Yeah, this is just wrong and just makes the rest of your point completely moot. Almost every team does lose comfortably to ManC. Even Chelsea could manage only 1 shot on target over 180 minutes. If the other 19 teams had the same wage bill and same level of talent on the field then this wouldn't be possible but since that isn't true then here we are. This applies to LFC as well against 16 other teams and our results reflect that when we don't lose every CB to injuries at one time.
What?
Money is a bigger factor in a longer run of games than a single game in isolation and this is because the possibility of over-performance/under-performance in a single game is more frequent than the possibility of over-performance/under-performance in a long run of games or seasons put together. This is why most teams are expected to regress to mean. How is this difficult to understand?
In either way, it's not the absolute and only factor, but the factor becomes bigger and bigger over a run of games. You were using the Palace game in isolation to show the money difference between the two sides, but looking at the Premier League table, I see only one team near the Top of the Table, which is expected, isn't it? This completely validates my theory, not make it moot.
Also, City lost to Palace at the Etihad earlier in the season, conceding 2 goals and scoring none, I'm sure they didn't begin to question their attack, defense, footballing philosophy and their financial advantage after that game in isolation.
Over long periods, there are multiple other factors in it, the more money spent is likely to reflect in more consistency over a longer period of time, and having a squad where players can replace the other without drop-off is another factor. Compared to us, City's overall squad strength is better (not talking about numbers btw) and they can afford to lose their first team players and still produce dominating games.
City can rotate their front 5 players with almost equal level of performance, because their system is closer to total football than ours is. De Bruyne can easily slot wide or play in their false 9 positions and they would still manage to beat teams, but we cannot play Hendo/Thiago out wide/false 9. Bernardo can do the same. Gindogan can easily slot in instead of De Bruyne or Bernardo. Sterling can play across the front 3, so can Mahrez, Grealish, Foden and Jesus. Not saying they are all versatile players, but in their system, they are versatile. Any player who can dribble and pass can play in their front 5 positions. However, we need system players. We need players that fulfill specific roles in their respective position, if their bench/second team replacements cannot fulfill those roles in the same manner, we suffer.
So, rather than looking at from the surface and saying our team is good enough, our manager is good enough, and still we are 2nd, you have to also look at their squad depth and the respective style of play we both have.
In individual games in isolation, there are also some teams who prefer to play against certain styles of play and tactics, there are certain bogey teams for every team out there. City's bogey teams are Liverpool, Spurs, Wolves, Palace, Southampton and even Chelsea - you can look into the last five years and see that these teams have taken the most points off City.
Chelsea couldn't manage to trouble City because they probably didn't play well against City this season and they were also in a horrible run of form when they met City the 2nd time around. Last season however, Chelsea did beat City in the biggest game in the history of City as a club so far (Champions League final), and they also beat them in the League last season.
So, what are your complaints again?