Latest / The Financial Exchange Show / Why do voters love policies that economists hate?

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Why do voters love policies that economists hate? · The Financial Exchange Show

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by Veterans Development Corporation. This is the Financial Exchange with
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Speaker 2: Chuck, Mike and Tucker with you here, kicking off the
1:16
second hour the Financial Exchange. We got stocks kind of
1:21
going eh, we don't know where we want to go.
1:24
Some of us go up, some of us go down.
1:26
Mostly we just kind of flop around and don't do
1:28
too much. But the Dow is up forty eight points,
1:30
the S and P is up nine, NASDAC up fourteen,
1:33
So bet a tenth of a percent, maybe fifteen hundreds
1:37
seven percent in the positive. Today. We've got the ten
1:40
year US Treasury continuing to see a little bit of
1:45
a sell off there, with rates rising now up to
1:48
three point seven seventy nine percent, up five bases points today.
1:53
Oil up eighteen cents barrel to seventy one eighteen the
1:57
triple A national average for gas prices today, though continuing
2:03
to see some further declines now at three twenty eight
2:07
tenths of a cent, and based on what we are
2:09
seeing in gasoline futures, looks like we may be making
2:13
a run at a national average of three dollars a
2:16
gallon sometime in the next couple weeks, so that is
2:20
potentially on tap here as far as what we're seeing,
2:23
a number of states already well below that three dollar mark.
2:25
The lowest that I've seen was Mississippi at two seventy
2:29
a gallon on average. But you've got most of the
2:32
Sun Belt in that ballpark, and Wisconsin, Jersey and Rhode
2:37
Island all amongst the lowest numbers that we're seeing nationwide
2:42
as well. And then we've got gold today, which is
2:46
up nine dollars and seventy cents announced to twenty six
2:48
fifty five and ninety cents. Gold did hit into all
2:52
time high earlier in the day, but has pulled back
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not a ton, maybe five six bucks from that all
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time high. Great piece today in the Wall Street Journal
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that it's titled Voters love the Policies that Economists love
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to hate, And basically what they did this is just
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fantastic actually, in terms of the work that the Wall
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Street Journal did on this. They pulled seven hundred and
3:17
fifty registered voters about different economic policies and then they
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asked thirty nine economists and said, hey, what do you
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think about these policies? And it's fascinating what we ended
3:30
up getting here, so they separated that. They called them
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ordinary people and economists. I'll note that economists can be
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ordinary people too. They're not all extraordinary. Some of us are,
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but not all of us. But most of us, you know,
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are pretty ordinary people as well. So the ordinary people
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category in terms of, Hey, do you think it's a
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good idea to eliminate taxes on tips for service workers?
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Not a good idea? But are you in favor of
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or against? Seventy nine percent in favor, fifteen percent against economists,
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eighty seven percent against, ten percent in favor. Polar opposites,
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quite honest, Yeah, eliminate taxes on Social Security income, even
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if it increases the national debt. This is how they
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pose the question, not my additional commentary. Sixty eight percent
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in favor, twenty four percent against economist, ninety two percent
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against five percent in favor. Impose a tariff of up
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to twenty percent on all imported goods. Forty seven percent
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in favor, forty percent against for the ordinary people, pretty
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fifty to fifty ye for economists, one hundred percent pose.
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That's a pretty universal one, pretty universal. Penalized companies that
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engage in price gouging for food and groceries seventy two
4:43
percent in favor, twenty three percent oppose. That's for ordinary people.
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For economists, sixty eight percent of POSE, thirteen percent in favor.
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Speaker 3: Does that one surprise you a little bit? I mean,
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I think with the economist commentary there is there isn't
4:59
price gouge and going on so tough to tough to
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Actually I'm not.
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Speaker 2: Going there for what what economists thinker don't think of
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fair enough? You know, it's no way to do. It's just, hey,
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what did they what do they say in the survey?
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Speaker 3: Uh?
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Speaker 2: Make the twenty seventeen Trump tax cuts that expired twenty
5:15
twenty five permanent ordinary people fifty percent in favor, thirty
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two percent of POSE economists, eighty five percent of POSE
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eight percent in favor. Where did they get some agreement
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on this? A few different areas? First, give first time
5:32
home buyers twenty five thousand dollars to put towards down payment,
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even if it increases the national debt. Thirty eight percent
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of ordinary people in favor, fifty nine percent of POSE
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economists eighty seven percent of POSE eight percent in favor.
