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Price shocks in formative years scar consumption for life

knowledge.wharton.upenn.edu

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Re: Price shocks in formative years scar consumption for life

#291

Post by wolverine876 »

ChuckNorris89 wrote: post #2

Being poor in general, during your childhood, scars you for life. It makes you penny wise and pound foolish, adverse to taking risks in your career and investments, can destroy your confidence in yourself, while always having to look over your shoulder monetarily speaking. Habits that even after you remove poverty from your live, you still feel the the anxiety and triggers in your head.

> Habits that even after you remove poverty from your live, you still feel the the anxiety and triggers in your head.

In high school, I went to a friend's house for lunch. Their father served a mountain of food. My friend said, a bit exasperated, 'Dad - why do you always serve so much food?!'

Dad said, caringly but directly: 'Remember that I grew up in a refugee camp in Palestine. It is very important to me that nobody ever runs out of food to eat in my home.'

An eye-opening moment for a teenager.

Re: Price shocks in formative years scar consumption for life

#292

Post by 01100011 »

ChuckNorris89 wrote: post #2

Being poor in general, during your childhood, scars you for life. It makes you penny wise and pound foolish, adverse to taking risks in your career and investments, can destroy your confidence in yourself, while always having to look over your shoulder monetarily speaking. Habits that even after you remove poverty from your live, you still feel the the anxiety and triggers in your head.

I feel like the results of risky behavior in the real world are somewhat similar to risky behavior in investing. When there is a bull market and overall growth trajectory, risky behavior is more likely to pay off. When a nation is in its growth phase, risky behavior is also more likely to pay off. If a nation starts to enter a phase of decline, perhaps more conservative behavior is a better gamble? Certainly you have to take risk to make outsized gains, I'm just thinking the likelihood of a payoff changes depending on the overall environment.

Re: Price shocks in formative years scar consumption for life

#293

Post by laputan_machine »

DrBazza wrote: post #172
ChuckNorris89 wrote: post #2

Being poor in general, during your childhood, scars you for life. It makes you penny wise and pound foolish, adverse to taking risks in your career and investments, can destroy your confidence in yourself, while always having to look over your shoulder monetarily speaking. Habits that even after you remove poverty from your live, you still feel the the anxiety and triggers in your head.

Another way of stating that article is that most people in their 20s and 30s have only ever known low-inflation and stability. Those in their mid-40s onwards are possibly young enough to remember how what their parents dealt with in the 70s.

I'm in my 30s, I remember 2008 not being a fun time, didn't feel stable watching friends and family lose their jobs and then their houses!

Re: Price shocks in formative years scar consumption for life

#294

Post by mountainb »

ChuckNorris89 wrote: post #75
mwint wrote: post #52

Earlier quoted context omitted.

Correct, this is what I’ve observed too. It’s stunning to me that the big tech companies - Amazon comes to mind - aren’t writing colleges big checks in exchange for “produce us people who can function in real life teams”.

>aren’t writing colleges big checks in exchange for “produce us people who can function in real life teams”. The US has has the privilege($$$) to import the minds and workforce it needs, thereby skipping the need to invest in local education, and offshoring this burden to brain-drain countries in the process.

The US spends more per capita on education than any other large country on earth. The only countries in the OECD that surpass the US in per capita education spending are Luxembourg, Norway, Austria, and Iceland. https://nces.ed.gov/programs/coe/indicator/cmd

So, the US is actually doing both: doing its best to brain-drain other developed countries while also spending more than anyone else on education. Is college the best place to train people to function better in teams? Or would Amazon be better served in funding lots of youth sports teams and recruiting from those?

Re: Price shocks in formative years scar consumption for life

#295

Post by Brybry »

lotsofpulp wrote: post #125
CalRobert wrote: post #101

Earlier quoted context omitted.

We were surprised to discover after her death (in the late 80's) that my great grandmother kept $1,000 in a pouch in her bra. I can understand not trusting the banks and wanting to always have some sort of cash on your person.

I cannot understand not having at least a couple hundred cash on you, and much more at home. What are people’s plans if the power or payment networks go offline? Earthquake, hurricane, ice storm, volcano, etc.

While having some cash is good, if you're planning ahead for a disaster it's better to have stuff than cash cause in the event of disaster your ability to buy things is likely to be decreased.

