The Cost of Living

The Cost of Living

At a recent holiday gathering a nephew of mine who is currently feeling put upon by life (he has an injury that is very painful and its effecting every aspect of his enjoyment of life according to him), recited something that he had read about San Diego being the most expensive city in America. That didn’t feel right to me so I looked it up and found the source, which was U.S. News & World Report, generally one of the more reputable media outlets for news. I read the piece and must admit that I didn’t question the underlying data and found that I had no choice but to accept the factoid as stated. I mentioned the statistic to a number of people and it had seemed to spread like wildfire and almost everyone had already heard the comment from one source or another. It had very quickly become accepted reality that we were living in the most expensive city and whatever your current cost of living gripe was, you could hammer on it using this overall cover story. In fact, the same nephew went on to say that the biggest reason was the cost of gasoline. Now I drive and EV, so who am I to say anything about the cost of gasoline, but that just didn’t feel right to me since I do drive our gas gusler around the state and country and would have said our gas prices are high, but not astronomically so. When I referenced the U.S. News story I saw nothing about gas prices as the cause and corrected my nephew.

People love to have cover stories to validate their pet peeves and this one was a doozy for disgruntled locals. If there is anything most people don’t like about the world, it is the cost of living in it. Indeed, on the national stage, economic facts and reality be damned by most people and the cost of living gripe is taking over the dialogue about the performance of Bidenomics. Other than his advancing old age, the thing that seems to be causing Joe Biden’s rating to fall to the lowest level in modern history seems to be the performance of the economy. That performance is as measured by each individual voter based on their gripes about what is costing them too much on a day-to-day basis. They are literally ignoring the economic data that tells us that 2023 was a startlingly good year for the U.S. economy on every front including the inflation front (especially so as we see EU inflation numbers now coming out at higher than anticipated levels). The S&P was up by 24% for Christ’s sake, and most people should have at least an ameliorating attitude about the economy when they see that number, but the price of eggs is still bothering them too much. It’s not even the price of gasoline (this one’s for you, nephew) because there is demonstrable evidence that the national price of gas is, indeed, lower than it was a year ago. But people still grouse and Biden’s numbers still suffer.

I too have my cost of living moments like everyone else. I occasionally marvel at how much something is costing me and, to a certain extent, as a sort of fixed income pensioner, that is to be expected. I mostly no longer have the ability to make up for the high cost of living by making more money. I am in what economists call the decumulation stage of life. Since I am not so wealthy that investment appreciation overwhelms my cost of living (a sad place to be if you can avoid it…but, hey, that’s the way it goes when you like living XXXL like I like to), I am among the great unwashed of society that sees his net worth shrinking rather than passively growing. And that’s OK, especially since I still hold a few wildcards that could see another one of my ships come in and that is enough hope to keep me bumping along. I am also still a current income guy by virtue of my expert witness gigs, so my depletion rate is very much moderated. I am not hemorrhaging, just very slowly bleeding out. And like I said, that’s OK since I adhere to a diet-broke philosophy of life.

But my personal circumstances aside, I still don’t get this obsession with cost of living. Living is the highest and best use our selves, is it not? Isn’t living what its all about? If I live in the most expensive city in America, isn’t that a wonderful thing? That is especially so if you own your own home since the cost of housing is much more the culprit than anything else including the cost of gasoline. For my nephew’s sake, I will make a case that he is young enough to move to anywhere he wants, including the lower cost of living places noted in the U.S. News story. But the truth is that he, like many other people, have chosen to live here because it is such a nice place and would logically tend to be more desirable and therefore more expensive as a place to live. What I am saying is that we should take our cost of living as a badge of success rather than something to complain about. Aren’t we lucky, we get to live in the nation’s most expensive city and boo hoo to anyone else who isn’t so fortunate, right? I, personally, love where we live, and wouldn’t do anything to change that if at all possible. As a home owner, I also know that in the end-stage of my decumulation, I should be able to sell my house (presumably for higher and higher value) and live out my final days somewhere more comfortably for it having been the most expensive place to live. Not a bad deal by my reckoning.

But here’s the rub. I just read in The Economist, one of the publications I would rank above U.S. News & World Report in credibility, a new report from a well-respected data lab (IEU) that tracks cost of living indices, that San Diego is actually way down on the list of expensive places to live both in the world at large and specifically North America. Some of those places tagged by U.S. News to be in the top ten, like L.A., New York and San Francisco, remain on both lists as top most expensive places to live, but San Diego does not. SInce everyone was surprised to see San Diego higher in cost of living than New York, I also note that IEU scales whiter global cost of living exercise against a 100 point ranking where New York City is the baseline of 100. They then color-code the other cities on the map and list out the most expensive and least expensive places to live. That latter list seems too easy on a global basis, but more interesting and relevant on a North American basis.

The least attractive and therefore lowest cost places to live are shown as Toronto, Calgary, Montreal and San Juan, where the most attractive and thus highest cost places are listed as New York, L.A., San Francisco, Houston and Seattle. The former are colored blue and the latter are colored red. They have a map that then lists other cities in their respective color-coding. The bottom line is that San Diego comes up as a light blue, which means less rather than more expensive, but not among the least expensive. At least it is on the better and less costly side of the cost spectrum. It’s a place that feels right and I am happy to see us there. It means we are nice, but not too nice, cost effective, but not crazy cheap and therefor less desirable.

But the real message I feel needs to be stated is that we have to stop grousing so much, especially about the cost of living. Let’s all remember that it sure beats the alternative. There is a silver lining in life that says that when things are good we should stop complaining about them. If prices are high, maybe that’s a good thing and not a bad thing. The glass can have exactly the same amount of water in it and be considered half-empty or half-full and we all know where I come out in that experiment. The optimist in me wants to always be half-full, even if I am most often half-full of it.