« How a Small Country Can Quickly Capture Gains from the Technological Economy | Main

Comments

Geoman

I've found something related, which I think is important. And that is the availability of parts and youtube videos.

I have found over the last 5 years or so, that I am quite capable of repairing most things in my home. A big part of this is Youtube videos showing exactly how things are taken apart and put back together, and, most importantly, the ability to order small parts on-line.

My fridge broke. Rather than call a repair man, or buy a new one, I went on line. I found out that 1) the problem is a common one with this make and model of fridge, 2) A company had crafted a small part that could be used to fix the flaw in the design.

My bar-b-que broke - the burners corroded. I went on line and found that new burners could not only be purchased, cheaply, with free shipping, but they were specifically manufactured to be identical to the one's that broke. A 15 minute repair with the right parts.

My dishwasher started leaking. What have I got to lose? After finding the broken part, I got a new one in three days for $17. Works like a charm.

Those three examples, as well and a half dozen more I'm not listing, have saved me thousands of dollars over the last 5 years. I'm not especially mechanically inclined. But cheap, readily available parts, and instructional videos, make everyone a repair genius.

Even in the cases that failed - I failed to repair a cell phone dunked in water, and failed to repair a problem with my car, the loss was <$50 in each case. In a third case, I repaired my computer, then decided a better model might be worth it anyway. The process is low risk, high reward.

This may seem like something different, but it really is the same thing - information. I can now obtain information on where and what part to buy very easily, and information on what is wrong and how to fix it. I'm avoiding unnecessary purchases, just like I would avoid unnecessary purchases of bad movies.

Kartik Gada

Geoman,

Yes, that is a good one that we have discussed before. I will award it one of the awards in a future month, once I figure out how to describe the marriage of parts + Youtube instructional videos as a major deflationary force enabled by information democratization.

My own anecdote was a cracked bumper cover. The body shop said $1000 plus keeping the car over there two days. Instead, a brand new part was available from Amazon for just $220, and YouTube instructional videos showed how easy it was to replace it (literally 10 minutes of work even for a first-timer). And the $220 was for a brand-new part delivered to my door. On Craigslist, scratched-up but still usable parts were available for as little as $10. Compare that to $1000 from the body shop.

I have also changed timing belts and spark plugs for a tenth of the price a mechanic would charge. Sure, Chilton manuals existed back in the day, but YouTube videos are exponentially easier to follow.

Geoman

Sorry if I repeat myself.

But to the topic at hand, would you say that as a result, movies and TV shows have gotten better? We are experiencing the golden age of television. Many people believe it is because there are new avenues and monetary sources willing to take chances on more creative offerings. Perhaps. But I believe it is because, especially for TV, it is extremely hard to hide a bad show. No amount of advertising can overcome crappy reviews, which are readily available.

The same thing is happening to movies, albeit more slowly.

Fatcat

Here is a study that attributed 1 percent inflation decrease due to online shopping.
It alone well with ATOM deflationary impact

https://marginalrevolution.com/marginalrevolution/2018/06/the-internet-and-inflation.html#comments

Kartik Gada

Geoman,

I would say that reviews have slowed the overarching decline in the quality of TV shows.

The golden age of (American) TV was 1970-99. A lot of this was due to the fact that there were only 3 networks during the earlier part of this period, and people didn't have VCRs so the theater was the only place to see new movies. After that, one had to wait for movies to come on TV.

Since the 3 networks had so many eyeballs, they aggregated the best talent in one place. I remember when top shows of the 80s and 90s had 25M viewers. Now, there is so much fragmentation that most shows can barely exceed 3M viewers.

Add to that the aggressive pushing of the SJW agenda, which has also wrecked most TV shows.

Internationally, however, the review effect has been useful. The quality of films produced in India has risen. In the old days, disgruntled movie-goers used to take it upon themselves to do the legwork to deface posters of substandard films with words like 'Flop' and 'Bomb' written across the posters to warn others not to waste time and ticket money on bad films. Now, this manual effort is obsolete, and market punishes bad films more quickly.

Kartik Gada

Fatcat,

Good find. Note that eCommerce is still only 9% of total US retail, so much more is yet to come.