Or at least that's my experience from living in an area where hurricanes sometimes take down power for 2+ weeks.

When things shut down for a long time the government usually sets up free distribution of MREs and water and already having gas in your tank is more valuable than having cash to buy gas at the theoretical gas station with power to pump but not payment network access.

Re: Price shocks in formative years scar consumption for life

#296

Post by teh64 »

olalonde wrote: post #264
teh64 wrote: post #231

Earlier quoted context omitted.

So for life or death decisions, the ambulance driver would first go on some price comparison website or ask the insurance and see "ok, this person wants a doctor in the $10,000-15,000 range, the closest of which is 30m away. The hospital next door costs at least $50,000 minimum, so we will not send them there for life saving medical care." And what incentive would insurance have to send me to a reasonably priced doct…

It feels like you don't understand or don't believe in free enterprise in general, not just when it comes to medicine. All the theoretical issues you mention do not actually occur in industries that are closer to a free market. There is no cost problem in "tech". In fact, many services are literally free of charge. Despite Google having a near-monopoly on search, it is unable to charge users for it. Demand for softwa…

I understand just fine, I just don't share the naive "invisible hand" narrative. I think there are a lot of places where free markets make for better products and services, but not all products and markets are fundamentally the same, so I believe the same prescription of "just remove all limits to a free market -> all problems solved" does not work everywhere.

But Google can charge their "actual" users, i.e. advertisers quite a bit, and it is much harder to do any advertising without also advertising on Google Platforms, such as Search, Maps, Youtube, Adwords, etc. The wages may have only slightly gone up, but the profits definitely have gone up quite a bit, which shows that amount of workers and their pay has little to do with how much money can be made (which I believe is perfectly fine, because tech is not a place where I think free markets create a detriment to society).

I don't want to start a debate on free enterprise in general, just to show that free enterprise is not a once size fits all solution. My argument was just that the supply of doctors has very little to do with the price of medicine, because the market forces that determine price and can lead to lower prices in some markets do not work correctly in this market.

Re: Price shocks in formative years scar consumption for life

#297

Post by beezle »

I was a kid during both oil shocks of the 1970s. That has absolutely nothing to do with my driving. What does, and not just for driving, is the family taught cultural value of 'don't be wasteful'.

So unlike so many people today, I don't make 12 trips a day to stores/friends/whatever when I can just make one or two if I actually think 5 minutes ahead. That applies whether gas is $1 or $5 per gallon.

I also try to make good use of what I own and not discard things that are functional simply to get the new shiny.

Re: Price shocks in formative years scar consumption for life

#298

Post by jackblemming »

beezle wrote: post #297

I was a kid during both oil shocks of the 1970s. That has absolutely nothing to do with my driving. What does, and not just for driving, is the family taught cultural value of 'don't be wasteful'. So unlike so many people today, I don't make 12 trips a day to stores/friends/whatever when I can just make one or two if I actually think 5 minutes ahead. That applies whether gas is $1 or $5 per gallon. I also try to make…

How many years earlier does that let you retire?

Re: Price shocks in formative years scar consumption for life

#299

Post by bornfreddy »

jackblemming wrote: post #298
beezle wrote: post #297

I was a kid during both oil shocks of the 1970s. That has absolutely nothing to do with my driving. What does, and not just for driving, is the family taught cultural value of 'don't be wasteful'. So unlike so many people today, I don't make 12 trips a day to stores/friends/whatever when I can just make one or two if I actually think 5 minutes ahead. That applies whether gas is $1 or $5 per gallon. I also try to make…

How many years earlier does that let you retire?

Is that the only goal people are supposed to have in life?

Re: Price shocks in formative years scar consumption for life

#300

Post by eric_cc »

beezle wrote: post #297

I was a kid during both oil shocks of the 1970s. That has absolutely nothing to do with my driving. What does, and not just for driving, is the family taught cultural value of 'don't be wasteful'. So unlike so many people today, I don't make 12 trips a day to stores/friends/whatever when I can just make one or two if I actually think 5 minutes ahead. That applies whether gas is $1 or $5 per gallon. I also try to make…

> I don't make 12 trips a day to stores/friends/whatever when I can just make one or two

Forget gas: This type behavior is a waste of time! The most precious resource of all.

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