3 ms·

I've never found that econ 101 logic credible. Even if money supply is ultimate the reason for prices going up, there's an intermediate step where somebody actu

by ajkjk 1y ago

I've never found that econ 101 logic credible. Even if money supply is ultimate the reason for prices going up, there's an intermediate step where somebody actually set a higher price. And there was a cause for their thinking. Not just "well there's more money going around so we can charge more " or "our parts and labor cost more so we've got to bump prices", but a synthesis of all that that decides the price to set, the types of cars to make, whether to sell and market a 'discount' model, etc. So even though inflation may feed into that stuff, there's plenty of causality to inspect. Why aren't there cheaper cars? Not because there's more money, but because nobody decided to make and sell a cheaper car. That's the stuff that we should be asking about. Not waving our hands and saying 'sucks, inflation'. The inflation happens at the speed it does because of things like this. The reason may well be: who would sell a car, or a car part, or their labor, for less when there's so much money going around? But we can still ask plenty of questions about that. Cause I'm pretty damn sure the labor isn't raking in the difference at a rate matching inflation. And it sure seems like there's plenty of room to compete on price, so if no one's doing that effectively, why not?

scotty79 1y ago
> there's an intermediate step where somebody actually set a higher price Yes. But the most common reason for setting up higher price is because you can, because there's more money flowing in the economy than it should be. Going into details is in the grand scheme of things about as useful as rearranging chairs on the Titanic. > Why aren't there cheaper cars? Not because there's more money, but because nobody decided to make and sell a cheaper car. That's the stuff that we should be asking about. Yes. But we should be asking why cars are 3% more expensive, because their prices rose by 29% while the inflation is "only" 26% (don't remember exact numbers), not why car prices rose 29%. If you don't deduct inflation you are interested in wrong things because large numbers make you think there's a drastic reason. Does 3% even deserve and explanation? Isn't it fully explained by toxic advertising making consumer want heavier car year after year, that naturally cost more?

by ajkjk 1y ago

scotty79 1y ago

> there's an intermediate step where somebody actually set a higher price Yes. But the most common reason for setting up higher price is because you can, because there's more money flowing in the economy than it should be. Going into details is in the grand scheme of things about as useful as rearranging chairs on the Titanic. > Why aren't there cheaper cars? Not because there's more money, but because nobody decided to make and sell a cheaper car. That's the stuff that we should be asking about. Yes. But we should be asking why cars are 3% more expensive, because their prices rose by 29% while the inflation is "only" 26% (don't remember exact numbers), not why car prices rose 29%. If you don't deduct inflation you are interested in wrong things because large numbers make you think there's a drastic reason. Does 3% even deserve and explanation? Isn't it fully explained by toxic advertising making consumer want heavier car year after year, that naturally cost more?