djAdvocate
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Post by djAdvocate on Jul 10, 2012 18:59:24 GMT -5
Virgil, I still don't think your understanding of productivity is quite right. And US GDP is up something like 150% since 1990. You cherry picked industries. What about industries that didn't exist in 1990? They are up infinity percent. With respect to CPI being fudged, I'd be interested in seeing actual proof. Personally, I can't argue one side or the other as I'm nowhere near an expert. But all I've seen are anecdotes and references to shadowstats. The former don't mean much, and the latter is easily proved wrong because their numbers compound out to something like 800-900% inflation since 1983. On the flip side, there have been in-depth studies that suggest that CPI slightly over-estimates inflation. I think it had something to do with a lag in the data or some calculation process. The study was posted at the old MSN boards once. ib- have i told you that your posts kick ass, lately? kudo for a really terse yet vigorous defense of your earlier post.
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Post by Deleted on Jul 10, 2012 19:02:19 GMT -5
You are too kind. I seem to have a good memory for this sort of semi-useless info. I just wish I had the same ability in "real life", where I sometimes have trouble remembering what I did yesterday....
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mmhmm
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Post by mmhmm on Jul 10, 2012 19:05:35 GMT -5
LOL! I hear you, investorbob. Most of the time, though, if I do manage to remember what I did yesterday, I find it was spectacularly uninteresting.
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Virgil Showlion
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Post by Virgil Showlion on Jul 10, 2012 19:22:33 GMT -5
Virgil, I still don't think your understanding of productivity is quite right. And US GDP is up something like 150% since 1990. You cherry picked industries. What about industries that didn't exist in 1990? They are up infinity percent. With respect to CPI being fudged, I'd be interested in seeing actual proof. Personally, I can't argue one side or the other as I'm nowhere near an expert. But all I've seen are anecdotes and references to shadowstats. The former don't mean much, and the latter is easily proved wrong because their numbers compound out to something like 800-900% inflation since 1983. On the flip side, there have been in-depth studies that suggest that CPI slightly over-estimates inflation. I think it had something to do with a lag in the data or some calculation process. The study was posted at the old MSN boards once. 800% inflation in 30 years goes overboard, but the ~200% (i.e. prices are now 2x as high) suggested by the CPI are equally fudged. I obviously can't prove it rigorously in a single post, but consider this handy site. postage stamp (1980 = 0.15) (now 0.45) (300%) bread (1980 = 0.48) (now 2.59 per the food inflation experiment in MT) (540%) milk (1980 = 1.60) (now 3.55 per the FIE in MT) (222%) gas (1980 = 1.03) (now 3.40) (330%) car (1980 = 5,413.00) (now 28,400.00 per the FTC) (525%) house (1980 = 86,159) (now 260,000 per this source) (302%) Not one of these gains below 200%, and most vastly above it. I honestly didn't. Various things popped into my mind: food, metals, fuel, etc., and I looked them up one at a time. Quite right, but they nearly always supplant other industries. The way the productivity calcs work, I'm "more productive" now because instead of producing 100 plain ol' scientific calculators, I'm producing 100 graphing calculators (which didn't exist in 1990). And I agree, to an extent, that since a graphing calculator is more useful than a scientific calculator it should be valued as "more output". But using year-by-year prices to determine the relative value of the two goods is an absurd way of determining the relative usefulness of the two products. When graphing calculators first came out, I'll bet they were priced 10x as much as plain old scientific calculators. But are they ten times as useful? If I produce a graphing calculator instead of a scientific calculator, have I really produced ten times the output? I say "no ruddy way", especially for things like iJunk where 0.0025" thickness and a few megs of ram can mean the difference between the $300 2011 model and the $500 2012 model. No way is any comparison of their prices going to reflect their actual relative worth. Same thing with the hedonic adjustments to the CPI. Your average car today actually costs 525% as much as it did in 1980%, but it only really "counts as" 200% because current cars are "262% better" than they were in 1980. I say to that. Give me the raw numbers and let me decide how much better my car is from x years ago. Of course they won't do that, because GDP is CPI adjusted, and we can't have a real CPI showing a less-than-stellar GDP, now can we?
