When I say 'deeply' I mean having the empathy and imagination to actually 'feel' the emotions that result from having to comparison-shop food prices and then food prices vs other necessities.
It all comes down to financial assets and whether a person benefits from rising asset prices.
Regarding the example below, Denny's, I've never been to a Denny's. Nobody I know goes to Denny's. But there are millions of people who do; when they need something to eat and don't have the time or skill or implements to cook for themselves. And for those people the S&P 500 approaching the old highs literally has no meaning.
First up, from Yahoo Finance, August 4:
Even as "America's Diner" cheers falling commodity costs, with inflation slowing overall, execs at the South Carolina-based restaurant chain noted consumers have reservations about spending.
"We are seeing a lot of things work in our favor in terms of commodities and disinflation, hopefully eventually deflation," Denny's CEO Kelli Valade told Yahoo Finance Live (video above). "At the same time, there’s still uncertainty from the consumer as gas prices go up — and sharply as of late. We still see some reason to be cautious."
Denny's second quarter results came in short of Wall Street estimates. Same-store sales for the quarter increased 3%, just shy of expectations of 4.16%.
However, the company's value offerings and lower price points won over consumers.
The Super Slam meal, which starts at $7.99 and includes a lineup of pancakes, eggs, bacon strips, sausage links, and crispy hash browns, is just one part of a larger "playbook and strategy" aimed at delivering value.
"We can clearly point out correlations between pricing and traffic," Denny's CFO Robert Verostek pointed out in a call with investors following the results. He added that such value offerings "will be the driver" of Denny's 2023 full-year outlook, which targets a 3% to 6% increase in system-wide same-store sales compared to 2022.
Denny's stock is up 12% year to date, roughly in line with the nearly 11% rise for the S&P Restaurant Index, but remains well below its pre-pandemic heights.
Bacon and egg prices are moving lowerThere's one ingredient where Denny's is still seeing higher costs, and it could affect diner favorites from hash browns to wavy fries."Potatoes are still a commodity that has not yet come down, while the other things in our market basket either are locked or have come down quite a bit," Valade said....
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That's about as basic as you can get, the price of spuds in a diner.
Breakfast for four, for less than the cost of an appetizer.
And from Charles Hugh Smith's Of Two Minds blog, August
The Wealthy Are Not Like You And Me - Our Terminally-Stratified Society
History suggests such a stratified society cannot endure as a democracy.
When we say "The Wealthy Are Not Like You and Me," most people will assume we're talking about ultra-high-net-worth individuals (UHNWIs) with $30 million or more in assets or even the hyper-rich worth hundreds of millions or billionaires.
I'm not discussing the tiny class of UHNWIs here, I'm discussing the 8 million households of the top 5% and the 13 million households of the top 10% who own 70% of all assets and almost 90% of income-producing assets such as stocks, bonds, rental properties, etc. Not the uber-wealthy or hyper-wealthy, just the wealthy who own a million or two in assets not counting their primary residence.
A recent survey reports that there are 13.6 million households that have a net worth of $1 million or more (about 10% of the 132 million US households), and about 8 million US households have a net worth of $2 million or more (about 6% of households), not including the value of their primary residence. .
This top 10% collect about 50% of all income and account for about 40% of all consumption.
The topic here is the increasingly impermeable barrier between the top 5% and the bottom 95%, a matter not just of financial inequality but of sociological separation discussed by Christopher Lasch in his 1996 book The Revolt of the Elites and the Betrayal of Democracy.
I want to stipulate that I am not slamming the class of people I'm describing here. Rather, I am observing them as an anthropologist observes tribes, classes and cultures.
I recently met up with some old friends from our college days. At the time, they were students living in a cookie-cutter high-rise apartment with the usual hand-me-down furniture and concrete-block / pine boards book-shelving.
Now they live in a multi-million dollar house in an exclusive neighborhood, surrounded by $5 million McMansions recently built on small lots after the original homes were demolished. They too demolished the house inherited from parents and built a new luxe home.
What struck me as a journalist / analyst was how wealthy there are, and how all their friends are wealthy. They don't interact with the bottom 95% of "normal" people except as their housecleaning maids, repair or delivery person, etc., as interchangeable, commoditized laborers who are effectively peasants / peons in our highly stratified neofeudal economy. They don't actually know any "normal" people as friends or even colleagues; their friends are all wealthy people like themselves.
We might say this impermeable class divide is natural, but this overlooks three key factors.
One is that the barrier between the wealthy and the not-wealthy was once more permeable. As Lasch observed, America's elites have separated themselves from the rest of society in exclusive enclaves and in a mobile lifestyle detached from place.
Other commentators have written about the same sociological trend of elites living in bubbles populated by other elites: in elite universities, in exclusive social groups, in exclusive neighborhoods no normal household can possibly afford, etc.
Lasch's point was this economic / lifestyle stratification is toxic to democracy, a reality that is playing out in all sorts of ways.
Another factor is all the wealthy people I know became wealthy as a direct result of financial help from their parents. Every wealthy person I know (with a very few exceptions)--and by that I mean people who live in homes worth $750,000 or more in value and who own other substantial financial assets that generate capital gains and income--attended university funded by their parents, and whose first home purchase was enabled by help from their parents or in-laws.
I've also observed that this class of privileged people often tout their "bootstrapping" while neglecting to list the full measure of financial support they received from their family. Everyone wants to claim "I did it all myself" but this rings hollow once the facts of the matter come out.
This class also inherited substantial wealth when their parents passed away, or from trusts established by the parents to transfer their wealth prior to their death.
Lastly, all the wealthy people I know bought or acquired assets long ago at prices that were affordable to households with normal middle-class incomes. At today's valuations, the homes and assets they bought decades ago are no longer affordable to any household below the top 10%.
Another shared characteristic of the wealthy who inherited their wealth and benefited tremendously from the past 30 years of asset inflation is that they uniformly attribute their wealth to their hard work. Yes, they worked hard, but so did most of the bottom 95% who aren't wealthy.
The deciding factor wasn't the wealth they created as entrepreneurs or workers; it was the assets they were able to buy long ago as the direct result of financial help from their parents--or put another way, the wealth generated by the monumental inflation of assets their parents bought decades ago.
Scrape away the 1) parents-paid university, 2) the parental help in buying their first property, 3) their ability to save money in IRAs and 401Ks as a result of having low-cost mortgages (or no mortgage at all) and invest these savings in other assets at low prices, and 4) the rampant asset inflation of the past 30 years, and how much wealth would they own that was solely the result of their earnings / frugality?
Yes, there are wealthy entrepreneurs who earned their wealth by creating value in an enterprise, but once again, scrape away the enterprises that are bubble-dependent real estate and stock-market based ventures, and how many entrepreneurs actually created wealth via creating value? Take away the 30 years of asset inflation and the answer is very few.
Much of what the wealthy claim as brilliance is nothing more than the good fortune of living in a multi-decade era of ever-rising asset valuations....
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