7 ms·

It looks like the things that are increasing the most in cost have government programs to give people money to pay for them. Maybe that's the problem! The free

It looks like the things that are increasing the most in cost have government programs to give people money to pay for them. Maybe that's the problem! The free market has made TVs and even cars cheaper and better than ever.

frik 10y ago
The other day I read a Volkswagen (VW Golf) today is ten times more expensive today then thirty years ago. And the modern one is cheating so it will be hard to sell, while the older models still work like a clock if there is no rust issue it will last another thirty years (if well maintained). Also computers got cheaper and cheaper, but now with smartphones and tablets a desktop computer gets a lot more expensive again. A modern graphic card nowadays costs 500$, whereas in 2011 you got it or 200$. And CPUs got more expensive again as well. Five years ago you could buy a highend computer for 1200$, today you pay at least 700$ more.
- Analemma_ 10y ago
  > The other day I read a Volkswagen (VW Golf) today is ten times more expensive today then thirty years ago. After adjusting for inflation? I'm gonna need a citation on that. This number sounds bogus. > A modern graphic card nowadays costs 500$, whereas in 2011 you got it or 200$. A high-end graphics card (like a 1070) costs $500. A mid-range "good enough" card (like an RX 480) costs $200. It's a segmented market, and it was exactly the same in 2011. Again, your claims are highly suspect and I want to see some numbers backing them up. > And CPUs got more expensive again as well. That's because AMD released a garbage fire architecture in Bulldozer, and Intel, no longer having meaningful competition, did what they always do and jacked up prices. Boo on Intel, but there's nothing macroeconomic about it.
  - 15charlimit 10y ago
    A high-end graphics card is $700+, the 1070 you mentioned is toward the upper end of the "mid tier" market. Cards like the 1060 and RX480 are considered low tier.
    - TulliusCicero 10y ago
      This is nowhere close to true. A 1060 is only "low tier" for someone who subscribes to /r/pcmasterrace; for regular PC gamers it's a solid mid-range card. Also remember that the GeForce 3, when launched, cost $600, which would be $800 today (and this was a consumer card equivalent to the 1080, not a professional card like the Titans).
- steve19 10y ago
  I think the issue might be people requiring better and better products. Cost vs. utility is decreasing, but the absolute cost rises. Graphics cards are a great example. The new gtx1080 is faster, and half(?) the cost, of the previous generation Titan, but costs a lot more than the gtx980 (previous gen card it replaced). So you could say Nvidia cards are getting more expensive, but not really. Price vs. performance is falling.
- rifung 10y ago
  The regular Golf wasn't caught for cheating was it? Only the TDI? I'm not sure the price comparisons you give make sense because $200 today still buys you a better CPU/GPU than $200 did back then..
- AnimalMuppet 10y ago
  Ten times more expensive over 30 years? What was inflation over those 30 years? Was it a factor of 10? Even if not... how were the airbags in a VW 30 years ago? Oh, it didn't have them? You're literally not buying the same thing, even if it serves the same function. The statement from the mid-to-late 1980s was that the computer you want always costs $2000. That quit being true from about 2000 to about 2010. But if you don't need high-end graphics (by current standards), you can buy a quite nice computer for $700.
- bluGill 10y ago
  > while the older models still work like a clock if there is no rust issue it will last another thirty years (if well maintained). There is every reason to believe that a modern VW will last for 60 years as well in similar situations. I would guess the new one will last longer than the old one: VW has been improving quality over the years. Of course most cars are wrecked long before that 60 years: humans make bad drivers. People also tend to not want to take care of old cars as well. Cars don't hold value in general so keeping the car on the road for 60 years will more than once call for more maintenance dollars than the car is worth.
  - frik 10y ago
