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had been doing a lot of thinking about rising prices lately. I realized that low-end cars in today’s market cost as much as my first house. I took this dilemma to one of the social networking groups.I was dismayed at the answers I received. It seemed to be a question which touched a lot nerves very quickly. I would say that close to 90 per cent concluded that rising prices was just an inevitable as changes in the weather.
What’s more many seemed convinced that if one did the ratios between what one earned and what one paid for housing between 1965 and the present they would get the same answers. I don’t think so. They wanted to convince themselves they were no worse off than folks in the 60s. All I can say is dream on.
In 1965 I was paying 20 per cent of my earnings on rent. In 1992, I was paying 40 per cent. I am currently paying 59 per cent.
Then, there was the issue about the cars. I had a dozen replies trying to convince me that one in 1965 had to work just as hard to buy a car than they do now. Of course, I was overlooking the facts that cars now have a higher value because of all the bells and whistles. Yeah right. It can take up to five years to pay off a car. My car note was $36 a month for two years. Read the numbers again if you are shocked. Car payments today are close to what we used to pay for rent.
When a market goes haywire, you do not have to sit still and do nothing. Recently the Hollywood writers’ strike has gotten a lot of press. It’s obvious that Hollywood writers for the most part are never happy. A small article caught my eye this past week. A number of them are negotiating with venture capitalists in an effort to by past the studios. If they get the financing, they will write and produce and put the movies directly on the Internet. This is a dramatic attempt at creating a new market and avoiding middlemen who became too cumbersome.
There is no way to get completely around food prices unless you happen to own a very profitable farm. But, you can take extra care to shop at places that offer prices under the usual. There are 99 cents stores in California, Arizona, Nevada and Utah. They started in 1982 and are still expanding. In other states, there are Dollar Stores. (This is not an attempt to promote either) I have recently moved and am now shopping regularly at the 99 cents store again. It’s saving me about $50 a month.
When there is a demand for a product and a market doesn’t exist, or the one that does is a mess, the consumers will find a way to make it happen. Back in the days that the Central Committee controlled what was bought and sold in Russia, there was an ongoing black market for jeans. The demand was so high no one dared to put a thumbs down on the selling which was done out in the open on the sidewalks of Moscow.
If city governments decided enough was enough with the traffic problems, they could make a good faith effort in making a big difference. All that it would take is an ordinance mandating all businesses within city limits allocated a good percentage of work to be done by telecommuting. Even customer support is now being handled by a few workers every week out of their home. There was once predictions that the freeway on the way to downtown Los Angeles would be so empty by the year 2000, you could walk down the middle of it.
If you know someone with a garden, you might find a way to save on vegetables and fruits. I can’t think of a better way to get kids working than showing them what can happen when working a garden.
There isn’t a market niche that push come to shove will not change if the prices go too high. (An example used in econ textbooks: if the man selling ice cream and soda at the beach on a hot day goes to high with his prices, someone will start collecting money and go to the store.) We need more aggressive consumers. Haven’t you had enough yet?
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