I can't eat an Ipad

[Deleted]

on wsj : online.wsj.com/article/SB10001424052748704893604576199113452719274.html?KEYWORDS=I+can%27t+eat+a+ipad

The Federal Reserve has been on a media campaign to sell its monetary policy to average Americans, but this hasn't always gone smoothly. Witness last week's visit to Queens, New York, by New York Fed President William Dudley, who got a street-corner education in the cost of living.

The former Goldman Sachs chief economist gave a speech explaining the economy's progress and the Fed's successes, but come question time the main thing the crowd wanted to know was why they're paying so much more for food and gas. Keep in mind the Fed doesn't think food and gas prices matter to its policy calculations because they aren't part of "core" inflation.

So Mr. Dudley tried to explain that other prices are falling. "Today you can buy an iPad 2 that costs the same as an iPad 1 that is twice as powerful," he said. "You have to look at the prices of all things."

Reuters reports that this "prompted guffaws and widespread murmuring from the audience," with someone quipping, "I can't eat an iPad." Another attendee asked, "When was the last time, sir, that you went grocery shopping?"

Mr. Dudley has been one of the leading proponents of negative real interest rates and quantitative easing, so this common-man razzing is a case of rough justice. If Mr. Dudley were wise, he'd take it to heart and understand that Americans aren't buying the Fed's line that rising commodity prices are no big deal. Unlike banks and hedge funds, they can't borrow at near-zero interest rates, and most of them don't have big stock portfolios. Wall Street and Congress may love the Fed's free-money policy, but Mr. Dudley and Chairman Ben Bernanke ought to worry about losing the confidence of the middle class.

So how do you tell someone that all is well with the economy when all the prices around them is going up and income for most has remained the same?
Do they really care that they can get an Iphone 4G for the same price they got an Iphone 3G? or in the one used in the article an Ipad 2 at the same price as an Ipad 1.

[2kids10horses]

They make the same kind of arguments about the price of cars. THey say they haven't gone up in price much, because even though the sticker price is more, they have more options, and they attribute the higher costs to the new options the old cars didn't have. Things like side airbags, rear view cameras, built in GPS systems, etc.

Basicly, the government is good at twisting the statistics to read the way they want things to be.

And, I'm not super paranoid. Just skeptical. And, I know they like to put a 'spin' on stuff.

[Savoir Faire-Demogague in NJ]

The cost of living, and products consumers buy is wide ranging. Some areas have price escalation, others have experienced declining prices.
Perhaps some consumers should forego replacing cell phones every year as well as iPads, iPhones and mp3 players and instead spend their money on the necessities they actually need.

[973beachbum]

Mar 16, 2011 8:11:54 GMT -5 Savoir Faire-Demogague in NJ said:

The cost of living, and products consumers buy is wide ranging. Some areas have price escalation, others have experienced declining prices.
Perhaps some consumers should forego replacing cell phones every year as well as iPads, iPhones and mp3 players and instead spend their money on the necessities they actually need.

I agree. The wide range of things in the CPI used to gauge inflation more often than not just cancel each other not.

The sad part is the data is used to say inflation is flat. But the lower you are down the economic scale the harder it is to buy staples. A poor person still has to buy the food that is rising like mad. The cost of an IPAD doesn't matter. And I still need a car to get to work. The fact that it has more junk on it that I didn't want in the first place doesn't make me feel any better about having to pay even more money for it.

[Savoir Faire-Demogague in NJ]

A poor person is likely getting a variety of federal and state welfare handouts, including food stamps.
They are also very likely to have the latest tech gadgets, fancy cell phones and get manicures every other week.
I'll toss in designer basket ball sneakers just for fun.

[Havoc]

Remember that the government also has a very deep interest in keeping the "official" COL increases low, as there are a lot of moving payment parts (SS, pension, disability payments etc) that get COL adjustments depending on the official inflation rate. They changed the official inflation measurements back in the 70s, I believe (this was when they stripped the food and energy components out, which just happen to be the ones that affect consumers the most). I will have to look up the source again, but I read a few weeks ago that if they were still calculating the inflation rate according to the original metrics, which took EVERYTHING into account, we would be running at over 8% right now.

I had read of the exchange with Mr. Dudley.... just a tool that should get back in his ivory tower.... and stay away from anything with cameras and microphones.

[daisylu]

Mar 16, 2011 8:25:04 GMT -5 Savoir Faire-Demogague in NJ said:

A poor person is likely getting a variety of federal and state welfare handouts, including food stamps.
They are also very likely to have the latest tech gadgets, fancy cell phones and get manicures every other week.
I'll toss in designer basket ball sneakers just for fun.