Fatcat

And yet another article mentioning that major economists don't know why the inflation is low


https://www.armstrongeconomics.com/world-news/central-banks/making-sense-of-the-federal-reserve/

Palamas

Kartik,

I stumbled again across your site and posts: interesting ideas.

In particular, I watched your Google chat video from Dec 2016. Not that I want to diminish ideas, but I'm far more interested in predictions as I see that they indicate a grasp of the goings on vs strict speculation or bloviation. It's been a year and a half since that video, and the beginnings of what you thought would transpire didn't come to pass. What's more, it seems that they'll be delayed quite a bit longer. I do agree with many of your premises or inclinations, let me say. However, it seems to me that the USA will continue to draw investment and ride current economic waves throughout the Trump presidency, which after its end in 2025 will coincide with major pension and national entitlement crises. Is there any change in your feelings as of June 2018? Why do you think you were too early in your predictions back in December 2016?

Thanks for your time.

Kartik Gada

Palamas,

Trump, as a complete surprise to everyone, has delayed the recession, which was already imminent in late 2016. But note that the ^vix bottom was in 2017 and has not been revisited. Plus, the stock market top was in January 2018, so even Trump may not have delayed things by much.

Remember that when Obama become imminent around August 2008, the entire curve shifted downward. That negative influence continued for 8 years, and the expectation of Hillary kept things on that trajectory. Instead, the removal of the Obama-Hillary weight enabled the trajectory to get back to what it was before August 2008.

Another factor is that I said the 2017 crisis will happen *if* countries don't make printing permanent. China and Japan seem to have figured out that the imaginary inflation specter will never arrive, so are profiting greatly from this. These two countries can print enough to keep the entire world afloat.

Palamas

Just a few things:

There were two large VIX spikes from 2010 to 2012, and the S&P continued to climb. Both were more than double the value of the early 2018 spike you refer to. Now we are back at near 2017 lows, though of course I won't say that it won't revisit a spike here or there.

I foresee the markets rallying into the Dow 40k range, which is funny, but I think you could see that too, I'm guessing.

My most interesting question for you is regarding the USD as the world reserve currency. That is my current speculation as to the next big economic and/or market crash, and I foresee it in the mid to late next decade, as above. Do you have thoughts on that (Triffin Dilemma/World reserve status of the USD)?

A final inquiry that I'd like to offer up is that of the human element some have mentioned before, regarding your DUES suggestion. Won't the people lose confidence in the currency? I think you might underestimate that. There seem to be many factors we are really not aware of that are playing into this kicking the can down the road phenomenon, and that many are "getting away wit it" currently --- but I suspect it's not all just technological deflation.

Fundamentally, I do not see the purpose in taxing anyone if you are OK with running deficits and have that huge of a debt (it's a joke). It's weird that people never say this out loud or in public, that is, "Why the F are we even paying taxes?". I am sympathetic to your ideas for this reason, and I do also agree that they are going to wait too late when bond BS manipulation can't save the next crash.

But I don't think there is no cost to inflating the currency, at least in the minds of the citizens where confidence in it is everything. I think you underestimate how hard it will be for people to buy in, as I've noticed that you realize there are examples in the past of this (notes first, credit cards later, etc) ... but we've never run these types of joke deficits and had this high of a debt before. It's actually pretty funny, when you think about it. You should see the way people look at me when I tell them there's no point in paying taxes, since mathematically our taxes (and that of the "1%") do NOTHING to make any of it remotely "better."

I always appreciate your thoughts,

P

Palamas

By the way, do you have an official explanation of what is referred to consistently here as the "singularity"? And what happens in 2050 ...

Thanks

Verify your Comment

Previewing your Comment

This is only a preview. Your comment has not yet been posted.

Working...
Your comment could not be posted. Error type:
Your comment has been posted. Post another comment

The letters and numbers you entered did not match the image. Please try again.

As a final step before posting your comment, enter the letters and numbers you see in the image below. This prevents automated programs from posting comments.

Having trouble reading this image? View an alternate.

Working...

Post a comment

Your Information

(Name and email address are required. Email address will not be displayed with the comment.)