod Alley; mobile electronics and technology; powersports and utility vehicles; racing and performance; the restoration marketplace; restyling and car care accessories; tools and equipment; trucks, SUVs and off-road; and w heels and accessories. This year, many automobile manufacturers - Ford, General Motors, Chrysler, Toyota, Hyundai and Honda among them - had especially large displays of customized vehicles.

Although the show itself is closed to the general public, this year it expanded from inside the convention center into adjacent parking lots for publicly viewable ride-and-drive demonstrations and a Global Rally Cross racing competition. After the show, the public was invited to the SEMA Cruise, a recent addition, in which all the show's thousands of cars are invited to parade out of the convention center and through Las Vegas streets.

The first SEMA show, which was little more than an informal swap meet and flea market, was held at Dodger Stadium in Los Angeles in 1967. The following year it was moved to the convention center in Anaheim, Calif., where it stayed for nine years, until Leo Kagen, one of the founding members of the association, relocated it to Las Vegas in 1977.

“Everybody said I was crazy to move it, because it was really doing well in California,” Mr. Kagen, 96, said in an interview last month, after it was announced that a SEMA scholarship to encourage women to train as automotive re-stylists had been established in his name. “I guess I have the last laugh now!”

SEMA recently signed a contract extension to continue holding the show at the Las Vegas Convention Center through 2017.

Wheelies: The Going Forward Edition

General Motors Test Track presented by Chevrolet is scheduled to open at Epcot on Dec. 6

In which we bring you motoring news from around the Web:

- The revamped Test Track at Epcot Center in Orlando, Fla., is scheduled to reopen on Dec. 6, and General Motors and Walt Disney World are promising that visitors will have an opportunity to design their own vehicles, using computers similar to those used by G.M. designers, according to The Orlando Business Journal. Then visitors will get a chance to test their vehicle designs during the ride. “The reimagined Test Track portrays an optimistic view of the future and reflects the deep collaboration between Disney and Chevrolet on both the design and the overall experience,” Eric Jacobson, senior vice president, Walt Disney Imagineering, said in a statement. “It's a thrilling attraction supported by rich exhibit displays and interactive elements that bring guests directly into the design process â€" with a few surprises thrown in.” (Orlando Business Journal)

- Chrysler‘s iconic 2011 Super Bowl commercial that featured Eminem in a tribute to Detroit was the beginning of a beautiful friendship between Chrysler and Selected of God, a Detroit gospel choir that appeared in the ad, according to The Detroit Free Press. The choir, which is releasing its third album, has maintained a relationship with the automaker since the commercial was produced. The choir has performed at Chrysler-sponsored events, and the company paid to produce a video, “Lose Yourself,” that is available on YouTube but will not be used in an advertisement. Meanwhile, the choir has seen its appea rances grow from about six a year to 60. (The Detroit Free Press)

- At the Volkswagen Group of America headquarters in Herndon, Va., the employee parking lot is filled with Volkswagens and Audis, and that's no accident, The Washington Post reports. Volkswagen offers its employees a deal on leasing new vehicles that is hard to pass up. Every six to 12 months, employees and their families can lease a new Volkswagen or Audi vehicle for a cost equal to 1.5 percent of the retail price. The company pays for the vehicle registration, maintenance expenses and car insurance. And lease payments are deducted from the employees' paycheck, making it a cinch to keep up with the bills. Each worker and family - spouse, children, parents and spouse's parents - can lease up to four cars at a time through the program. (The Washington Post)

General Motors

Honda Previews a Facelift for the 2013 Civic Before Debut in Los Angeles

American Honda The restyled 2013 Honda Civic sedan.

When Honda unveiled the slightly refreshed ninth-generation Civic at the Detroit auto show last year, the car was somewhat underwhelming. The Civic looked dated, and many reviews in the media have not been kind, with some saying that the car has lost the personality that made it fun. Consumer Reports even left it off its list of recommended cars.

So Honda, acutely aware of how important the Civic is to its bottom line, is taking another shot at perking the car up, at least cosmetically, with a midcycle refresh of its refresh. In its news release on Monday, the company said it was giving the 2013 car a more youthful style. A new fron t bumper headlines the update with a sporty looking mesh grille, chrome accents and integrated fog lights on upper trims.

The amber corner lights are replaced with classier looking clear units, and the hood gets some aggressive lines. A new rear bumper and trunk lid help get rid of the 2001 Toyota Camry look, and the taillights now extend onto the trunk lid. Reflectors are integrated into the new bumper, and a number of new wheels will be added to the option sheet.

Honda also says it is adding safety, comfort and chassis improvements, though Chris Naughton, a company spokesman, said in a telephone interview that he could not provide further details. He also wouldn't say whether any powertrain updates were coming. All of the questions will presumably be answered when Honda unveils the sedan on Nov. 29 at the Los Angeles auto show.

American Honda The 2013 Honda Civic sedan has a new rear bumper and trunk lid.

Our Long-Term Fiscal Future Is Better Than It Looks

Bruce Bartlett held senior policy roles in the Reagan and George H.W. Bush administrations and served on the staffs of Representatives Jack Kemp and Ron Paul. He is the author of “The Benefit and the Burden: Tax Reform â€" Why We Need It and What It Will Take.”

Despite Republican propaganda to the contrary, the long-term fiscal problem of the United States is principally that revenues are too low. If fixing this problem required a legislated tax increase, the nation would be in serious trouble, because Republicans will forever block it as long as they have the ability. Fortunately, they handed Barack Obama the power to permanently fix our fiscal problem if he has the courage and skill to use it.

The core problem, from the Republicans' point of view, is that they stupidly enacted temporary tax cuts during the George W. Bush administration. Their expiration creates a bludgeon that could eventually beat sense into them on the tax issue.

At the time the tax cuts were enacted, I recall arguing with my longtime friend Grover Norquist that temporary tax cuts were a really bad idea. Supply-side theory has always held that permanent tax changes are vastly more powerful than temporary changes, I told him. He didn't disagree, but said the Bush tax cuts were de facto permanent because Democrats would never have the guts to permit them to expire; they would be renewed forever. People and businesses will know that, Mr. Norquist said.

That was a foolish position for political and economic reasons. People and businesses don't make the sorts of changes in their behavior that would give the economy a supply-side boost unless they have confidence that today's tax regime will be in place when the payoff from increased work, saving or investment is realized.

A perfect example is the research and development tax credit. Economic theory is clear that R.&D. needs to be subsidized because the social benefits greatly exceed what businesses can capture from it, thus leading to less R.&D. than necessary to sustain growth. For this reason, Congress created the R.&D. credit in 1981.

But the credit has never been permanent. It has expired every few years and expires again at the end of this year. Academic studies show that even though it may be de facto permanent, the fact that it isn't actually permanent in law greatly inhibits its effectiveness.

Corporations can't risk taking it into account when calculating rates of return on planned R.&.D, for it might have expired when they need it down the road. The credit ends up being a bonus for what they would do anyway without the credit.

For this reason, Republicans and Democrats support making the R.&D. credit permanent. Congress always refuses, because renewal of the cre dit is a great way to shake down corporate lobbyists for campaign contributions. The lobbyists don't mind, because when the credit is renewed they can demonstrate that they have added to the company's after-tax bottom line. In Washington, this is called a win-win â€" except for the economy, which doesn't get the R.&D. that it needs.

A key reason that the tax-rate reductions of the Bush administration failed to have any stimulative effect is because they came with expiration dates from Day 1. Republicans insisted on cutting them on a partisan basis, without negotiating with Democrats. Consequently, they lacked the votes in the Senate to overcome the so-called Byrd Rule, which limits legislation that raises the deficit to a maximum of 10 years when budget reconciliation procedures are used.

Republicans needed to use those procedures to enact their tax cuts, in order to overcome a Senate filibuster by Democrats. Permanent tax changes would have required bipartisansh ip, which the Republicans rejected.