I hate this genaralization. 25-30 years ago, my parents both worked more than 1 job in one of the largest east coast cities to take care of me and were still barely able to eke by. Never even had a vehicle until I was 13yo - and that was a TRUE clunker. I do not know if they were considered too high income for assistance, but I know that they never got them. Hardworking people who probably never tried. For sure, they COULD HAVE taken the easy route as 99% of the neighborhood did and let the government support them while selling drugs on the side. A LOT of people in those type of situations can go either way, but there are a lot of people who deal with that type of struggle every day who forego asking for a handout.

They taught me and my sister a better way. And many years later when I found myself raising 2 kids alone on an $8.50/hr job, I made my situation work too - without any handouts.

Sorry, I just hate the generalization that poor (which is a relative word to me) people abuse the system.

[973beachbum]

Mar 16, 2011 8:25:04 GMT -5 Savoir Faire-Demogague in NJ said:

A poor person is likely getting a variety of federal and state welfare handouts, including food stamps.
They are also very likely to have the latest tech gadgets, fancy cell phones and get manicures every other week.
I'll toss in designer basket ball sneakers just for fun.

I used the wrong word. I don't mean poor as in completely without any means. I meant poor as in working poor who spend all of their income on food and shelter and transportation but don't qualify for any assistance.

The poverty line for a family of 4 in NJ is $21000 a year family income. So does anyone actually think the family of 4making $31000 is actually doing fine? Lots of families spend amost all their income on the basics and don't have much left over for the latest IPAD. but the rising cost of gas and food seriously hurts them.

[Gardening Grandma]

973bb,
Don't you know that the "poor" drive late model SUV's on their way to the store where they pull food stamps out of their coach purses, then go get free healthcare at the ER? They dont have jobs but they all have iphones and big flat screen TVs.
[sarcasm]

[Savoir Faire-Demogague in NJ]

The poverty line for a family of 4 in NJ is $21000 a year family income. So does anyone actually think the family of 4making $31000 is actually doing fine? Lots of families spend amost all their income on the basics and don't have much left over for the latest IPAD. but the rising cost of gas and food seriously hurts them.

I dated a woman about 8 years ago who made that amount, and my current GF is earning roughly the same. Both ladies had cell phones, cable tv, late model cars, plenty of clothes, nicely decorated apartments, etc.

[Savoir Faire-Demogague in NJ]

Don't you know that the "poor" drive late model SUV's on their way to the store where they pull food stamps out of their coach purses, then go get free healthcare at the ER? They dont have jobs but they all have iphones and big flat screen TVs.

I grocery shop at a Shop Rite that is patronized by many residents from Newark, NJ, who use food stamps. Their carts a loaded to the gills with groceries, and they load them into late model cross-overs or SUVs.

[973beachbum]

Mar 16, 2011 9:21:35 GMT -5 Savoir Faire-Demogague in NJ said:

The poverty line for a family of 4 in NJ is $21000 a year family income. So does anyone actually think the family of 4making $31000 is actually doing fine? Lots of families spend amost all their income on the basics and don't have much left over for the latest IPAD. but the rising cost of gas and food seriously hurts them.

I dated a woman about 8 years ago who made that amount, and my current GF is earning roughly the same. Both ladies had cell phones, cable tv, late model cars, plenty of clothes, nicely decorated apartments, etc.

Just to be clear they were the sole support for their 3 kids? 'Cause that $21000 figure is the poverty line for a family of 4's total income. , not a single person.

I have two kids and it is amazing how much they eat. My cart is always packed and it is still gone in two days.

[Small Biz Owner]

As an old GF of mine used to say while making about $50K / yr.
"Just because I am poor, does not mean I have to look or act poor."
Then she filed BK for the 2nd time at age 29. She had to turn in her BMW 320. 6 months later, she was back in a new BMW 3 series, all on credit. Hope those days of EZ credit are over now.

[bean29]

A poor person is likely getting a variety of federal and state welfare handouts, including food stamps.
They are also very likely to have the latest tech gadgets, fancy cell phones and get manicures every other week.
I'll toss in designer basket ball sneakers just for fun.



Read more: notmsnmoney.proboards.com/index.cgi?board=finance&action=display&thread=4822#ixzz1GlyCDRXW

SF, while I am not poor and have never been considered poor, I find your statements above offensive. The situation with rising costs of food and Gas bring to mind my DS. She doesn't bother to polish her nails much less pay for a manicure. She is driving the car I gave her when I bought a new car in 2003. It is a 1997 minivan with almost 200,000 miles on it now. Her DH is driving two very old trucks practically taped together with duct tape. Their household income probably comes in at least at $40,000/year but they are just barely scraping buy. Oh yeah, not sure how old my DS's cell phone is probably about 5 years old, but my BIL is still using his first cell phone it is probably at least 10 years old.