    > There is every reason to believe that a modern VW will last for 60 years as well in similar situations. I would guess the new one will last longer than the old one That's funny and must be a joke. Cars since at least the late nineties are completely designed in 3D CAD (computer aided design). The manufacturer knows exactly what each part weights, how much each part costs, how long each part lasts and they increased the revenue margin tremendously while lowering the car quality to last just as long enough and earn a lot of money additionally with car parts that break exactly two weeks after the 3 or 5 year warrent. Or vital parts that aren't protected to corrosion, and transform a good car in a few years. Look at the BBC TV show Top Gears (pre 2016). For their christmas special the hosts drove with older cars around the world in sheer unbelievable tortious conditions for the cars. An american or european car build in 2000s/2010s is made to last for x years, and need to replace several parts after every y thousends miles. If you take an old Mercedes, Volvo, etc from the 1970-1990s you can use it for thirty or fourty years even in demanding regions of the world. Such cars run in their later life after being a taxi vehicle in US/Europe for twenty years with the same car engine or a replacement another thirty years in Africa or parts of Asia. You can't do that with newer models, at all (with the exception of a few models like Mercedes G perhaps, but certainly not with Mercedes E or S class - the last "well" built ones are from 1999, the same or often a lot worse with most other US/European car manufactorer - like the 1970s VW cars run fine today, but don't even think about owning a new model for more than ten years - it would get very expensive fast).
- mseebach 10y ago
  The Golf is not ten times more expensive today than 30 years ago, not even close, non even in nominal dollar value. Adjusted for inflation, a 1986 Golf would have to have retailed for less than $1000 for the 10x number to hold (the 2016 starts at $20k, which is about $9k in 1986). Also, FWIW, the Golf of today seems to be more of a upscale car, where the 80's models felt substantially more of a no-nonsense workaday car.
- alaxsxaq 10y ago
  You are a bit off on the increase in auto prices. For instance, A 1978 VW Rabbit (Golf predecessor) cost around $5000. A 2016 Golf starts at $18,500. I haven't had a VW in a long time, but the Rabbit was a pretty bare bones automobile. Almost anything these days is way more luxurious than cars back then and way more reliable.
- mahyarm 10y ago
  The high end graphics cards were $500 in 2011 too. Maybe your definition of high end has changed...
  - frik 10y ago
    A nVidia GForce GT580 was less than $500 (like $400), and a mid-to-highend GT570 around $250. The same class of cards the GTX 1080 costs now $650-$700 and the GTX 1070 $450. "GTX 1070 prices start at $429 instead of $379, while GTX 1080 prices start at $649 (and if you actually want a card in stock, that’ll be $699). These are prices that are closer to last generations GTX 980 Ti/980 prices than they are 980/970, and it means that the actual GTX 1000 series price premium is much higher as it stands, at $100+ compared to the last generation. Given that these cards keep selling out, clearly there are enough buyers willing to pay these prices – it’s the free market in action – but it means NVIDIA’s MSRPs are for the moment an imaginary number." -- http://www.anandtech.com/show/10325/the-nvidia-geforce-gtx-1080-and-1070-founders-edition-review http://www.anandtech.com/show/10325/the-nvidia-geforce-gtx-1... Fact is computer components got more expensive, as less people buy a PC. It correlates with the stagnation of single core performance of Intel/AMD (aka no need to replace a years old PC at all) and the less than inviting situation that Microsoft introduced with Windows 8 and continues even more aggressive with Windows 10. The users simply buy an iOS or Android tablet and a Playstation 4 to prevent continues frustration.
toodlebunions 10y ago
Sure because TVs and cars are mass produced products. Housing, school and childcare are not.
- stale2002 10y ago
  Well then perhaps the solution is to mass produce those things? At the very least housing could be mass produced if there werent so many regulations getting in the way.
  - epicaricacy 10y ago
    The problem with trying to mass produce homes... Most of us don't want to live in prefabricated boxes that have no character.
    - JoshTriplett 10y ago
      I wouldn't go so far as "most of us". Having a home is a necessity; having a home with "character" is a luxury. Inexpensive housing needs to exist too.
      - zepto 10y ago
        A home with no character is called a prison cell.
        jschwartzi 10y ago
        No, it's called suburbia.
        shardinator 10y ago
        That escalated quickly
    - TulliusCicero 10y ago
      Mass producing homes would likely mean more density/taller apartment complexes, not prefab mobile homes. And the necessity part of housing is having a decent home you can afford, having one with outward 'character' is a nice-to-have.
jseliger 10y ago
Tyler Cowen discusses precisely these issues in The Great Stagnation: http://www.amazon.com/Great-Stagnation-America-Low-Hanging-Eventually/dp/0525952713?ie=UTF8&tag=thstsst-20&linkCode=as2&camp=1789&creative=390957 http://www.amazon.com/Great-Stagnation-America-Low-Hanging-E..., which was published in 2010 or 2011 but is still excellent.