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dumdeedoe
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Post by dumdeedoe on Jul 10, 2012 19:45:44 GMT -5
I have a Question about some old posters on the msn money board. What ever happened to frank the impaler and old and grey? Old and Grey had some very good stories about the recovery.. And index mundai has a fairly good historical indexing of most commodities and such. www.indexmundi.com/
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Virgil Showlion
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Post by Virgil Showlion on Jul 10, 2012 20:11:45 GMT -5
O&G followed Duffminster over to "Duffminster Times"—another message board/blog.
FTI left for reasons I won't specify. It had nothing to do with the board, a poster, or any of the moderators, including myself.
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Post by Deleted on Jul 10, 2012 20:16:33 GMT -5
"I obviously can't prove it rigorously in a single post, but consider this handy site."
I clicked on your link and my security software said that site is "high risk" due to viruses having been found there. The list you give, though is just anecdotal. I'm glad to hear you don't buy into that shadowstats crap, though!
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Virgil Showlion
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Post by Virgil Showlion on Jul 10, 2012 22:24:25 GMT -5
Food, gas, houses, cars... Not like these collectively add up to a large part of anyone's spending. How about movies? Average movie ticket price in 1980: $2.69. Today? $10.50 at my local theatre. (390%) Natural gas? 1,000 cubic feet in 1980: $3.68. Today? $15.05. (409%) Appliances? Whirlpool Dryer, New York 1980: $228; Today: $800.00 (351%) Whirlpool Dishwasher, New York 1980: $228; Today: $709.00 (311%) Still not seeing anything remotely near the hypothetical 195% the CPI is claiming. But enough of this. I could list every commodity and product in the US, and to you it would still only be "anecdotal". Not to mention the Panasonic microwave my family owned in 1982 (before I was born) lasted until I was 18 years old. I believe my parents have had five microwaves in the subsequent 12 years. If only shoddy construction and engineered obsolescence wasn't such a boon to GDP and "productive output". I've never actually looked at Mr. Williams' inflation stats. His methodology for computing unemployment stats is clearly documented, and superior to the methodology used by the BLS, where "longtime unemployed" doesn't count as "unemployed", and where "birth/death adjustments" make short work of the little accuracy that remains.
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zipity
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Post by zipity on Jul 10, 2012 22:29:19 GMT -5
two quick things:
in the real world (the one where people make actual products that they sell to actual customers) labor value is what drives profits. if you can pay someone $7 and sell their labor for $10, you are doing pretty well. if you have to pay $10, not so well. second, the worker generally lives where he works, so i am not sure what your final point is.
Thanks for the insights, here are a few for you, in the business world you don't bet your business on the hope that you can hire illegal labor. You base you plans on the market cost of labor and if you come in cheaper all the better. Second, guest workers are just that, they don't live in the US, they work here for a short period and go home. Typically they take the majority of the money they made here home with them.
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fairlycrazy23
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Post by fairlycrazy23 on Jul 10, 2012 23:10:38 GMT -5
Virgil, I still don't think your understanding of productivity is quite right. And US GDP is up something like 150% since 1990. You cherry picked industries. What about industries that didn't exist in 1990? They are up infinity percent. With respect to CPI being fudged, I'd be interested in seeing actual proof. Personally, I can't argue one side or the other as I'm nowhere near an expert. But all I've seen are anecdotes and references to shadowstats. The former don't mean much, and the latter is easily proved wrong because their numbers compound out to something like 800-900% inflation since 1983. On the flip side, there have been in-depth studies that suggest that CPI slightly over-estimates inflation. I think it had something to do with a lag in the data or some calculation process. The study was posted at the old MSN boards once. 800% inflation in 30 years goes overboard, but the ~200% (i.e. prices are now 2x as high) suggested by the CPI are equally fudged. I obviously can't prove it rigorously in a single post, but consider this handy site. postage stamp (1980 = 0.15) (now 0.45) (300%) bread (1980 = 0.48) (now 2.59 per the food inflation experiment in MT) (540%) milk (1980 = 1.60) (now 3.55 per the FIE in MT) (222%) gas (1980 = 1.03) (now 3.40) (330%) car (1980 = 5,413.00) (now 28,400.00 per the FTC) (525%) house (1980 = 86,159) (now 260,000 per this source) (302%) Not one of these gains below 200%, and most vastly above it. I honestly didn't. Various things