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So directionally the same closer there?
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Speaker 3: Uh.
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Speaker 2: The second one cap out of pockets spending on prescription
5:51
drugs to two thousand years for all Americans. Seventy seven
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percent of ordinary people in favor, forty six percent of
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economists wear sixteen percent of ordinary people opposed. Forty four
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percent of economists so more in balance, Yeah, cap insulin
6:05
price is thirty five for all Americans. Eighty four percent
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of ordinary people and sixty four percent of economists agree.
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Only eight percent and twenty three percent of ordinary people
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and economists pose.
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Speaker 3: Pretty obscure one that I'm sure not many economists study,
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but nonetheless.
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Speaker 2: They still gave it an opinion. Yep, you know they
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did what they did partially reversed Trump's corporate tax cuts
6:26
by increasing the rate on corporations to twenty eight percent
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from twenty one. Forty eight percent of ordinary people said yeah,
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that's good, Forty six percent said no, Fifty nine percent
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of economists said yeah, that's good, thirty one percent said no. Finally,
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the last one that was pulled here provided a six
6:44
thousand dollars tax credit to families with newborns. Sixty seven
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percent of ordinary people and seventy four percent of economists
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said yes. Twenty eight percent of ordinary people and twenty
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three percent of economists said no.
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Speaker 3: Interesting that that's the single closest one where economists and
6:58
ordinary people agree.
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Speaker 2: Here's what when you're trying to figure out what's going
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on here, in my opinion, the place where there is agreement,
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the places where there is closer agreement, you try to
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figure out, Okay, is there anything in common on these
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three of them, in my opinion, effectively relate to healthcare.
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Capping prescription drug costs, insulin prices, and providing a six
7:26
thousand dollars tax credit to families with newborns. More or less,
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i'd classify that as healthcare. The other one, again, I
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don't even know if there's any agreement on this, give
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first time home. I guess there is, because the majority
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of people disagree, whether economists or not. I think people
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that are like, okay, that's not actually gonna change anything.
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The other place where people agree is on increasing the
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corporate tax rate, and even there it's kind of narrow.
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It's just it's kind of split just on both sides.
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The places where there are big disagreements are on trade policy,
8:00
trade policy, social security, taxation, tip taxation, price gouging, and
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tax cuts. I can't really find a great well. I
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think that I meshes.
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Speaker 3: There to me. The one that seems to hold true
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other than the trade one is forms of stimulus are
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immensely popular among voters, although I guess the twenty five
8:27
thousand dollars.
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Speaker 2: Twenty five thousand dollars for buying a home is not. Yeah,
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I don't know what to make of this other than look,
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the items that we rattled off. Some of them are
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from the Trump campaign, some of them are from the
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Harris campaign. There are some good ideas, there are some bad,
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and there's no real consensus on all of these, but
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there's some pretty clear consensus from economists on a number
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of these when we talk about, hey, you know, are
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these good or bad? And again, this is not to
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say that economists are always right, because they're not. But
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I'm just kind of laying out where there's disagreement on these.
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The one that Mike and I have come back to
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quite often, and this is one that's embraced by both
9:13
campaigns right now, is the elimination of taxes on tips
9:16
for service workers. And hey, why does everyone just classify
9:20
everything as a tip? Or why is the person working
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in the front of the house get different tax treatment
9:24
from the back of the house, like, there's some real
9:28
questions on stuff that is polling really well there. On
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the other hand, you look at some of this other
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stuff that isn't polling well, and we had questions about
9:35
it too. The first time home buyers with an extra
9:38
twenty five thousand dollars. Well, hey, if you're just giving
9:40
everyone an extra twenty five thousand dollars but not increasing
9:43
the supply of homes, that's not really something that makes
9:46
sense either. And so it's something where as we try
9:52
to navigate, you know, what policy is actually going to
9:56
come out of this. Where I've always kind of landed
9:59
on this is, Look, imagine that the candidate that you
10:03
don't like wins an election. Do you want to be
10:07
granting them the power to control the things that you're
10:11
in favor of granting your candidate to control. And more
10:14
often than not, my answer is no, I prefer that
10:18
that not happen. And this is kind of how I
10:22
get to you know, hey, you don't want to have
10:24
the executive branch with too much control over anything. And
10:27
even when it comes to Congress, there are certain things
10:29
where you're like, hey, maybe you shouldn't even touch this,
10:32
this is best less for you know, the different states
10:35
to decide and this and that, or the courts. It's
10:38
you just don't want to grant anyone too much power.
