There's a big debate happening right now about "affordability." Democrats are using that word because if they say "inflation," everyone is reminded that Biden poured gasoline on an inflation fire and Democrats cheered it on. Inflation is an ongoing problem, but there's another affordability problem that's slightly divorced from it.

Affordability is a nebulous term, so let's break it down. On one hand, when people think of affordability, they mean prices. This is where inflation comes in because while people see things like "cooling inflation rates," as was touted this past week, the critical distinction is that prices still went up.

I've pounded this drum for years now, but what Americans are explicitly signaling in poll after poll is that what they want is deflation. That is: Americans want prices to fall. Economists are terrified of deflation because it signals recession, and neither party, when it takes power, wants that.

The current Trump plan is to run the economy hot with various forms of stimulus and hope the growth outstrips a milder rate of inflation. We're partially getting this milder inflation because tariffs drag down domestic demand to some extent.

But nowhere is there deflation. At least yet. And voters being polled are understandably upset about that. Further, the massive AI investment boom is sending enough growth rocketing into the economy to keep overall numbers afloat on the general economic level.

There's another form of "affordability" that runs in a similar lane to what we're talking about so far, but is slightly different. That version is: the American economy is no longer focused on producing affordable products for the average person.

Put another way, the mass market is over.

There are many examples we can use to explore this; let's start with cars.

One of the major gripes among customers in the automotive world is that new, cheap cars have vanished. Earlier this year, Cars.com ran a piece titled, "The Death of the Affordable New Car: What Happened to the $20,000 Cars?"

Long story short: auto manufacturers stopped making them and are positioning for higher-margin vehicles. The truth is this: you can make the same, or more, profit by selling fewer vehicles, but marketing towards the luxury end. CNBC put it more bluntly: American automakers can't make cheap cars.

This means that, to get a car, Americans are increasingly having to take on more expensive loans with far longer terms. According to Experian:

Data through the third quarter of 2025 shows that the average price of new car payments in the United States is up to $748 per month. This payment rate correlates to an average new car transaction price of $42,332, with an average interest rate of 6.56 percent. The average loan term length for new cars is up to 69 months, with almost 81 percent of new cars purchased this year being financed.

The story we're telling about cars could also be exported to the housing sector. Realtor.com ran an article earlier in 2021, see if you spot the trend, titled, "The Death of the Starter Home: Where Have All the Small Houses Gone?"

CNBC reported on this story, too, this year: "While the exact definition of a starter home varies, they're typically under 1,400 square feet. In 2023, just 9% of the new homes built in the United States were under that size, according to Census Bureau data. In 1982, it was more like 40% of new homes."

CNBC got a quote from Freddie Mac that rings familiar: "Many builders are not leaving money on the table ... They are just simply unable to build, or it's become so expensive to build that they can only build high-end single-family and high-end multifamily."

It's the same story, though. For builders, you can make the same money by selling a few homes at higher prices. Fewer products at higher prices equate to more profit because you're expending fewer resources to accomplish that. It's peak productivity.

These are products, though. We're seeing similar things play out in entire American cities. Nate Silver published a piece over the weekend about Las Vegas and its current slump. He asks, "Did Las Vegas get too greedy?" If you read his take or the piece in Slate, he mentions, it's a similar story: Vegas is aiming more and more at higher-end clientele, not the average person.

The result is a more profitable Vegas, particularly to the private equity types running the city. But the average person is no longer the focus. They get shoved to the side for high-end buyers.

I can point to any industry at the moment. The overarching goal isn't to create something wide; it's to hyperfocus on the top end of a market and hammer that endlessly (there's a similar dynamic happening in publishing, for instance).

The result is that we're getting an America where businesses are not focused on the mass market, but rather on dominating every imaginable niche and selling exclusively to the high end. That's creating an affordability gap in the middle.

Because we could induce a recession in the country to help crash prices, as has happened in the past. But if the supply side of the market keeps itself contained by refusing to mass-market, then we're shifting towards a siloed economy, where smaller subsets trump a broad middle ground.

It's an affordability crisis of our own making. Typically, the answer to high prices is simple: increase the supply. More supply leads to lower prices. But if the supply side is more focused on the high end and purposely supplies less to protect margins, that will leave a gap.

In most rational markets, some actor would be induced to fill the gap. That's not happening right now. And the result is an affordability crisis across nearly every industry.

Inducing a massive, across-the-board supply increase for everything is critical for policymakers. Otherwise, we're going to watch affordability die off as a general concept. Politically speaking, that will create more populist backlash, not less of it. Inflation does the same thing.