What's really wild is $2M is around the cost of a single Tomahawk cruise missile, Patriot missiles can cost almost double that. The Excalibur GPS guided round costs roughly as much as a nice Mercedes and during a conflict hundreds or thousands can be fired.
I came to this realization when learning about someone driving a car into a building to do damage and thinking "wow, that's an expensive round", then looking it up and realizing, it's not actually that expensive compared to how much military projectiles really do cost.
I've found it somewhat interesting that we'll be shocked at a fire truck, which gets a life time of 15-25 years and works in the service exclusively of saving lives, costs around $2 million, but not be shocked that we effectively use something as expensive as a fire truck as a single round in a gigantic gun.
Not to say that fire trucks don't potentially cost too much, nor that military weapons aren't worth it. More that I don't think most people are really aware of the obscene costs of military conflicts.
The federal government alone spends $1.9 trillion annually on healthcare. That's enough to buy almost a million Tomahawk missiles every year. The total production will be around 9,000 missiles over 46 years, or less than 200 per year. We do not meaningfully choose between paying for healthcare domestically and blowing up foreigners. Even overthrowing Iraq's government and trying to make it a democracy only cost about $2.4 trillion over 10 years.
That’s the story anyway. They’ll be paid either as Cost Plus or on a Firm Fixed Price. Neither of which incentivize the supplier to give the USG a better deal.
wow, that nice of you to invade foreign country and you must be doing it out kindness right???? WWWWRRROONNNGGG
US government literally get the IRAQY oil, stop acting like you get to have moral high ground, literally almost 50% people in earth hate US interventionist
The U.S. didn't even get the oil! The Chinese got the oil. The whole thing was because George W. Bush's heart was bigger than his brain: he thought the U.S. could create a functioning democracy from the Iraqi population.
Iraq's current government is still siginficantly better than Saddam's regime, depsite being currupt and somewhat dysfunctional (and things have improved over the years in case you dig up an article from a decade ago about ISIS).
The US, by all evidence, spends more on its non-universal, gap-prone, healthcare system than any reasonable (single-payer, government-provided, or mostly private insurance with universal guarantee) universal healthcare system would cost; the US spends ludicrously more than any other country per capita, and much more than most universal systems on a per GDP basis (heck, the government side of the US system alone costs a greater share of GDP than some universal systems, and more per capita than basically any of them, even without counting the larger private side.)
The US doesn't deny local citizens healthcare so that some people far away can be blown up. If anything, it limits its ability to blow people up far away with all the extra money it is spending locally to prevent people from getting healthcare.
But the US has lots of money, so it still finds quite a bit for blowing people up far away.
There's apparently at one least cruise missile variant that basically mounts a sword on the warhead with a thin fairing. It's apparently used for killing a single target
You're thinking of the AGM-114R-9X "Flying Ginsu", which is a variant of the short-range AGM-114 Hellfire anti-tank missile. It's not a cruise missile.
With the amount of money printing going on, it is really insincere for them to create that false dichotomy anyway. It was never about which one out of the two we could afford.
The federal bank performed quantitative easing between 2008 and 2014 as well, during the last economic crisis, but no one complained about "money printing" then. Inflation over the last few years has been a largely global phenomenon, which most economists attribute to supply chain disruptions, increased demand, and rising energy costs.
The "supply chain disruptions" explanation was always complete garbage. When there's a supply chain disruption, the price goes up and then comes back down when the disruption ends. It's very easy to see that the money supply barely increased from 2008-2014 and jumped massively during covid. https://fred.stlouisfed.org/series/WM2NS
I now think that we've been lied to big time: One thing Covid was good for was to provide a cover story for massive inflation that was likely coming no matter what. I'm not saying it was released for that reason (and yes, I do think it was deliberately released) but governments worldwide certainly took full advantage of the chaos and uncertainty to pull off all kinds of devious projects that they had on the back burner. Look at how effective Covid was at ending the democracy movement in Hong Kong, for example. Massive overhang of inflation? No problem!
Those QE periods were minuscule in how much they printed compared to this last phase we have entered. The rise in M2 money supply is out of this world.
“ Each Javelin round costs $80,000, and the idea that it's fired by a guy who doesn't make that in a year at a guy who doesn't make that in a lifetime is somehow so outrageous it almost makes the war seem winnable.”
It's in part because the military doesn't buy stuff from China.
The companies that make the parts for those missiles (not just the mega corp whose badge is on it) are likely only in business because they make the parts for it, and employ 20-200 people with decent pay and full benefits in Corn County, Midwest to do it.
On the surface it looks like enormous waste, it still might be, but understand that the defense budget is primarily a jobs program and basically only thing propping up Americans manufacturing.
This is why it never gets cut, but anyone red or blue. It employs way to many people and in way to many places without much good work. Republicans especially hate welfare, but if you can get people to show up and turn screws, they'll happily "waste" money on them.
They also arbitrarily reduce numbers and raise unit costs by regulations because weapons bad, though they are dropped asymmetrically on living people anyway. The US isn't incentivizing weapons correctly for them to improve in cost performance.
I mean, there is also the strategic benefit of not having your capacity to wage war in the stranglehold of a potential adversary. Not to say that politicians won't vote for graft that helps their districts, but there is a legitimate argument for employing only Americans in wartime industries.
But yes, that's a big source of the expense. Even on the IT side of things, the government (especially the military) pays sometimes up to 50% more for FedRAMP versions of SaaS products that have their servers based in the US and which are only administered by US citizens.
I mean it definitely has to be monumental waste. Look at the cost of launching rockets prior to SpaceX versus the cost now which is really a pittance by comparison.
If you are going to blow something up, using these GPS guided smart missiles is actually much cheaper than previous generations of explosive ordinances.
1. You can only use one missile to hit a target. In pre-gps era we would would dozens or hundreds of rounds to ensure one of them destroys the target.
2. You can fire from a safe distance. Using artillery or dropping bombs from an airplane involves physically getting closer to the target. This introduces much more complexity that adds to the overall cost.
3. There is significantly less collateral damage when using a single missile for a target compared to bombing the general direction of the target.
4. We take significantly less risk of casualties when using these missiles.
Except that because of all those things, the government is more likely to use it so the "it's cheaper!" argument doesn't hold water.
The comparison is not between "do it without smart bombs and drones" vs "do it with smart bombs and drones" and the former costing more.
The comparison is between "if we didn't have the smart bombs and drones, we wouldn't have done anything because whatever it was wouldn't have been worth the cost in money and American lives" versus "we spent a million dollars blowing up some stuff because we could do it on the cheap and with no risk."
On a broader scale the US's involvemnt in the foreign affairs of other nations skyrocketed when we went from having volunteer armed forces to a "professional" armed forces. Ike predicted as much in his rant about the military-industrial complex.
We're shocked they cost $2 million dollars because until recently they didn't, and it's not because of inflation, it's because private equity has bought up most of the industry, consolidated it, and jacked up prices.
> Not to say that fire trucks don't potentially cost too much
The only place in the entire world where fire trucks cost that much is North America, and it’s not because there’s anything inherently special about trucks made there.
> I've found it somewhat interesting that we'll be shocked at a fire truck, which gets a life time of 15-25 years and works in the service exclusively of saving lives, costs around $2 million, but not be shocked that we effectively use something as expensive as a fire truck as a single round in a gigantic gun.
Isn't military spending and the corruption of the government military industrial complex one of the oldest gripes in the American public forum? People sure are outraged about it, or were[1] -- has that become passe now?
[1] "The cost of one modern heavy bomber is this: a modern brick school in more than 30 cities. It is two electric power plants, each serving a town of 60,000 population. It is two fine, fully equipped hospitals. It is some fifty miles of concrete pavement." -- Eisenhower 1953
It didn't really take off until WW2--Eisenhower warned us of the military-industrial complex in his last days in office, but chickened out of of military-industrial-congressional complex at the last minute apparently.
There was no real standing Army until WW2 since it's against the Constitution. That's why the Marines (part of the Navy) were all over the place supporting US business interests, but not draining the public purse too heavily (look up Smedly Butler for a good read)
> There was no real standing Army until WW2 since it's against the Constitution.
