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Topic: How Cheap Things *Used* to be

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Cincydawg

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Re: How Cheap Things *Used* to be
« Reply #182 on: Today at 03:57:09 PM »
Sure, there is a lot of demand for fast food.  I'm always still surprised how many McDs I see in Europe and Asia.  

When my kids were smaller, I tried to avoid FF to the extent possible, but we'd fairly often be in a rush.  That Arny's Five for Five deal was a savior.  My son would scarf down 2 before we got home a mile away.

We'll often have breakfast at McDs when on the road.  

If I could educate more people on one thing, it might be credit card use.  

FearlessF

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Re: How Cheap Things *Used* to be
« Reply #183 on: Today at 04:32:12 PM »
Sure, but that's why I said they really make it hard to do so.  It's your kids' favorite place, it's convenient, blah blah blah.  They scientifically make it tick every taste box.
Learning a better habit and "just don't be lazy" aren't very high-percentage actions, lol. 
yup, similar to many poor choices made by the masses every single day

cigarettes, vapes, credit card debit, sugary sodas, illegal drugs, other illegal activities, gambling, the list is endless
"Courage; Generosity; Fairness; Honor; In these are the true awards of manly sport."

OrangeAfroMan

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Re: How Cheap Things *Used* to be
« Reply #184 on: Today at 05:05:46 PM »
Supply & demand does explain a lot, simply.  But it's more than that. 

Swaths of people, especially poor people, can be cajoled into demand for things that aren't good for them, are addictive, are extremely convenient, etc. 
That's why we can't simply look at the ebb and flow and just shrug, as if nothing can be done.  That's BS and I give everyone here enough credit to know it.
Maybe their plight hasn't been fully considered by some of you.  And that's fine.  But shrugging and saying 'supply and demand' as if that solves anything is silly.

It's herding cattle into the pen they want, then you telling the cattle to think more strategically.  Not mean to be insulting, but you get the idea.
“The Swamp is where Gators live.  We feel comfortable there, but we hope our opponents feel tentative. A swamp is hot and sticky and can be dangerous." - Steve Spurrier

Cincydawg

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Re: How Cheap Things *Used* to be
« Reply #185 on: Today at 05:07:01 PM »
What can be done?

betarhoalphadelta

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Re: How Cheap Things *Used* to be
« Reply #186 on: Today at 05:46:17 PM »
Supply & demand does explain a lot, simply.  But it's more than that. 

Swaths of people, especially poor people, can be cajoled into demand for things that aren't good for them, are addictive, are extremely convenient, etc. 
That's why we can't simply look at the ebb and flow and just shrug, as if nothing can be done.  That's BS and I give everyone here enough credit to know it.
Maybe their plight hasn't been fully considered by some of you.  And that's fine.  But shrugging and saying 'supply and demand' as if that solves anything is silly.

It's herding cattle into the pen they want, then you telling the cattle to think more strategically.  Not mean to be insulting, but you get the idea.
Hey, smart/rich people make bad choices too. A lot of people who make a lot more money than you'd think live paycheck to paycheck and are up to their eyeballs in debt. I know, because I was one of them up until the point I divorced my spendthrift wife 10 years ago. So I might have been smart and high income, but I sure acted long-term irrationally until my mid-late 30s. 

Plenty of smart/rich people are fat and don't exercise. Do you think it's because they don't know that they should eat better and lose weight? Of course not. It's that doing the thing that benefits you 5 years down the road vs the thing that makes you happy today is really hard. I think you've talked about being overweight, right? I'm sure it's not because you don't know what causes it. 

Plenty of smart/rich people are smokers, or addicted to various substances, or are addicted to certain other negative behaviors like gambling... It's not because they don't know better. Everyone knows cigs/drugs/casinos aren't good for you. But they do it anyway.

It's humanity. Preferring instant gratification vs delayed benefit is kinda hard-wired into our DNA. They herd themselves into the pen. 


