Question

Elmer Davis writes that "dividends on automobile stock can only be maintained by insisting that

[every two-car family] must become a three-car family." What point is he making?

Answer 1

Elmer Davis is critiquing the economic model that requires continuous consumer spending growth, implying that dividends for automobile stocks rely on unrealistic increases in consumption, such as a two-car family being pressured to become a three-car family.

Step-by-step explanation:

Elmer Davis is commenting on the unsustainable nature of economic growth that is dependent on continuous consumer spending and ever-increasing consumption. By suggesting that dividends on automobile stock can only be maintained if a two-car family becomes a three-car family, Davis is highlighting the industry's reliance on perpetual sales growth to sustain profits and shareholder dividends. This implies a need for the creation of consumer demand to an almost artificial degree to continue profit growth. There's an underlying critique of a system that requires such unending expansion, which could lead to overproduction, debt accumulation, and environmental strain.

Answer 2

Elmer Davis is stressing the need for perpetual demand growth in the auto industry to sustain profits, hinting at the unsustainability of this model.

Step-by-step explanation:

Elmer Davis is making the point that maintaining profit levels in the automobile industry necessitates a constant increase in demand. This can be understood as a reflection on consumer culture where companies must continuously promote consumer spending to sustain growth and shareholder value. The idea that every two-car family must become a three-car family is a critique of this system, suggesting the unsustainability of such a model in the long run both economically and, though not explicitly mentioned, environmentally.