Cash Test Dummies

Billy Ocean famously sang, Get out of my dreams, get into my car. For an increasing percentage of Americans, owning a new car is now reserved for those with an economic life in the fast lane. The fast and furious rise of new car prices is due to lingering supply chain issues, global inflation, higher interest rates and other factors that have conspired to carjack yet another aspiration on the road to the American dream. And once again, this is a story about the great divide. “Spending on new cars by the lowest 20 percent of earners dropped to its lowest level in 11 years. Meanwhile, spending on new cars by the top 20 percent reached its highest level on record.” WaPo (Gift Article): New cars, once part of the American Dream, now out of reach for many. In today’s America, you’re either riding shotgun or stuck with an economic lemon.

+ “The line outside Boston’s American Red Cross Food Pantry on a recent Saturday morning stretched the length of two football fields. The number of people filing into the red-brick industrial-zone warehouse on some days now exceeds the worst periods of the pandemic economic crisis and in April it had the second highest monthly traffic since it opened in 1982.” Lines stretch down the block at food banks as costs go up and pandemic aid expires.

+ This divide is directly related to the current despair in American cities, where we respond with fear instead of empathy. I touched on this last week: Fear and Loathing on the F Train.

+ One of the big concerns about AI is that it will ultimately increase the already gaping economic divide. The people who create these technologies are often motivated by a desire to level the playing field. The people who ultimately deploy them have other motivations. Ted Chiang in The New Yorker with a very interesting look at the conundrum. Will A.I. Become the New McKinsey? “It will always be possible to build A.I. that pursues shareholder value above all else, and most companies will prefer to use that A.I. instead of one constrained by your principles.”

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