In 2010, Republicans congratulated themselves that their strategy was working when they refused to negotiate with President Obama because he demanded that tax cuts for the rich be allowed to expire. Faced with an earlier “fiscal cliff” on Jan. 1, 2011, he caved to Republican intransigence and agreed to a two-year extension of all the Bush tax cuts. That extension expires at the end of this year, and President Obama has renewed his demand that taxes on the rich be allowed to rise.

Republicans like the House speaker, John Boehner of Ohio, are talking bravely about holding the line on taxes, and Mr. Boehner has dismissed the demand for higher tax rates for the rich.

But the economic and political dynamics this year are much different than they were two years ago. Then, Republicans were coming off a huge electoral victory; this year they have suffered a huge political defeat.

In December 2010, the economy was too fr agile to take risks, even temporarily. President Obama had no choice but to cave. Today, the president's hand is greatly strengthened, the economy is much stronger, and he is running out of time to get America's fiscal house in order on his watch. Republicans are chastened by their defeat, and he will never hold a stronger hand against them than he does now. Therefore, taking the risks with the tax cuts, at least temporarily, is now a viable option.

If things go bad because of Republican inflexibility, the political dynamics change completely in January. At that point, Republicans have to accept whatever tax cut Obama is willing to support to replace the Bush tax cuts in whole or part. His veto pen would be enough to force Republicans to negotiate in good faith for a change, even if Democrats didn't control the Senate.

Any 2013 tax cut that would offset the effect of allowing the Bush tax cuts to expire can easily be made retroactive. The Internal Revenue Service can delay changing withholding tables for average wage earners if it chooses, on the assumption that their tax cuts will be preserved under any possible compromise, thus forestalling any impact from the fiscal cliff on the vast majority of Americans.

And here's the kicker. All President Obama has to do is insist that whatever retroactive tax cuts are enacted next year be temporary. Not only will this mitigate the impact of higher taxes for the same reason that temporary tax cuts are limited in their impact, but he will have another opportunity in a year or two to bludgeon Republicans back to the negotiating table, where their adamant opposition to higher taxes will again be negated by an automatic tax increase absent Congressional action.

Revenues are just 15.8 percent of gross domestic product, compared with a postwar average of 18.5 percent, which even Mr. Norquist accepts as a long-term goal. The sooner we get there, the sooner we can get the national finance s on track toward sustainability.

Because Republicans now lack the power to prevent legislated tax increases, the nation is no longer held hostage to their stubborn opposition to any tax increase whatsoever, which has torpedoed every serious effort to reduce the trajectory of debt since 2010.

That is why I am optimistic about our fiscal future.

Bundled Households

As I wrote on Friday, lots of young Americans are finally moving out of their parents' basements and forming their own households now that the economy is picking up. But the bundled-household phenomenon remains large, and Mark Zandi, chief economist at Moody's Analytics, has just shared some interesting data showing its extent.

Based on demographics and previous trends in household formation, it looks as if the country still has about 1.8 million fewer households today than it would have in a more “normal” economy, and most of that total household deficit is accounted for by the lower numbers of households formed by those in the 15-34 age group. Demographics suggest that there should be about 1.1 million more households headed by younger Americans today than there actually are.

As a result, we're still see an unusually high number of people living with parents, other relatives or friends.

This chart shows the total number of additional adults living w ith a home's official householder, broken down by the relationship to the householder: nonrelative, child or other relative.

Sources: Census Bureau, IPUMS USA, University of Minnesota, Moody's Analytics.

As you can see there are about 17.2 million adult children living in their parents' homes this year, compared with around 15.3 million in 2007, the year the recession began.

Mr. Zandi has also broken out the employment status of those adult children crashing with their folks. And the numbers show that the greatest increases are accounted for by unemployed adult children who have moved in with parents.

Sources: Census Bureau, IPUMS USA, University of Minnesota, Moody's Analytics.

In 2007, 1.3 million unemployed adult children were living in their parents' homes. This year, the total is about 2.5 million.

Motorsports Monday: Keselowski Builds Sprint Cup Lead

Tom Pennington/Getty Images for Nascar Jeff Gordon, in number 24, and Clint Bowyer tangle during the AdvoCare 500 at Phoenix International Raceway on Sunday.

Sixth-place finisher Brad Keselowski escaped Sunday's wild Nascar race at Phoenix, which he described as “borderline ridiculous at times,” with a commanding although not insurmountable lead over Jimmie Johnson, with one race to go in the Chase for the Nascar Sprint Cup championship.

Kevin Harvick won the AdvoCare 500, in a controversial, crash-filled green-white-checkered finish; the race had been stopped with one lap to go after Jeff Gordon wrecked champ ionship contender Clint Bowyer. A melee ensued in the pits between the crews of Jeff Gordon and Clint Bowyer.

“Things just got escalated over the year, and I'd just had it,” Nascar.com quoted Gordon as saying. “Clint has run into me numerous times, wrecked me, and he got into me on the back straightaway and pretty much ruined our day. I've had it.”

Nascar said on Monday that it was reviewing the incident. Penalties and sanctions could be announced before the circuit arrives next weekend in Homestead, Fla., for the season finale, officials said.

Keselowski has a 20-point lead over Johnson, whose seven-point lead going into Phoenix was obliterated by a flat tire-induced crash into the wall while he was running seventh with 77 laps to go.

Keselowski, challenging for the lead at the time, knew his championship chances would soar if he could just drive conservatively for a top-10 finish. That proved difficult as Gordon crashed into Bowyer directly in the path of Keselowski. But Keselowski wasn't so lucky in the final-lap donnybrook caused in part by Danica Patrick's spin, and an oil slick on the track, for which Nascar failed to throw the caution flag; as cars bounced off his Dodge, he was just able to keep it going straight enough to get it across the finish line.

Though there are various permutations of how points might be earned in the Florida finale, Keselowski needs to finish only midpack to clinch the championship, regardless of where Johnson might finish. Bowyer, who had been third in the points until Gordon wrecked him, was unable to finish the Phoenix race. As a result, Bowyer was mathematically eliminated.

Denny Hamlin took second at Phoenix, followed by Kyle Busch, who led the most laps but couldn't close the deal as the race ran seven laps longer than its 312-lap scheduled distance.

Here are other motorsports results from the weekend:

- Antron Br own, despite being eliminated in the first round, became the first African-American to win a major United States drag-racing title, holding on to just enough points Sunday in Pomona, Calif., at the final National Hot Rod Association event of the year. Brown, nursing burned hands after an onboard fuel fire in his early round loss, had to watch anxiously from the sidelines as his closest rivals lost one by one in the later rounds; Brown's title was secured only when his last challenger, Tony Schumacher, lost to Brandon Bernstein in a razor-close final-round duel.

Joining Bernstein, who took his first Top Fuel final since 2009, as winners on the day were the 2012 points champion Allen Johnson in Pro Stock, Andrew Hines in Pro Stock Motorcycle and Cruz Pedregon in Funny Car. Jack Beckman claimed the Funny Car season championship title by outlasting teammate Ron Capps by a mere two points in the final tally. Eddie Krawiec had enough points in hand to be crowned the motorcyc le champ even though he lost the final to his teammate Hines. (NHRA.com)

- Dani Pedrosa, who had lost the 2012 MotoGP points title to Jorge Lorenzo a week earlier, took his seventh victory of the season Sunday in a sloppy, wet season finale at Valencia, Spain. Lorenzo, an early leader, crashed out after a run-in with a back marker. With his victory, Pedrosa, who came in as runner-up in points to Lorenzo, took solace from the fact that he scored enough points Sunday for Honda in the constructors championship to at least give his employer that 2012 title. The replacement for the injured Ben Spies, Yamaha test rider Katsuyuki Nakasuga, who came in second.