This isn’t true. Firstly it isn’t against the Constitution to maintain a standing Army. What the Constitution says in Article I, Section 8, Clause 12 is “The Congress shall have Power To ...raise and support Armies, but no Appropriation of Money to that Use shall be for a longer Term than two Years...”
The people drafting the Constitution knew that a standing army could be abused by a tyrant, but having served in the Continental Army also knew how vital a standing Army was to maintain peace. That’s why they designed it so Congress controls the purse strings and authorises military spending only for 2 years at a time. The executive may give the orders, but there’s a time limit on the Army he can give orders to.
And the second part - the US has had a standing Army since 1796. You remember Robert E Lee resigning from the Army to join the Confederacy? If there was no standing Army, what did he resign from?
But even leaving aside these two historical facts, think about it logically. Throughout history military advantage has always been with the better trained, more experienced troops. Even if you rely on conscripts in a war, they need to be trained and led by professionals. Saying a standing army shouldn’t exist is like firing all your developers and saying you’ll start hiring when you get a few bug reports in.
I think if Ike was shown that the military industrial complex had prevented the occurrence of WWIII for nearly 80 years while maintaining economic growth and quality of life for US citizens, he would have withdrawn his reservations. He, above all, knew the alternatives.
$24 billion in American taxpayer money went to Israel in 2024, or about $65M/day. That's 32 equivalent of those. Each and every day. And this is what enables burying/killing a wide ranging, unknowable number (60k-200k?) of humans, half of whom were children, by systematic aerial bombardment using 2000 lbs. unguided Mk. 84's into urban areas and terrestrial structural demolitions, forced concentration/ethnic cleansing, and engineered famine by siege. Not all Israelis and Americans are okay with this, but protesting so far hasn't made much difference.
> I don't think most people are really aware of the obscene costs of military conflicts.
Would those costs still be obscene if you were in a conflict where you’d want to use a significant number of them? Right now they’re expensive because they’re essentially just sitting around.
Speaking of Javelin missiles, mentioned upthread. In 2022, when the war in Ukraine erupted, the small stock of Javelins which the NATO countries were able to provide was spent in like first several months. After that, $300 drones carrying a $1000 armor-piercing round started to dominate the battlefield, leading to terrible losses in Russian armor, especially the newest and most expensive tanks. Similarly, having lost a number of advanced and expensive aircraft, and watching advanced and expensive cruise missiles mostly shot down during airstrikes, Russian forces turned to expendable drones imported from Iran (!) and expendable rockets imported from North Korea (!!).
In other terms, Protoss-type technology works well when you have a large advantage and need to deal a decisive blow; an example would be B-2s bombing the Iran nuclear facilities. But when you're in a protracted conflict against a capable adversary, Zerg-type technology, cheap, flimsy, and truly massively produced, seems to be indispensable.
No economy of scale. The cost to build one car is ~$100 million. The cost to build the second one is ~$20K. The only reason you can buy a car for $40K is because they build millions of them to spread the initial investment. The military buys missiles in units of 100s and there are no other buyers, so the cost per missile is massive.
Those contracts are put out for competitive bids. Profit margins for defense contractors aren't very high. The prices are driven by a combination of strict requirements, lack of economies of scale, and legal compliance with government mandated processes.
If the defense contractors figured they could get away with those costs, at higher volume? Hell, yes.
If the U.S. still had it's own (gov't-owned, gov't-operated) production facilities - as, historically, every A List nation has had - to provide honest competition? Hell, no.
Amusingly, a decent part of the cost is to produce parts in different congressional districts as bribes for the votes. It's not that the parts are really needed for national defense (because we'd want them built in the best place) but that they're needed for national defense funding approval.
Length of time from end of WWI (the war to end all wars, remember) to start of WWII (the next war) was 20 years and 9 months. To quote the late Tom Lehrer, “we taught them a lesson in 1918 and they’ve hardly bothered us since then”.
Length of time from the end of WWII (ending with two ideological opponents, victors who saw the fruits of victory, a ramped up industrial base focused on armaments and a devastated landscape of Europe and Asia to fight on) to WWIII is 79 years, 10 months and counting. No one reading this site has experienced a World War (and if you did, I’d like to shake your hand). Whatever keeps that counter ticking over have been, and are, dollars well-spent.
A bit like keeping your hand raised to keep elephants away from your US house (well, it’s worked so far). But the alternative is just…unacceptable.
another perspective is that WW1 hasn't ended, and ww2 was actually WW1. Even now, if you look at the Ukrainian conflict from an economic perspective, it's a continuation of the same conflicts of ww1
Not quite. WW1, and its continuation WW2, was a fight between Germanic states on one side vs. Britain and France on the other side. The fight ended (it really ended!!!) when two powerful outsiders (US and USSR) invaded and split the European continent.
What is happening now in the Ukraine is a result of a gross miscalculation without any grounding in reality (no, NATO was not going to attack Russia). The war in the Ukraine is not a leftover from WW2.
Tomahawk missiles have a ton of tech and software inside, can fly for 1000 miles, and are also basically a jobs program for Americans in many different states.
Our community has three large fire trucks, and one is sent out for every 911 call, even though the vast majority of calls are for medical emergencies, not something requiring a fire truck (which always arrives quickly, but a subsequent ambulance on call is what inevitably hauls a patient to the hospital). I've never understood why the fire department doesn't acquire and dispatch small vehicles for all those medical calls instead of a giant fire truck. Seems like that would help hold down costs.
Valid question, and I hear it all the time. Most of the time it's due to preparedness and staffing. By having those 4 people on a fully equipped engine, if something big (structure fire, vehicle extrication, rescue) happens, they can jump in and go with a vehicle full of tools. (provided the ambulance crew can take over).
Otherwise if they're in a car, they'd have to drive back through traffic to the station, move their gear to the new vehicle, and drive back to the scene. It can cost valuable time. Fire engines carry a surprisingly large amount of tools and equipment for a variety of purposes.
That being said, many larger departments are trying out "cars" (usually an SUV) with two people and a med bag to go to medical calls. While the engine/truck and crew stay at the station. This is fairly expensive with the new vehicle, equipment and extra staffing. However it is being done now with success in urban areas.
Fire and rescue appliances are a bit of a problematic thing to buy as they never go very far and are retired with low mileages.
In my Australian State, South Australia, this a huge contrast with police who buy new from the manufacturer, get a three or maybe five year service contract from the manufacturer and then sell them when the warranty expires and they've done around 100,000 km (60,000 miles). So no servicing worries and they get some tax benefits so it works for them.
Ambulances have less mileage and my guess is retire after 10 years. Ambulances are very standardised so can swap metro and country vehicles to get value from the asset. There was a "twin life" ambulance (http://www.old-ambulance.com/Twin-Life.htm) that had a long life rear bit on a light truck chassis so swap out the motor bit two or three times every 200,000kms, but these days vans are used. There was much sadness in the ambulance fleet buying community when Ford discontinued the F150 type chassis in Australia.
But your average (fire/rescue) appliance in the city or country has low mileage. In the city plenty of use but never have to drive far. In the country not much use but do drive further but end up the same a very old vehicle without much mileage on the clock. Trailers can be even older 50 or 60 years before retirement. Another issue with a fire appliance is they carry water which is heavy, three tonnes is a pretty common load. And have other readers have mentioned a monopoly on manufacture wouldn't help.
I have heard that the problem with ex-emergency services vehicles is they tend to have low distance on the odometer but drastically higher engine hours, particularly idle hours. That is, they may sit with the engine idling for hours at a time to maintain power to the lights, radios, and other vehicle systems, and are generally closer in wear and tear to a vehicle with several times the mileage.
Another problem I have heard of is that while the actual mileage may be low, the miles that are driven tend to be much "harder", in the sense that an emergency services vehicle may be accelerating and stopping rapidly, and generally being thrashed without regard for the vehicle, leading to increased wear on the engine and transmission.
It reminds me of the saying attributed to Jeremy Clarkson, about the fastest car in the world being a rental.
