I think the main difference that people forget: discretionary vs mandatory spending. People are currently being killed by mandatory spending (housing/rent, food, healthcare, gas/transportation) to the point that their discretionary spending is all credit or avoided entirely.
The price gouging since 2019 has been extreme. Companies have inflated prices to what the market can and will bear. Look at fast food; the value proposition has completely collapsed. Automobile prices are insane.
This is the find out phase of FAFO: when no one has any money to buy your shit. You either carve out a niche of consumers who spend more per transaction, or attempt to rebalance towards more consumers and less per transaction.
Unfortunately, consumers are hurt on both sides of our economy (rampant inflation/stagnation of wages, and recession). Those with assets will profit when we print more money, and by buying up the lost assets from the working class at discount prices.
Makes you wonder who the economy is meant to be working for.
The discretionary vs mandatory argument is exactly why all of the deflation fear mongering is bunk.
The country inflated so fast with minimal actual wage increase that it could bear a fairly significant deflation and it would be more of a correction than an issue.
You're thinking of deflation as a singular event where prices just go down and then they're lower and the issue of over-inflation relative to stagnant wages is corrected.
That's not how deflation actually works though. Deflation is often an economic death spiral, and that's because of the reasons for it. Deflation doesn't typically happen as a response to previous inflation.
Deflation usually happens because some part of the economy is collapsing. People stop buying products (yes they still buy basic food if they can, but that's not all the economy needs to function), which leads to reduced production, which leads to layoffs, which further impacts the public's spending power, which leads to even lower purchases, and even lower production, and so on.
It's a vicious cycle that is almost impossible to break out of. It leads to severe economic depressions, which are worse than recessions.
What we need is disinflation (a reduction of the inflation rate), not actual deflation. Deflation is a disaster 99% of the time.
I would argue that the labor market is already running so thin that layoffs would be minimal outside of full on business closures, which seem unlikely given margins.
I think the kids are disillusioned because as much as the system is currently "working", it is producing outcomes that are horrid for subsequent generations. Working 40 hours+ a week to not be able to afford living alone, saving, affording healthcare, or buying things you want.
Not to mention corporations laying off 1,000s, whilst doing stock buy backs.
What's the point of participation if the system excludes you whilst actively participating? You can't budget your way out of the income to expense ratios we currently have; people are falling behind despite participation. There's no incentive to participate when federal policy ONLY helps those with assets. 10 year boom and bust cycles have produced a shrinking share of wealth for the majority, whilst we have massively inflating fortunes for the top micro percentage.
The issue is that when people explain to them why their idiotic suppositions on the supposed benefits of deflation, they don't listen to people who have actual lived experience with it.
It think it's more so that older generations have more to lose, and thus protect said system. You have assets: housing, retirement accounts, etc. Younger generations are suffering under said system, own little to nothing, and would like the outcomes to change - preferably asap. The gap between compensation and costs are not the same as when previous generations were the same age/place in life. It isn't budgeting. It isn't will. It isn't lack of trying.
Shouting "deflation bad!" when someone is pointing out that the purchasing power of the many has shrunk significantly due to inflation, does little to address the underlying issue/causes, or that a correction of prices (in theory) would actually benefit the majority of consumers.
It amounts to "line must go up, line go down - bad. No other option, sorry." There has to be a major correction to something to improve the quality of life for people. Pick one: increased wages, reduced costs, increased entitlements.
Everyone screaming about inflation says they would love if prices go down, but you ask any of them if they'd be willing to take a huge pay cut or get laid off from their job to see grocery prices go down and none of them are going to make that trade. But these kids seem incapable of making that conceptual connection.
I just want to point out that during the Biden years, wages, especially for the lower order of jobs, increased way faster than inflation.
And despite this, young people decided to swing towards Trump in 2024 in a iirc 10 point shift right.
And what did that accomplish? Things are so much worse than they were 2 years ago. Turns out throwing a brick at "the system" won't magically make things better. Asking for things to 'change' doesn't necessarily mean the change will be positive.