MikeDeTiger

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Re: How Cheap Things *Used* to be
« Reply #187 on: Today at 06:06:50 PM »
That said, I'd argue your smartphone demand is still real demand. It's not entirely freely chosen by you--rather it's imposed on you by circumstances that make it necessary--but it's real demand.

It's like the demand for gasoline. I'd prefer not to use as much gasoline as I do. I'd prefer to WFH all 5 days a week in which case I wouldn't need to consume nearly as much. But I make the choice of going in 3 days a week as my company now demands, which increases my overall fuel demand. But I much prefer working 3 days a week in the office to being unemployed and not earning a salary, so I have to buy that gas. It's real demand even if I would prefer it not be.

I don't think that's how free-market economists would define "demand."  What we're talking about here is closer to the kind of interference they complain about, which creates artificial price points.  Demand is usually conceptually structured around easily accessible alternatives within discretionary income.  There's a lot of things--even things generally considered necessities which could arguably still be construed as demand, in that if we really don't like the price per kwh from our electric company, we don't have to have it*--that we could do without.  I see what you're saying here, but I don't think most would count leaving our jobs and getting another one as the kind of readily available choice that they're outlining when they teach the demand curve.  In other words, how we spend income on the scale of our discretionary-to-essential spending is one thing; messing with that income we choose to buy things with is a different thing.  

It'd be like saying that government regulations/interference is not really messing with the supply curve, those companies are choosing to be in that business when they don't have to be.  They could fold up shop and do something else.  It's not that you're not pointing to a real thing, it's that it's not how an economist would typically categorize it. 

betarhoalphadelta

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Re: How Cheap Things *Used* to be
« Reply #188 on: Today at 06:22:06 PM »
I don't think that's how free-market economists would define "demand."  What we're talking about here is closer to the kind of interference they complain about, which creates artificial price points.  Demand is usually conceptually structured around easily accessible alternatives within discretionary income.  There's a lot of things--even things generally considered necessities which could arguably still be construed as demand, in that if we really don't like the price per kwh from our electric company, we don't have to have it*--that we could do without.  I see what you're saying here, but I don't think most would count leaving our jobs and getting another one as the kind of readily available choice that they're outlining when they teach the demand curve.  In other words, how we spend income on the scale of our discretionary-to-essential spending is one thing; messing with that income we choose to buy things with is a different thing. 

It'd be like saying that government regulations/interference is not really messing with the supply curve, those companies are choosing to be in that business when they don't have to be.  They could fold up shop and do something else.  It's not that you're not pointing to a real thing, it's that it's not how an economist would typically categorize it.
Well, my point is that the market can't always tell the difference between "necessary" and "discretionary" demand. The market doesn't know if I'm filling my gas tank because I have to drive to work vs being unemployed, or whether I'm filling my gas tank because my wife and I are going on a road trip vacation. 

Where that usually comes up is in things like elasticity of demand.

  • Gasoline has a portion that is very inelastic (the amount of gas needed for the average worker to get to their jobs, to take kids to/from school, to run necessary errands). But it also has a portion that can be quite elastic, such as said road trip vacation. 
  • Paying for power to your house is something that we all, in a modern society, need. So electricity service is inelastic. However for me, having a very inefficient A/C unit and a drafty house, means that my demand for A/C is a lot more elastic--I don't run the A/C until we get to the hot part of the year where my house would be 85+ degrees without it. 
  • Likewise, your need to have a smartphone for work is inelastic demand. But your determination whether you're going to keep a smartphone 5+ years and run it into the ground before replacement, or whether you're going to keep up with the Joneses and always be on the latest tech, is elastic demand. 
  • Demand for Ruth's Chris Steak House--a luxury good--is highly elastic. But demand for food--for enough calories to sustain oneself and not starve to death--is highly inelastic. 


In most markets, the balance between elastic and inelastic demand applies constraints on how a supply/demand curve acts, but it doesn't invalidate the theory. 

 

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