Cars and inflation

Typically solid thinking on inflation from Greg Ip in today's Journal on inflation. In the article he quotes Biden as saying re inflation in autos, "If car prices are too high right now, there are two solutions: You increase the supply of cars by making more of them, or you reduce demand for cars by making Americans poorer." This is a rather simplistic way of viewing the problem, and admittedly Presidents do have to boil things down and speak at a high level.

But he could go on to say there's a third way. We could increase the supply of cars by extending the life of the cars we already own by being more mindful in how we use and service them. Auto repair is primarily a local industry (I don't have stats), though there are roll ups and chains like Pep Boys, etc. I'm willing to bet those are largely franchised, so they are effectively local. Moreover, the auto repair business is highly trust-based, so the successful ones are very community-oriented.

We could also reduce auto demand by thinking more about the driving we do and being less willing to hop in the car at the drop of a hat to go to the store to get one thing, go to a drivethrough for dinner, drive 400 miles roundtrip in a day for a soccer tournament, etc. Would that make us poorer? It really depends on your definition of wealth. I think that most people, if they slowed down to ponder it, wouldn't think so.

Time and again I think back to the anecdote John Bogle uses at the beginning of his book Enough. Kurt Vonnegut is at a party at the home of some hedge fund guy in the Hamptons talking to someone who remarks on how nice the house or yard or something is. Vonnegut says to the guy: "I have something these guys will never have. I have enough."