popped into my mind: food, metals, fuel, etc., and I looked them up one at a time. Quite right, but they nearly always supplant other industries. The way the productivity calcs work, I'm "more productive" now because instead of producing 100 plain ol' scientific calculators, I'm producing 100 graphing calculators (which didn't exist in 1990). And I agree, to an extent, that since a graphing calculator is more useful than a scientific calculator it should be valued as "more output". But using year-by-year prices to determine the relative value of the two goods is an absurd way of determining the relative usefulness of the two products. When graphing calculators first came out, I'll bet they were priced 10x as much as plain old scientific calculators. But are they ten times as useful? If I produce a graphing calculator instead of a scientific calculator, have I really produced ten times the output? I say "no ruddy way", especially for things like iJunk where 0.0025" thickness and a few megs of ram can mean the difference between the $300 2011 model and the $500 2012 model. No way is any comparison of their prices going to reflect their actual relative worth. Same thing with the hedonic adjustments to the CPI. Your average car today actually costs 525% as much as it did in 1980%, but it only really "counts as" 200% because current cars are "262% better" than they were in 1980. I say to that. Give me the raw numbers and let me decide how much better my car is from x years ago. Of course they won't do that, because GDP is CPI adjusted, and we can't have a real CPI showing a less-than-stellar GDP, now can we? I do believe that the CPI that is normally reported disregards energy and food. But for the example of postage stamp of (1980).15 to (2012) .45, would be about 3.5% per year.
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zipity
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Post by zipity on Jul 10, 2012 23:24:10 GMT -5
A couple of random thoughts as I caught up on the last 3 pages. How do we get jobs, specifically manufacturing jobs back into the US and get the US consumer spending again while simultaneously saving. First thought is that we stop spending HUGE dollars to protect every country on this planet while we can't even stop the flow across our own border. Cut defense spending, if Asia wants to feel secure in the face of China, let them build their own individual military organizations and build their own alliances. Nothing would kick start manufacturing here in the US better than an exchange between India and Pakistan, or a Chinese attack on Taiwan. Don't get me wrong, I'm not hoping for war but while the security we provide allows jobs to flow from the US to these other countries, why are we footing the bill for that security. If Asia does erupt, that would directly kick Walmart (and others) in the supply chain.
As for people spending and saving, again security is key. Contrary to what was stated a few pages back, people were saving during the 90s while they were buying their McMansions. The initiation of 401K programs with corporate matching and government tax breaks (pre-tax savings) saw Americans salting away large percentages of their incomes. The problem is that they were salting that income away into a financial industry make insecure by deregulation. The bursting of the real estate bubble triggered the explosion of credit default swaps/derivatives which drained a large percentage of peoples savings/401ks. While the 90s offered real incentive to put funds aside, today without financial regulation, you run the same risk for an ROI of a couple points. Not much reason to save. It's time to let interest rates start to rise, it's time to regulate the use of credit default swaps and force financial institutions to retain a cash percentage of the derivatives they hold. It's time to put the glass wall back up between banking and investment institutions. Take action like this and people will begin to regain a bit of trust in and might possibly start saving again. Once the consumer starts feeling a bit more secure with their savings and employment situation then their spending will begin to pick up. (IMO of course)
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djAdvocate
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Post by djAdvocate on Jul 10, 2012 23:28:37 GMT -5
two quick things:
in the real world (the one where people make actual products that they sell to actual customers) labor value is what drives profits. if you can pay someone $7 and sell their labor for $10, you are doing pretty well. if you have to pay $10, not so well. second, the worker generally lives where he works, so i am not sure what your final point is. Thanks for the insights, here are a few for you, in the business world you don't bet your business on the hope that you can hire illegal labor. You base you plans on the market cost of labor and if you come in cheaper all the better. Second, guest workers are just that, they don't live in the US, they work here for a short period and go home. Typically they take the majority of the money they made here home with them. i wouldn't really know about any of that, since i don't employ temporary labor. so like you, i will just say "thanks".
