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Much of what is in this chart is simply a function of gouging.

@Johncdvorak The measurement of affordability of cars is surprising to me

@HiroProtagonist

I'd be interested in knowing exactly what they are comparing as far as cars.

@Johncdvorak

@m00se @HiroProtagonist @Johncdvorak the chart only goes to 2018..I'm sure car costs would now be way up.

@m00se @HiroProtagonist @Johncdvorak

Just once. ;)

I honestly wasn’t positive, I only started hearing about it recently and haven’t bought a car years before that so wasn’t sure.

@HiroProtagonist Bear in mind the chart is based on prices, not affordability. Affordability has to include many other factors starting with your buying power, aka inflation.

@HiroProtagonist @Johncdvorak
The car line might look as it does because of the time frame 1998-2018. The gouging may very well have occurred earlier, the 80s or early 90s?

I always wondered why one could buy a nice Mercedes in the mid 70s for $10k, with ~3% inflation you are looking at $38k today, yet a mid class Mercedes starts at $55k now? A 44% gap.

Might be good to look at more charts like these.

@L0g0s There's difficulty in doing a price comparison like that between a car sold in the 70s and today: the features list isn't the same and they aren't made of the same materials.

@HiroProtagonist
Most things have changed a lot. Food, a basic necessity, is completely different from the genetic level all the way through to packaging.

A person of a certain economic level could afford to buy car X, with all the latest materials and technologies of that year. Wouldn't it make sense that a person at a similar economic level today could afford a similarity advanced car?

Maybe the price gap is because of tech. But it is sort of moot because one can't buy a car without it.

@L0g0s "Wouldn't it make sense that a person at a similar economic level today could afford a similarity advanced car?" Not necessarily so. There's way too many factors that could affect these things to assume that correlation as a given.

@HiroProtagonist

There's a reason some people pay new car money for a classic and daily drive it.

@L0g0s

@HiroProtagonist @leyonhjelm I'm all in classic cars. My daily drive is 40+ years old. Finding parts is getting a bit more difficult.

@L0g0s

Mine's 60 years old but parts are easy, VW was a great pick on this level

@HiroProtagonist
@Johncdvorak College textbooks in particular -- they sell the same textbooks to poor people for reasonable prices and do whatever they can to stop you from buying from there.

@Johncdvorak No such thing as gouging. Buyers always set the price. Always.

@AlabamaHokie @Johncdvorak "whatever the market can bear". Might not hold water if it's a necessity. Life or death.

@AlabamaHokie @Johncdvorak you think you set the price for medical and hospital services? Or for housing? Nah, most things are completely defined by taxes and megacorps. Why do you think the stuff you REALLY need skyrocketed most? Because you cannot decline healthcare or shop around for it "cheap".

@Johncdvorak #1 increase in price? hospital services

what's one of the most proprietary-software using industries in the US? hospitals

GNU/Health news.opensuse.org/2021/10/20/h is how to reduce that overhead substantially, and to take a good chunk of the graft away

@jeffcliff @Johncdvorak software costs down? Most big software packages switched to subscription..might be lower, but you never stop paying that low price.

@Johncdvorak Most of the top of this chart is the government shoveling shocking amounts of money into those industries and bidding up the prices commensurately, not businesses maliciously pricing out their customers.

"Gouging" is just a word for "market clearing that upsets people".

See also: Munger on Price Gouging https://www.econtalk.org/munger-on-price-gouging/

@anonymoose @Johncdvorak

That assumes a level playing field. There can be gouging when you have a protection from competition. The graph is a pretty good line up on regulatory burden.

@average_random_joe @Johncdvorak True, and there are a lot of barriers to entry in all of those fields too, which is blocking the market's natural relief-valve for high prices (more firms enter and compete to bid prices back down). I only object to the word 'gouging' insofar as it implies the problem is businesses are being malicious or "too greedy", rather than that the government has implemented bonkers policies, including heavy regulatory burdens and barriers to entry.

@Johncdvorak It seems odd that there are no fuel or utilities in the graph.

@Johncdvorak To all commenters, keep in mind that gouging is not necessarily determined by price. Margin, or markup, or profit, for a good or service is where I would lay claim to gouging. So if the markup on a good or service is out of line with respect to its value in the market there is a potential problem. A problem that a true capitalist system would correct. But we don’t have that. Not even close.

@Johncdvorak or anyone, have an idea on the reason for the 2018 textbook dip and spike? First I thought it was too granular, and maybe it was tied to semesters, but it didn't happen in other years. (Maybe 2009?)

@Johncdvorak in fairness, college textbooks are printed on unicorn vellum, that justifies their cost

@Johncdvorak a function of government policies is what I think you mean.

@Johncdvorak
Price gouging is mis-understood. When government sanctioned middlemen get involved with something like Healthcare, we hear the costs are rising and government needs to solve the problem. In reality that is gouging.
If there is a wildfire in CA and lumber is necessary there will be a price rise due to scarcity. I will find the price necessary for me to remove my products from another market and bring it to CA. My profits enable CA to have what it needs. There is a difference

@Johncdvorak Markets FedGov interferes with versus the ones they don’t

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