The Honda rider Casey Stoner, the 2011 season champ who is retiring, signed off his MotoGP career by placing third and taking the final position on the podium. More than a dozen riders crashed on the rain-soaked Valencia circuit. Lorenzo said he was unhurt in his crash and planned to be back on the bike Tuesday for the start of 2013 testing. (MotoGP.com)

Wheelies: The Veterans Day Edition

John F. Martin for General Motors Navy veteran Harry Croyle, left, and Doug Waite, president of General Motors Veterans Affinity Group, posting the colors Friday in joint UAW Local 160 Veterans Committee and GM Veterans Affinity Group ceremonies in Warren, Michigan.

In which we bring you motoring news from around the Web:

- General Motors is expanding its military discount program to include veterans who have been discharged from the armed forces in the last year, USA Today reports. Previous ly, the discounts were given only to active duty service members, reservists, retired service members and their spouses. The discount, when combined with other incentives, can result in savings up to $4,948.95 on a 2013 GMC Sierra 1500 Extended Cab SLE, according to an example on the GM Military Discount Program website. (USA Today)

- Toyota is developing a safety system in which its cars would communicate with one another and with the road they travel on, The Japan Daily Press reports. The company has opened a testing ground near Mount Fuji in Japan to help in the development of what it calls its Intelligent Transport System. The practice area, which is described as being the size of three baseball stadiums, has sensors installed in the roads to warn drivers of such things as intersections and pedestrians in crosswalks. Toyota says its plans call for testing the system on Japanese streets in 2014 and in the United States after that. (The Japan Daily Press)

- In an effort to solve the problem of gridlock, Ozan K. Tonguz, a telecommunications researcher at Carnegie Mellon University in Pittsburgh, has been working on a high-tech means of controlling traffic at intersections since 2009. His system uses the behavior of ants, termites and bees as inspiration. Mr. Tonguz's company, Virtual Traffic Lights, recently got a patent on an algorithm that directs traffic at busy intersections, according to New Scientist. In Mr. Tonguz's system, stop lights would be inside the vehicles and drivers would see a red or green light based on the amount of traffic approaching the intersection. The system would give preference to larger groups of vehicles to keep traffic moving efficiently. (New Scientist)

The Power of Plastic

Nancy Folbre is an economics professor at the University of Massachusetts, Amherst. She recently edited and contributed to “For Love and Money: Care Provision in the United States.“

Credit card payment networks and card-issuing banks are taking advantage of their market power to extract more and more revenue from small businesses. In last week's post, I provided an overview of recent legal and legislative battles over rising swipe fees. But as an attentive reader points out in an e-mail, I should have called attention to how hard it is for merchants even to figure out what fees they will be charged.

Michael Latigona of David Michael's Salon in Berlin, N.J., provides a vivid description o f the perils of a phenomenon known as “strategic price complexity”:

Please, take a credit card out of your wallet and look at it closely. Any card will do. Now let me ask you. Can you tell me whether or not your card is a MC rewards class I, II or III (all of which have different rates)? How about your Visa? What type of Visa is it you are holding? Would it be a Visa CPS Retail card; how about a Visa Rewards 1 card? Or it could be a Visa enhanced business card?

You see, each card carries a different fee for the merchant. But how can a merchant ever know what the card is to ask the customer to use a different or cheaper card that carries less fees for the merchant? You can't. There is nothing on the cards to delineate the literally thousands of types of cards and fees associated with them.

I asked my merchant provider to give me a list to show me the different types of cards and fe es associated with them. Well, that was about 20 pages long, and still, even with that knowledge, could never determine what card you are holding, how much I will be charged for such card, let alone ask the consumer to use a cheaper one.

So regardless of the ruling or future settlement, unless it is clearly marked on the card what type of card I am about to swipe, us millions of small businesses have no clue what that charge will be until we receive our monthly statement. It's like you going to the restaurant and eating, but not seeing the bill until it comes in a month. Would you receive a service without knowing how much it will cost you? Well us small businesses have no clue what our charges will be when we swipe that card.

Did you figure out whether you are a class I, II or III Visa yet? Now even if I gave you my 20-page list of types of cards, could you still determine it? No. So us small business will continue to be forced to accept a card, and have absolut ely no clue how much we will be charged for that card, and that is something nobody is talking about.

I hope you can research this and do a story on this. After all, don't you think us small businesses should know ahead of time what we have to pay before we swipe that card? Or you could come to my salon and I could do your hair, not give you a price and send you a bill later. But I think you might not be happy without knowing how much that fabulous hair I just gave you would cost before the service and get sticker shock when you come to the register. Not quite fair to the consumer is it? And it's definitely not fair that your credit card doesn't tell me which one out of the thousands out there I am taking, the fees associated with that type of card and then have sticker shock each month when opening a statement because I have no clue what the actual charge will be when I accept the card.

Here's some economic background that Mr. Latigona and other sma ll-business owners might find useful:

The credit card payment network is an oligopoly. Visa and MasterCard dominate the market, along with the smaller networks Discover and American Express. This market structure is hard to discern, because cards themselves are issued by different banks, with different terms - and they come in many different colors. Among issuers, the top 10 credit-card-issuing banks accounted for more than 90 percent of outstanding credit card debt in 2009.

Both the payment networks and the card issuers operate in a “two-sided” market - selling their services both to consumers and to merchants. Consumers can engage in at least some comparison shopping - considering both terms of service and interest rates charged by different providers.

Small businesses, however, have long been limited in their ability to steer customers toward credit cards that charge lower fees, partly as a result of payment-network rules and partly because they fear inconveniencing their customers and reducing sales.

Payment networks and card issuers know how to exploit that fear, and they have a common interest in extracting as much revenue as possible from the merchants who rely on their services. Their market power puts them in a strong position to do so.

In a report on interchange fees (also known as swipe fees) published in 2009, the Government Accountability Office concluded that these fees had increased significantly since 1991, especially for so-called premium cards offered only to high-spending customers. It delicately pointed out that producers with market power “have the ability to charge high, noncompetitive prices” and went on to note that representatives of card issuers openly acknowledged that their fees were not determined by costs but “were one of several revenue sources.”

The G.A.O. report also noted that the number of fee categories had proliferated over time, to 60 from four for Visa and to 243 from four for MasterCard between 1991 and 2009.

Here is where the concept of “strategic price complexity” comes in. In his study of retail financial markets, Bruce Carlin of the Anderson School of Management at the University of California, Los Angeles, contends that complexity itself can increase market power, because it reduces the power that buyers would otherwise have to compare prices.

This strategy seems to be working well for credit card issuers. A recent report from the Federal Reserve notes that credit card earnings have almost always been higher than returns on all commercial bank activities. The financial sector in general commands a far higher profit rate than the retail sector.

The proposed legal settlement that grew out of the antitrust suit I described last week gives small businesses more latitude to encourage customers to use cards with lower fees. But this settlement will not solve the problem because, as Mr. Latigona points out, it is difficult for businesses to determine which cards fit this category.

Paying with plastic is technically more efficient for everyone than paying with checks or cash. But the fees we are now charged for using plastic far exceed the actual costs. They reflect the market power of a financial oligopoly.

Movin\' Out

Almost exactly a year ago I wrote an article about how tortoise-slow growth in household formation was hurting the economy. Unemployed new high school and college graduates were staying with their parents rather than moving into homes of their own, thereby depriving the economy of all the spending and hiring that goes along with setting up new digs. Under normal circumstances, each time a household is formed it adds about $145,000 to output that year as the spending ripples through the economy, according to an estimate last year from Mark Zandi, chief economist at Moody's Analytics.

Over the last year, though, household formation has been picking up. Here's a look at the change in the number of households in the United States in a given month compared to the same month a year earlier:

Source: Census Bureau, via Haver Analytics.

As you can see, household growth is still volatile, but it has been trending upward. The pickup is probably related to job growth, which has enabled multigenerational households to spin off into multiple new homes.