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djAdvocate
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Post by djAdvocate on Jul 10, 2012 23:30:02 GMT -5
But for the example of postage stamp of (1980).15 to (2012) .45, would be about 3.5% per year. the inflation i use for rent calculations is based on either a half century or a full century of data (can't remember which now), and i believe it came to 3.42%
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djAdvocate
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Post by djAdvocate on Jul 10, 2012 23:33:44 GMT -5
A couple of random thoughts as I caught up on the last 3 pages. How do we get jobs, specifically manufacturing jobs back into the US and get the US consumer spending again while simultaneously saving. First thought is that we stop spending HUGE dollars to protect every country on this planet while we can't even stop the flow across our own border. Cut defense spending, if Asia wants to feel secure in the face of China, let them build their own individual military organizations and build their own alliances. Nothing would kick start manufacturing here in the US better than an exchange between India and Pakistan, or a Chinese attack on Taiwan. Don't get me wrong, I'm not hoping for war but while the security we provide allows jobs to flow from the US to these other countries, why are we footing the bill for that security. If Asia does erupt, that would directly kick Walmart (and others) in the supply chain. As for people spending and saving, again security is key. Contrary to what was stated a few pages back, people were saving during the 90s while they were buying their McMansions. The initiation of 401K programs with corporate matching and government tax breaks (pre-tax savings) saw Americans salting away large percentages of their incomes. The problem is that they were salting that income away into a financial industry make insecure by deregulation. The bursting of the real estate bubble triggered the explosion of credit default swaps/derivatives which drained a large percentage of peoples savings/401ks. While the 90s offered real incentive to put funds aside, today without financial regulation, you run the same risk for an ROI of a couple points. Not much reason to save. It's time to let interest rates start to rise, it's time to regulate the use of credit default swaps and force financial institutions to retain a cash percentage of the derivatives they hold. It's time to put the glass wall back up between banking and investment institutions. Take action like this and people will begin to regain a bit of trust in and might possibly start saving again. Once the consumer starts feeling a bit more secure with their savings and employment situation then their spending will begin to pick up. (IMO of course) you have an interesting definition of security, which i RARELY see in print, but i happen to agree with: economic security. what sort of security does a person have who is worried about having his job offshored? none, that's what. it would be good for us to focus on THIS kind of security, rather than the kind that involves people who have absolutely nothing to do with us, and will probably never leave their backwards villages in far off places. it is really not that much of a logical leap, so i hold out hope for that one, way more than i hold out hope for us learning out to restrain our ever expanding appetites for cheap goods.
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djAdvocate
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Post by djAdvocate on Jul 10, 2012 23:36:12 GMT -5
zip- i like that last post very much. thanks for putting it up, and you got a kudo for it.
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Virgil Showlion
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Post by Virgil Showlion on Jul 11, 2012 11:00:48 GMT -5
But for the example of postage stamp of (1980).15 to (2012) .45, would be about 3.5% per year. the inflation i use for rent calculations is based on either a half century or a full century of data (can't remember which now), and i believe it came to 3.42% You're right, FC. It's about 3.5% right on the nose. And a reasonable number. A factor of 4, which many items seem to be hovering around, is approx. 4.43% per year. The CPI would have you believe the actual number is 2.11%. No way. Not even housing is that low from 1980 until today, and that's even with housing prices down 40% from their 2007 peak in many states. I did find a nifty site just last night that allows one to download the data series they've used for the CPI calcs over past years. When I get the time, I'm going to dive in and see what the raw data says.
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Driftr
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Post by Driftr on Jul 11, 2012 11:09:21 GMT -5
Virgil - Is your analysis going to be able to do anything with the 'like items' distortions I've heard about?
Gross exageration I think: substitute hamburger prices for what used to be steak.
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formerroomate99
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Post by formerroomate99 on Jul 11, 2012 11:18:35 GMT -5
Yes, but you have to remember that the reason 1950's families didn't feel cramped in 1200 sq ft ranch houses was because all consumer goods, from refrigerators to shoes, were very expensive. A $1000 refrigerator in today's dollars would probably seem cheap compared to what a fridge cost back then and back then, those who couldn't afford the high prices either bought used or did without. There was no option to buy junk.
