Author Topic: Six Dumb Misconceptions About The Economy (that Politicians Want You To Believe)  (Read 2661 times)

neo von retorch

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Six Dumb Misconceptions About The Economy (that the Politicians Want You To Believe)

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Well, it looks like we’re here in another US election year already.

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But alas, winning an election is a very different thing than proposing stuff that is actually best for the country. And for that reason, we cast our votes for the best party and then tune back out until the next election.

Happy voting!

zolotiyeruki

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Well, I agree with a lot of MMM's points, but I do take issue with a few:

Inflation *has* made life harder.  In the last few years, our household has shrunk from 8 to 6, and yet our grocery budget each month is up approximately 40% from pre-COVID.  I would also argue that the president (or, rather, presidents and legislators) contributed tremendously to that via the roughly $5 trillion in stimulus money.  At restaurants, we watched prices jump 30-50%.  Home prices are up 50%+ in my area, but with interest rates going to 6%,* the mortgage payment on our house would have doubled.  And in the area where we almost moved just pre-COVID, home prices have doubled on top of the interest rates.  It strikes me as a bit disingenuous to claim that inflation hasn't made life harder for Americans, when three paragraphs later the article talks about how housing prices (typically the single largest expense for every household) have risen faster than wages.

It's also a bit misleading to say that politicians can't control prices.  While it's generally true that politicians can't really make things cheaper (TANSTAAFL!), they certainly can make them more expensive or less available, via regulation, taxation, shutdowns of various types, and/or threats of such actions.  And we've seen a awful lot of that over the past four years.  And while the president doesn't directly control interest rates, policy decisions (like dropping $5 trillion of stimulus) absolutely can lead to the kind of inflation that invites the Fed to raise interest rates.

As for EV's, well...our family owns four cars which, on average, have 175,000 miles and are 22 years old.  I'd be surprised if their combined value exceeded $12,000.  For example:  my '01 Civic with a rebuilt engine.  Total cost, without insurance, title, registration, etc: about $1000.  It can get 400 miles on a tank of gas, at 32-39MPG.  I drive it ~6,000 miles/year.  It's dirt cheap to insure, and I do my own maintenance.  Is there really an EV out there that will be cheaper for me over the next 10 years?  I'd be shocked if there was one. Would an EV be less trouble and less maintenance?  Perhaps.  But less cost?  Nah.  The comparison to MMM's Tesla is particularly egregious.  A few years back, I ran the numbers:  my '97 Geo Prizm that I bought for $1,750 vs my boss' brand-new Model Y.  As it turns out, I could literally throw away my Prizm every couple years and still come out ahead financially.

But there's lot of good points here in the article.  Streamlining building permits is a good start.  Promising various tax breaks for very specific, favored activities is bad.  Generally not getting emotionally twisted in knots because of politics is good.  Greedy corporations aren't quite as greedy as it may seem, once you actually take time to look at the numbers.  The president really doesn't control the economy, nor should we want him or her (or any politician, for that matter) to.

 

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