Why Affordability and the Vibecession Are Real Economic Problems | Hacker News Reader

Why Affordability and the Vibecession Are Real Economic Problems

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Time for the other American political party to pick up the "nah it's just negative media, people still have money and food" drum!

Sure, many people (in an absolute-number sense) are in no immediate risk of crisis. But many are.

Economic policy for 40+ years has been shifting both income and wealth largely to the already-haves with massive knock-on effects on the general affordability and comfort for everybody else. The flow of money into small sets of assets and investments distorts the "inflation" measurements and we find ways to ignore it. Buy groceries instead of eating out! Just let the median household's kids work more too, in some red states! That part of the story has been going on for a long time, and the actual-Covid-inflation just drew more attention to the trend.

People were talking about it long before Covid, but the Covid bullwhip and the complete lack of foresight or management[0] of the situation pushed it into a new, noticably-worse-normal overnight. While before we were just boiling the frog and blaming avocado toast for millenials not buying houses or having kids yet. Some good math in the post about the concrete part of this vs just "vibe" parts, especially re: the behavior of the lower-income end of the economy.

But you can't have a viable consumer economy when everyone with power is squeezing the consumer tighter and tighter. We've been papering over this problem by making stuff free-with-ads but eventually there won't be enough buying power left in a large enough non-broke cohort to keep the system working for anybody.

[0] "you think maybe people will want more of the stuff they bought before, and less Pelotons, in a two years?? No way! Buy Zoom stock!"

I saw a thing in Wall Street Journal today about how millennials are "splurging on rotisserie chicken."

> “Gen Zers and millennials are swimming in student debt and may never own homes, but they’re splurging on gut-healthy juices and rotisserie chickens.”

https://offthefrontpage.com/the-wall-street-journal-gets-com...

Aren’t rotisserie chickens one of the #1 grocery store loss leaders?

Some places like Costco - yes.

Other places have them priced high enough that I think they make money on them.

(The trick is they take the unsold ones and strip the meat off and sell it in the deli/sandwiches.)

It's a good way for a grocer to minimize waste. When raw chicken gets close to sell by date, turn it into rotisserie chicken, when it doesn't sell - turn it into sandwiches and other products.

My kids just remarked to me that a Costco rotisserie chicken was $4. I didn't believe them but I do now. I wonder how freezing that will thaw. That's a cheap food option.

On the /r/costco subreddit they talk about deboning it the moment they get home and then setting aside the bits for pre planned meals(here’s where one would slice then freeze). The bones can be used for making stock.

Yeah, that's been the typical attitude for well over a decade now from the older generations who didn't have the same struggles and don't imagine that things have actually changed.

Even if we read that as generously as possible - "wow, look at how many millennials buy $20 Erewhon smoothies" - it's a wildly stupid play to couple that to how many millennials are in debt and can't afford homes.

Nobody said no millennials can afford homes. Nobody said they are all broke. Plenty of businesses out there are still capitalizing off the higher end of the range.

But at almost every percentile they're worse off than their parents were, economically. And probably working more hours to get there.

If you are <30 and are not in a trade related field, you will likely be unable to purchase a home in your life time.

Banks in Australia are now denying University Graduates, including those like myself in IT Industries, home loans due to increased risk of AI replacement in various workforces.

Where I shop, rotisserie chickens are 1/2 the price of a raw whole chicken..

Is the largest produced (by volume) source of animal protein in the US considered a luxury item?

Rotisserie chickens are a great deal. Lots of calories and protein, and you can save the carcass to make stock. They're cheap relative to restaurant food as well.

It's weird I was having a conversation with a contractor the other day, and he mentioned how in 1970, contractors earned ~9k/year and a truck cost ~2k. He was making the comparison about how he made 50K this year and the truck he financed was also around 50K..

I don't think it's a coincidence a lot of problems are happening at the same time in the US.

Part of the economic distortion, and difficulty in making these comparisons, is that a 1970 Ford F-100 and 2025 Ford F-150 are pretty radically different. Both by design, government mandate, and customer demands.