“We're slowly but steadily improving, with more job opportunities in particular for younger households,” Mr. Zandi said. “They can only live with their parents for so long. There are powerful centrifugal forces in those households, on both side. As soon as they have a chance to get out, many will take it.”

Hiring growth, in particular growth in construction, may also be attracting more immigrants, although we don't have data yet to support this.

Mr. Zandi said that while household formation has picked up, it's still below what the demog raphics suggest it should be, meaning that the “household gap” - the difference between how many households exist and how many there should be based on demographics - is widening.

“Years' worth of households that have been pent up will be unleashed in the next few years,” he predicted. “That's one reason why I'm more optimistic than some other people about G.D.P. growth in the next few years. As we move to the mid-part of the decade, I think those households will get formed and that will power a lot of housing construction and consumption.”

Report: James Bond\'s Carmaker for Sale

Columbia Pictures Daniel Craig in “Skyfall” with the original Bond car, an Aston Martin DB5.

The Investment Dar Company of Kuwait, which owns a 64 percent stake in Aston Martin, the British-based luxury sports car maker, has retained advisers to help it sell its share, according to a Bloomberg.net report on Friday. The news that James Bond's favorite car maker was being shopped, in a bit of irony that even 007 might appreciate, came on the day the latest Bond movie, “Skyfall,” opened in the United States.

In the movie, Daniel Craig, who portrays the fictional secret agent, is at the wheel once again of a classic 1963 Aston Martin DB5.

Bloomberg quoted five sources it said it could not identify publicly as the basis for the report. It's been no secret, however, that Aston Martin's future looks cloudy. Current-year sales are flat, despite the lift from reminders like the newest Bond thriller of its classic image. Resources for development of future models appear uncertain at best because of Investment Dar's financial woes in recent years.

Investment Dar was part of an investment group that bought Aston Martin from Ford Motor Company in 2007. Its stake was calculated to have been worth £503 million ($805 million) at the time of purchase. Two years later, however, Investment Dar missed a payment on an Islamic bond; the company agreed in February 2011 to a $4.9 billion reorganization.

The Bloomberg report said Mahindra & Mahindra, the Indian vehicle manufacturer, and Toyota have expressed interest in Aston Martin. However, Janette Green, an Aston Martin spokeswoman, de nied to Bloomberg that Investment Dar was looking to sell. No one from Investment Dar was willing to go on record with a denial.

A Toyota spokeswoman in Japan said the automaker had no comment. A spokesman from Mahindra & Mahindra could not be reached.

Bloomberg said Rothschild's of London, the investment banking services firm, had been retained by Investment Dar to investigate the possible sale. Investment Dar's asking price is about equal to that of its initial investment, Bloomberg reported.

Price Is Major Factor for Electric Vehicles, Study Says

Nissan North America The 2012 Nissan Leaf.

Money talks. And unless automakers can make a better economic case to consumers who are considering an all-electric vehicle, like the Nissan Leaf, or a plug-in electric, like the Chevrolet Volt, these alternative-fuel vehicles will remain a very small part of the market in the United States.

That is one of the conclusions in the J.D. Power & Associates 2012 Electric Vehicle Ownership Experience Study. The study, the first on this topic by J.D. Power, looks at what consumers experience as they consider these vehicles, shop for them and own them, as well as the expectations and concerns of current and future owners.

For current owners, the early adopters, the dec ision to buy an alternative-fuel vehicle was more of an emotional one, said Neal Oddes, senior director of the green practice at J.D. Power, a market research firm. Of current owners, 44 percent said the top benefit of their vehicles was lower emissions. Those owners were more willing to pay a premium for their vehicles.

But future buyers are more pragmatists than idealists. Of future buyers, 11 percent said they would consider an electric vehicle for its environmental benefits, but 45 percent said they were interested in saving on fuel.

The people who shopped for an electric vehicle and ultimately decided not to buy one said their primary reason was the price, Mr. Oddes said in a telephone interview.

“The only way to address the price is by improving the technology to reduce the overall cost of the vehicle,” Mr. Oddes said. “The manufacturers have a huge task to be able to do that.” But once they do, electric vehicles will go mass market.

Electric vehicles account for less than 1 percent of new-vehicle sales in the United States, according to LMC Automotive, J.D. Power's automotive forecasting partner.

The study, conducted in October, was based on online responses from more than 7,600 consumers who either own an electric vehicle, are considering buying one or shopped for one but decided not to buy.

Current owners said recharging their vehicles' batteries increased their monthly electric bills by $18, much less than the estimated $147 they would have paid for gasoline during that same period.

However, the study found that consumers paid on average $10,000 more to buy all-electric models and $16,000 more on average for plug-in hybrids.

Based on the annual fuel savings, it would take an average of 6.5 years for an all-electric vehicle owner to break even and 11 years for a plug-in hybrid owner to break even.

That premium does not take into account the curr ent federal income tax credit of up to $7,500.

All owners in the study got a rebate, Mr. Oddes said, “and if it wasn't for those rebates I think the market would be a lot worse.”

The study found that one-third of owners used a standard 120-volt outlet to charge their vehicles at home rather than installing a special 240-volt charging station at an average cost of $1,500. However, of those who did install a charging station, 43 percent got it at no cost.

Among people who are considering an electric vehicle, the study found that driving range and the availability of charging stations were the top concerns.

Following price as a reason for not buying an E.V. is vehicle size. Most consumers who are considering electric vehicles are looking for midsize sedans and, currently at least, most of the vehicles are smaller. Third is a concern over the reliability of alternative-fuel vehicles.

Chrysler Recalls 745,000 Jeeps for Air Bag Problem

Chrysler Group The 2002 Jeep Grand Cherokee is among the Jeeps that Chrysler is recalling.

Prompted by an investigation by the National Highway Traffic Safety Administration, Chrysler is recalling almost 745,000 Jeeps because the air bags might deploy without the vehicles being in a crash, according to a report from the automaker posted early Friday on the safety agency's Web site.

The recall covers the 2002-3 Liberty and 2002-4 Grand Cherokee models.

The agency began investigating the Liberty models in September 2011 after receiving complaints from owners.

The agency said in January that investigators were concerned enough with their findings to upgrade the investigation to an engineering analysis.

The agency report said investigators found 87 inadvertent deployments resulting in 50 injuries, including cuts, burns and bruises.

In some cases only the driver's air bag deployed. In others, the passenger air bag deployed, too.

In reporting the recall, Chrysler blamed an “electrical overstress” of a component for the problem. It said a supplier had made a change to a part without the automaker's knowledge.

In other action:

- Jaguar is recalling almost 4,200 of its 2010-12 XF models with the 5-liter V-8 because of a fire hazard, the automaker has told the safety agency.

In a report to the agency, Jaguar said part of a fuel-tank fitting could crack, allowing gasoline to leak.

Jaguar said it learned of the problem through warranty claims and began investigating in July. It recently concluded a recall was needed and said it was not aware of any fires related to the defect.

- Toyota is recalling 11,153 of its 2012-13 Scion iQ models because the passenger air bag may malfunction.

In its report to the agency, Toyota said the problem was because of a cable under the passenger seat that is part of the system that determines if a person is sitting in the seat and the air bag should be turned on. The report said the cable could be damaged by moving the seat fore and aft. That could either cause the air bag not to deploy in a crash or to deploy without being in a crash.

Chrysler, Jaguar and Toyota each described the recalls as voluntary, but once a manufacturer is aware of a safety problem it must, within five days, inform agency of its plans for a recall or face a civil fine.

China\'s Economic Growth and American Fears

Uwe E. Reinhardt is an economics professor at Princeton.

Rummaging around my kitchen counter, where a huge pile of “to be read” material tends to accumulate, I recently came across the Aug. 27 issue of Newsweek. Its cover features President Obama and the headline “Hit the Road, Barack,” with the subtitle “Why We Need a New President.” The cover page draws attention to a partisan political tract inside the magazine by the Harvard historian Niall Ferguson.