10:41
Speaker 3: Can I bring up a quote that's been misattributed to
10:43
a bunch of people over time, and I think is
10:44
especially relevant to these types of debates, which one it's
10:48
about how a democracy is always temporary in nature. I
10:52
think I've seen it attribute to Ben Franklin, but I
10:54
think that's a misattribution.
10:56
Speaker 2: I've seen everything gets attributed to Ben Franklin.
10:58
Speaker 3: Yeah, seventeen hundred Scottish statesman. Quota democracy will continue to
11:03
exist up until the time that voters discover that they
11:06
can vote themselves generous gifts from the public treasury. From
11:09
that moment on, the majority always votes for the candidates
11:11
who promised the most benefits from the public treasury, which
11:15
with the result that every democracy will finally collapse due
11:18
to loose fiscal policy. Again, the attribution that I've seen
11:23
most commonly is to Alexander Fraser Tyler, a kind of
11:26
obscure Scotsman, just an obscure Scots Scotsman who lived in
11:30
the late seventeen hundreds.
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Speaker 2: He been golf.
11:33
Speaker 3: I don't think so, but I find that quote especially
11:36
relevant right now. And I don't know that it's going
11:39
to lead to the end of democracy in our lifetimes,
11:41
but it does seem to me right now that this
11:44
presidential race is mostly about who can promise bigger gifts
11:49
to these Every week.
11:50
Speaker 2: There's a new one.
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Speaker 3: Yeah, every week there's a new one, you know, pretty disheartening.
11:56
Speaker 2: Like, hey, now, like in what world you go back,
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like fifteen twenty years in what world are we having
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a serious conversation about, Hey, should we exempt tipped workers
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from being taxed? Yeah? And not anyone else? Like, what
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what are we doing here? What are we actually doing here?
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It's it's a little bit comical. Hey, you know, grocery
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prices are too high. You know, who can you know,
12:22
set the right prices for groceries? The government? The government?
12:26
What what are we doing here?
12:30
Speaker 3: It's strange world we live in right now.
12:33
Speaker 2: What's the right level of profit? Michael, imagine you walk
12:37
into your econ one on one, Mike, describe the right
12:40
level of profit? Okay, Like we've kind of jumped the
12:45
shark on this a little bit.
12:47
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Speaker 3: Folks, if you haven't heard, the Financial Exchange is hitting
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live lunch and seminar with the Armstrong Advisory Groups. An
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educational lunch with us from the AG. We'll be talking
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about the upcoming presidential election policy that both candidates have proposed,
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you know, different types of viewpoints we might have on
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15:12
Speaker 2: Peace in Bloomberg opinion titled I want to pay higher
15:15
gas taxes and you should too. This is from Javier Bloss,
15:19
who is admittedly like a very good energy analyst. But
15:24
there's a difference between being a very good energy analyst
15:26
and being someone who still has popular positions when it
15:29
comes to things like the gas tax. So here's the
15:33
argument that Javier mix is. Look, oil prices have come
15:37
down significantly. If there's ever a time for governments to
15:41
enact higher gas tax prices in order to raise revenue
15:44
for improved transportation infrastructure, this is it.
15:48
Speaker 3: And he makes some reasonable arguments here. It does direct,
15:52
you know, create a direct link between road usage and payment,
15:54
although that's declining over time due to evs. They collect
15:58
a lot of money simple they're cheap to manage. Tax
16:01
Payers have previously largely accepted them, although that would be
16:05
debated since they have consistently voted down increasing gas taxes
16:09
across the board. And then they're also very difficult to evade.
16:12
Not a lot of people are refining oil into gases
16:14
gasoline in their basement. So no, all those things are true.
16:18
Speaker 2: You don't see much of that.
16:19
Speaker 3: You don't see a lot of evasion. The questions that
16:22
get raised on this are very simple.
16:24
Speaker 2: Okay, if you're instituting this because oil prices are low,
16:27
are you going to wave them when oil prices go up?
16:29
Speaker 3: And you could?
16:30
Speaker 2: And the answers we saw in twenty two is well, yeah,
16:32
a lot of states actually did wave their state level
16:35
gas taxes in twenty twenty two, so you did see
16:38
that as they tried to generate some relief four prices
16:42
of the pump.