A single woman making $30,000/year is not poverty level. they said poverty level for a family of 4.

BTW, Cell phones are not necessarily a sign of wealth, b/c the government provides a cell phone to people that qualify for food stamps.

[Gardening Grandma]

A poor person is likely getting a variety of federal and state welfare handouts, including food stamps.
They are also very likely to have the latest tech gadgets, fancy cell phones and get manicures every other week.
I'll toss in designer basket ball sneakers just for fun.


I have a son who is a single dad (2 teenagers living at home, a third in an inst). He's struggled with unemployment for the last two years. He did draw UE until it ran out and one of the kids is on the reduced lunch program at school. He does not use food stamps (although I've encouraged him to apply). His cell phone is an old flip model and his plan is a $20 plan that is 12 years old. He's never had a manicure in his life (nor a massage for that matter). The kids do not wear designer basketball sneakers. I purchase their clothes mostly from Target or WMart. I did gift the younger child a cell phone (which I pay for as a reward for getting good grades). My son does not have cable service for his 15 yr old TV. His landline is $12/mo for the basic service (no caller id, no other features). He drives a 1992 truck with over 200K miles on it. He does not owe a dime other than his mortgage (and his ex wife's 1/2 of the equity). His income last year was under $30K.

I find the above generalization very offensive when I see how hard my son works to support his family and be a good dad.

[8 Bit WWBG]

...:::""Today you can buy an iPad 2 that costs the same as an iPad 1 that is twice as powerful,"":::...

To be fair, there is also a lot of competition from Android tablets. There have also been advances in technology such that the parts used in the iPad 2 are probably of the same calibur as in the iPad 1 when it first came out. Apple would not be able to sell as many iPads at a higher price.

But yeah, the technology still hasn't advanced to the point that you can eat it.

[Deleted]

Mar 16, 2011 11:49:49 GMT -5 8 Bit WWBG said:

But yeah, the technology still hasn't advanced to the point that you can eat it.

Yep...

I can use my drive as an example: I drive 45 minutes to work every day. I went from spending about $60-$75week on gas to over $100 a week now.

Yes not everyone has such a long drive (my wife only drive 15 minutes to work) but if someone was telling me how costs of living has not increase I would seriously be laughing in your face.

Same goes for groceries: we tend to eat pretty healthy and the costs of food as also increased.

I am not up for a review till this June for me or semptember for my wife. So we still have to cover everything on the same salary. Now if we were already on the edge, that could have push us over.

[The J]

At the same time, I understand the reason not to include something like gas. A couple years ago, gas was at the price levels we see today. What happened? The price dropped in half, then climbed back up some more, then stayed stagnant. If it was included in core CPI, we would have had inflation, followed by deflation, followed by inflation, within the span of a few months.

[Deleted]

I think it's an important point that quality of life isn't necessarily directly equal to income. The typical middle class person today has luxuries that rich people of previous generations couldn't even dream of.

But yes - food and gas prices are definitely going up.

[bobbysgirl]

Mar 16, 2011 8:44:08 GMT -5 daisylu said:

Mar 16, 2011 8:25:04 GMT -5 Savoir Faire-Demogague in NJ said:

A poor person is likely getting a variety of federal and state welfare handouts, including food stamps.
They are also very likely to have the latest tech gadgets, fancy cell phones and get manicures every other week.
I'll toss in designer basket ball sneakers just for fun.

I hate this genaralization. 25-30 years ago, my parents both worked more than 1 job in one of the largest east coast cities to take care of me and were still barely able to eke by. Never even had a vehicle until I was 13yo - and that was a TRUE clunker. I do not know if they were considered too high income for assistance, but I know that they never got them. Hardworking people who probably never tried. For sure, they COULD HAVE taken the easy route as 99% of the neighborhood did and let the government support them while selling drugs on the side. A LOT of people in those type of situations can go either way, but there are a lot of people who deal with that type of struggle every day who forego asking for a handout.

They taught me and my sister a better way. And many years later when I found myself raising 2 kids alone on an $8.50/hr job, I made my situation work too - without any handouts.

Sorry, I just hate the generalization that poor (which is a relative word to me) people abuse the system.

KARMA for you DAISY!

[tea4me]

Mar 16, 2011 9:38:53 GMT -5 bean29 said:

BTW, Cell phones are not necessarily a sign of wealth, b/c the government provides a cell phone to people that qualify for food stamps.

Please tell me this is not true.

