On Dec 4, 3:57*am, "Robert Green" wrote:
"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.

We got here because of the instant gratification syndrome and the
entitlement culture.