I don’t think you need an economist to understand why it can quickly lead to a runaway disaster…
Imagine you see a car price going down every week by 1k, do you buy it this week or next week? The competitor what do you think they need to do to compete? Lower their price too but wait everybody is waiting for next week, so literally nobody is buying anymore … So as a company you just start to fire people or close shop as quickly as possible, so a lot of people are now on the market so their labor value also goes down, ie. the salaries are dropping… This tsunami of jobless people would they buy a car this week you think? So companies need to continue dropping the prices…
Except if you think even a few more depths about this… you would understand people have needs. I would be happy to buy a car now if I need it now and can afford it. Your argument only works for goods that are not a necessity to life.
I buy a car if I need a car, not because I want to opportunistically ride the market dips so that I’ve eeked out a profit once the economy’s gone back to being unsustainable.
Besides, consumers get ripped off by bad deals all the time.
Imagine seeing a car price go up every week. Interest rates go up a full point every 6 months. Next month you might be able to afford it but next month it’s gone up 4k and another point.
Companies are making money and people keep buying cars so they keep increasing prices.
I get your point but when you as a person are removed entirely from the equation then you no longer have a stake. How many Americans have no savings, no investments and work a miserable job that doesn’t pay the bills? Do you think they give a fuck if it all comes crashing down? They probably do but a lot less than everyone else.
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I don’t think you need an economist to understand why it can quickly lead to a runaway disaster… Imagine you see a car price going down every week by 1k, do you buy it this week or next week? The competitor what do you think they need to do to compete? Lower their price too but wait everybody is waiting for next week, so literally nobody is buying anymore … So as a company you just start to fire people or close shop as quickly as possible, so a lot of people are now on the market so their labor value also goes down, ie. the salaries are dropping… This tsunami of jobless people would they buy a car this week you think? So companies need to continue dropping the prices…
Except if you think even a few more depths about this… you would understand people have needs. I would be happy to buy a car now if I need it now and can afford it. Your argument only works for goods that are not a necessity to life.
Sounds like an investor’s problem.
I buy a car if I need a car, not because I want to opportunistically ride the market dips so that I’ve eeked out a profit once the economy’s gone back to being unsustainable.
Besides, consumers get ripped off by bad deals all the time.
Imagine seeing a car price go up every week. Interest rates go up a full point every 6 months. Next month you might be able to afford it but next month it’s gone up 4k and another point.
Companies are making money and people keep buying cars so they keep increasing prices.
I get your point but when you as a person are removed entirely from the equation then you no longer have a stake. How many Americans have no savings, no investments and work a miserable job that doesn’t pay the bills? Do you think they give a fuck if it all comes crashing down? They probably do but a lot less than everyone else.
Exept the government swoops in and gives a cash injection