- metaphorm 10y ago
  Tyler Cowen is a good economist. And that's why he shouldn't be trusted further than you can throw him.
baconner 10y ago
There's certainly a correlation between necessities and government regulation, but I think that's an oversimplification. A more nuanced way to look at it is to consider the context in which a consumer needs to decide what to spend their money on... * Necessities have a much different demand than luxuries. The free market may play against consumers when not getting healthcare or food is not an option. * Markets like healthcare and education make the cost benefit analysis for the consumer so hard as to be effectively not done by most of the population. people find out the cost after they already owe the money a lot of the time. gov programs can exacerbate this but so can free market loans and insurance. * As the article points out it's also got a lot to do with the production of goods. Mfg costs have come way down, innovations for lowering healthcare costs are much more complicated. * Also consumers may have less money in their pockets to begin with because of some of the same reasons luxuries are cheap. Cheap mfg = cheap or no mfg paycheck in the us.
Loic 10y ago
I see 4 groups: 1. Largely above inflation are everything requiring local work. 2. Below inflation are everything mass produced in Asia. 3. Staying at 0 are the mix of the first 2, your car is built locally with automation and parts coming from everywhere in the world. 4. The last, housing and food is basically the center mass of the inflation calculations, this is basically normal that it is following the inflation. The particular case of college tuition and textbooks is a US issue, we do not have it in the rest of the world. So, we just learnt that the higher education system in the US is broken or maybe we knew it already?
- metaphorm 10y ago
  higher education, housing, healthcare, and many forms of essential food products (particularly produce and grains) have gone up in price by a hugely significant amount.
imgabe 10y ago
The market for healthcare is not free. If you don't buy it, you die or suffer in pain. There's no other transaction where that would be considered a free consumer choice. If you walked into Best Buy and they said "Buy this TV or we'll kill you" that would be robbery, not a free market transaction, but that's pretty much the choice you have when you decide to buy healthcare or not.
- Kenji 10y ago
  Nonsense. Most cases of people going to the doctor are not immediately lethal. Broken bones, large skin lesions, rashes and the flu, back pain and tooth aches. With all of these things, it is really nice to go to the doctor, but you don't necessarily have to: You "just" face large amounts of pain and possibly long-term damage. Rational decision making takes place in a free market: You weigh your pain and the damage against the money spent at the doctor. By socializing healthcare, we destroy its efficiency and drive up prices. If everyone goes to the doctor because of a little cough because it's "free", that is precisely the irrational uncapitalistic decision making we do not need. Another aspect is dumping millions into old people with end-stage cancer who die anyway, just prolonging the massive suffering by a couple of months or years (I personally know of such a case and it's heartbreaking how the greed of the doctors and the socialist health care system work together).
  - baconner 10y ago
    I think there's significant evidence that socialized healthcare does not increase medical costs vs a system like the us has. Quite the opposite. In the us our costs grow dramatically compared to the rest of the world yet our outcomes are worse than many socialized systems. Socialized healthcare can absolutely include limits on what they will pay for and not to reduce overuse. There's zero reason it has to allow for unconstrained spending.
  - twblalock 10y ago
    > By socializing healthcare, we destroy its efficiency and drive up prices. If everyone goes to the doctor because of a little cough because it's "free", that is precisely the irrational uncapitalistic decision making we do not need. You say that like you are predicting the outcome of an experiment that hasn't been tried -- but socialized medicine has been tried in dozens of countries, and the price and efficiency outcomes you predicted have not happened in any of them! In fact, people going to the doctor more often for things like a "little cough" is a good thing, because it increases the likelihood that serious conditions will be discovered early, in the course of treating less-serious conditions. The life expectancy of Japanese people, which is the highest in the world, has been largely credited to the fact that they visit doctors more frequently than most other people.