The real cost of the American fire truck is in the roads it forces to be extra wide. It’s those trucks that make it necessary to have oversized neighborhood streets. Most countries don’t need that.
In Europe, you’ll see small, peaceful neighborhoods where people naturally drive slower on narrower roads. More greenspace. Less asphalt. They have small fire trucks that can navigate those streets just fine.
There’s really no reason they need to be so massive. It's a choice.
These numbers for trucks paired with the 3+ year wait times are very real. It hits small communities the hard because they have a small tax base but still need a certain amount of trucks. You can only consolidate so much before you are to far to respond.
Another good point called out in the article are the floating costs. The manufactures do in fact increase the costs after the fact so not only do you need to order a truck years ahead of time with a budget you don’t have (borrow money) but then you have to cough up an indeterminate amount of money years later. A real sad time for first responders.
My two cents of info as mildly informed. I am a volunteer ff/emt.
My department is very well funded compared to the rest of our county. Compared to cities, it is laughably underfunded. We are 90 percent volunteer. We have zero paramedics, only EMTs (about 4).
An Engine not only has to run but has to pump. An engine may drive 3 miles but then run for 20 hours without moving but pumping water the entire time (using the transmission to do so). If the pump is not up to standards, FFs do not enter a building. No water, no entry. If the pump isn't compliant then it is not longer an "engine". Mileage is irrelevant. A low mileage engine (10k) might have a million other problems after 100k hours. Who fixes that in a volunteer department?
Ambulances are the same. The drive may be short but the engine never stops idling or charging the equipment on board. In the city the answer is always transport. If you have 1 ambulance and 6 hours round trip, you may stay on scene for a while to avoid a transport (assuming you don't risk the patient's life).
Most volunteer departments have 1-2 engines, and those are aging. If an engine goes out of service without a replacement, we stop responding.
This is not a city/rural problem. If you have ever taken a road trip, gone camping, visited relatives in "the country", then then you are relying on, and praying they have the equipment and staff to respond. Go outside the city for a rafting trip- swiftwater, rope rescue, EMS, traffic... all in the hands of volunteers with no resources.
Back to the article- we have one engine out of service. We can't buy 20x our tax revenue. Yes, everything has gone up in price. When EMS and Fire becomes unpurchaseable, there are (dire) consequences.
This is exactly it. I'm also a volunteer for a small town, in a department that is decently funded. We have had the same two engines since 2009. We just (within the last month) received a new engine. It became extremely difficult to provide the level of service the community expects, and come up with money for a new engine. It's a major struggle.
Also something most folks don't know: about 70% of the firefighters in the US are volunteers. If you're in a big city you'll have 4 paid folks on an engine (maybe 3 and 1 intern) but as soon as you venture out of the city you'll see more engines 100% staffed by volunteers. And if you don't know the difference that's a good thing!
Fire departments run on budgets that would also shock you (how low they are).
Thanks for the first hand feedback. It is helpful. When I read your post carefully ("laughably underfunded. We are 90 percent volunteer. We have zero paramedics"; "Who fixes that in a volunteer department?"), the first thing that crossed my mind is your tax revenue is just too low. You cannot have nice things with low taxes.
Another way to think about it: Are other highly developed nations seeing the same "crisis(es)" that you mention? (Think G-7 and close friends.) Hint: They do not.
It says that cost for a regular fire truck has increased from 300-500k to 1mil from 2010 to 2025. Considering house and car prices have doubled, we can chalk most of that up to purely inflation. Seems like another case of forgetting that inflation has been sky-high due to botched COVID response and what would be a good story in previous decades just, isn't.
The article makes it abundantly clear (down a ways from the top) that much of the cost increase is due to small companies being acquired by monopolists. E.g.
> Fast forward 60 years, and those businesses were contending with aging founders, depleted municipal budgets, and declining fire-truck orders. Sensing an opportunity, a private equity group called American Industrial Partners (AIP) began to roll up the industry.... the REV Group, now one of the three leading manufacturers of fire trucks in the U.S. REV captures about a third of the country’s $3B in annual fire truck sales ...
“About a third” doesn’t sound anywhere near a monopoly to me.
This is all demand-side inflation: For any number of better and worse reasons (mostly worse), as building codes have gotten stricter and fires have become rarer, municipal spending on fire departments has exploded. Well-funded fire departments buy more expensive trucks than they probably need, just like well-funded police departments buy military-class SWAT equipment they probably don’t need.
Monopoly is a misnomer, because it implies a single seller. In reality any market with a small number of incumbents will exhibit anti-competitive behavior, which is what people usually mean when they talk about monopolies and antitrust law. With a third of the market, a single company can effectively set prices based on desired margins, rather than having to compete on price.
Do you have evidence for your claim about well funded fire departments splurging on unneeded equipment? Police departments buy military surplus through federal programs that specifically encourage it [1]. It has nothing to do with how well funded they are, which is why you see that equipment show up even in smaller and poorer areas that don't have particularly well-funded police or the need for a Bradley fighting vehicle.
If there are two more companies just like that one, that's 3-thirds of the business, right?
Point is, what's to stop that from happening? In that business or any other, it's bad for many, good for a very few.
In one side-effect, the wait time for a new truck has reached up to 4 years. And the contracts are being written so that the cost can go up during that wait.
A third of the market isn’t a monopoly, but it is enough economy of scale to allow for reaping huge profits if competing against a long tail of smaller competitors.
The most popular new car is the RAV4, which starts at $29,500 today [1]. In 2010, a new RAV4 retailed for $21,675 [2]. Dealers were more flexible with haggling back then, but at best, that's still only a 50% increase.
This is a great stat. I asked Google what is the annualised inflation rate: It says 2.77%. That is still amazingly low. A lot has happened in those years -- quantitative easing plus COVID-19. Both were once-in-a-lifetime, enormous economic events.
That's not a great comparison due to the difference volume can make on your fixed costs. Even taking a work trim Silverado isn't great, but even from 2017 until now it's almost doubled ($27k to $44k). I'd assume it would be even worse for a low volume vehicle like a fire truck.
Following from my other post above, it is only 2.77% inflation per year. Do you really think people haven't seen pay rises of at least 2.77% per year in those 15 years? It seems hard to believe.
Standard low rate production effects. Equipment like fire trucks are full of weird, low volume things made by a few, or only one shop somewhere, built exclusively to order, with long lead times. A fire truck is simultaneously a mobile power station, a mobile high pressure water pump, a mobile communications base station, and a high performance all-terrain, all-weather vehicle. It has to do all of that without killing any firemen, so there are very high liability costs factored in. Also, every major department has a collection of hang-ups about how a fire truck is supposed to function and what it's compatible with, so there is no way to scale production.
The consolidation of suppliers for all of this is also a contributor to cost and delivery time. That problem is endemic throughout Western economies.
Many of the MAN trucks in Europe are fitted out by a supplier like Rosenbauer (mentioned in the article) who pair a standard truck chassis (MAN, Scania, Mercedes, etc) with a modular equipment layout. You'll know their iconic Panther trucks which are used at many US and Canadian airports.
The cost quickly adds up once you start adding features, and they have a lot to choose from.
We have strict regulations and standards set by the NFPA, EPA, and DOT for fire trucks. Would need to make significant modifications for it to meet standards.
Is this really any different to pre-covid, I could negotiate $3k off a Toyota Sienna minivan and have my pick of color tomorrow and now there is a several month to a year waiting list and I have to pay $5k to 10k over MSRP and MSRP is up 20% since 2019?
I paid MSRP but had to go to a dealer further away. The nearest one had several thousands in markup. It magically evaporated when they found out where I was going, but trust had been lost.
By the way the owners of AIP also happen to mostly be suppliers of materials for building these vehicles. They have a double incentive to abuse their monopoly position.
Comparable vehicles cost ~500k Euro (~600k USD) in Germany for instance. Update regulations to allow imported vehicles, get popcorn, and laugh as they wail and cry foul play.
> Comparable vehicles cost ~500k Euro (~600k USD) in Germany for instance. Update regulations to allow imported vehicles, get popcorn, and laugh as they wail and cry foul play.
