Nah. Just a 40-year systems engineer. An economy is only a complex system with lots of cause and effect relationships. The basic laws of economy prevail, supply and demand being the big one. It explains inflation exactly as the ratio between available money and available goods & services. When government throws a big bucket of money into the economy (stimulus!), a big rise in prices is inevitable because the "stimulus" does nothing to increase supply (crestfallen suckers).
It also explains why Trump's tariff's work when everyone says they shouldn't. All goods offered for sale as imports have a price consisting of (cost + profit). The "conventional" wisdom holds that if you apply a tariff, it will raise the cost of a good. But that makes sense only if there is NO PROFIT to begin with. If there is any profit, the importer must make a calculation of how much of the tariff should be paid by a price increase and how much by a profit decrease. Add into this that any price increase will shrink their market share (why they are importing in the first place). And---here's the big one---What if the profit is huge to begin with? Think of Chinese goods, made by pseudo-slave labor in a weak economy, with paltry cost, being sold to wealthy Westerners at lower cost than Western product, but far, far above the Chinese cost of manufacture. In that case, it makes sense for the importer to shrug, eat the tariff, and preserve his market share while still making a good profit. I don't hear that Walmart is going out of business!
As for the corporations, they may do a lot of things we don't like, but they never jeopardize their profitability (except when they make monumentally stupid strategic decisions---think Jaguar---but are generally aware of the economics of their situation).
I have to vent. I'm a Jaguar owner. Wonderful car to drive. So, the big brass hired some bald monkey with a lust for bananas and they dreamed up this wonderful strategy: "We have a great name and a loyal customer base---but we are going to abandon everything that makes a Jaguar a Jaguar and discard our customer base altogether---because we are going to slug it out with Bentley and Rolls Royce for a piece of a very small market share, with vehicles that will be all-electric ("chariots of fire"), and styling like a bar of soap." In other words, their strategy is to shoot themselves in the nuts, then arise from the dead in order to appeal to a very tiny market consisting of wealthy weirdos. Sir William Lyons must be reliving his death agonies in the grave.
Goodness gracious !! 🤓 I'm humbled by your thoughtful indulgence to my surface-level understanding of the supply /demand ratio as related to our fuel inflationary issues. I do think we're in a strange capitalist space due to different global factors. Also, I'm sorry for your Jaguar betrayal - of which I commiserate. Broke my heart when they did that too. I grew up loving the style of that XK - E type sports coupe ❤️
I hope my explanation was clear enough. If it was, all you need to do is break down the problem into simple pieces and follow the applicable economic law. This isn't rocket science (which I should know, since I am a rocket scientist) and humanity has been using markets since time immemorial. Don't be afraid to go "Hmmmmmm...now how does that work?" It amazes me how some people can be full of book learning and they are never able to think their way through to a conclusion. They just repeat dogma.
I had a 2001 XK8 convertible, but as a result of a 2021 break-in, which damaged the driver's door keylock (the only keylock), for which no replacement could be found worldwide (hard to believe, but there it was), the vehicle had to be totaled for insurance purposes. A fond but sad memory. I now have a 2019 Jaguar F-Pace, which is nice, but not at all the same as a grand touring car. I thought at one time they could make a great BMW beater by offering a convertible XE model, alas. Their entire regular car line just withered away. The XF station wagon was a superb vehicle. The XJ was heavenly. (The F-type was supposed to replace the XK models, but in driving one, I found the seat was too hard and the cockpit too tight. It was a sports car, not a GT.)
Ok, tell me the truth... you're a macroEcon professor aren't you? 🤩 Thank you! On your last sentence, ...I will try to keep my cynicism in check. Ha.
Nah. Just a 40-year systems engineer. An economy is only a complex system with lots of cause and effect relationships. The basic laws of economy prevail, supply and demand being the big one. It explains inflation exactly as the ratio between available money and available goods & services. When government throws a big bucket of money into the economy (stimulus!), a big rise in prices is inevitable because the "stimulus" does nothing to increase supply (crestfallen suckers).
It also explains why Trump's tariff's work when everyone says they shouldn't. All goods offered for sale as imports have a price consisting of (cost + profit). The "conventional" wisdom holds that if you apply a tariff, it will raise the cost of a good. But that makes sense only if there is NO PROFIT to begin with. If there is any profit, the importer must make a calculation of how much of the tariff should be paid by a price increase and how much by a profit decrease. Add into this that any price increase will shrink their market share (why they are importing in the first place). And---here's the big one---What if the profit is huge to begin with? Think of Chinese goods, made by pseudo-slave labor in a weak economy, with paltry cost, being sold to wealthy Westerners at lower cost than Western product, but far, far above the Chinese cost of manufacture. In that case, it makes sense for the importer to shrug, eat the tariff, and preserve his market share while still making a good profit. I don't hear that Walmart is going out of business!
As for the corporations, they may do a lot of things we don't like, but they never jeopardize their profitability (except when they make monumentally stupid strategic decisions---think Jaguar---but are generally aware of the economics of their situation).
I have to vent. I'm a Jaguar owner. Wonderful car to drive. So, the big brass hired some bald monkey with a lust for bananas and they dreamed up this wonderful strategy: "We have a great name and a loyal customer base---but we are going to abandon everything that makes a Jaguar a Jaguar and discard our customer base altogether---because we are going to slug it out with Bentley and Rolls Royce for a piece of a very small market share, with vehicles that will be all-electric ("chariots of fire"), and styling like a bar of soap." In other words, their strategy is to shoot themselves in the nuts, then arise from the dead in order to appeal to a very tiny market consisting of wealthy weirdos. Sir William Lyons must be reliving his death agonies in the grave.
Goodness gracious !! 🤓 I'm humbled by your thoughtful indulgence to my surface-level understanding of the supply /demand ratio as related to our fuel inflationary issues. I do think we're in a strange capitalist space due to different global factors. Also, I'm sorry for your Jaguar betrayal - of which I commiserate. Broke my heart when they did that too. I grew up loving the style of that XK - E type sports coupe ❤️
I hope my explanation was clear enough. If it was, all you need to do is break down the problem into simple pieces and follow the applicable economic law. This isn't rocket science (which I should know, since I am a rocket scientist) and humanity has been using markets since time immemorial. Don't be afraid to go "Hmmmmmm...now how does that work?" It amazes me how some people can be full of book learning and they are never able to think their way through to a conclusion. They just repeat dogma.
I had a 2001 XK8 convertible, but as a result of a 2021 break-in, which damaged the driver's door keylock (the only keylock), for which no replacement could be found worldwide (hard to believe, but there it was), the vehicle had to be totaled for insurance purposes. A fond but sad memory. I now have a 2019 Jaguar F-Pace, which is nice, but not at all the same as a grand touring car. I thought at one time they could make a great BMW beater by offering a convertible XE model, alas. Their entire regular car line just withered away. The XF station wagon was a superb vehicle. The XJ was heavenly. (The F-type was supposed to replace the XK models, but in driving one, I found the seat was too hard and the cockpit too tight. It was a sports car, not a GT.)