81–90 of 99 posts
It's a bit confusing what he's arguing against. But his 2nd-last graph is the good one, [1]. That's only 20 years but [2] is the same thing since 1950. Some things have become much cheaper, other things have become more expensive. Attempting to summarize that in one number seems like it hides more than it exposes, no matter what number you pick. [1] https://awealthofcommonsense.com/wp-content/uploads/2021/01/... [2]…
I find it interesting to look at this graph against Maslow's hierarchy of needs. First layer, shelter and food, have increased almost perfectly in line with wages. That's reasonable. Second layer, security - including healthcare in the US - "feels like it’s experienced hyperinflation", according to the author. And, as you age, your healthcare needs increase. So if you're low in this hierarchy, being relatively poor,…
Not just the US. From 2000 to 2018, US healthcare costs went up by a factor of 2.3. Germany went up by 2.1, France 1.8, Canada 2.0, Italy 1.7, Japan 2.6, and UK 2.6. It's similar for most other OECD countries, and also similar if you expand the range to 1970-2018. My data source doesn't go back farther than 1970.
Here's a comment from a while back with a source for those numbers [1].
The US has two problems with health care costs. (1) we pay a lot more than nearly anyone else per capita, and (2) the cost is going up in an unsustainable manner.
The first problem is mostly just a US problem, but the second is a problem for everyone. This suggests that the first problem is due to something the US is doing wrong and could fix. The second problem, though, seems to be one that nobody has figured out.
One gotcha about how inflation is calculated (at least in Germany, I assume it to be the same in the US), is that they try to compare identical products. So if this years cars do not have air conditioning, but next years cars do, the prices can increase accordingly without showing up as inflation, because you are getting "more car for more money". The problem appears at the point, when there are no cars without air c…
There are many problems with mainstream ideas about inflation, but one key problem is that it does not take into account the disastrous decline in the quality of public services that Americans have experienced over the last couple of decades. How do you measure the inflationary impact of the fact that in many cities, the public schools have declined in quality so much that people are faced with the choice of either m…
Yet, We are spending more on public schools than virtually any time in American history.
I think the author is confused about what inflation is, vs the benefits reaped from the advancement of technology. The author also seems to have a bias against the people screaming "inflation". That is pretty obvious from the title. To show real inflation, I like using the Burger King whopper as an example. In the early 90's I remember being able to buy 4 whoppers for $1. With the advancement of farming technology, t…
In 2000 it still cost $0.99.
In 2018 it cost $4.29.
So that's a 4.3x change, not a 28x change as claimed, and represents an "inflation" of about 7.5%/yr over the past two decades (or 5.5%/yr since 1990).
https://www.insider.com/fast-food-burgers-cost-every-year-20...
Earlier quoted context omitted.
The final graph on median home mortgage payments is misleading too. That can be propped up by REITs and increasing institutional ownership of consumer homes. There’s also the issue of more millennials living with parents and relatives, unable to afford their own homes, which can be hidden in that. Definitely can’t conclude from it that wages and purchasing power have kept up with mortgage costs.
Millennials can live at home because average home size has increased. My first house, built in the late 19th/early 20th century had indoor plumbing retrofitted and would fit in the garage of my current house.
And it’s likely not purely true. Home sizes being larger is also a function of REITs and corporate ownership of more consumer real estate, as well as boomers using soaring retirement fund profits to finance remodels, etc.
It’s way more complex than to draw any conclusion that this means purchasing power of homes has stayed close to wages. It hasn’t.
It's a bit confusing what he's arguing against. But his 2nd-last graph is the good one, [1]. That's only 20 years but [2] is the same thing since 1950. Some things have become much cheaper, other things have become more expensive. Attempting to summarize that in one number seems like it hides more than it exposes, no matter what number you pick. [1] https://awealthofcommonsense.com/wp-content/uploads/2021/01/... [2]…
The thing he's arguing against is the Chicago/Austrian school of economics, whose response to just about every monetary policy measure is "But inflation!" UBI would cause inflation; raising the minimum wage would cause inflation; worker protections would cause inflation; government borrowing causes inflation. That kind of economics gained popularity in the 1970s, when inflation caused genuine hardship. It left a kind…
Real median personal income went up almost 8% from the year before the tax cuts (2017) and 2019.
Demand elasticity of food is near 0, either you eat more calories than you spend, or you die. That's very much a truth.
Would some smart economic theory tell that's not the case?
A grand lack of common sense.
Earlier quoted context omitted.
The thing he's arguing against is the Chicago/Austrian school of economics, whose response to just about every monetary policy measure is "But inflation!" UBI would cause inflation; raising the minimum wage would cause inflation; worker protections would cause inflation; government borrowing causes inflation. That kind of economics gained popularity in the 1970s, when inflation caused genuine hardship. It left a kind…
> and despite tax cuts for the wealthy wages haven't gone up. Real median personal income went up almost 8% from the year before the tax cuts (2017) and 2019. https://fred.stlouisfed.org/series/MEPAINUSA672N
That's not zero, but compared to GDP, the stock market, and other measures of overall economic health -- which have gone up by an order of magnitude or more -- the median is practically immobile.
And for much of that time, it was even more immobile. The median was $31k in 1997, and was $31k in 2014. It bottomed out at $30k in 2012; it has been rising since but that was almost two decades of complete stagnation -- while GDP rose and stock markets climbed.