Some luxury wake board boats cost $500k. They might get used twice a month, destroy shore lines, pollute the environment and are designed strictly for leisure. They won’t save anyone, or eliminate an enemy.
It’s likely regulation is a too-high barrier of entry for foreign products, and it’s also likely regulation was steered by lobbying from the currently dominant vendor.
Capitalism that has defects introduced via regulation is sort of like Communism that has defects introduced by authoritarians: the actual version that gets implemented.
Sensing an opportunity, a private equity group called American Industrial Partners (AIP) began to roll up the industry.
> As usual, things are the way they are because of unregulated capitalism and private equity being allowed to do whatever they hell they want.
This is exactly what happened - and why. Capitalism is a healthy system where it is a healthy system. Beyond that, capitalism is either: Beneficial thru flexible, effective governance. Or not beneficial. That's every possibility.
Exploitive manipulation of the firetruck market lies outside of the healthy-by-default area of capitalism.
I don’t get why municipal investment isn’t more of a thing - why can’t cities and counties be their own PE, buy a small fire truck company and turn it into a non-profit? If they captured the surplus that’s going to the PE company surely costs would be cheaper?
I guess that’s socialism though, so not gonna happen.
Why don't towns buy the Chinese trucks? Why doesn't a new entrant start making cheaper firetrucks? I really don't know what a firetruck "should" cost but $2M seems reasonable to me for a specialized, low-volume, high-performance, American-built industrial vehicle.
As a consumer (even a corporate or government consumer), you have to watch out for this in a capitalist system. My ex's family asked me to take my son to this specific water park this weekend. When I went to buy the tickets this morning, it was going to be $250 to go to the swimming pool! I live in Austin, TX and we have the coolest pool in the world and it's $5 ($8 or something like that if I take my son).
Businesses will try and trick people into thinking $250 is an acceptable price to charge to visit a swimming pool. They'll do the same shit with firetrucks if nobody is paying attention.
Excellent article, and great to see someone pointing this out. Prices will climb out of control if people are suckers and believe the lie of "you get what you pay for." It's more like businesses will keep ratcheting up prices indefinitely as long as there are suckers around who are easily parted with their money.
Extended rant... my ex once wanted to pay $500 for a f*cking vacuum cleaner. People are stupid. Had we listened to Henry Ford they'd still be making some version of the Model T and you could buy a new car for $6,008.85 (inflation adjusted price of a Model T).
My $350 Soniclean is way more than 3x better a shitty $100 vacuum from Target. (Also seems better than everything they sell, including for a lot more...)
When it's companies preying on impulse buying, brands, trends, temporary demand spikes like a popular water park on a popular weekend then it's understandable to see people paying more than they "should" have (according to one's own high and mighty objective standards), and perhaps blame "capitalism" or believe there should be some regulation to protect consumers. Sure.
But when it is government bureaucrats spending public money procuring multi million dollar equipment, the problem is more likely to be government corruption or at best incompetence.
> It's more like businesses will keep ratcheting up prices indefinitely as long as there are suckers around who are easily parted with their money.
Who wouldn’t? Aren’t people usually proud of minimizing their work to pay ratio, whether it’s earning more and more to sit at a desk and browse HN or selling a firetruck for a new high price.
Government almost always seems to overpay for everything. It's a racket to benefit big finance.
The idea that everything is so complex that only a small number of suppliers are capable of building any machine is preposterous.
I bet you with a budget of $50 million, I could design and build a Firetruck from scratch as well as the entire production line and I could produce each subsequent truck for $200k max, made in America. I could probably have the whole thing almost fully automated with robots in 5 years with a bit of additional funding.
And I know nothing about mechanical or electrical engineering. I just know I could do it. I would find the right people. There doesn't need to be that many components to bloat up the cost/complexity to $2 million, that's ridiculous. I'm no Elon Musk. I just think many people with a little bit of brain could do it if given the opportunity.
The problem is lack of opportunity. I will not be given this opportunity because it works against established financial interests. The economy is a zero-sum game, that's a fact. Everybody knows this because nobody would even give me the opportunity to prove it even though $50 million would be chump change for big finance.
Why would anyone fund a venture which involves work and risk, when they can already extract the same nominal profits without any additional risk or work? Nobody is thinking about 'real value'; everyone is chasing nominal gains in a race to the bottom; whipping up the entire economy into a giant souffle full of air.
Caring about nominal gains is like caring only about volume and ignoring the weight... If the economy was a cooking competition, everyone would end up baking souffle, chocolate mousse and meringue. Nobody would be baking pound cake.
What's really wild is $2M is around the cost of a single Tomahawk cruise missile, Patriot missiles can cost almost double that. The Excalibur GPS guided round costs roughly as much as a nice Mercedes and during a conflict hundreds or thousands can be fired.
I came to this realization when learning about someone driving a car into a building to do damage and thinking "wow, that's an expensive round", then looking it up and realizing, it's not actually that expensive compared to how much military projectiles really do cost.
I've found it somewhat interesting that we'll be shocked at a fire truck, which gets a life time of 15-25 years and works in the service exclusively of saving lives, costs around $2 million, but not be shocked that we effectively use something as expensive as a fire truck as a single round in a gigantic gun.
Not to say that fire trucks don't potentially cost too much, nor that military weapons aren't worth it. More that I don't think most people are really aware of the obscene costs of military conflicts.
It’s daunting to think that all your lifetime contributions to the IRS might be spent launching one or two Javeline missiles in the Middle East.
It’ll be worth denying all those local citizens healthcare just so that some people far away can be blown up.
The federal government alone spends $1.9 trillion annually on healthcare. That's enough to buy almost a million Tomahawk missiles every year. The total production will be around 9,000 missiles over 46 years, or less than 200 per year. We do not meaningfully choose between paying for healthcare domestically and blowing up foreigners. Even overthrowing Iraq's government and trying to make it a democracy only cost about $2.4 trillion over 10 years.
It would buy a lot more than 1 million. The reason they cost so much is because they only build 200 of them a year.
That’s the story anyway. They’ll be paid either as Cost Plus or on a Firm Fixed Price. Neither of which incentivize the supplier to give the USG a better deal.
So you could have increased the healthcare spend by 12% for 10 years if you didn't overthrow Iraq's government?
Uh I think you're missing the point.
Your numbers are a mess and jump wildly between scales.
wow, that nice of you to invade foreign country and you must be doing it out kindness right???? WWWWRRROONNNGGG
US government literally get the IRAQY oil, stop acting like you get to have moral high ground, literally almost 50% people in earth hate US interventionist
The U.S. didn't even get the oil! The Chinese got the oil. The whole thing was because George W. Bush's heart was bigger than his brain: he thought the U.S. could create a functioning democracy from the Iraqi population.
Tbh, there's a non zero chance it would've been successful if not for insane policies like de baathification.
Iraq's current government is still siginficantly better than Saddam's regime, depsite being currupt and somewhat dysfunctional (and things have improved over the years in case you dig up an article from a decade ago about ISIS).
how tf chinnese got the oil, it didnt make sense
US literally controlling the baghdad directly, they just force puppet government to lease the oil field
The US, by all evidence, spends more on its non-universal, gap-prone, healthcare system than any reasonable (single-payer, government-provided, or mostly private insurance with universal guarantee) universal healthcare system would cost; the US spends ludicrously more than any other country per capita, and much more than most universal systems on a per GDP basis (heck, the government side of the US system alone costs a greater share of GDP than some universal systems, and more per capita than basically any of them, even without counting the larger private side.)
The US doesn't deny local citizens healthcare so that some people far away can be blown up. If anything, it limits its ability to blow people up far away with all the extra money it is spending locally to prevent people from getting healthcare.
But the US has lots of money, so it still finds quite a bit for blowing people up far away.
There's apparently at one least cruise missile variant that basically mounts a sword on the warhead with a thin fairing. It's apparently used for killing a single target
You're thinking of the AGM-114R-9X "Flying Ginsu", which is a variant of the short-range AGM-114 Hellfire anti-tank missile. It's not a cruise missile.
