Price Points

December 15, 2019

by Steve Stofka

This week I tested Alexa. You know who I mean. She who shall not be named in idle conversation for she will respond. She can do arithmetic, but can she do algebra? I asked her, “What are the factors to the expression x2+2x+1?” She gave me the simple factors x(x+2) + 1. A better answer would have been (x+1)2. Not bad.

We have adapted so quickly to these new technologies. It is normal to talk to a cylinder. Farmers guide their tractors with a cellphone app (Future Farming, 2017). A library of information readily available 24 hours a day. An earthquake on the other side of the planet and we learn of it within the hour.

Despite the accessibility of information and communication, we are bombarded with disinformation. We can’t talk to members of our family or some of our friends because of their political beliefs. Has technology unloosed our own demons from Pandora’s box? In one version of the myth, the demons burst out from Pandora’s box and she was so frightened and alarmed that she closed the lid before the last demon, Hope, could get out. Is hope a curse or a blessing?

We have become accustomed to the entertainment, communication, information and convenience of our phones. They make us powerful. We watched a movie on DVD tonight. I forgot we still had a DVD player. The remote didn’t work. We had to put new batteries in.

On a job site a decade ago, I heard a family arguing. Mom was taking her kids’ phone away because he did something or didn’t do something. A short while later I heard the kid crying. This was a big 12-year-old boy who had received a smart phone as a gift. The phone had become this kid’s heartbeat. He was addicted to a phone.

Have we become a nation of addicts? We are addicted to high energy use even if it does introduce much more carbon dioxide into the atmosphere than the plants, soils and oceans can absorb. Yes, it’s a problem, but …

I forgot my phone last week, turned the car around and came back eight blocks to get it. I was only going to be gone for a few hours. Yes, I know I’m addicted to my phone, but…

Are we addicted to our opinions? God forbid that someone should threaten our political or religious beliefs. Don’t try to change my mind about something. If I want to change my mind, I’ll do it on my own time, thank you. We have so much information at our fingertips that we can’t absorb it all, so we select a few sources and satisfy ourselves that we have a balanced enough perspective.

The stock market has gone up more than 10% in the past one hundred days. Is that the final hurrah before prices dive? Or is the market waking up to a new era of continued low inflation and healthy corporate profits? I’m surrounded by a cacophony of opinion.

In a decade, my calendar app will know what to remind me about. I won’t have to tell it. For that to happen, the app will need access to a lot of personal and financial information about me. “You paid for a subscription to National Geographic magazine last February,” my app will say. “Shall I add a reminder for this coming February?” Sure, why not. I’ve already given away so much information.  I will need an app to guard my information in case someone hacks into the database where my calendar app stores all my information.  

Each of us has price points – boundaries of what we’re willing to pay for something. There was a time in my life when I wouldn’t spend more than a $1000 on a car. Then it was $2000 for a reliable car. My price points were moving up.

Starbucks has been around for almost 50 years (Starbucks, n.d.). I couldn’t believe it. Sometime in the 1990s I became aware of them. Who would pay $3 for a $1 cup of coffee? Lots of people.

A decade ago, who would pay $700 for a phone? A decent computer could be bought for that price. Apple rolled out the iPhone 3G for $199 with AT&T as the exclusive carrier (Wikipedia, n.d.). More than a million people bought one in the first weeks. $199 was just the down payment on the phone. The two-year contract with AT&T included about $20 extra per month for the phone according to some estimates. That raised the cost of the phone to $700.

If the stock market goes down 20%, who buys and who sells? What are the price points? What about 30%? 50%? During the 2008 financial crisis, brokers said they got a lot of calls when the market was down 50%. They cautioned their clients that this was the wrong time to sell. Most of the damage had been done. Their clients couldn’t take it anymore. Sell, sell, please sell. There was a last hurrah of selling and then…the buying began in earnest.

What are our political price points? I asked Alexa. She doesn’t know that. What causes people to say, “I’ve had enough!” and go out in the streets to demonstrate? In the past month the world has witnessed large scale demonstrations in Tehran, Iran, in Hong Kong, in Baghdad, Iraq, in Santiago, Chile, and in Barcelona, Spain. I think 2020 will be an American crisis year and we will see such demonstrations in our country. I hope I’m wrong.

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Notes:

Future Farming. (2017, June 21). App turns smartphone into a cheap tractor guidance system. [Web page]. Retrieved from https://www.futurefarming.com/Tools-data/Articles/2017/6/App-turns-smartphone-into-a-cheap-tractor-guidance-system-1597WP/

Photo by Colin Watts at Unsplash.com

Starbucks. (n.d.). Starbucks Company Timeline. [PDF]. Retrieved from https://www.starbucks.com/assets/ba6185aa2f9440379ce0857d89de8412.pdf

Wikipedia. (n.d.). iPhone 3G. [Web page]. Retrieved from https://en.wikipedia.org/wiki/IPhone_3G

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