2 door single row -> 4 door two rows

drum brakes -> anti-lock disc brakes

lap belts only -> shoulder belts with airbags,

normally aspirated V-8, no catalytic converter -> twin turbo v6 and dual catalytic converter

manual transmission -> 10 speed automatic

If you wanted to make a Ford F-100 today, without the modern safety, emissions, fuel efficiency, and comforts, you could probably do it for less than $17,000, which is what $2,000 adjusted for inflation is.

And a computer in 1970 would've been way more expensive and far crappier than a hundred dollar Android tablet today. It's not exactly in dispute that there has been technological development between 1970 and 2025. But it's also not the central issue.

In America the personal vehicle is a necessity in the vast majority of the country, and it's relatively more expensive today. As are many other necessities.

(If you want we can quibble further and say a 17k used Rav 4 or Tacoma would be more reliable than a 1970 F-100 anyway blah blah blah blah the increased lifespan and availability of used cars causes new cars to have to go more upmarket blah blah blah... but the hedonic treadmill is also real and if you would've been living it up with a new car and a nice home with a 30min commute in the 70s, but today have a 10 year old car and an apartment with a 70min commute, you're not gonna feel good.)

Yes I agree they are MUCH more expensive relatively. But they are more expensive entirely by choice, not because of inflation or stagnant wages. People want better cars, and that costs more. The government demands lower emissions, that costs more. Safety costs more. There is no world where you get all that for the same percentage of income.

you would've been living it up with a new car and a nice home with a 30min commute

And you be killed or paralyzed after a fender bender. Death rate per 100,000,000 miles dropped from 5 in 1970 to 1.4 in 2023.

> People want better cars, and that costs more. The government demands lower emissions, that costs more. Safety costs more. There is no world where you get all that for the same percentage of income.

Hell, we did it with computers. Let's figure out how to do it in more places.

Isn't that supposed to be the main job of the economy? Increase productivity? So that we all get more for less? Make the pie bigger, don't just make your own slice bigger?

If there's "no world" where all that can happen, most of the "taxes will hurt innovation, actually" arguments fall EXTREMELY hollow. Let's connect a few dots:

- Streets are in disrepair

- You can't afford the lifestyle you used to (by "choice")

- It's far harder for people, especially the young, to find a job (many end up hiding on disability and such that didn't exist much several decades ago in the first place)

- The wealthy have more money, and proportionally more money, than any time in the last century

Maybe instead of choosing the more expensive car we should start choosing to put some of that money to use repairing our basic infrastructure and trying to increase whole-society productive output instead of bottom-line ROI.

It is happening with cars too, it just that features are being added even faster than the price can come down. If you wanted Ford F-150 in 1970, you could do most of it, but it would have been a multi-million dollar car. You get all that for 50k. You are getting a lot more per dollar.

This reminds me the housing discussing - a part of the affordability problem is that houses have gotten much bigger. And have air conditioning. And have to comply with strict building codes. And have to be fire safe.

> houses have gotten much bigger

Which is a problem. I know a people who would be happy with a smaller house, but there just aren't enough on the market, and the scarcity of them leads to bidding wars that drive the price up. Meanwhile huge houses sit on the market for months, because no one can afford them.

I don’t think this is true. Advancements in technology often make things possible that previously were not at any price. Engines, for example, are better than ever in part due to computer modeling that would have been impossible in the 70s. Same deal with aerodynamics, safety features, and a million other things. In the 70s, you couldn’t have those things for any price. They required decades of development in other sectors to open possibilities for automobiles.

Most technology on cars existed years or decades before the became commonplace and affordable enough to use outside racing or exotic cars.

Airbags were patented in the 1950s. Modern ABS in 1971. Fist electronic fuel injector in 1957. You could take the Formula 1 level technology of 1970, and with enough money, apply it to a pickup truck. It would be shockingly expensive - and not as good. T

hat's my point! You are getting so much more for your dollar today, even though prices have risen faster than inflation. You are getting a multi-million dollar truck for $50k.

