It's a model that makes behavioral assumptions that are provably wrong. The fact that people buy computers despite prices going down contradicts the underlying assumption. There is nothing particularly special about computers among all goods.
Only collapse of the consumer economy, which in the first place should never be allowed to rise to enough significance to be much of a show-stopping collapse when it happens.
Note that this is showing household incomes, not individual incomes. Household used to mean 1 working family member, now it's closer to 2 due in large part by more women joining the workforce. If you had a traditional family with one working spouse, they would definitely be falling behind.
If you look at the source below for men's wages (for example), the real wage has fallen by 3% for the median male since 1979 (and by 10% real decline for the bottom 10%). That's not even accounting for the fact that housing should make up a higher % of the consumption basket for the lowest-paid workers (as compared to CPI).
That link appears to be great data (based on reading the summary). Bookmarked to read in more detail later, but saying "thanks!" now.
It appears that the 10th percentile male income has decreased by 7.7% [rather than 10%] in the 40 year period from 1979-2019, if I'm reading the page 4 content correctly.
Figure 1 is facsinating - it shows the 80s were awful for everyone, especially the bottom 10%. Male workers dropped 16.3% from 1979-1990, and Hispanic dropped 20.9%!
2010-2019 was the best real income growth for all groups apart from top 10% hispanics, and the growth is fairly evenly spread across demographics.
Most likely under-reported COVID deaths. Having looked at the Russia data at least, many deaths (earlier on) were marked with "pneumonia" and they didn't even bother testing for COVID.
I have found that pneumonia is apparently broadly misunderstood by a lot of people. (It's an inflammatory issue in the lungs, usually caused by a viral or bacterial infection. It is not it's own type of virus.)
We had some family friends that refused to get vaccinated. The wife contracted COVID and then died a few weeks later. When we asked the husband if he was going to get vaccinated, he said no. Because COVID is no worse than a cold. He explained that his wife died from pneumonia, not COVID.
I have seen this repeated a lot when it comes to cause of death. Reports can show things like cardio pulmonary arrest (which means your heart and lungs stopped) complicated by COVID and heart disease or whatever. And then people go away saying well, COVID didn't kill them, it was a cardio pulmonary arrest ... and they had heart disease...
It's amazing how much you can convince yourself of if you want to.
It was initially declared that Russia is protected from COVID by God and by mighty Putin. Patriarch drove around Moscow in a Mercedes holding an icon. So doctors were ordered not to write "covid" on death certificates.
The other reason that prices are way cheaper second hand is that the buyer is taking the risk of buying a lemon - versus some sort of guarantee (usually) when you buy new. The seller has more information about the object in question than the buyer (i.e. wifi card on laptop is flaky, for example), so buying secondhand implies more risk, which drops the exchange price.
I think that this affects the price of new vs used moreso than the experience of purchasing it.
Again, though, most of the economic value of that is in the experience itself. The retailer reassures you with a warranty and you do avoid the small risk of painful emotions (humiliation/disappointment) should something go wrong with an informal transaction.
The short-term failure rate of second hand goods is nowhere near the 50% that would be needed to justify the price difference in terms of pure rational economic terms, especially given that most informal sellers are happy to guarantee that a product is working at the moment of sale.
Basic economics assumes a functional and competitive market. The majority of markets in America no longer fit this criteria - today's corporate environment is closer to neo-feudal than capitalist; if we want to return to "true" capitalism, we need a lot stronger anti-merger and monopoly busting efforts.
I highly recommend listening to "Bullshit Jobs" by David Graeber on the observed inverse relationship between pay and [actual] value (if we're talking about societal value, for example). There are exceptions to the rule, but the correlation is quite strong.
Yes, chess masters at the top actually have groups of coaches (if they're preparing for an important match). Sometimes up to 5-10 people. Though it might not be so much coaches as "preparation team" - one of them might be the lead coach, one responsible for openings, one responsible for mental game, etc etc.
Novel writing is more subjective - if it were a clearly competitive endeavor with objective rules, I'm sure that the top performers would have coaches as well.
> if it were a clearly competitive endeavor with objective rules
I think this is the critical takeaway. Business and engineering are not "clearly competitive endeavour with objective rules", even though some attempt to make it so.
The poorer/richer argument only makes sense in the context of a specific consumption basket. If your main goal in life is to buy as many bananas as you can (for example), then you would measure the house appreciation in bananas. Can you get more bananas for your house now (at $1M - 250k) than you could when you got it? Then you're "richer", otherwise you're not.
Usually we use CPI as a proxy for it. However, most people when evaluating houses ignore the implied rent paid; owning a house means not having to pay rent - and that has a specific price on it, depending on your local rental market. So in a relative sense, you owning that house makes you richer relative to the people that did not own a house (who did not get the same nominal appreciation at all and are much worse off), and leaves you at the same place with other people owning the house. You're unlikely to be worse off (on a relative standing) than if you hadn't gotten the house. So I'm not sure richer/poorer makes sense without considering the alternatives (i.e. renting & investing)
Big crashes (and fast-drop bottoms) happen not because of panic selling, but because of forced selling (covering margin calls, getting liquidated, etc). Panic selling usually leads to slow grind downs.
Shorts usually cover once the rebound starts, not when things are free-falling (their trailing stops get triggered, etc)
No. Again, like short selling, you misunderstand the relative ratios of beta length vs. everything else. Smaller moves, at the money, occur because of this or in single names in multi SD moves (a la Archegos). The prevalence of vol control strats today means we also see these sorts of moves around key index gamma levels, but we're talking 100bps travel.
Mar'20, 2008, etc - these did not happen because guys were getting margined. These happened because because were panic selling huge amounts of length.
https://en.m.wikipedia.org/wiki/Paradox_of_thrift
You get ahead by saving, but everyone can’t do that all together or the economy collapses.