The U.S. economy is stellar. So why are we all so mad?
Nov 1, 2023
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The podcast discusses the contradiction between the positive state of the US economy and people's dissatisfaction, exploring factors such as politics and media. They also delve into the state of the EV market and reminisce about Halloween experiences. Additionally, they recommend a bakery in London and provide suggestions for podcasts and music.
The EV market is maturing with concerns about lack of innovation in Tesla's lineup and delays in delivering new models, while the future of EVs may involve new companies rather than traditional manufacturers.
People's perceptions of the economy often diverge from the actual state of affairs, which makes it difficult to address issues like housing affordability from a position of strength.
Deep dives
Tesla's Position in the EV Market
The EV market is maturing with a slowdown in growth rates. Tesla, as the industry leader, is cutting prices to maintain a competitive advantage. They have a strong position due to their lower labor costs compared to competitors like Ford. However, there are concerns about the lack of innovation in Tesla's lineup and delays in delivering new models. The future of EVs may involve new companies rather than traditional manufacturers.
Perceptions of the EV Market
There is uncertainty about the growth and prospects of the EV market. Tesla's significant price cuts, without evident demand response, raise questions about market competition and demand. The fear is that the market may be facing a road bump, impacting not only Tesla but also other automakers such as GM, Ford, and Mercedes. This uncertainty reflects macroeconomic factors, potential market disruption caused by Tesla, or challenges in the development of the EV market.
The Surprising State of Consumer Finances
The recently released Survey of Consumer Finances by the Federal Reserve Board reveals remarkable financial health in the US. Median net worth increased by 37% in three years, reaching nearly $200,000, while average net worth grew by 23% to approximately $1.1 million. Income also saw positive growth, with average income increasing by 15% and median income by 3%. These gains were fairly well distributed across income levels, race, and other factors. However, public perceptions of the economy often do not align with these positive financial indicators.
The Discrepancy Between Perceptions and Reality
Despite positive financial indicators, people's perceptions of the economy often diverge from the actual state of affairs. Partisan divisions and media biases contribute to this discrepancy. The politics of victimization and a general sense of discontent may also influence individual perceptions. This lack of agreement on the economic reality makes it difficult to have productive conversations and address issues like housing affordability from a position of strength.
In this episode, Mihir and Felix discuss consumer finances, which are remarkably healthy. The average U.S. household now has a net worth of more than a million dollars. But if things are this good, why are we so angry? Why lament the state of the economy? Plus, we talk about Tesla and the market for electric vehicles. Has it reached its nadir?