"DerbyDad03" wrote in message
news:01adadc8-6bba-4589-b9ab-

Wait...maybe you didn't have a specific auto mechanic that you would
have used. So how does it work then? Did 1000 mechanics have their
pocket cash decreased by $1 each? or 500 by $2? or 2000 by 50 cents?
or is there just 1 random auto mechanic out there someplace who is
$1000 poorer? Gosh, I hope not. Doesn't seem fair, does it? I mean,
why *him*?

I know I am going to regret this, but in the long view of things - the
macroeconomic view, yes, when a person does their own repairs it does effect
(ever so slightly) the aggregate income of all auto repair mechanics. So
the magic number is not one or 100 mechanics who share in the loss of
potential income, but the entire pool of mechanics (actually not even that -
it's the aggregate income of all mechanics who were geographically likely to
have fixed the car. Economics follows Newtonian laws to a spooky extent
because every action has a reaction, usually opposite and usually equal, but
often very hard to see. BobR's own auto repair would be mostly invisible
and unlikely to affect the salary of the area mechanics by a dollar, if it
effected their aggregate salaries at all.

Economic forecasters spend lots of time trying to anticipate trends that
cause economic shifts because that's where money is made (and lost).
Goldman-Sachs had some very good economic forecasters on their team because
they saw the real estate bubble popping ahead of the rest of the investment
banking pack. They made lots of money as a result.

BobR's is right to think that his doing his own work affects the economy.
It certainly conserves his assets and not spending money is usually saving
money. There are exceptions like deferred maintenance like letting your
brakes grind to metal to save money but then needing to do a rotor job,
too). Even things like CFL bulbs and new refrigerators come into play here.
I confess to abject stupidity in nursing my old refrigerator along for so
long. The new one costs less than ONE THIRD what the older one cost to run.
So even "savings" are situational. Plenty of people think they are saving
money when they're not.

When you do you own auto repairs, you don't earn $1000 by doing it. The
economist eggheads I used to work with would probably say "what you really
did was prevent a mechanic from earning $1000 that he might have ordinarily
earned" with a wry smile on their faces. They would then qualify that by
saying if the mechanic already had his calendar filled, he might not even
have been deprived of any earnings. Then they would point out that plenty
of people *try* doing the work themselves but then get in way over their
heads and end up going to the mechanic anyway. Some people wreck their cars
attempting to fix them and lose real money in terms of potential resale
value of the car. (I once watched a guy drill right into his transmission
installing a new stereo - that was a negative cash flow event).

The key to all this is still opportunity costs which my Econ 601 prof
explained very neatly. "Why are you here paying 100's of dollars to listen
to a grad school Econ lecture when you could be making at least $30 working
in a pizzeria? You've chosen to spend your time and money in a way you hope
will maximize your future income. You're investing in your own human
capital and hoping to create a finished product that has value to an
employer."

Actually, back then I could have made way more than $10 an hour I had chosen
to work OT instead of going to night school. But he was right. The best
use of my time was to make myself knowledgeable enough to command a higher
salary. He also drilled in the value of investment and compound interest to
the entire class showing us how a few thousand invested in stocks instead of
a spending it on nice new car would pay for a Jaguar when we were having our
mid-life crises. He was right about that too.

How did we get here? (-:

--
Bobby G.