How Inequality Killed the Affordable American Car by Harold Meyerson

[justaprogressive]

Last edited Mon May 4, 2026, 11:17 AM - Edit history (1)

Let’s talk cars. In particular, their prices.

As thousands of sticker-shocked Americans can attest, and as economist Clifford Winston has documented in The New York Times, the average sale price for a new car today is roughly $50,000. Only four cars on the new-car market can be purchased for $25,000 or less. That’s doubly true for American EVs, despite the fact that they are cheaper to run and maintain. Even the revived small hatchback Chevy Bolt starts at more than $28,000—and production is apparently only going to continue for a year or so.

For middle-class and working-class Americans, most new cars and homes—two foundations of what we’ve long regarded as a middle-class life—are now out of reach.

Ironically, the American auto industry has historically played a key role in scaling supply to demand and was the first in which pricing its products to the financial capabilities of consumers was infused with mathematical precision. Initially, Henry Ford’s Model Ts came in one size, one color, and sold at one price. During the 1920s, however, General Motors, under the leadership of Alfred P. Sloan, started making a variety of brands, each scaled to the consuming capabilities of different portions of the public. Sloan decreed that GM would make “a car for every purse and every purpose.” Its cheapest car was the Chevrolet; then, in ascending order of price, came the Pontiac, the Oldsmobile, the Buick, and, for the wealthiest buyers, the Cadillac. By 1929, GM was selling more Chevys than Ford was selling Model Ts, and factoring in its other brands, was outselling Ford (not to mention Chrysler and all other U.S. companies) by a wide margin—a lead it has maintained to this day.

While the uniformity of Ford’s product enabled the company to centralize production in just a few massive plants, GM opened plants all around the country (a strategy it doubled down on after the autoworkers’ 1937 sit-down strike in a few key factories halted production of most of GM’s models). Its brands were never as differentiated as they appeared to be: By making slight modifications, many of its factories could turn out, for instance, both Chevys and Pontiacs, or Buicks and Oldsmobiles. But the very existence of the brands, and the cosmetic changes made to the brands every year (another Sloan marketing ploy), brilliantly built on, and fostered, Americans’ status anxieties.

Until the coming of the New Deal, Sloan’s economists and researchers probably had a better grasp of Americans’ finances than the federal government had. And while that advantage has long since dissipated—today, every big corporation and bank, not to mention big government, too, has economists, many now aided by AI, making long-term and short-term economic projections—GM today is surely even more able than it was in Sloan’s time to assess Americans’ finances so that it can maximize its profits.

https://prospect.org/2026/05/04/how-inequality-killed-affordable-american-car/]