frik 10y ago

The other day I read a Volkswagen (VW Golf) today is ten times more expensive today then thirty years ago. And the modern one is cheating so it will be hard to sell, while the older models still work like a clock if there is no rust issue it will last another thirty years (if well maintained). Also computers got cheaper and cheaper, but now with smartphones and tablets a desktop computer gets a lot more expensive again. A modern graphic card nowadays costs 500$, whereas in 2011 you got it or 200$. And CPUs got more expensive again as well. Five years ago you could buy a highend computer for 1200$, today you pay at least 700$ more.

Analemma_ 10y ago
> The other day I read a Volkswagen (VW Golf) today is ten times more expensive today then thirty years ago. After adjusting for inflation? I'm gonna need a citation on that. This number sounds bogus. > A modern graphic card nowadays costs 500$, whereas in 2011 you got it or 200$. A high-end graphics card (like a 1070) costs $500. A mid-range "good enough" card (like an RX 480) costs $200. It's a segmented market, and it was exactly the same in 2011. Again, your claims are highly suspect and I want to see some numbers backing them up. > And CPUs got more expensive again as well. That's because AMD released a garbage fire architecture in Bulldozer, and Intel, no longer having meaningful competition, did what they always do and jacked up prices. Boo on Intel, but there's nothing macroeconomic about it.
- 15charlimit 10y ago
  A high-end graphics card is $700+, the 1070 you mentioned is toward the upper end of the "mid tier" market. Cards like the 1060 and RX480 are considered low tier.
  - TulliusCicero 10y ago
    This is nowhere close to true. A 1060 is only "low tier" for someone who subscribes to /r/pcmasterrace; for regular PC gamers it's a solid mid-range card. Also remember that the GeForce 3, when launched, cost $600, which would be $800 today (and this was a consumer card equivalent to the 1080, not a professional card like the Titans).
steve19 10y ago
I think the issue might be people requiring better and better products. Cost vs. utility is decreasing, but the absolute cost rises. Graphics cards are a great example. The new gtx1080 is faster, and half(?) the cost, of the previous generation Titan, but costs a lot more than the gtx980 (previous gen card it replaced). So you could say Nvidia cards are getting more expensive, but not really. Price vs. performance is falling.
rifung 10y ago
The regular Golf wasn't caught for cheating was it? Only the TDI? I'm not sure the price comparisons you give make sense because $200 today still buys you a better CPU/GPU than $200 did back then..
AnimalMuppet 10y ago
Ten times more expensive over 30 years? What was inflation over those 30 years? Was it a factor of 10? Even if not... how were the airbags in a VW 30 years ago? Oh, it didn't have them? You're literally not buying the same thing, even if it serves the same function. The statement from the mid-to-late 1980s was that the computer you want always costs $2000. That quit being true from about 2000 to about 2010. But if you don't need high-end graphics (by current standards), you can buy a quite nice computer for $700.
bluGill 10y ago
> while the older models still work like a clock if there is no rust issue it will last another thirty years (if well maintained). There is every reason to believe that a modern VW will last for 60 years as well in similar situations. I would guess the new one will last longer than the old one: VW has been improving quality over the years. Of course most cars are wrecked long before that 60 years: humans make bad drivers. People also tend to not want to take care of old cars as well. Cars don't hold value in general so keeping the car on the road for 60 years will more than once call for more maintenance dollars than the car is worth.
- frik 10y ago
  > There is every reason to believe that a modern VW will last for 60 years as well in similar situations. I would guess the new one will last longer than the old one That's funny and must be a joke. Cars since at least the late nineties are completely designed in 3D CAD (computer aided design). The manufacturer knows exactly what each part weights, how much each part costs, how long each part lasts and they increased the revenue margin tremendously while lowering the car quality to last just as long enough and earn a lot of money additionally with car parts that break exactly two weeks after the 3 or 5 year warrent. Or vital parts that aren't protected to corrosion, and transform a good car in a few years. Look at the BBC TV show Top Gears (pre 2016). For their christmas special the hosts drove with older cars around the world in sheer unbelievable tortious conditions for the cars. An american or european car build in 2000s/2010s is made to last for x years, and need to replace several parts after every y thousends miles. If you take an old Mercedes, Volvo, etc from the 1970-1990s you can use it for thirty or fourty years even in demanding regions of the world. Such cars run in their later life after being a taxi vehicle in US/Europe for twenty years with the same car engine or a replacement another thirty years in Africa or parts of Asia. You can't do that with newer models, at all (with the exception of a few models like Mercedes G perhaps, but certainly not with Mercedes E or S class - the last "well" built ones are from 1999, the same or often a lot worse with most other US/European car manufactorer - like the 1970s VW cars run fine today, but don't even think about owning a new model for more than ten years - it would get very expensive fast).
mseebach 10y ago
The Golf is not ten times more expensive today than 30 years ago, not even close, non even in nominal dollar value. Adjusted for inflation, a 1986 Golf would have to have retailed for less than $1000 for the 10x number to hold (the 2016 starts at $20k, which is about $9k in 1986). Also, FWIW, the Golf of today seems to be more of a upscale car, where the 80's models felt substantially more of a no-nonsense workaday car.
alaxsxaq 10y ago
You are a bit off on the increase in auto prices. For instance, A 1978 VW Rabbit (Golf predecessor) cost around $5000. A 2016 Golf starts at $18,500. I haven't had a VW in a long time, but the Rabbit was a pretty bare bones automobile. Almost anything these days is way more luxurious than cars back then and way more reliable.
mahyarm 10y ago
The high end graphics cards were $500 in 2011 too. Maybe your definition of high end has changed...
- frik 10y ago
  A nVidia GForce GT580 was less than $500 (like $400), and a mid-to-highend GT570 around $250. The same class of cards the GTX 1080 costs now $650-$700 and the GTX 1070 $450. "GTX 1070 prices start at $429 instead of $379, while GTX 1080 prices start at $649 (and if you actually want a card in stock, that’ll be $699). These are prices that are closer to last generations GTX 980 Ti/980 prices than they are 980/970, and it means that the actual GTX 1000 series price premium is much higher as it stands, at $100+ compared to the last generation. Given that these cards keep selling out, clearly there are enough buyers willing to pay these prices – it’s the free market in action – but it means NVIDIA’s MSRPs are for the moment an imaginary number." -- http://www.anandtech.com/show/10325/the-nvidia-geforce-gtx-1080-and-1070-founders-edition-review http://www.anandtech.com/show/10325/the-nvidia-geforce-gtx-1... Fact is computer components got more expensive, as less people buy a PC. It correlates with the stagnation of single core performance of Intel/AMD (aka no need to replace a years old PC at all) and the less than inviting situation that Microsoft introduced with Windows 8 and continues even more aggressive with Windows 10. The users simply buy an iOS or Android tablet and a Playstation 4 to prevent continues frustration.