This one: https://youtu.be/weJKPcOHI0U?si=BOoGqYrixa3Bulfq
Blowing up is so 2020s. These days you starve them to death like it's the 1940s.
Healthcare spend, not including state and local governments, is many multiples of military spend:
https://fiscaldata.treasury.gov/americas-finance-guide/feder...
With the amount of money printing going on, it is really insincere for them to create that false dichotomy anyway. It was never about which one out of the two we could afford.
The federal bank performed quantitative easing between 2008 and 2014 as well, during the last economic crisis, but no one complained about "money printing" then. Inflation over the last few years has been a largely global phenomenon, which most economists attribute to supply chain disruptions, increased demand, and rising energy costs.
The "supply chain disruptions" explanation was always complete garbage. When there's a supply chain disruption, the price goes up and then comes back down when the disruption ends. It's very easy to see that the money supply barely increased from 2008-2014 and jumped massively during covid. https://fred.stlouisfed.org/series/WM2NS
RIP Ron Paul Revolution.
https://tenor.com/view/excited-ronpaul-itshappening-lights-g...
I now think that we've been lied to big time: One thing Covid was good for was to provide a cover story for massive inflation that was likely coming no matter what. I'm not saying it was released for that reason (and yes, I do think it was deliberately released) but governments worldwide certainly took full advantage of the chaos and uncertainty to pull off all kinds of devious projects that they had on the back burner. Look at how effective Covid was at ending the democracy movement in Hong Kong, for example. Massive overhang of inflation? No problem!
Those QE periods were minuscule in how much they printed compared to this last phase we have entered. The rise in M2 money supply is out of this world.
How many more turns do we get before the dollar is Weimar worthless? Seems like not many...
Fortunately there are hundreds of millions of other people also paying taxes, so the Middle East can be sufficiently showered in javelin missiles.
Reminds me of this quote
“ Each Javelin round costs $80,000, and the idea that it's fired by a guy who doesn't make that in a year at a guy who doesn't make that in a lifetime is somehow so outrageous it almost makes the war seem winnable.”
Yes, but think about how much money ends up in the pockets of private contractors, and how much suffering it causes. Don't you feel better?
It's in part because the military doesn't buy stuff from China.
The companies that make the parts for those missiles (not just the mega corp whose badge is on it) are likely only in business because they make the parts for it, and employ 20-200 people with decent pay and full benefits in Corn County, Midwest to do it.
On the surface it looks like enormous waste, it still might be, but understand that the defense budget is primarily a jobs program and basically only thing propping up Americans manufacturing.
This is why it never gets cut, but anyone red or blue. It employs way to many people and in way to many places without much good work. Republicans especially hate welfare, but if you can get people to show up and turn screws, they'll happily "waste" money on them.
They also arbitrarily reduce numbers and raise unit costs by regulations because weapons bad, though they are dropped asymmetrically on living people anyway. The US isn't incentivizing weapons correctly for them to improve in cost performance.
I mean, there is also the strategic benefit of not having your capacity to wage war in the stranglehold of a potential adversary. Not to say that politicians won't vote for graft that helps their districts, but there is a legitimate argument for employing only Americans in wartime industries.
But yes, that's a big source of the expense. Even on the IT side of things, the government (especially the military) pays sometimes up to 50% more for FedRAMP versions of SaaS products that have their servers based in the US and which are only administered by US citizens.
I mean it definitely has to be monumental waste. Look at the cost of launching rockets prior to SpaceX versus the cost now which is really a pittance by comparison.
Not that I want to see anybody build bombs
If you are going to blow something up, using these GPS guided smart missiles is actually much cheaper than previous generations of explosive ordinances.
1. You can only use one missile to hit a target. In pre-gps era we would would dozens or hundreds of rounds to ensure one of them destroys the target.
2. You can fire from a safe distance. Using artillery or dropping bombs from an airplane involves physically getting closer to the target. This introduces much more complexity that adds to the overall cost.
3. There is significantly less collateral damage when using a single missile for a target compared to bombing the general direction of the target.
4. We take significantly less risk of casualties when using these missiles.
Except that because of all those things, the government is more likely to use it so the "it's cheaper!" argument doesn't hold water.
The comparison is not between "do it without smart bombs and drones" vs "do it with smart bombs and drones" and the former costing more.
The comparison is between "if we didn't have the smart bombs and drones, we wouldn't have done anything because whatever it was wouldn't have been worth the cost in money and American lives" versus "we spent a million dollars blowing up some stuff because we could do it on the cheap and with no risk."
On a broader scale the US's involvemnt in the foreign affairs of other nations skyrocketed when we went from having volunteer armed forces to a "professional" armed forces. Ike predicted as much in his rant about the military-industrial complex.
We're shocked they cost $2 million dollars because until recently they didn't, and it's not because of inflation, it's because private equity has bought up most of the industry, consolidated it, and jacked up prices.
> Not to say that fire trucks don't potentially cost too much
The only place in the entire world where fire trucks cost that much is North America, and it’s not because there’s anything inherently special about trucks made there.
> I've found it somewhat interesting that we'll be shocked at a fire truck, which gets a life time of 15-25 years and works in the service exclusively of saving lives, costs around $2 million, but not be shocked that we effectively use something as expensive as a fire truck as a single round in a gigantic gun.
Isn't military spending and the corruption of the government military industrial complex one of the oldest gripes in the American public forum? People sure are outraged about it, or were[1] -- has that become passe now?
[1] "The cost of one modern heavy bomber is this: a modern brick school in more than 30 cities. It is two electric power plants, each serving a town of 60,000 population. It is two fine, fully equipped hospitals. It is some fifty miles of concrete pavement." -- Eisenhower 1953
It didn't really take off until WW2--Eisenhower warned us of the military-industrial complex in his last days in office, but chickened out of of military-industrial-congressional complex at the last minute apparently.
There was no real standing Army until WW2 since it's against the Constitution. That's why the Marines (part of the Navy) were all over the place supporting US business interests, but not draining the public purse too heavily (look up Smedly Butler for a good read)
> There was no real standing Army until WW2 since it's against the Constitution.
This isn’t true. Firstly it isn’t against the Constitution to maintain a standing Army. What the Constitution says in Article I, Section 8, Clause 12 is “The Congress shall have Power To ...raise and support Armies, but no Appropriation of Money to that Use shall be for a longer Term than two Years...”
The people drafting the Constitution knew that a standing army could be abused by a tyrant, but having served in the Continental Army also knew how vital a standing Army was to maintain peace. That’s why they designed it so Congress controls the purse strings and authorises military spending only for 2 years at a time. The executive may give the orders, but there’s a time limit on the Army he can give orders to.
And the second part - the US has had a standing Army since 1796. You remember Robert E Lee resigning from the Army to join the Confederacy? If there was no standing Army, what did he resign from?
But even leaving aside these two historical facts, think about it logically. Throughout history military advantage has always been with the better trained, more experienced troops. Even if you rely on conscripts in a war, they need to be trained and led by professionals. Saying a standing army shouldn’t exist is like firing all your developers and saying you’ll start hiring when you get a few bug reports in.
Look up Smedly Butler for a great read!!!
I think if Ike was shown that the military industrial complex had prevented the occurrence of WWIII for nearly 80 years while maintaining economic growth and quality of life for US citizens, he would have withdrawn his reservations. He, above all, knew the alternatives.
$24 billion in American taxpayer money went to Israel in 2024, or about $65M/day. That's 32 equivalent of those. Each and every day. And this is what enables burying/killing a wide ranging, unknowable number (60k-200k?) of humans, half of whom were children, by systematic aerial bombardment using 2000 lbs. unguided Mk. 84's into urban areas and terrestrial structural demolitions, forced concentration/ethnic cleansing, and engineered famine by siege. Not all Israelis and Americans are okay with this, but protesting so far hasn't made much difference.
> I don't think most people are really aware of the obscene costs of military conflicts.
Would those costs still be obscene if you were in a conflict where you’d want to use a significant number of them? Right now they’re expensive because they’re essentially just sitting around.