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Virgil Showlion
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Post by Virgil Showlion on Jul 11, 2012 11:44:44 GMT -5
Those are the "hedonic adjustments" I've been railing against, Driftr.
The "yesterday's steak is like today's hamburger" myth. If there were any reality to it, it would be "yesterday's ordinary grapefruit is today's 'heirloom organic locally-grown grapefruit' that costs three times as much as the pesticide-soaked GMO grapefruit imported from the Philippines".
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AgeOfEnlightenmentSCP
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Post by AgeOfEnlightenmentSCP on Jul 11, 2012 12:35:47 GMT -5
DJ I whole agree with you. However there is another side that a manufacturer makes something to last six months. So ever six months you go and spend a dollar every six months. Now lets say you spend five dollars every two to five years. The maker of the five dollar unit must have a much broader market to survive. The cheap maker depends on repeat business. So based on human nature the maker of a cheap product is in the best position. Cheap is good for a manufacturer but not a wise choice for the consumer. But it meets market demand. It is a catch 22 in manufacturing. I got in to an argument over "planned obsolescence" , the idea that manufactures make things to go bad or useless after x amount of time. I said manufactures don't make things fail after some magic time, they make things up to (but not beyond) the quality that the market demands. I just traded my 1997 Honda. I never even considered another make. I considered other models- but it was which Honda, not which car. Compare to the GM model. Tell me, is cheaper, planned obsolescence really the better model? BTW, it's our 4th Honda, but in the meantime my MIL, FIL, SIL, mom, dad, and brother have all, as a direct result, purchased their first Hondas.
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djAdvocate
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Post by djAdvocate on Jul 11, 2012 13:56:12 GMT -5
Yes, but you have to remember that the reason 1950's families didn't feel cramped in 1200 sq ft ranch houses was because all consumer goods, from refrigerators to shoes, were very expensive. A $1000 refrigerator in today's dollars would probably seem cheap compared to what a fridge cost back then and back then, those who couldn't afford the high prices either bought used or did without. There was no option to buy junk. very true. the option was expensive or none.
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Virgil Showlion
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Post by Virgil Showlion on Jul 11, 2012 15:44:30 GMT -5
My folks got burned by a Chrysler so badly in the 1970's that they vowed never again to buy one. And they meant it.
Personally, I think holding a grudge for forty years is a bit excessive. But I subscribe to the you-burn-me-I-boycott-you mentality 100%—even to the point of making "irrational" purchasing decisions. Like it or not, it is the consumer's responsibility to punish corporations for producing faulty or substandard products. I wish more consumers understood that and took it seriously.
I likewise wish more consumers were "relational shoppers" like Paul. If you find a corporation, it treats you well, and its products are of good quality, demonstrate your loyalty by being willing to pay a significant premium for the brand. It's the "shop for the best deal" no-loyalty attitude, combined with people's ridiculously short memories and inability to tell how long a product "should" last, that give us the Big Box Marts of the world.
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Aman A.K.A. Ahamburger
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Post by Aman A.K.A. Ahamburger on Jul 12, 2012 15:43:16 GMT -5
Double post
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Aman A.K.A. Ahamburger
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Post by Aman A.K.A. Ahamburger on Jul 12, 2012 15:43:41 GMT -5
China may indeed be a giant catastrophe, but I fail to see how that bodes well for Uncle Sam. :-\ It's called happiness not GDP! I have a Question about some old posters on the msn money board. What ever happened to frank the impaler and old and grey? Old and Grey had some very good stories about the recovery.. And index mundai has a fairly good historical indexing of most commodities and such. www.indexmundi.com/ It would be cool to see Old and Grey around here a bit more. Don't listen to Virg Doe. FTI is gone because of a poster that is still here and one that is gone..(that's all I will say about it) You can find FTI here.. fedwatch.proboards.com/Yes, but you have to remember that the reason 1950's families didn't feel cramped in 1200 sq ft ranch houses was because all consumer goods, from refrigerators to shoes, were very expensive. A $1000 refrigerator in today's dollars would probably seem cheap compared to what a fridge cost back then and back then, those who couldn't afford the high prices either bought used or did without. There was no option to buy junk. Exactly, most just did without!
