Can we have an economic questions that don't deserve their thread thread?
How the fuck did the price of cars get so expensive? Unless you make a substantial amount of money you can't really buy a car outright anymore, however there seems to be a near infinite supply of new cars and even the "old" cars of 2010-2014 are expensive for middle class to own. Did union wages really cause this?
Inflation.
How much do you think automotive industry is regulated by the states?
Unlike vidya industry, it's completly controled by the states, from regulations to tax payers money give aways to new car buyers and shit like that.
It's not like production costs are far from selling prices, it's just that production costs are not getting lowered because it's not a capitalistic model of bussiness.
Any long-term bussiness where the product actually requires a really long time to design, make, promote and sell a new product needs a legal framework stability for those years, or their investments might get fucked up.
With mob rule that incentives these companies to get behind the shadow of the state to function with these odds.
That's literally why.
To sum up, you can't actually buy a new car with the same specs a car in the 80s was made, but it's more secure and better.
Because there's a roof by law to surprass.
Unions also mess things up, as that overcosts is patched with everyone else financing those who buy cars.
Everyone actually finances the car industry with public roads, as road users don't actually pay it, as everyone does.
Incentives are as fucked up as society is.
What's the actual effect of the Fed's low interest rate policy? Can't be economic growth.
The problem is with public corporations. No longer is the Manufacturer concerned with making good quality cars that last. The concern is to increase profits every year. This leads to increased funding for R&D. Then it is spent on crap like backup cameras, blind spot sensors, adaptive cruise.... It's all about gimmicks and good luck keeping a car for over 10 years because replacing anything with those cheap rusty bolts is a nightmare. There are cars put there that cost $15,000 and will work for the family but there is also a social pressure to keep up with the neighbors because SOMEONE LET THEIR WIFE MAKE THE DECISION TO USE CREDIT
Construction has become so corrupt that everyone without an immigrant connection has riveted to a standstill, the litigation surrounding it has been so incredibly jewed up that nobody wants to build roads because they can use the landlords to force the price of housing to be beyond the middle class
Cars are more expensive to produce, and credit to buy them is more widely available.
it encourages people without wealth to purchase cars
this incentive is produced by devaluing the savings and income of more succesful people
Lower the interest rates, the better for these companies to sell their products on the short run.
On the long run, all that credit expansion will produce incentives to order all the resoruces in society in a wrong way, that will start to heal after the rise of the economic cycle with bussines going broke and people unenployed with unvaluable skills while prosperity goes backwards.
If you don't suspect how fucked up is inflation then learn about negative interest rates.
somewhat related
we'll see even more governmental interference with costs of private transportation in first world nations as population density in urban settings starts to hit ceilings and radiate outwards
some places are getting ahead with transportation infrastructure, but plenty of others are already hitting the hour-long daily commute with no signs of slowing
transport planning is going to be a hell of a profession in the coming 100 years
Lowering the interest rate always stimulates growth, the effectiveness of it is debatable, but not the general principle.
It's fucked up because a third party outside the market (the governments, with interventions and regulations) is the super-owner of all property, as they allow or reject investment projects or bussiness models over someone else's land kek
I think the best house pricing in EEUU is in Texas, it's also the most free.
This is a good thread op. Learning econ changed a ton of my political opinions when I took the courses
It stimulates growth in X instead of Z.
It not really true it stimulates growth. It just alter the natural order of human incentives, which are linked to the circunstances and what people actually consider a priority.
Inflation effectivity is not debatable, beneficiaries are the state and all it's institutions and bureaucracy, licenced bankers, some corporations and general export markets and turism.
Just ot point out a final consequence example, inflations is literally taking blood from most people to make hotel builders bussiness easier to do.
Without all that shit, people would make different choices, wiser ones, and society growth would be grounded in solid foundations.
Just buy second hand?
>It just alter the natural order of human incentives, which are linked to the circunstances and what people actually consider a priority.
if someone finds this hard to understand, let's make a fun example
You can fuck A girl, pol dream girl, she's an 8
You can fuck B girl, she's also a pol dream girl, she's a 7
You find somehow you're getting paid to hang with B girl, so that makes B option more attractive, even if it wouldn't be without a third party manipulation of incentives
Also, every neet who's paying that incentive would find harder to find a girl at all. Because their purchase power would be decreased due to being forced to finance that incentive.
Life is a huge cold kek
Your local bank betting on stocks instead of loaning out the money to you and me starting a business. When your mom and dad gives you money when your 10 do care what you spend it on more than when you are 10 and spent 2 hours earning it cutting grass? It's essentially free money.
>even the "old" cars of 2010-2014 are expensive for middle class to own
I'm not knowledgeable when it comes to economics so this is an honest to goodness question, is it really that bad? I mean, I can buy a 2010 used car with not too many km on the meter for something like €5k. Doesn't seem that expensive to me.
Was it way better before? Do keep in mind also that cars have become much more complex things with new features and amenities.
I'd like to highlight how the reliability of cars has decreased while the cost has increased, the employment in auto repair has been the greatest turnover job of the past few decades, junkyards are filled with appraised parts as just about everything made by big car these days is a ducttaped go cart driving over a blatant iceberg of a failing government
Trumps trade policy is bad.
His tax plan is good.
>Life is a huge cold kek
THAT'S THE POWER OF LOOOVE
They have done unspeakable things to car industry. When a car is sent to a dealership they are counted as being sold by Ford, GM, Jeep, etc. When a person takes out a loan on a car- new one the payment plan is on avg 84 months VS 42 ten years ago. Oil in the US from fracking cost 5-1 to pull it out of the ground VS the 70's when you could just take it out and actually make a profit from pulling out of the ground.
Things are so beyond fucked I am really surprised someone hasn't been shot by a major ceo or a revolution hasn't started yet. I think this hasn't started yet because 20 and 30 year old's are still able to live with their parents and their parents still have employment. It doesn't make any sense
Tldr; there is no more money!
>there is no more money!
It's not just that.
Actually people who have not being born are in debt just due to citicienship kek.
And more over, resources in society are placed wrong only thanks to current state's incentives, which are not models who will last, which means a painful time to realocate them all, and a losing of prosperity because part of it obv will be destroyed.
All main currencies are going to start cracking, but as everyone is on the same shit, it's gonna be softened. But oh boy, it's gonna be fun to see who falls first, japan, eeuu or europe.
Monetary magic at its best.