> You are getting a multi-million dollar truck for $50k.

You’re not, though, because that truck never did and never could exist. A modern F-150 isn’t a 70s F1 car made cheap by new tech. This isn’t something you can wave away with an argument equivalent to “we put 1000 research points in the tech tree.”

When the US economy was working well, products got better and cheaper over time. Tech and increased labor productivity drove that. Now, tech and labor productivity has continued to increase, yet consumer prices have far outpaced inflation.

"A modern F-150 isn’t a 70s F1 car made cheap by new tech. "

Yes, it pretty much is. You have to consider technology in cars is moving on two seperate/distinct paths.

1: improving manufacturing processes, materials, quality, which is lowering prices over time. Megacasting aluminum car parts is an example.

2: Adding totally new complex parts and systems that cars didn't have. This is things like airbags, antilock breaks, infotainment system, catalytic converters. This adds to the total cost.

#2 is far outpacing #1, which is why prices of cars are going up faster than inflation, wages, etc.

Again, the old car comparison is demonstrably untrue. To put the same example forward, computer modeling has wildly changed and accelerated car design in ways that were impossible for any sum of money in the 70s.

I think part of why this is hard to believe is that people strongly believe in the concept that time is money. On the margins for decisions like hiring someone to mow your lawn, it is true. For large scale things, you often cannot accelerate processes no matter how much money you dump into it. A good example of this is how long it has taken China to industrialize.

To be clear also, you have to prove your point that #2 is outpacing #1. The fact that the price keeps going up is not proof as there are other explanations. The poor quality of domestic manufacturers and their bad business practices, for example.

And 3D printing helped a lot too. Not as much as computer modelling, but still.

> There is no world where you get all that for the same percentage of income.

There is if we are comparing 2026 to the 70s. Technology has increased productivity overall. If those gains were distributed more evenly, it is more likely that the cost of, say a car, would be similar to the same percentage of income.

Productivity is up ~3x since 1970, but the car price has gone up 25x. It is driven by the massive increase in features/complexity on cars, and that means it will cost a bigger percentage of income. There is no possible redistribution of gains that would have driven income up 25x to match the car prices.

> There is no world where you get all that for the same percentage of income.

This is only true because real income has barely budged since the 1970s.

If real income had tracked productivity during that time, we would have plenty. But it didn't. All the increases have been siphoned off to feed the ultra-wealthy, in a variety of ways.

real income has barely budged since the 1970s

This is not true. Real income has more than doubled since 1970.

https://fred.stlouisfed.org/graph/?g=o1gV

All the increases have been siphoned off to feed the ultra-wealthy

No, the productivity gains are eaten up by expensive items with low perceived value. You don't think about the $1000 catalytic converter in your car, or $5,000 set of airbags. You just think you are paying more to do the exact same drive to work that you could have done in a $2,000 1970s car. And that's true! Nonetheless, there is real added cost and value to the car.

I don't think this is an example of the hedonic treadmill. People who believe that a new 2026 Tacoma is the hedonic equivalent of a new 1970 F-100 are simply wrong, in the same way that people who imagine taking all the flights they take today with the level of service provided on 1970s passenger planes are wrong. The extreme increase in reliability and build quality has shifted the dynamics of the car market, with essentially all new vehicle sales pushed upscale as budget-conscious buyers have no reason to buy new with even an infinite time horizon.

My $15k used car with 100k miles on it is just as reliable, just as stylish, and sparks just as much joy in me as the new cars my grandparents could have bought in 1970.

There are more vehicles in the US than the F150 right? in Australia this would be seen as an absurdly over the top vehicle for almost all contractors and construction workers.

Some amount of this issue must be marketing and propaganda making people buy massively over spec vehicles than their actual needs require. Most of these workers could get by with basically any car but get marketed and peer pressured in to spending $50,000 on the biggest one.

Yes, but there are no ~17k pickups in the US, which would be the inflation adjusted price of the F-100. The cheapest truck is the Maverick which starts at 28k.