16:43
Speaker 3: But it's unpopular on both the right and left, which
16:46
is probably why this is never read to happen. So
16:49
it's unpopular on the right, I think for obvious reasons
16:52
and not wanting to disincentivize gas vehicles. There's been a
16:55
general pushback against evs Oh that's changing a little bit
16:57
with Elon Musk's influence on the Trump campaign. I think,
17:00
sure on the left, there are regressive tax I mean,
17:04
you know, plain and simple. Actually, there's a few different
17:07
ways in which it's regressive, but you know, any tax
17:09
on consumption is generally considered regressive. If you make a
17:12
million dollars, the portion of your income going towards gas
17:15
tax is relatively small. And then furthermore, if you're making
17:18
a million dollars, you're more likely to drive a newer,
17:22
more fuel efficient or even electric vehicle, in which case
17:25
you aren't paying much of this tax at all. And
17:27
so Democrats hate it from the aggressiveness side, and there's
17:30
no real way to fix it on that end. I
17:34
think it would be if your goal, by the way,
17:36
is to dramatically lower the amount of gasoline consumption in cars,
17:41
then the gas tax is the very best way to
17:43
go about that. The problem is nobody's on the left.
17:46
There's reasons they're not willing to do it. On the right,
17:48
that's not their goal.
17:49
Speaker 2: Yeah, And the other thing that you have to remember
17:51
is it's not set in stone that money you raise
17:54
from the gas tax goes to fund transportation infrastructure. Either
17:58
in many states and even in level a lot of
18:00
it's pulled into other stuff.
18:02
Speaker 1: Anyways, bringing the latest financial news straight to your radio
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18:27
Speaker 2: I want to talk a little bit like have you
18:29
been to a conference?
18:30
Speaker 3: What do you mean?
18:31
Speaker 2: Have you ever been to a conference?
18:32
Speaker 4: Is a zoom conference?
18:33
Speaker 2: Just just a conference?
18:34
Speaker 3: I've been to a conference.
18:35
Speaker 2: Okay, So Salesforce had their big annual conference last week.
18:40
It's called dream Force and on I don't know if
18:43
it was the last day or the exactly when.
18:46
Speaker 3: Who goes to I mean, are these larger customers or like.
18:51
Speaker 2: Customers, like developmentors, developers, all these employees, like everyone gets
18:57
it's huge and and they hired the comedian John mulaney
19:04
to do a set one night, and.
19:08
Speaker 3: It's a big act.
19:09
Speaker 2: I gotta say, like John Nailedy, he went like full
19:13
Norm McDonald on this in terms of just absolutely going
19:18
at them walks in first thing, he says, let me
19:22
get this straight. You're hosting a Future of AI event
19:25
in a city that has failed humanity, humanity so miserably.
19:28
It's taking place in San Francisco. Then he goes it
19:32
says there were audible groans. Then he goes, you look
19:36
like a group who looked at the self checkout counters
19:39
at CVS and thought this is the future. He continues,
19:46
If Ai is truly smarter than us and tells us
19:49
that humans should die, then I think we should die
19:51
because so many of you feel imminently replaceable. He added,
19:56
can Ai sit there in a fleece vest? Can Ai
19:58
not go to events and and all day at the bar? Instead?
20:02
He just absolutely crushing them on this other things that
20:09
he said. What's important here is that we're looking for solutions,
20:14
and in looking for solutions, what were really after his
20:17
insights which then led to success, and now we can
20:20
start prepping the humans for robots. Some of the veguesst
20:23
language ever defined has been used here in the last
20:25
three days, and the fact that there are forty five
20:28
thousand quote trailblazers here couldn't devalue the title anymore. Oh
20:33
man like basically just just going right for the gut,
20:36
not not even like nice in any way, shape or form. Finally,
20:39
he concluded by thanking attendees for quote the world you're
20:43
creating for my son where he will never talk to
20:46
an actual human again. Instead, a little cartoon Einstein will
20:49
pop up and give him some sort of good answer
20:52
and probably refer to him as refer him to another chatbot. Ultimately,
20:56
me and my son are just two guys hitting whiffleballs
20:59
badly and yelling good job at each other. It's kind
21:01
of the same energy here at dream Force.
21:04
Speaker 3: I long to get to the place in my career
21:07
where people will hire me to insult them.