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djAdvocate
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Post by djAdvocate on Jul 12, 2012 16:00:52 GMT -5
China may indeed be a giant catastrophe, but I fail to see how that bodes well for Uncle Sam. :-\ It's called happiness not GDP! It would be cool to see Old and Grey around here a bit more. Don't listen to Virg Doe. FTI is gone because of a poster that is still here and one that is gone..(that's all I will say about it) You can find FTI here.. fedwatch.proboards.com/Yes, but you have to remember that the reason 1950's families didn't feel cramped in 1200 sq ft ranch houses was because all consumer goods, from refrigerators to shoes, were very expensive. A $1000 refrigerator in today's dollars would probably seem cheap compared to what a fridge cost back then and back then, those who couldn't afford the high prices either bought used or did without. There was no option to buy junk. Exactly, most just did without![/quote] products were marketed totally differently back then, too. you could get a black fridge or a white one. there were no peuce (sic) fridges, or daisy yellow ones. things have changed a lot.
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Post by Value Buy on Jul 12, 2012 16:48:12 GMT -5
The more I think about this issue, I am coming to a conclusion. It is all the boomer's fault. I am a boomer. Four bedroom house, a few years from retirement. We have six televisions, three in bedrooms, one in living room, one in rec room, one on the three season porch. Two refrigerators-one in kitchen, three years old, one in the garage, removed there for the new one in kitchen. Two dvr players, and four, out of date and useless vcr's not to mention an old vcr I saved that was on the old Panasonic tape system-I saved that one because it literally had large rubber bands to turn the tapes inside, so old fashioned, maybe becomes an antique in the future. Cars- remember when everyone was renting in with three year plans, and turning in after three years and getting another one? We never did, but many boomers did. Sometimes two rentals to the family. Well, today, boomers are not doing that much any longer. Buying, and living with the cars for say,five years or so, maybe longer. Remember the video camera craze? Husband and wife might both have owned one. Then the digital camera craze came out, and one for EVERY MEMBER of the house, and maybe one for a grandchild too. The cell phones---we all know how that craze has developed, and now tablets........... Bottom line, boomers are coming to the end of their flagrant disregard of spending. We have learned we do not need all the useless gadgets anymore. With the generation X'ers coming along, not quite as well off, and their children in even worse economic shape, we cannot get the spending going again. Thus, big Government thinks it is up to them to flood the country with bennies to keep it going. Yep. Blame it on the boomers. We made the economy what it was, and now we are making it what it is.
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Post by djAdvocate on Jul 12, 2012 17:25:51 GMT -5
demographics? sounds entirely plausible to me.
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Post by Don Perignon on Jul 12, 2012 17:26:57 GMT -5
You are representative of a sub-group of the "baby-boomers". Not all "baby-boomers" were/are as materialistic and shallow as you describe yourself to be.
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Deleted
Joined: Jun 1, 2024 18:04:03 GMT -5
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Post by Deleted on Jul 12, 2012 18:59:04 GMT -5
"The CPI would have you believe the actual number is 2.11%."
Virgil, looking at the past 30yrs (Jan 1982-Jan 2012), the average is 3%, not 2.11%. 226.665 now and 94.3 then 94.3*1.02965^30=226.569.
"Still not seeing anything remotely near the hypothetical 195% the CPI is claiming. But enough of this. I could list every commodity and product in the US, and to you it would still only be "anecdotal"."
You didn't even get the natural gas one right. Using the past 31 years (EIA doesn't quite go as far back as you were looking at), the avg residential price has gone from about $4.30 to $12. That's a 180% increase, which is right dead in line with the overall CPI.
Residential electricity prices are up 43% since 1998 (only slightly faster than overall CPI).
Then go look at clothing, airline tickets, and technology. Those have all increased slower than the overal CPI. Many other commodities, too. You can find plenty of things that have increased slower than the overal CPI. You're just not trying, and some of the data you were using was faulty.
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Value Buy
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Post by Value Buy on Jul 12, 2012 22:30:50 GMT -5
You are representative of a sub-group of the "baby-boomers". Not all "baby-boomers" were/are as materialistic and shallow as you describe yourself to be. materialistic and shallow. Thank you
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