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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 mo

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.

sarchertech 1y ago
That doesn’t explain the other half of the story which is that it takes 4-5 years to get one.
- topspin 1y ago
  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.
8bitsrule 1y ago
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 ...
- twoodfin 1y ago
  “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.
  - tomrod 1y ago
    That's an HHI of 1089 at best. Pretty high, indicating consolidation is a big deal.
  - brookst 1y ago
    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.
  - arrosenberg 1y ago
    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-departments-1033-military-equipment-weapons https://www.marketplace.org/story/2020/06/12/police-departme...
  - 8bitsrule 1y ago
    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.
Aunche 1y ago
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/ https://www.toyota.com/rav4/ [2] https://www.motortrend.com/cars/toyota/rav4/2010 https://www.motortrend.com/cars/toyota/rav4/2010
- giantg2 1y ago
  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.
- BobbyTables2 1y ago
  How many people’s salary went up 50% in the same timeframe?
  - throwaway2037 1y ago
    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.
    - BobbyTables2 1y ago
      For the first 10 years of my career, was barely that. A few years had no raise at all. Despite always having top performance, never received a “merit” based raise. The only “raise” I ever got was to change jobs.
  - kgwgk 1y ago
    Most of them?
- throwaway2037 1y ago
  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.
throwaway2037 1y ago
> botched COVID response I don't follow this part. Can you explain what exactly was "botched" about the response to COVID-19?
- phendrenad2 1y ago
  I don't get why you'd care.
jacquesm 1y ago
House prices are not typically a part of inflation.
- phendrenad2 1y ago
  And there's NOTHING suspicious about that, right?
  - jacquesm 1y ago
    I'm not sure what you are getting at but this is a definition issue more than anything else. You either do or you don't include real estate in inflation and if you don't then you can't suddenly add them in later on, then you'd have to re-compute that number all the way back and then you can't really call it inflation any more without all kinds of footnotes about whether you mean inflation v1.0 or v2.0. I agree with you that it would have been better if it was part of it from day #1, if only because the cost of housing is a massive factor in the cost of living.
    - phendrenad2 1y ago
      > You either do or you don't include real estate in inflation and if you don't then you can't suddenly add them in later on I didn't, I compared average home price then vs now.
      - jacquesm 1y ago
        That's a result of an increase in demand and a very strong shortage of supply, which is related to inflation but not quite equivalent. Houses, as a store of value have substantial differences compared to the rest of the items that go into the inflation calculation, and don't get 'consumed' in the same way that say a bag of potatoes would be. I don't necessarily agree that the price of houses shouldn't be in inflation, but it is there by proxy and the calculations do make some sense: https://www.brookings.edu/articles/how-does-the-consumer-price-index-account-for-the-cost-of-housing/ https://www.brookings.edu/articles/how-does-the-consumer-pri... So it is the cost of shelter rather than the prices of houses that determine inflation.

sarchertech 1y ago

That doesn’t explain the other half of the story which is that it takes 4-5 years to get one.

topspin 1y ago
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.

8bitsrule 1y ago

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 ...

twoodfin 1y ago
“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.
- tomrod 1y ago
  That's an HHI of 1089 at best. Pretty high, indicating consolidation is a big deal.
- brookst 1y ago
  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.
- arrosenberg 1y ago
  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-departments-1033-military-equipment-weapons https://www.marketplace.org/story/2020/06/12/police-departme...
- 8bitsrule 1y ago
  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.

Aunche 1y ago

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/ https://www.toyota.com/rav4/ [2] https://www.motortrend.com/cars/toyota/rav4/2010 https://www.motortrend.com/cars/toyota/rav4/2010

giantg2 1y ago
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.
BobbyTables2 1y ago
How many people’s salary went up 50% in the same timeframe?
- throwaway2037 1y ago
  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.
  - BobbyTables2 1y ago
    For the first 10 years of my career, was barely that. A few years had no raise at all. Despite always having top performance, never received a “merit” based raise. The only “raise” I ever got was to change jobs.
- kgwgk 1y ago
  Most of them?
throwaway2037 1y ago
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.

throwaway2037 1y ago

> botched COVID response I don't follow this part. Can you explain what exactly was "botched" about the response to COVID-19?

phendrenad2 1y ago
I don't get why you'd care.

jacquesm 1y ago

House prices are not typically a part of inflation.

phendrenad2 1y ago
And there's NOTHING suspicious about that, right?
- jacquesm 1y ago
  I'm not sure what you are getting at but this is a definition issue more than anything else. You either do or you don't include real estate in inflation and if you don't then you can't suddenly add them in later on, then you'd have to re-compute that number all the way back and then you can't really call it inflation any more without all kinds of footnotes about whether you mean inflation v1.0 or v2.0. I agree with you that it would have been better if it was part of it from day #1, if only because the cost of housing is a massive factor in the cost of living.
  - phendrenad2 1y ago
    > You either do or you don't include real estate in inflation and if you don't then you can't suddenly add them in later on I didn't, I compared average home price then vs now.
    - jacquesm 1y ago
      That's a result of an increase in demand and a very strong shortage of supply, which is related to inflation but not quite equivalent. Houses, as a store of value have substantial differences compared to the rest of the items that go into the inflation calculation, and don't get 'consumed' in the same way that say a bag of potatoes would be. I don't necessarily agree that the price of houses shouldn't be in inflation, but it is there by proxy and the calculations do make some sense: https://www.brookings.edu/articles/how-does-the-consumer-price-index-account-for-the-cost-of-housing/ https://www.brookings.edu/articles/how-does-the-consumer-pri... So it is the cost of shelter rather than the prices of houses that determine inflation.