[The J]

Mar 16, 2011 13:25:35 GMT -5 @tea4me said:

Mar 16, 2011 9:38:53 GMT -5 bean29 said:

BTW, Cell phones are not necessarily a sign of wealth, b/c the government provides a cell phone to people that qualify for food stamps.

Please tell me this is not true.

There's a program that provides cheapo disposible prepaid cell phones with like 50 minutes/month for some people, so they can have a phone number through which they could scehdule interviews.

[Deleted]

Mar 16, 2011 13:25:35 GMT -5 @tea4me said:

Mar 16, 2011 9:38:53 GMT -5 bean29 said:

BTW, Cell phones are not necessarily a sign of wealth, b/c the government provides a cell phone to people that qualify for food stamps.

Please tell me this is not true.

Yes but it is not like they provide them with iphones and blackberry's like my wife and I have.

Just bare phones (cheap ones) with some minutes.

Edited: I see the J covered that.

[973beachbum]

Mar 16, 2011 13:27:00 GMT -5 The J said:

Mar 16, 2011 13:25:35 GMT -5 @tea4me said:

Please tell me this is not true.

There's a program that provides cheapo disposible prepaid cell phones with like 50 minutes/month for some people, so they can have a phone number through which they could scehdule interviews.

I think this is an extension of the lifeline program that has been around for years. It provided a landline with just local service for emergencies for people who were disabled or just very low income.

Pretty soon land lines will be a thing of the past and everyone will have a cell phone except for fleeing felons.

[sheilaincali]

Pretty soon land lines will be a thing of the past and everyone will have a cell phone except for fleeing felons

Why do you think those disposable cell phones are so popular? just kidding.

I haven't had a landline in 5 years. None of my friends have landlines either. Only people I know that use a landline are my parents.

In my town we have a battered women's shelter that collects used cell phones and the cell company gives them free service so they can call 911 if their abuser tracks them down.

[robbase]

I have it on pretty good authority that a person can eat an Ipad 2, as long as you have the right amount of hot sauce

[Opti]

Mar 16, 2011 8:11:54 GMT -5 Savoir Faire-Demogague in NJ said:

The cost of living, and products consumers buy is wide ranging. Some areas have price escalation, others have experienced declining prices.
Perhaps some consumers should forego replacing cell phones every year as well as iPads, iPhones and mp3 players and instead spend their money on the necessities they actually need.

Personally I think the crowd said what they did because you usually need to buy gas and food and the stuff SF mentions is optional. I think there are more than a few people out there like me who don't have an mp3 player, iPad, or iPhone. My pay as you go cell phone is 6 years old. I care about the cost of food and gas. Electronics, not so much.

[lisaa]

Mar 16, 2011 12:41:44 GMT -5 The J said:

At the same time, I understand the reason not to include something like gas. A couple years ago, gas was at the price levels we see today. What happened? The price dropped in half, then climbed back up some more, then stayed stagnant. If it was included in core CPI, we would have had inflation, followed by deflation, followed by inflation, within the span of a few months.

But isn't that, like, reality? Shouldn't reality be what we are measuring?

[Deleted]

Mar 16, 2011 22:50:11 GMT -5 lisaa said:

Mar 16, 2011 12:41:44 GMT -5 The J said:

At the same time, I understand the reason not to include something like gas. A couple years ago, gas was at the price levels we see today. What happened? The price dropped in half, then climbed back up some more, then stayed stagnant. If it was included in core CPI, we would have had inflation, followed by deflation, followed by inflation, within the span of a few months.

But isn't that, like, reality? Shouldn't reality be what we are measuring?

Yep and I think that is what some people are getting at.

My laptop is 2 years old and my wife's is 4. We don't plan on getting a new one for her for another 2 years or so. Her iphone is 2 years old and she is still using it and the only reason I have a new blackberry is because I broke mine.

Unless you have money to spend like crazy, you really don't update your electronics that often; update the software yes but not the actual hardware.

But food, gas, electricity bill, heat, etc you spend money on those on a regular basis so you are more interested in those prices going up instead of an ipad.

[The J]

Mar 16, 2011 22:50:11 GMT -5 lisaa said:

Mar 16, 2011 12:41:44 GMT -5 The J said:

At the same time, I understand the reason not to include something like gas. A couple years ago, gas was at the price levels we see today. What happened? The price dropped in half, then climbed back up some more, then stayed stagnant. If it was included in core CPI, we would have had inflation, followed by deflation, followed by inflation, within the span of a few months.

But isn't that, like, reality? Shouldn't reality be what we are measuring?

And reality is being measured. There are multiple calculations of CPI. For economic analysis puposes, however, core CPI is more relevant because it does remove some of the short-term volitility and fluctuations, which basically smooths out the trend line.