> $50,000 on the biggest one

You can easily run into trucks in the $120,000-$150,000 range in the car lots now.

Not entirely, the problems are also that wages haven't kept up with inflation; $9,000 salary in 1970 would be $75,000 today, and the automakers realized they make more profit in financing than on the vehicle itself, optimizing the maximum they can squeeze someone who needs a vehicle, hence 96 months for an auto loan.

$9,000 salary in 1970 would be $75,000 today

That's actually in the range of what contractors make today.

Some sources:

GLassdoor: 67k https://www.glassdoor.com/Salaries/contractor-salary-SRCH_KO...

Finturf: 75k https://finturf.com/blog/how-much-do-contractors-make/

BLS: 91k https://www.bls.gov/ooh/management/construction-managers.htm...

Also if we are going to say the truck of yesterday is better now, productivity today is 2x what it was, so that $75,000 should be more like $150,000 (since we have to account for things improving for their higher price, we can't ignore productivity improving, that would make for warped comparisons).

It's one of the problems with saying healthcare prices have "gone up". An x-ray in 1976 cost like $100 in 1976 dollars and one today costs like $100 in 2026 dollars, so it's significantly cheaper. But you couldn't get an MRI for any price in 1976 and you can get one in 2026 for $800, so the cost of "imaging" has gone up notionally.

And the $9,000 salary adjust for inflation would be $75,000 today. Then adding in the difference (since we did that with the truck, and since worker productivity has doubled) that $9,000 should be $150,000 today.

The shift to 4 doors seems to be just because now a single vehicle has to do it all.

(AT is because Americans can't drive? Partially kidding, but due to the car dependency that requires everyone being able to drive)

I think it would be beneficial to conduct such analysis at a subnational level, becuase the reality is the market dynamics in (eg.) the Bay are distinct from those in Chicagoland.

A similar macro-level analysis by the FT highlighted how certain states are in the midst of a positive economic expansion and others have fallen into a deep recessionary cycle [0].

I've also noticed HN cycles of pessimism and optimism shift significantly based on time zone - which could be attributed to this subnational malaise.

[0] - https://www.ft.com/content/e9be3e3f-2efe-42f7-b2d2-8ab3efea2...

"is the US in a depression? 540$ for your first year to read FT!"

> "is the US in a depression? 540$ for your first year to read FT!"

Honestly, if you want good information, you need to pay for it. I've been subscribed to the FT for almost a decade now, and it's definitely helped me a lot. For context, I also subscribed to all the other newspapers people suggest (NYT/WSJ/WaPo/Guardian etc) and find the FT to be the most useful for me.

I do agree that it's really expensive, but for me it makes sense.

This guy isn’t wrong: https://youtu.be/Ub585Pn4yro

“When metrics and anecdotes differ, believe the anecdotes.”

> But the first step is to believe that what people have been screaming about their lives for the past several years actually exists. Even a representative agent, forward-looking and fully aware of all the parameters surrounding them, can feel the vibecession.

Gee. Who would have fucking thought.

When people, en masse, are saying they're in pain, *believe them*. They have very real fears or stressors, even if "you" can't understand them.

Indeed. The problems exist. The Republicans have absolutely batshit and counterproductive explanations and proposed solutions for those problems, but at least they acknowledge them. The Democrats only offered condescending denial.

(Until Mamdani's campaign. But even then the DNC tried their hardest to ratfuck him, as they always do with candidates to the left of Dick Cheney.)

It's not an economic effect. The news is all awful. If you're in the US and on the left, or outside the US, the world is descending into autocratic chaos and police state violence. If you're in the US and on the right, the country is descending into chaos at the hands of the anarchist left and the invasion of a horde of immigrants who need to be suppressed by autocratic chaos and police state violence.

Yeah yeah, there's food on the shelves and money in your pocket. But it's scary out there for everyone, and that trumps (heh) rationality.

The solution is to get Washington and partisan media to, ahem, shut the fuck up and just let people be happy. But that doesn't put bribes in their pockets or advertisers on their screens, so on with the autocratic chaos.

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