Others have already subjected Professor Ferguson's tract to searing fact-checks. What caught my eye, however, and what invites further comment, is the fear Professor Ferguson seeks to strike in the hearts of Americans over the prospect of rapid economic growth in China, relative to American growth.

It seems to be a common theme in this country, especially as our economy is only gradually emerging from a period of nationwide deleveraging that is achieved through lower spending and hence lower economic growth, and especially when that lower growth is compared with previous periods in which economic growth was significantly abetted by excessive debt financing all around.

Professor Ferguson opines:

The failures of leadership on economic and fiscal policy over the past four years have had geopolitical consequences. The World Bank expects the U.S. to grow by just 2 percent in 2012. China will grow four times faster than that; India three times faster. By 2017, the International Monetary Fund predicts, the G.D.P. of China will overtake that of the United States.

He supports his position with appeal to a graph, which I have recreated below, based on data put online in April 2012 by the International Monetary Fund. I have added a line for the European Uni on (the brown line), as distinct from the euro zone (the purple line). The lines express purchasing-power-parity dollars.

So what do readers make of Professor Ferguson's commentary? What in his graph should strike fear in our hearts? Should we all lapse into deep national mourning and fly our flags at half-staff when the red line in the graph pierces the back line?

In any case, short of fervently praying that China's economy somehow meets adversity or even collapses, is there, in fact, much that an American president can do about this prospect, other than, perhaps, moving that fateful date a year or two up or down the time line? Should that become a national purpose for America?

I would remind reader s â€" and Professor Ferguson â€" that the size of the population matters in cross-country comparisons of the sort exhibited in his graph. According to the I.M.F. data, the United States population in 2012 is about 315 million and China's about 1.35 billion, that is, 4.3 times as large. The corresponding figures for 2017 are 330 million and 1.39 billion, or a ratio of 1 to 4.21. Economists would take it into account in cross-national comparisons of G.D.P., and historians should as well.

The next graph adjusts for size of population by restating the first graph on a per-capita basis. An entirely different picture emerges.

Note in particular China's relatively low per-capita G.D.P., now and in the foreseeab le future. Should Americans be worried that after centuries of mass poverty in China, more and more of its citizens will finally escape poverty?

And what about the differential growth rates that Professor Ferguson cites? China's and India's 2012 economic growth rates are projected by the I.M.F. as multiples of America's rate of economic growth. Are we to be shocked by it?

Economies do not grow at high exponential rates forever. It is more reasonable to assume that they tend to grow along some variant of what mathematicians call a logistic curve, as illustrated in the graph below.

China, India and other emerging market economies are still on the relatively steep segment of this curve. They have yet t o build the extensive infrastructure that the highly developed Western economies already enjoy, including an abundance of world-class educational and health care systems, residential housing for all stocked with modern appliances, automobiles, entertainment venues and so on.

In meeting that pent-up demand for investment and consumption goods, the emerging economies can draw more or less freely on sophisticated technology developed over time and at great expense by the advanced economies, including the latter's intellectual property, their pool of highly skilled human capital and their academies. America's universities teem with students from the emerging market economies, notably from Asia and especially in science and engineering.

Small wonder then that the emerging market economies now experience rapid economic growth, not even to dwell upon the huge exports their abundant and still relatively cheap labor makes possible.

The more mature and highly develop ed economies now tend to be positioned somewhere on the upper and flatter segment of the economic growth curve. I draw readers' attention to a fascinating paper by Robert Gordon of Northwestern University, “Is U.S. Economic Growth Over? Faltering Innovation Confronts Six Headwinds.” The abstract alone is worth a quick read.

As Professor Gordon asserts, major innovations - such as the invention and development of the combustion engine, electricity, indoor water and sanitation, chemicals and new materials during the second industrial revolution starting in the 1870s - can lead to bursts of rapid economic growth. Such innovations can shift up the entire curve shown in the graph above. Rapid growth ensues as economies transit from a lower to a higher growth curve.

But such innovations do not support rapid economic growth forever. Absent major new bursts of significant innovation, Professor Gordon contends, mature economies are apt to settle down to relatively slo wer growth along a given growth curve.

Ferrari to Auction F12 Berlinetta for Hurricane Relief

Ferrari North America Proceeds from the auction of an F12 Berlinetta will be donated to the American Red Cross.

The first F12 Berlinetta to be sold in the United States will be auctioned by Ferrari, which will donate the proceeds to the American Red Cross to support the organization's relief efforts after Hurricane Sandy, the automaker said.

The auction will be at 9 p.m. Eastern time on Nov. 17 at the Formula One United States Grand Prix in Austin, Tex. People who cannot attend the event may contact Ferrari dealers for information on how to place bids.

“Here at Ferrari, we have experienced and seen the devastation that Hurricane Sandy has caused in the affected area firsthand,” Marco Mattiacci, chief executive and president of Ferrari North America, said in a statement. “We want to use our event next week at Formula One in Austin to give back to our local community by auctioning the F12 Berlinetta.” Ferrari North America's headquarters are in Englewood Cliffs, N.J.

Ferrari has also created a special contribution page jointly with American Red Cross, where Ferrari fans can also contribute to the Red Cross.

The F12 Berlinetta will be available for purchase in the United States starting in the second quarter of 2013 with a base price of $315,888. But Ferrari expects the auction to bring in much more than that. “The F12 Berlinetta is already in high demand, and we expect the auction to yield a significant contribution to storm relief,” Mr. Mattiacci said.

Ferrari joins a long list of automakers that have contributed to hurricane relief. Among them:

- BMW of North Americ a donated $1 million to the American Red Cross.
- Chrysler‘s Ram brand gave $100,000 and 20 Ram 1500 Tradesman trucks to the American Red Cross.
- Ford has donated $50,000 to the American Red Cross through its Red Cross Disaster Responder Program.
- General Motors gave 50 Chevy Silverado full-size pickups and Express cargo vans to the Red Cross and the GM Foundation contributed $250,000 to the Red Cross Disaster Responder Program.
- Mazda contributed $100,000 to the Red Cross and made $5,000 grants to two food banks.
- Mercedes-Benz donated $1 million to the Red Cross.
- Toyota gave $1 million to the Red Cross.
- Volkswagen contributed $500,000 to the Red Cross through its Volkswagen of America Foundation.

Wring Out That Ride: Submerged Older Vehicles May Be Salvageable

Stacy Albin of Lido Beach, N.Y., watched water rush into the street in front of her house during Hurricane Sandy. Saltwater soon rose above the wheel wells of her 2010 Subaru Impreza, setting off the car's panic alarm as the electronics shorted out. The next day Ms. Albin went to open the door with the remote clicker. Nothing. So she used the key that Subaru provides as an alternate means of opening the door and looked inside to find the interior â€" and her New York Yankees teddy bear â€" soaked. Her insurance company, acutely aware of the severe damage that results from a saltwater soak, said it was a total loss.

Her mother's car, a 1993 Oldsmobile that Ms. Albin described as a clunker, was parked on high ground and weathered the storm quite handily. Because that car was not insured for loss, its survival could be seen as a bright spot in a dreary situation.

In theory, any flood-damaged automobile can be fixed, but when a contemporary vehicle, packed with ele ctronics, is submerged in water to dashboard level, the cost of repairing the car will almost certainly exceed its value, and if repaired, it may never be quite right. The odds of repairing an older vehicle that doesn't rely heavily on electronics are better.

Fresh water is damaging to automobiles; saltwater is deadly, because it generates corrosion almost immediately, car repair experts say. But while salt eats away at electronic components rapidly, mechanical devices that have been underwater can sometimes be saved. Thus, older cars, particularly those built before 1970, may be salvageable without resorting to extreme measures if submersion was only partial and did not continue for an extended amount of time. Time is the enemy here, becasue salt begins to corrode metal on contact.