Speaking of Javelin missiles, mentioned upthread. In 2022, when the war in Ukraine erupted, the small stock of Javelins which the NATO countries were able to provide was spent in like first several months. After that, $300 drones carrying a $1000 armor-piercing round started to dominate the battlefield, leading to terrible losses in Russian armor, especially the newest and most expensive tanks. Similarly, having lost a number of advanced and expensive aircraft, and watching advanced and expensive cruise missiles mostly shot down during airstrikes, Russian forces turned to expendable drones imported from Iran (!) and expendable rockets imported from North Korea (!!).
In other terms, Protoss-type technology works well when you have a large advantage and need to deal a decisive blow; an example would be B-2s bombing the Iran nuclear facilities. But when you're in a protracted conflict against a capable adversary, Zerg-type technology, cheap, flimsy, and truly massively produced, seems to be indispensable.
“ Right now they’re expensive because they’re essentially just sitting around.”
Why do you think that’s the reason for these high prices rather than, say, lack of competition?
No economy of scale. The cost to build one car is ~$100 million. The cost to build the second one is ~$20K. The only reason you can buy a car for $40K is because they build millions of them to spread the initial investment. The military buys missiles in units of 100s and there are no other buyers, so the cost per missile is massive.
Those contracts are put out for competitive bids. Profit margins for defense contractors aren't very high. The prices are driven by a combination of strict requirements, lack of economies of scale, and legal compliance with government mandated processes.
Why, yes, competition has been stifled like 30 years ago, because the US was dominating the world anyway, or so the administration was thinking: https://en.wikipedia.org/wiki/Last_Supper_(defense_industry)
If the defense contractors figured they could get away with those costs, at higher volume? Hell, yes.
If the U.S. still had it's own (gov't-owned, gov't-operated) production facilities - as, historically, every A List nation has had - to provide honest competition? Hell, no.
History: The not-even-yet-the-U.S.A. set up the https://en.wikipedia.org/wiki/Springfield_Armory in 1777, to manufacture military ammumition. And the https://en.wikipedia.org/wiki/Washington_Naval_Yard in 1799.
We are also running quite low on various types of interceptors, some of which will be very slow to replace.
https://archive.ph/74N1x
Military weapons cost what they do because of the requirements. Could costs come down? Sure; Ill be the first to assume we need disruption.
https://www.ycombinator.com/launches/Ler-ares-industries-bui...
Indeed.
When it comes to government work, the biggest cost savings always come from questioning the necessity of requirements.
People point the fingers at defence contractors, but their net margins are typically only around 10%.
Amusingly, a decent part of the cost is to produce parts in different congressional districts as bribes for the votes. It's not that the parts are really needed for national defense (because we'd want them built in the best place) but that they're needed for national defense funding approval.
When you assume you make an ass out of you and… formerly the worlds only remaining super power.
Length of time from end of WWI (the war to end all wars, remember) to start of WWII (the next war) was 20 years and 9 months. To quote the late Tom Lehrer, “we taught them a lesson in 1918 and they’ve hardly bothered us since then”.
Length of time from the end of WWII (ending with two ideological opponents, victors who saw the fruits of victory, a ramped up industrial base focused on armaments and a devastated landscape of Europe and Asia to fight on) to WWIII is 79 years, 10 months and counting. No one reading this site has experienced a World War (and if you did, I’d like to shake your hand). Whatever keeps that counter ticking over have been, and are, dollars well-spent.
A bit like keeping your hand raised to keep elephants away from your US house (well, it’s worked so far). But the alternative is just…unacceptable.
"Once all the Germans were warlike and mean,
But that couldn't happen again.
We taught them a lesson in 1918,
And they've hardly bothered us since then."
another perspective is that WW1 hasn't ended, and ww2 was actually WW1. Even now, if you look at the Ukrainian conflict from an economic perspective, it's a continuation of the same conflicts of ww1
Not quite. WW1, and its continuation WW2, was a fight between Germanic states on one side vs. Britain and France on the other side. The fight ended (it really ended!!!) when two powerful outsiders (US and USSR) invaded and split the European continent.
What is happening now in the Ukraine is a result of a gross miscalculation without any grounding in reality (no, NATO was not going to attack Russia). The war in the Ukraine is not a leftover from WW2.
Tomahawk missiles have a ton of tech and software inside, can fly for 1000 miles, and are also basically a jobs program for Americans in many different states.
[dead]
Our community has three large fire trucks, and one is sent out for every 911 call, even though the vast majority of calls are for medical emergencies, not something requiring a fire truck (which always arrives quickly, but a subsequent ambulance on call is what inevitably hauls a patient to the hospital). I've never understood why the fire department doesn't acquire and dispatch small vehicles for all those medical calls instead of a giant fire truck. Seems like that would help hold down costs.
Valid question, and I hear it all the time. Most of the time it's due to preparedness and staffing. By having those 4 people on a fully equipped engine, if something big (structure fire, vehicle extrication, rescue) happens, they can jump in and go with a vehicle full of tools. (provided the ambulance crew can take over).
Otherwise if they're in a car, they'd have to drive back through traffic to the station, move their gear to the new vehicle, and drive back to the scene. It can cost valuable time. Fire engines carry a surprisingly large amount of tools and equipment for a variety of purposes.
That being said, many larger departments are trying out "cars" (usually an SUV) with two people and a med bag to go to medical calls. While the engine/truck and crew stay at the station. This is fairly expensive with the new vehicle, equipment and extra staffing. However it is being done now with success in urban areas.
but the ambulance crew already has a paramedic, so why do they also need one from the fire department?
The fire truck goes because it has a paramedic.
It needs a paramedic because fire fighters often need paramedics.
So if the small vehicle has a paramedic, you still need one for the big truck.
And if you have another vehicle, you need a bigger apparatus bay at the station and more beds and more staff times three shifts.
Finally, when the 911 call comes in there is not time to triage. The system is optimized for response time because people might die.
I assumed it's so it gets used, otherwise it would just sit there and might not work when needed
> Seems like that would help hold down costs.
That's not a goal.
Fire and rescue appliances are a bit of a problematic thing to buy as they never go very far and are retired with low mileages.
In my Australian State, South Australia, this a huge contrast with police who buy new from the manufacturer, get a three or maybe five year service contract from the manufacturer and then sell them when the warranty expires and they've done around 100,000 km (60,000 miles). So no servicing worries and they get some tax benefits so it works for them.
Ambulances have less mileage and my guess is retire after 10 years. Ambulances are very standardised so can swap metro and country vehicles to get value from the asset. There was a "twin life" ambulance (http://www.old-ambulance.com/Twin-Life.htm) that had a long life rear bit on a light truck chassis so swap out the motor bit two or three times every 200,000kms, but these days vans are used. There was much sadness in the ambulance fleet buying community when Ford discontinued the F150 type chassis in Australia.
But your average (fire/rescue) appliance in the city or country has low mileage. In the city plenty of use but never have to drive far. In the country not much use but do drive further but end up the same a very old vehicle without much mileage on the clock. Trailers can be even older 50 or 60 years before retirement. Another issue with a fire appliance is they carry water which is heavy, three tonnes is a pretty common load. And have other readers have mentioned a monopoly on manufacture wouldn't help.
I have heard that the problem with ex-emergency services vehicles is they tend to have low distance on the odometer but drastically higher engine hours, particularly idle hours. That is, they may sit with the engine idling for hours at a time to maintain power to the lights, radios, and other vehicle systems, and are generally closer in wear and tear to a vehicle with several times the mileage.
Another problem I have heard of is that while the actual mileage may be low, the miles that are driven tend to be much "harder", in the sense that an emergency services vehicle may be accelerating and stopping rapidly, and generally being thrashed without regard for the vehicle, leading to increased wear on the engine and transmission.
It reminds me of the saying attributed to Jeremy Clarkson, about the fastest car in the world being a rental.
Here’s a good video with overlap on the reasons causing this, with current cost comparisons for Chinese made fire trucks https://www.youtube.com/watch?v=78nZ-JJNmzQ
even at 100% tarriffs US is still not competitive.