21:12
Speaker 2: Isn't that kind of what parts of our show do? No, No,
21:17
sometimes we do so, Like we read that piece about
21:20
the guy who said that the FED can't stop a
21:22
bear market, and we kind of roasted that. Yeah.
21:25
Speaker 3: You know, I was at a conference years ago, a
21:27
financial advisor conference where Martin Short was there. Oh yeah,
21:32
and yeah. I think it was actually more during a
21:35
lull in his career where he would do that type
21:36
of thing before.
21:38
Speaker 2: He got into what's the one that he does now?
21:40
Is it only murders?
21:42
Speaker 3: Yeah? But his takeaway was basically, you know, thank goodness,
21:47
I am so bad with money, because otherwise there is
21:50
no way that I would be sitting here talking to
21:53
all of you something like it's talking to all losers.
21:57
It's just like right out the gate. Just a good
21:59
insult did all the financial advisors out there, which was guys.
22:02
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23:06
Speaker 2: Mike, you want to talk about the expansion from Bjay's
23:09
Wholesale Club as they are closing in on two hundred
23:13
and fifty stores nationwide.
23:14
Speaker 3: Now, yeah, traditionally more of a Northeast player here, but
23:17
has been expanding and clearly has their eyes on a
23:20
national market. And my my main question here, Chuck, is
23:25
there actually room for BJ's and Costco in most markets?
23:28
Speaker 1: Look?
23:28
Speaker 3: Correct me if I'm wrong. You moved a few years
23:30
ago and are now a BJ's wholesale.
23:33
Speaker 2: Club number yep, I am.
23:36
Speaker 3: My takeaway from my limited experience with Costco is I
23:40
don't know that I can put my finger on any
23:42
one thing that I feel BJ strongly does better than Costco.
23:46
Speaker 2: I don't know if it's necessarily better or worse. But
23:50
there's always space for two, you know players in any market. Yeah,
23:54
you know, it's in something that is ultimately commoditized, which
23:59
is by like obscenely large amounts of dog food. You
24:04
can have two companies that both are about as good,
24:09
and you know, as an example, one of the things
24:11
that I've heard that's a problem with Costco these days
24:14
is if you go anytime on the weekend after nine
24:17
am or before I'm sorry, yeah, after nine am or
24:22
before like five pm, it's basically completely jammed.
24:26
Speaker 3: That's an indication that there could be more competition.
24:28
Speaker 2: Yeah, yeah, And so someone might just get fed up
24:30
with that and say, look, I'm gonna go try something
24:32
else that might not be as busy. Are there, you know,
24:37
they're their differences in the business models in terms of
24:40
who they target as well. Costco, interestingly enough, targets are
24:43
more upscale, consumer different. You take a look at their
24:46
meat selection, just as an example, and you get an
24:48
awful lot of high end stuff that creeps in there.
24:52
BJ's doesn't necessarily play in that same ballpark, and there
24:55
are some differences you know, around the edges too. So
24:59
I think that in looking at it, is it something
25:01
where I say, hey, did they do this better than
25:03
you know, Costco or a Sam's Club. I don't really know.
25:07
I don't think so. I don't think it's worse either,
25:09
I just think it's kind of slightly different. Hey, here
25:13
are the really big shelves with eight thousand rolls of
25:15
paper towels.
25:16
Speaker 3: Yeah, but you can bet there are a whole bunch
25:18
of markets that are currently served by neither.
25:20
Speaker 2: Sure that.
25:23
Speaker 3: In this day and age of subscription models and clubs,
25:28
seems to be something that might be popular. So we'll
25:31
see how the expansion goes. And we've certainly seen other
25:34
companies expand too quickly and struggle with it. But Bjay's
25:40
hoping to compete a little bit more directly on a
25:42
national basis with Costco going forward.
25:43
Speaker 2: And the other thing that I will say that maybe
25:45
skews towards more demand on this side of things is, Look,
25:49
we're dealing with a surgeon prices over the last few
25:52
years that has left a lot of people looking for,
25:56
you know, ways to cut things like grocery budgets and
25:59
things like that. I do my grocery shopping every weekend
26:03
at bjsus, especially like, look, I got two little kids
26:06
that eat threw a pint of blueberries a meal. I
26:09
can't go to freaking Whole Foods to buy blueberries for them.
26:14
Speaker 4: We bought four pints yesterday.
26:16
Speaker 2: And that's one day. And that's one day. You can
26:19
do four more today. The blueberries are too high. It's insane.