Getting rid of salt is a priority. While wetting down a vehicle that has dried may seem counterintuitive, a thorough freshwater rinse can help limit corrosion. Rinse up to the point o f submersion, but rinse thoroughly and make sure body drain holes are open. Then spray exposed metal and components like door hinges and suspension joints with a light lubricant.

Don't try to start a car that has been submerged to the point where water has entered the interior until water and salt have been flushed out of the engine and transmission and fluid levels have been restored. Check the engine oil level. If it's no higher than normal, chances are water has not entered the crankcase. Check transmission and differential lubricant levels as well. If you think there's any chance that water has gotten in, drain, flush with mineral oil and refill.

If the engine was fully submerged, the cylinders may have filled with water as well. To purge it, remove the spark plugs and crank the engine. Once the water has been ejected squirt some mineral oil in the cylinders and crank it again before cleaning and replacing the spark plugs.

Other mechanical devices that were submerged will have to be serviced as well. In general, this involves flushing, lubricating and, in some cases, disassembling. An extensive guide to repairing water damage was published by RACQ, an insurance company in Australia.

Unfortunately, unless one does a complete vehicle disassembly, inspection and restoration, flood damage may not become evident for some time, and the creep of corrosion can cause problems in the future. But for those motivated by need or emotional bonding, that may well be a risk they can live with.

Wheelies: The Hurricane Sandy Edition, Part 2

In which we bring you motoring news from around the Web:

- Even after the flood waters have receded from the storm surge from Hurricane Sandy, the number of totaled cars keeps rising, The Detroit News reports. As many as 200,000 vehicles may have to be replaced, Larry Dixon, senior analyst for the National Automobile Dealers Association, told The News. That includes 15,000 vehicles that Toyota, Chrysler, Nissan and Honda plan to scrap. (The Detroit News)

- Losses have mounted for the hybrid car maker Fisker Automotive, because its whole shipment of about 300 vehicles at Port Jersey was lost in floods from the hurricane and resulting fires, The Wall Street Journal says. The losses total about $30 million for the cars that sell for more than $100,000 each. But the automaker says the losses should be covered by insurance. (The Wall Street Journal)

- Some lenders are giving a break to car owners affected by the hurricane. Six credit unions on Long Island are allowing customers to defer auto payments for up to 90 days, the Credit Union Times reports. And Ally Financial is offering deferred payments on new Chrysler and General Motors vehicles, The Detroit News says. Toyota also has a deferred-payment program for new cars, Forbes reports. (Credit Union Times)

Asian Automakers Not Necessarily Invincible in U.S.

Asian automakers are sometimes viewed as being invincible in the American market, but as Suzuki showed this week, that is not always the case.

On Monday, the American Suzuki Motor Corporation filed for bankruptcy with $346 million in debt, and the brand's new cars will no longer be sold in the United States. The company remains a major force in other markets, including Japan and India, and will continue to sell other products in the United States, motorcycles among them.

But several other low-volume players have also stopped selling their branded cars, including Isuzu, Daewoo and Daihatsu. Suzuki cited exchange rates that make it hard to be profitable, and the high cost of meeting regulations and setting up a distribution network. Those other nameplates had similar challenges.

“It's difficult for any small car company to get a footprint in the United States,” Jack Nerad, an executive market analyst at Kelley Blue Book, said in a telephone interview. â €œWe're a big country, with more than 300 million people, and it's hard to buy media and build awareness.”

Isuzu models included the Trooper and Ascender S.U.V.'s and the Impulse coupe. The company shut down its American sales operation in early 2008, having sold only 7,098 vehicles in 2007. Those with long memories will recall the company's “Joe Isuzu” commercials, which greatly increased the company's profile. Isuzu's sales peaked at 127,630 in 1986. And a sleazy car salesman Joe, played by the actor David Leisure, was enough of a celebrity for Michael Dukakis, the Democratic presidential candidate, to say during the 1988 debates, “If Bush keeps it up, he's going to be the Joe Isuzu of American politics.”

Daihatsu's cars, which included the 3- and 4-cylinder Charade (a competitor for the Geo Metro) and the Rocky S.U.V., were already fading memories by then. The Japanese company stopped selling to Americans in 1992, after sales plunged 40 percent in 1 991. Daihatsu had company then - Sterling from Great Britain and Peugeot from France had recently given up on the American market.

Mr. Nerad recalls that Korea's Daewoo, which briefly marketed such cars as the Nubira and Lanos under its own brand name through the 2002 model year, “had pretty grandiose ideas about marching into the American market and getting a large volume of sales in a short time. The company talked about 300,000 vehicles annually in the first year or two in the marketplace, which just wasn't going to happen.”

Daewoo didn't entirely disappear from the American market. The assets of Daewoo Motors were acquired by General Motors in 2002. Rebranded as GM Korea, it went on to develop cars now sold globally, including the Chevrolet Spark and Sonic. According to G.M., the Korean operation produces one out of every four Chevrolets sold worldwide. But the Daewoo brand name is gone, even on cars sold in Korea.

Will other Asian automakers be lea ving the United States market? Mitsubishi Motor Corporation, the remaining Japanese automaker with the fewest sales in the United States, says no. “We have no intention whatsoever of withdrawing from the U.S. market,” the company's president, Osamu Masuko, told Automotive News in an interview Tuesday. “The U.S. market is a very important market.”

The Importance of Elizabeth Warren

Gretchen Ertl/Reuters Elizabeth Warren greeting supporters in Boston after her Senate victory on Tuesday.

Simon Johnson is the Ronald A. Kurtz Professor of Entrepreneurship at the M.I.T. Sloan School of Management and co-author of “White House Burning: The Founding Fathers, Our National Debt, and Why It Matters to You.”

One of the most important results on Tuesday was the election of Elizabeth Warren as United States senator from Massachusetts. Her victory matters not only because it helps t he Democrats keep control of the Senate but also because Ms. Warren has a track record of speaking truth to authority on financial issues â€" both to officials in Washington and to powerful people on Wall Street.

During the campaign, Ms. Warren's opponent and his allies made repeated attempts to portray her as antibusiness. In the most bizarre episode, Karl Rove's Crossroads GPS ran an ad that contended that she favored bailing out large Wall Street banks. All of this was misdirection and disinformation.

Ms. Warren has long stood for transparency and accountability. She has insisted that consumers need protection relative to financial products â€" when the customer cannot understand what is really on offer, this encourages bad behavior by some companies. If this behavior spreads sufficiently, the entire market can become contaminated â€" damaging the entire macroeconomy, exactly as we have seen in the last decade.

Honest bankers should welcome transparency in all its forms. And the Consumer Financial Protection Bureau, which Ms. Warren helped to establish, has made major steps in this direction.

Ms. Warren has strong support from the progressive wing of the Democratic Party, and her resistance to sharp practices by big banks resonates across the political spectrum. (Disclosure: James Kwak and I wrote positively about Ms. Warren and her approach in “13 Bankers.”)

She has also established an impressive track record for effective oversight in Washington. As the chairwoman of the Congressional Oversight Panel for the Troubled Asset Relief Program, she drew bipartisan praise (until, of course, she decided to run for public office).

How much can a new senator accomplish? Within hours of her victory, some commentators from the financial sector suggested that no freshman senator could achieve much.

This is wishful thinking on their part. A newly elected senator can have a great deal of impact if she is well informed on relevant details, plugged into the policy community and focused on a few key issues. It also helps if such a senator can bring effective outside pressure to bear â€" and Ms. Warren is a most effective communicator, including on television. She has an unusual ability to cut through technical details and to explain the issues in a way that everyone can relate to.

Ms. Warren is a natural ally for Senators Sherrod Brown of Ohio, Jeff Merkley of Oregon, Carl Levin of Michigan, Jack Reed of Rhode Island and other sensible voices on financial sector issues (including some on the Republican side who have begun to speak out). My expectation is that Ms. Warren will work effectively across the aisle on financial sector issues without compromising her principles â€" and this could really be productive in the Senate context.