Well, right, because then they'd still not be able to afford said goods. There's not a direct correlation to compensation and the inflation we've seen since 2019; if there was a guaranteed reset of wage to cost ratios that are more beneficial to today's, most people would take the trade of some pain, because they're already experiencing some pain. They're already forced to the economic sidelines, with no benefit coming from said system.
Anyone who voted for Trump to improve their quality of life must've been completely asleep during his first presidency, too apathetic to care, or propagandized. Bidens landing out of COVID was better than any corporate media narrative gave the admin credit for.
It's more so inline with systems thinking: if the system produces these outcomes, the system must change or have some change enacted on it to create more equitable outcomes. Nothing DJT proposed was set to do that, so I can't speak to motivations for voting for him. People felt disempowered, and a con man offered them scapegoats.
"If we're to prosecute all of the pedophiles in the Epstein files, business leaders and global elites would be implicated, hurting the global economy - thus we won't." When the system refuses to enforce accountability, or change for equitable outcomes for those participating, it's really no surprise they want the system to change. Status quo thinking doesn't help young people get out of the current economic conditions locking them out of participation.
I didn't even think of it but you're right. The prices are insanely high, at least partially due to greed. Meanwhile wages climb slow or not at all, also at least partially due to greed.
The on-the-nose note about the economy being geared towards the rich is sad, but true. For the rich folk it's life on easy mode, and for the rest of us it's suffering until the law changes and is enforced properly to help even those who aren't rich. But changes are unlikely to happen because those who pass the laws are mostly bought by the rich folk to vote in a way that benefits the rich folk. Screws the little guy, but that's how it is.
Protectionist policy for specific industries (reducing import competition) doesn't help the consumer pricing either. Wages have not kept up with inflation (since 2019 30% vs. 15-16%).
It's the difference between debt/assets that benefit from inflation, or cash, which is devalued from inflation. Gen Z/Gen A are being priced out of their own future (housing, families, assets) while being told they're not working hard enough (when their take home isn't enough to afford renting a 2 bedroom).
Or, you know, pricing goods to provide maximum profit within the current market, just as they have pretty much always been. Point is, the "greed" has always been there, it's the market conditions that have changed.
Spending has kept up in the mandatory spending bucket. Consumers cannot cut spending from this category regardless.
I don't disagree there's a large divide between who is spending on surplus goods vs. basic life necessities currently. And there is a growing cc/consumer debt that should worry everyone.
I've already addressed your point in my previous response: I think what we're seeing is a division into niches - companies would rather target specific consumers at elevated prices than a lot of consumers at lower prices.
Yep - targeting specific markets is the ideal. You have an individual who is willing to spend the money and is a captive audience. Social media has made this even worse, and now you do customer profiles to the nth degree of granularity.
And it’s easier too. Would you like to spend $1K to blanket target 1MM people with a 1% likelihood or spend $100 on a target market ok 100K people with a 10% likelihood to spend. I’m simplifying but it is the move to purchase that is the hardest for consumer based businesses (movement through AIDA).
> The price gouging since 2019 has been extreme. Companies have inflated prices to what the market can and will bear.
So by "gouging" you mean, businesses raising prices to provide maximum profits, just as they have for 1000s of years? Do people really think that companies are just a little greedier now than they were 10 years ago? Or can we be adults and recognize that this is simply the result of market conditions and inflation?
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u/TheLamey 7h ago
I think the main difference that people forget: discretionary vs mandatory spending. People are currently being killed by mandatory spending (housing/rent, food, healthcare, gas/transportation) to the point that their discretionary spending is all credit or avoided entirely.
The price gouging since 2019 has been extreme. Companies have inflated prices to what the market can and will bear. Look at fast food; the value proposition has completely collapsed. Automobile prices are insane.
This is the find out phase of FAFO: when no one has any money to buy your shit. You either carve out a niche of consumers who spend more per transaction, or attempt to rebalance towards more consumers and less per transaction.
Unfortunately, consumers are hurt on both sides of our economy (rampant inflation/stagnation of wages, and recession). Those with assets will profit when we print more money, and by buying up the lost assets from the working class at discount prices.
Makes you wonder who the economy is meant to be working for.