26:23
Speaker 3: Which of these companies, BJ's or Costco will be the
26:26
first one to lump a streaming service into their subscription?
26:32
I only half joking here, I would go with Costco.
26:35
Speaker 2: Yeah, Costco Netflix tie and feels about right, Yeah it does.
26:40
Let's take a quick break here. When we come back,
26:42
it's time for a little bit of stack Roulette.
26:44
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27:44
Speaker 2: Mike, did you happen to catch the new Mozart single
27:47
over the weekend? Now, Tucker? No, what?
27:51
Speaker 3: What like the the Mozart?
27:54
Speaker 2: The Mozart that's the one. So a bunch of people
28:00
were floating around a library in Leipzig, I guess, and
28:06
legitimately found a two hundred and sixty year old composition
28:11
from Mozart that has never been played before. It's a banger,
28:15
and so they played it in Uh. I don't know
28:18
exactly where in Germany they ended up playing it over
28:22
the weekend, but it was the first new music from
28:26
Mozart in a couple hundred years. So, I don't know,
28:30
I find that really cool.
28:33
Speaker 4: Can we like listen to it or no?
28:36
Speaker 3: I don't know, Spotify it probably mix it into the
28:39
segment sometime Tucker has some bumper music?
28:42
Speaker 2: Yeah, one you maybe we can kick shows off with
28:44
its starting. You know, it's Mozart, very good with math,
28:49
very good with numbers.
28:50
Speaker 3: Gotta be in the public domain by now. I mean
28:52
you gotta be able to sample that for free. I
28:54
think you know new.
28:56
Speaker 2: It's a good question if if it's not new, Well,
29:00
here's the thing, very very old. Actually it might be old,
29:04
but the recording of it is new. We're gonna have
29:08
to get some law people on this and see what happened, Mike,
29:12
what do you got for me?
29:13
Speaker 3: Connor sent I think you don't even need to go
29:16
further than the title here. But I actually like the
29:18
point that he makes. We get either four percent mortgage
29:22
rates or a stable job market. You don't get both
29:25
anytime in the near future. I think is the point
29:27
that Connor is trying to make. And so here's what
29:30
he means. Tenure treasury yield has come down. Mortgage rates
29:33
are largely based on the tenure treasury yield. While the
29:36
Fed may choose to cut rates further, it is unlikely
29:40
that you get mortgage rates anywhere near four percent unless
29:44
we go through a really ugly recession, which means a
29:47
bunch of job loss. And I think that point might
29:49
be lost on some people. It's a fairly simple one,
29:51
and listeners of our show probably aren't lost on that one.
29:54
But those two things are pretty mutually exclusive, and you
29:59
may see ra come down. You could see them in
30:01
the high fives. But outside of a situation where unemployment
30:05
is ticking up over five percent, really tough to envision
30:08
a scenario where we get four percent of mortgage rates.
30:10
Speaker 2: Yeah, and the reason why is if you look at
30:13
what is priced into markets at the moment, by the
30:18
October FED meeting of next year, you've got an additional
30:22
two four six, you get an additional eight rate cuts
30:25
being priced in now you know, down to FED funds
30:29
rate of two hundred and seventy five to three hundred
30:31
basis points. So look in recessions, oftentimes you need to
30:35
see about four percentage points and cuts, so that could
30:37
take you down to like one seventy five to two.
30:41
But ultimately, the only way that you get there is
30:43
if you have a meaningful recession that requires like an
30:46
additional three and a half percent of rate cuts from here.
30:50
If not, then you start getting into scenarios where you say, okay,
30:55
if things are just slowing, maybe they can cut rates
30:57
and not necessarily have to bump them. You know, you
31:00
can still have another you know, two to two and
31:02
a half percent rate cuts. Okay, that's possible. But there's
31:05
also a scenario in which, hey, if the US economy
31:08
rebounds and inflation turns out to be bottoming around two
31:12
and a half to three percent instead of stabilizing around
31:15
two and a half percent. Gee, Now, now you've got
31:18
a question as to what happens to long term rates,
31:21
and they probably start to rise, and your six percent
31:25
mortgage is turned into seven or seven and a half
31:27
pretty easily in the event that inflation makes any kind
31:31
of even headfake upwards at some point next year. So
31:36
there's some real questions on that to watch for peace
31:40
In CNBC today, up to four hundred dollars to change
31:44
a light bulb appliance repair costs are no joke. Now,
31:50
they're not talking about someone charging you four hundred dollars
31:53
to come in and replace a light bulb in you know,
31:58
a lamp or the ceiling or something like that. Instead,
32:01
this was a case I'll quote here. I bought a
32:03
General Electric microwave oven in twenty twenty for three hundred
32:05
and fifty five dollars. Recently, I noticed the interior lighter
32:08
was out I told my husband and he took a
32:10
look go in and when it wasn't gonna be an
32:12
easy fix, so they had to call a technician. They
32:15
said that the labor costs could be up to four
32:16
hundred dollars and that didn't even include the cost of
32:18
the light bulb.