Hopefully, Ms. Warren will get a seat on the Senate Banking Committee, where at least one Democratic s lot is open.

President Obama should now listen to her advice. Senator Warren should have been appointed head of the Consumer Financial Protection Bureau in 2010 â€" but was opposed by Treasury Secretary Timothy Geithner. Unfortunately, the president was unwilling to override Treasury.

If President Obama wants to have impact with his second term, he needs to stand up to the too-big-to-fail banks on Wall Street.

The consensus among policy makers has shifted since 2010, becoming much more concerned about the dangers posed by global megabanks. That has been clear in recent speeches by the Federal Reserve governor Daniel Tarullo; Richard Fisher, president of the Federal Reserve Bank of Dallas; and Andrew Haldane of the Bank of England (all of whom I have covered in this space â€" including last week).

At the same time, we should expect a renewed effort against all recent attempts at financial sector reform â€" a point made by American Banker, a trade publi cation, immediately after the re-election of President Obama.

Scandals of various kinds will be thrown into this mix. The full extent of money laundering at HSBC is only now becoming apparent. Complicity of various institutions in rigging Libor should also become clearer in coming months. No doubt there will be big unexpected trading losses somewhere in the global banking community. The European macroeconomic and financial situation continues to spiral out of control.

Senator Warren is well placed, not just to play a role in strengthening Congressional oversight but also in terms of helping her colleagues think through what we really need to make our financial system more stable.

We need a new approach to regulation more generally â€" and not just for banking. We should aim to simplify and to make matters more transparent, exactly along Senator Warren's general lines.

We should confront excessive market power, irrespective of the form that it takes.

We need a new trust-busting moment. And this requires elected officials willing and able to stand up to concentrated and powerful corporate interests. Empower the consumer â€" and figure out how this can get you elected.

Agree with the people of Massachusetts, and give Elizabeth Warren every opportunity.

Wheelies: The Post-Election Edition

In which we bring you motoring news from around the Web:

- For the political junkies who were glued to the television on Tuesday night, the map showing the red states for Republicans and the blue states for Democrats was the centerpiece. And on Wednesday with all the political analysis in full swing, the map remains the center of attention. But for car fans who need a little more than vibrant colors to grab their attention, Jalopnik offers what it calls “the only car-based election map on the Internet.” Each state is filled in with the appropriate color and has a matching vehicle or other mode of transportation, like the boat representing Maine or the horse representing Kentucky. Now that's a map suitable for poring over. (Jalopnik)

- The Republican and Democratic party organizations had major get-out-the-vote operations running on Tuesday, but at least one automaker offered its own version. Ralph Gilles, Chrysler's chief designer and chief executive of the high-performance SRT brand, sent out a message on Twitter saying that Chrysler was giving all employees the day off to vote. Of course, the United Auto Workers contract already provides for a day off on Election Day at Chrysler, Ford and General Motors. So Chrysler extended the holiday to its nonunion employees. (Autoblog)

- Somehow a 30-day license suspension and $250 fine didn't seem to be enough of a punishment for a Cleveland woman who was found guilty of driving on the sidewalk to avoid stopping for a school bus. So Judge Pinkey S. Carr of Cleveland Municipal Court ordered the woman, Shena Hardin, to wear a sign that said: “Only an idiot drives on the sidewalk to avoid a school bus.” Watch for Ms. Hardin next Tuesday and Wednesday morning at the corner of East 38th Street and Payne Avenue in Cleveland. (Carscoop)

Hyundai\'s Fuel Economy Admission Leaves Some Car Owners Cold

Last Friday, following an investigation by the Environmental Protection Agency, Hyundai Motor Group admitted it had overstated the fuel economy of 900,000 vehicles sold in the United States over the last two years. But for many Hyundai and Kia owners, the company was merely stating the obvious.

There had been grumbling in online forums, like Edmunds.com and others, that Hyundai was playing games with the E.P.A. testing cycle.

One reads: “Bought 2012 Elantra based on 33 m.p.g. average. After 1,000 miles I do not get 23 m.p.g. Have reported this problem to Hyundai and heard all excuses!”

Another reads: “I've clocked 9,000 km in the past 10 months I've owned this car. I get an average 24 m.p.g. (mostly city driving), which is nowhere near the figures quoted by Hyundai. This is false advertising through and through!”

Mark Gordon of Whitestone, Queens, 58, a manufacturer's representative who sells bridal gowns, was so disappointed with the fuel e conomy of the 2012 Elantra he bought last year and with Hyundai's response to his complaints, that he created his own Web site, my2012HyundaiElantragetslousygasmileage.com.

The Elantra is rated at 29 miles per gallon city, 40 highway and 33 m.p.g. combined. Mr. Gordon said he and his wife were lucky to get 22 m.p.g. over all.

When he called Hyundai to complain, “They told me I didn't know how to drive. They were obviously working from a script because I got many e-mails from people all across the country saying they were also getting 22 m.p.g. And they would go to the dealer, and they were told they don't know how to drive.”

Because of complaints, he said Hyundai took him for a ride with an engineer. “They told me I drove too fast and that you could not let the r.p.m.'s go over 2,000. He never went into the fast lane, he always drove at 50, but when you are doing this at 2,000 r.p.m.'s, it takes you a half an hour to get up to 50 and it was an extreme ly unsafe way to drive.”

They were able to get it to 35 m.p.g. he said and every time it went over 35 they took a picture of the fuel economy read-out on the dashboard, making him feel like a liar, he said.

A self-described loyal Hyundai owner â€" he has had six or seven â€" he contrasts driving the Elantra with driving his 2010 Chevrolet HHR, which he said is rated at 20 m.p.g. city and 30 highway.

“I get 25 m.p.g. over all no matter what I do; and on the highway I get 30 m.p.g.,” he said. “I hit the number on the mark. I don't have to watch what the r.p.m.'s are; I don't have to watch whether I'm doing 70 or 30.”

Barry Koopersmith said he had trouble achieving stated mileage on the 2011 Elantra GLS that he bought in March 2011. Mr. Koopersmith, 61, an information systems manager who lives in Merrick, N.Y., said in a telephone interview that he had worked at the same company for 18 years and drove to work five miles a day in stop-and-go tra ffic.

He has been able to achieve only 21 to 22 m.p.g. with the Elantra, he said, but got 24 m.p.g. with his 2007 Nissan Sentra 2.0 S with an identical driving pattern.

He said he noticed the problem immediately after getting the car. Every time he fills up he notes his mileage and how much gas he buys, calculates the miles per gallon and enters the information into a spreadsheet. He also had the car serviced by Hyundai every six months.

When complaining initially, he was told to give it another six months. Then they said give it 10,000 miles. When he took it in for the next service he complained that even though it was rated at 29 to 40 m.p.g. he was getting only 22 m.p.g.

The service technician told him there was nothing wrong with the car.

“He admitted it should be 22, not 29 for city traffic,” Mr. Koopersmith said. “He probably won't be quoted on that, but that's what he told me.”

When Stacy Bray, 52, a project manager in San M arcos, Tex., complained about the mileage on her 2013 Elantra, she said she was told she “probably had a heavy foot” or was “probably not driving that many freeway miles.”

“They just come up with excuses,” Ms. Bray said.

The E.P.A. did not levy fines or sanctions against either Hyundai or Kia. Instead, Hyundai announced that it would restate the fuel economy of the Elantra as 28 m.p.g. city and 38 highway, with a combined average of 32 m.p.g., which is only one or two miles per gallon less than before. That, along with the rest of the settlement, doesn't sit too well with some owners.

“I tried to figure out the difference between what the m.p.g. should be and what I'm actually getting,” said Ms. Bray, who estimates her driving pattern to be 90 percent highway and 10 percent city. “I average around 30 m.p.g. I was expecting to get more like 36. But they are using a figure of two miles to the gallon difference and that's not true. No, it is not two. It's a lot more than two.”