The real cost of the American fire truck is in the roads it forces to be extra wide. It’s those trucks that make it necessary to have oversized neighborhood streets. Most countries don’t need that.
In Europe, you’ll see small, peaceful neighborhoods where people naturally drive slower on narrower roads. More greenspace. Less asphalt. They have small fire trucks that can navigate those streets just fine.
There’s really no reason they need to be so massive. It's a choice.
That works a lot better in Europe because realistically it's a lot smaller. America is absolutely gigantic
I'm not sure I understand your point. Just because the country is large doesn't necessarily mean that you need larger fire trucks?
(Or that America needs a one size fits all approach to fire trucks - things that work well in cities may not work well in rural areas)
What does the size of the country have to do with the size of firetrucks?
These numbers for trucks paired with the 3+ year wait times are very real. It hits small communities the hard because they have a small tax base but still need a certain amount of trucks. You can only consolidate so much before you are to far to respond.
Another good point called out in the article are the floating costs. The manufactures do in fact increase the costs after the fact so not only do you need to order a truck years ahead of time with a budget you don’t have (borrow money) but then you have to cough up an indeterminate amount of money years later. A real sad time for first responders.
My two cents of info as mildly informed. I am a volunteer ff/emt.
My department is very well funded compared to the rest of our county. Compared to cities, it is laughably underfunded. We are 90 percent volunteer. We have zero paramedics, only EMTs (about 4).
An Engine not only has to run but has to pump. An engine may drive 3 miles but then run for 20 hours without moving but pumping water the entire time (using the transmission to do so). If the pump is not up to standards, FFs do not enter a building. No water, no entry. If the pump isn't compliant then it is not longer an "engine". Mileage is irrelevant. A low mileage engine (10k) might have a million other problems after 100k hours. Who fixes that in a volunteer department?
Ambulances are the same. The drive may be short but the engine never stops idling or charging the equipment on board. In the city the answer is always transport. If you have 1 ambulance and 6 hours round trip, you may stay on scene for a while to avoid a transport (assuming you don't risk the patient's life).
Most volunteer departments have 1-2 engines, and those are aging. If an engine goes out of service without a replacement, we stop responding.
This is not a city/rural problem. If you have ever taken a road trip, gone camping, visited relatives in "the country", then then you are relying on, and praying they have the equipment and staff to respond. Go outside the city for a rafting trip- swiftwater, rope rescue, EMS, traffic... all in the hands of volunteers with no resources.
Back to the article- we have one engine out of service. We can't buy 20x our tax revenue. Yes, everything has gone up in price. When EMS and Fire becomes unpurchaseable, there are (dire) consequences.
This is exactly it. I'm also a volunteer for a small town, in a department that is decently funded. We have had the same two engines since 2009. We just (within the last month) received a new engine. It became extremely difficult to provide the level of service the community expects, and come up with money for a new engine. It's a major struggle.
Also something most folks don't know: about 70% of the firefighters in the US are volunteers. If you're in a big city you'll have 4 paid folks on an engine (maybe 3 and 1 intern) but as soon as you venture out of the city you'll see more engines 100% staffed by volunteers. And if you don't know the difference that's a good thing!
Fire departments run on budgets that would also shock you (how low they are).
> It became extremely difficult to provide the level of service the community expects, and come up with money for a new engine.
It's too bad the only possible way to pump water is with a $2M specialty truck. Let's just raise taxes.
Thanks for the first hand feedback. It is helpful. When I read your post carefully ("laughably underfunded. We are 90 percent volunteer. We have zero paramedics"; "Who fixes that in a volunteer department?"), the first thing that crossed my mind is your tax revenue is just too low. You cannot have nice things with low taxes.
Another way to think about it: Are other highly developed nations seeing the same "crisis(es)" that you mention? (Think G-7 and close friends.) Hint: They do not.
I would think it’s more about economy of scale. If you tried to build a car without any of the standard parts being available, it would be expensive.
That explains why they're expensive, but not why they're more expensive than they were before.
It says that cost for a regular fire truck has increased from 300-500k to 1mil from 2010 to 2025. Considering house and car prices have doubled, we can chalk most of that up to purely inflation. Seems like another case of forgetting that inflation has been sky-high due to botched COVID response and what would be a good story in previous decades just, isn't.
The article makes it abundantly clear (down a ways from the top) that much of the cost increase is due to small companies being acquired by monopolists. E.g.
> Fast forward 60 years, and those businesses were contending with aging founders, depleted municipal budgets, and declining fire-truck orders. Sensing an opportunity, a private equity group called American Industrial Partners (AIP) began to roll up the industry.... the REV Group, now one of the three leading manufacturers of fire trucks in the U.S. REV captures about a third of the country’s $3B in annual fire truck sales ...
“About a third” doesn’t sound anywhere near a monopoly to me.
This is all demand-side inflation: For any number of better and worse reasons (mostly worse), as building codes have gotten stricter and fires have become rarer, municipal spending on fire departments has exploded. Well-funded fire departments buy more expensive trucks than they probably need, just like well-funded police departments buy military-class SWAT equipment they probably don’t need.
Monopoly is a misnomer, because it implies a single seller. In reality any market with a small number of incumbents will exhibit anti-competitive behavior, which is what people usually mean when they talk about monopolies and antitrust law. With a third of the market, a single company can effectively set prices based on desired margins, rather than having to compete on price.
Do you have evidence for your claim about well funded fire departments splurging on unneeded equipment? Police departments buy military surplus through federal programs that specifically encourage it [1]. It has nothing to do with how well funded they are, which is why you see that equipment show up even in smaller and poorer areas that don't have particularly well-funded police or the need for a Bradley fighting vehicle.
[1] https://www.marketplace.org/story/2020/06/12/police-departme...
If there are two more companies just like that one, that's 3-thirds of the business, right?
Point is, what's to stop that from happening? In that business or any other, it's bad for many, good for a very few.
In one side-effect, the wait time for a new truck has reached up to 4 years. And the contracts are being written so that the cost can go up during that wait.
A third of the market isn’t a monopoly, but it is enough economy of scale to allow for reaping huge profits if competing against a long tail of smaller competitors.
That's an HHI of 1089 at best. Pretty high, indicating consolidation is a big deal.
The most popular new car is the RAV4, which starts at $29,500 today [1]. In 2010, a new RAV4 retailed for $21,675 [2]. Dealers were more flexible with haggling back then, but at best, that's still only a 50% increase.
[1] https://www.toyota.com/rav4/
[2] https://www.motortrend.com/cars/toyota/rav4/2010
This is a great stat. I asked Google what is the annualised inflation rate: It says 2.77%. That is still amazingly low. A lot has happened in those years -- quantitative easing plus COVID-19. Both were once-in-a-lifetime, enormous economic events.
That's not a great comparison due to the difference volume can make on your fixed costs. Even taking a work trim Silverado isn't great, but even from 2017 until now it's almost doubled ($27k to $44k). I'd assume it would be even worse for a low volume vehicle like a fire truck.
How many people’s salary went up 50% in the same timeframe?
Most of them?
Following from my other post above, it is only 2.77% inflation per year. Do you really think people haven't seen pay rises of at least 2.77% per year in those 15 years? It seems hard to believe.
That doesn’t explain the other half of the story which is that it takes 4-5 years to get one.
Standard low rate production effects. Equipment like fire trucks are full of weird, low volume things made by a few, or only one shop somewhere, built exclusively to order, with long lead times. A fire truck is simultaneously a mobile power station, a mobile high pressure water pump, a mobile communications base station, and a high performance all-terrain, all-weather vehicle. It has to do all of that without killing any firemen, so there are very high liability costs factored in. Also, every major department has a collection of hang-ups about how a fire truck is supposed to function and what it's compatible with, so there is no way to scale production.
The consolidation of suppliers for all of this is also a contributor to cost and delivery time. That problem is endemic throughout Western economies.
House prices are not typically a part of inflation.
So why not M A N fire trucks? Those are widely used in the European Union, and are considered good quality.