32:20
Speaker 3: That's just was it a ge microwave? Oh yes, yeah, yes, yeah.
32:25
Speaker 2: So in any case, this is not, you know, the
32:28
norm that we're talking about.
32:30
Speaker 3: But is that honestly the business model? Hey, we need
32:33
to make these products so that they fail or require
32:37
some service within a few years, because otherwise, if we
32:40
make a great microwave, well then who's going.
32:43
Speaker 2: To buy a new one?
32:45
Speaker 4: I mean, you hear people all the time saying their
32:47
appliance is crap. The bed after ten years, right, will
32:51
replace it.
32:52
Speaker 2: Look, if you get ten years out of anything, I
32:54
view that as a win.
32:56
Speaker 3: I recognize that. But like, how many grandmas still of
33:00
the you know, nineteen seventies teal refrigerator that's just been
33:04
running strong since then.
33:05
Speaker 4: Yeah, we have a old, old refrigerator in the basement
33:10
and it's the coldest beer you ever have. Okay, but
33:12
the one we had to replace in the kitchen it
33:14
was fifteen years old and we had to replace them.
33:16
Speaker 3: Fifteen years Yeah, I'd be happy with that.
33:18
Speaker 2: The thing is, people don't want to pay for quality. Yeah,
33:21
you know, like you will get how much a refrigerator
33:25
or a TV or something costs these days.
33:28
Speaker 3: And compared to what it was inflation adjusted, and the right.
33:31
Speaker 2: It is if you inflation adjust the cost of appliances
33:34
from back then, people generally don't want to pay for
33:36
that quality. Yeah, And so you get into this cycle
33:39
where you're buying these things frequently. And the problem is
33:43
also that remember with any product, there's a wide distribution
33:48
of how long they end up lasting. The average might
33:51
be eight years on a washer dryer, but there are
33:53
some that get stuck with the one that break after
33:55
two and there are others that can get through twenty
33:57
five years no problem. Yeah, and neither of those are right.
34:01
It's just okay, you got lucky with however it worked
34:03
out well. You had the situation with the vacuum cleaner. Right,
34:06
here's the This is the one that I always come
34:08
back to where I just don't understand how this is
34:09
a business for vacuum cleaner repair. You can go out
34:13
on Amazon now and buy a new Shark vacuum for
34:16
one hundred and twenty dollars. Why are you ever going
34:21
to repair it? Because even if you you will get
34:23
a repair a vacuum cleaner repair person. Okay, what do
34:26
they want to be making? Well, look, you can get
34:29
a job at Amazon paying twenty dollars an hour now,
34:31
so you're not gonna charge just that. You gotta be
34:33
probably at least thirty to forty plus parts plus just
34:37
your overall overhead. I'm probably paying one hundred and twenty
34:40
dollars just to fix the thing, and I could get
34:41
a brand new one like that.
34:44
Speaker 3: Yeah.
34:44
Speaker 2: So there's other places where the prices have come down
34:47
so much that it's almost you look at it, you go,
34:50
why would I try to repair this? It's gonna cost
34:52
me more because they're so cheap. In some cases now
34:56
I generally still try.
34:57
Speaker 3: Ma, you've got a passion for vacuum repair. Chuck could go, what's.
35:02
Speaker 2: The name of the place in the Breaking Bad Universe?
35:06
I was just about to say that, Yeah, you were
35:09
going that way. Yep, Yeah, change your identity exactly. Yeah.
35:13
In any case, we got markets slightly up. The Dow
35:16
was now up forty seven points. The s and p's
35:18
up nineteen, NASDAC up sixty five, so a little bit
35:21
of continued up. We're drift here. We'll see if we
35:23
get new all time high today again at the close,
35:26
all done for the day, Back at it tomorrow on
35:28
the Financial Exchange. We'll see you then