She figures she's losing $45 a month because of the difference between what the fuel economy actually is and what was advertised. Meanwhile, Hyundai is saying she might get $45 a year from the settlement.

Mr. Gordon estimates he is likely to get $55 a year under this settlement. “What gets me mad is the E.P.A. found out they fudged on the test and nobody got fined, nobody at Hyundai lost their jobs,” Mr. Gordon said. “But they sold 900,000 cars fudging the m.p.g.”

Jim Trainor, product public relations senior group manager for Hyundai Motor America, said the company was aware that some owners were unhappy with the compensation being offered but that others were more positive. “I've also seen a lot of people saying, ‘Hey good for them for owning up to this and I'm proud to be a Hyundai owner.'”

He cited a J.D. Power & Associates study in which customers were asked to rate how happy they were with their fuel economy. “We were by far No. 1 in pleasing our customers in fuel economy,” Mr. Trainor said.

Mr. Gordon says he thinks that Hyundai should be made to buy back the cars and that fines and sanctions should be levied against the automaker.

Mr. Koopersmith estimated he would get $30 a year in the settlement, which he said was not satisfactory.

He would rather have the company admit that the Elantra would get only 22 miles per gallon.

“It's just the principle of the thing,” Mr. Koopersmith said. “How can they get away with advertising that and enticing you to get a car and it's not true and then getting away with admitting, ‘O.K. I was only off by one.' I don't believe it.”

Gasoline Lines Are Unnecessary

Casey B. Mulligan is an economics professor at the University of Chicago. He is the author of “The Redistribution Recession: How Labor Market Distortions Contracted the Economy.”

When it comes to making the last week unpleasant, Hurricane Sandy got some help from government officials.

As the water from the storm began to recede, people in the New York metropolitan area wanted to repair, rebuild and get back to normal, But one of the most visible obstacles has been 1970s-style lines for gasoline. Many customers waited in line for hours only to learn that fuel had run out. Gasoline was rationed in New Jersey, where license plate numbers determined which days drivers were permitted to purchase fuel.

Waiting in line is a waste of time. The people there were certainly not helping bring more gasoline to the region and could instead be helping rebuild or could be productive in other ways.

Economists on the right and on the left agree that market prices â€" prices that reflect both supply and demand location by location â€" are much better at allocating scarce resources in extreme situations like the storm's aftermath. But state and local government regulations, in the form of antigouging laws, effectively outlawed market pricing.

Early on, Steve Bellone, the executive of Suffolk County on Long Island, warned suppliers that he would punish anyone charging prices that were too high. Gov. Chris Christie of New Jersey sent similar messages. In New York City, federal officials interfered with the market by giving gasoline away; those lines were so long and contentious that New Jersey decided not to use that strategy.

If officials had allowed the price system to work, it would have alleviated lines in a number of ways. As suppliers seek the maximu m profit, temporary and extraordinary prices encourage them (and make it affordable for them) to go to extraordinary lengths to get the electricity and fuel needed to have gasoline available to customers where it is needed the most.

Were they permitted, high prices would also have encouraged customers to economize creatively on their usage and acquisition of gasoline. If it had cost $10 or $15 a gallon, some people on those lines might have been willing to delay vehicle usage, leaving more for people who were willing to pay that price or who had no other choice.

Of course, many suppliers and customers take prudent steps because they want to be helpful during a time of emergency. But why not let the market bring forth more supply and more customer conservation by adding a financial reward?

Instead, officials resorted to begging customers to conserve â€" Gov. Andrew Cuomo of New York said, “Now is not the time to be using the car if you don't need to” â€" and spending law enforcement resources dealing with hoarding, gouging and other crimes that would not exist if the price system had been allowed to work.

Mistakes of economics will happen sometimes, but it is too bad that government officials in the New York area are making so many when residents can least tolerate them.

Britax Child Safety Recalls 55,500 Child Restraints

Britax Child Safety is recalling almost 55,500 child restraints because some children have tried to eat portions of them, according a report the company filed recently with the National Highway Traffic Safety Administration.

In that report Britax said the seats being recalled have “an enhanced harness system” chest pad that uses a softer “nontoxic material to provide increased safety and comfort.”

The problem, according to Britax, is three reports of children biting off parts of that harness, then gagging. There was no mention of a more serious injury.

The company said it had since changed the pads “to increase their durability and hardness,” apparently in the hope of making them less chewable.

Owners of the older models will receive the new pads.

The models being recalled are the Boulevard 70-G3; Pavilion 70-G3 and the Advocate 70-G3.

Britax described the recall as voluntary, but once a manufacturer is aware of a problem it has no choice, within five business days, to notify the safety agency of its plan for a recall.

More on Tax Rates and Growth

In his Daily Economist post this week, Bruce Bartlett writes about a September study on taxes and economic growth by Thomas Hungerford for the nonpartisan Congressional Research Service. Mr. Hungerford's conclusion that changes in the top statutory tax rate and the capital gains rate had no discernible effect on growth was at odds with a central tenet of conservative economic theory, and the study was withdrawn after Congressional Republicans raised concerns about methodology and wording.

Mr. Bartlett notes that an earlier report on the topic for the research service, by Jane G. Gravelle and Donald J. Marples in December 2011, laid a foundation upon which Mr. Hungerford built. Distinguishing between tax rate cuts intended as short-term stimulus measures and those intended as the basis for long-term growth, the 2011 study says that in the long run, “a review of statistical evidence suggests that both labor supply and savings and investment are relatively insensitive to tax rates.”

U.S. Fuel Economy Is at All-Time High, Researchers Say

University of Michigan researchers said Monday that new cars and light trucks sold in the United States in October had the highest average fuel economy ever recorded on American vehicles - 24.1 mpg combined.

Michael Sivak, one of the researchers, said in a telephone interview that new vehicle sales showed a four mile-per-gallon gain from October 2007 to October 2012, an improvement of about 20 percent.

Mr. Sivak and his colleague at Michigan's Transportation Research Institute, Brandon Schoettle, have tracked data from 1923 to show a largely stagnant fuel economy trend from that time until about 1973, when the Arab oil embargo caused gasoline shortages. That data was published last July in the journal Transport Policy. “Technology improvements were used to add power and acceleration for 50 years, and it's only after that time that we see sharp increases in fuel economy,” Mr. Sivak said. The average on-road fuel economy of all vehicles in 1923 was 14 m.p.g., the report said, compared with 17.4 m.p.g. as recently as 2008.

Historical fuel economy figures were attained by dividing the amount of fuel used for road transportation by vehicle miles traveled. More recent mileage information comes from Environmental Protection Agency data as used on window stickers.

“This is great news for consumers and the environment,” Luke Tonachel, a senior analyst in the transportation program at the Natural Resources Defense Council, said in an e-mail. “New cars being sold today make up the greenest car fleet ever, and we can look forward to even cleaner cars as fuel-efficiency standards continue to ramp up. If new cars had the efficiency of 2007 models, drivers would be spending another $8 billion a year at the pump.”

Fuel economy varies widely across the vehicle fleet. According to the Transport Policy article, the average 2011 model year car has 38 percent better fuel economy (23.7 m.p.g. combined) than a pickup truck from the same year (17.2 m.p.g. combined). The best car, it said, is nine times more fuel efficient than the worst car, and the best pickup twice as fuel efficient as the worst.

The article also showed that driving a car uses about twice as many B.T.U.'s of energy per occupant mile as taking an Amtrak train on the same trip. Flying also reduces energy use compared with driving, but not by as much. The comparisons take into account the average number of passengers in a car and the average load in planes and trains.

Mr. Sivak and Mr. Schoettle also publish a national Eco-Driving Index that estimates average monthly greenhouse gas emissions per American driver, based on fuel economy and per-capita distance driven. The monthly index was unchanged in August, reflecting the most current data available, but has declined 19 percent over all since October 2007.