Many of the MAN trucks in Europe are fitted out by a supplier like Rosenbauer (mentioned in the article) who pair a standard truck chassis (MAN, Scania, Mercedes, etc) with a modular equipment layout. You'll know their iconic Panther trucks which are used at many US and Canadian airports.
The cost quickly adds up once you start adding features, and they have a lot to choose from.
https://www.rosenbauer.com/en/au/rosenbauer-world/vehicles/m...
We have strict regulations and standards set by the NFPA, EPA, and DOT for fire trucks. Would need to make significant modifications for it to meet standards.
Well there's the problem. One of the same problems we have with housing. Overly complicated regulation forcing custom builds.
Is this really any different to pre-covid, I could negotiate $3k off a Toyota Sienna minivan and have my pick of color tomorrow and now there is a several month to a year waiting list and I have to pay $5k to 10k over MSRP and MSRP is up 20% since 2019?
You should never pay over MSRP.
You can get Siennas for $1-2k under MSRP. Shop around.
Where?
I paid MSRP but had to go to a dealer further away. The nearest one had several thousands in markup. It magically evaporated when they found out where I was going, but trust had been lost.
If nothing else, check out fb groups. There's a toyotas at msrp group where dealers willing to work with long distance buyers post.
Pre-sales tax + tag, or post?
That seems crazy lol, why do siennas have a wait list? Is there really that much demand for a minivan? Or is it a supply thing?
By the way the owners of AIP also happen to mostly be suppliers of materials for building these vehicles. They have a double incentive to abuse their monopoly position.
Comparable vehicles cost ~500k Euro (~600k USD) in Germany for instance. Update regulations to allow imported vehicles, get popcorn, and laugh as they wail and cry foul play.
The article says this company has one third of the market. This is not a monopoly.
> Comparable vehicles cost ~500k Euro (~600k USD) in Germany for instance. Update regulations to allow imported vehicles, get popcorn, and laugh as they wail and cry foul play.
And immediately get 100% tarrifs :)
Double 600k is still less than 2m. Might still be a viable tactic to bring down the current prices.
Are there any industries where private equity has come in and resulted in better, less expensive, or faster advances in their industry sector?
Firefighters want massive trucks they don’t need and push a bunch of regulation that makes everything worse. It’s not a big surprise.
Some luxury wake board boats cost $500k. They might get used twice a month, destroy shore lines, pollute the environment and are designed strictly for leisure. They won’t save anyone, or eliminate an enemy.
You can find old ones ( said to be in running order ) for around 5k on Facebook Marketplace. That’s some depreciation curve!
The reason appears about 1/4 of the way into the article, and it should be familiar by now:
> Sensing an opportunity, a private equity group called American Industrial Partners (AIP) began to roll up the industry.
As usual, things are the way they are because of unchecked capitalism and private equity being allowed to do whatever they hell they want.
What stops imports?
One point is that the US fire services seem to like really massive trucks, but fire trucks overseas are generally smaller.
Roads in the US have more space and homes in the US are more flammable
M A N makes enormous fire trucks, and they are quite popular throughout continental Europe.
Regulation most likely.
Darn capitalism and its regulation
It’s likely regulation is a too-high barrier of entry for foreign products, and it’s also likely regulation was steered by lobbying from the currently dominant vendor.
https://en.m.wikipedia.org/wiki/Regulatory_capture
Capitalism that has defects introduced via regulation is sort of like Communism that has defects introduced by authoritarians: the actual version that gets implemented.
Surely, the government and legal liability play no part in this, only bad businesses.
Probably the government, also-capitalist buyers would buy cheaper if they could.
Sensing an opportunity, a private equity group called American Industrial Partners (AIP) began to roll up the industry.
> As usual, things are the way they are because of unregulated capitalism and private equity being allowed to do whatever they hell they want.
This is exactly what happened - and why. Capitalism is a healthy system where it is a healthy system. Beyond that, capitalism is either: Beneficial thru flexible, effective governance. Or not beneficial. That's every possibility.
Exploitive manipulation of the firetruck market lies outside of the healthy-by-default area of capitalism.
I don’t get why municipal investment isn’t more of a thing - why can’t cities and counties be their own PE, buy a small fire truck company and turn it into a non-profit? If they captured the surplus that’s going to the PE company surely costs would be cheaper?
I guess that’s socialism though, so not gonna happen.
Why can’t there be more than one provider of this good?
Small market
Why don't towns buy the Chinese trucks? Why doesn't a new entrant start making cheaper firetrucks? I really don't know what a firetruck "should" cost but $2M seems reasonable to me for a specialized, low-volume, high-performance, American-built industrial vehicle.
thanks PE!
I think at some point, people are going to have to start doing things for themselves again.
Somebody will go buy a standard commercial truck with a flat bed and put a pump and hose on the back of it.
They did. From the article:
>“If you’re hanging out the window on the fifth floor, we can’t get you on a ground ladder,” he says. “You’re jumping.”
As a consumer (even a corporate or government consumer), you have to watch out for this in a capitalist system. My ex's family asked me to take my son to this specific water park this weekend. When I went to buy the tickets this morning, it was going to be $250 to go to the swimming pool! I live in Austin, TX and we have the coolest pool in the world and it's $5 ($8 or something like that if I take my son).
Businesses will try and trick people into thinking $250 is an acceptable price to charge to visit a swimming pool. They'll do the same shit with firetrucks if nobody is paying attention.
Excellent article, and great to see someone pointing this out. Prices will climb out of control if people are suckers and believe the lie of "you get what you pay for." It's more like businesses will keep ratcheting up prices indefinitely as long as there are suckers around who are easily parted with their money.
Extended rant... my ex once wanted to pay $500 for a f*cking vacuum cleaner. People are stupid. Had we listened to Henry Ford they'd still be making some version of the Model T and you could buy a new car for $6,008.85 (inflation adjusted price of a Model T).
My $350 Soniclean is way more than 3x better a shitty $100 vacuum from Target. (Also seems better than everything they sell, including for a lot more...)
Vacuum people have been trying to normalize high prices for a long time... From the old Internet: https://www.cockeyed.com/citizen/kirby/kirby.html
When it's companies preying on impulse buying, brands, trends, temporary demand spikes like a popular water park on a popular weekend then it's understandable to see people paying more than they "should" have (according to one's own high and mighty objective standards), and perhaps blame "capitalism" or believe there should be some regulation to protect consumers. Sure.
But when it is government bureaucrats spending public money procuring multi million dollar equipment, the problem is more likely to be government corruption or at best incompetence.
> It's more like businesses will keep ratcheting up prices indefinitely as long as there are suckers around who are easily parted with their money.
Who wouldn’t? Aren’t people usually proud of minimizing their work to pay ratio, whether it’s earning more and more to sit at a desk and browse HN or selling a firetruck for a new high price.
Government almost always seems to overpay for everything. It's a racket to benefit big finance.
The idea that everything is so complex that only a small number of suppliers are capable of building any machine is preposterous.
I bet you with a budget of $50 million, I could design and build a Firetruck from scratch as well as the entire production line and I could produce each subsequent truck for $200k max, made in America. I could probably have the whole thing almost fully automated with robots in 5 years with a bit of additional funding.
And I know nothing about mechanical or electrical engineering. I just know I could do it. I would find the right people. There doesn't need to be that many components to bloat up the cost/complexity to $2 million, that's ridiculous. I'm no Elon Musk. I just think many people with a little bit of brain could do it if given the opportunity.
The problem is lack of opportunity. I will not be given this opportunity because it works against established financial interests. The economy is a zero-sum game, that's a fact. Everybody knows this because nobody would even give me the opportunity to prove it even though $50 million would be chump change for big finance.
Why would anyone fund a venture which involves work and risk, when they can already extract the same nominal profits without any additional risk or work? Nobody is thinking about 'real value'; everyone is chasing nominal gains in a race to the bottom; whipping up the entire economy into a giant souffle full of air.
Caring about nominal gains is like caring only about volume and ignoring the weight... If the economy was a cooking competition, everyone would end up baking souffle, chocolate mousse and meringue. Nobody would be baking pound cake.
grifts like this can't happen without tolerance and in some cases help from corrupt public servants
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