toodlebunions 10y ago

Sure because TVs and cars are mass produced products. Housing, school and childcare are not.

stale2002 10y ago
Well then perhaps the solution is to mass produce those things? At the very least housing could be mass produced if there werent so many regulations getting in the way.
- epicaricacy 10y ago
  The problem with trying to mass produce homes... Most of us don't want to live in prefabricated boxes that have no character.
  - JoshTriplett 10y ago
    I wouldn't go so far as "most of us". Having a home is a necessity; having a home with "character" is a luxury. Inexpensive housing needs to exist too.
    - zepto 10y ago
      A home with no character is called a prison cell.
      - jschwartzi 10y ago
        No, it's called suburbia.
      - shardinator 10y ago
        That escalated quickly
  - TulliusCicero 10y ago
    Mass producing homes would likely mean more density/taller apartment complexes, not prefab mobile homes. And the necessity part of housing is having a decent home you can afford, having one with outward 'character' is a nice-to-have.

jseliger 10y ago

Tyler Cowen discusses precisely these issues in The Great Stagnation: http://www.amazon.com/Great-Stagnation-America-Low-Hanging-Eventually/dp/0525952713?ie=UTF8&tag=thstsst-20&linkCode=as2&camp=1789&creative=390957 http://www.amazon.com/Great-Stagnation-America-Low-Hanging-E..., which was published in 2010 or 2011 but is still excellent.

metaphorm 10y ago
Tyler Cowen is a good economist. And that's why he shouldn't be trusted further than you can throw him.

baconner 10y ago

There's certainly a correlation between necessities and government regulation, but I think that's an oversimplification. A more nuanced way to look at it is to consider the context in which a consumer needs to decide what to spend their money on... * Necessities have a much different demand than luxuries. The free market may play against consumers when not getting healthcare or food is not an option. * Markets like healthcare and education make the cost benefit analysis for the consumer so hard as to be effectively not done by most of the population. people find out the cost after they already owe the money a lot of the time. gov programs can exacerbate this but so can free market loans and insurance. * As the article points out it's also got a lot to do with the production of goods. Mfg costs have come way down, innovations for lowering healthcare costs are much more complicated. * Also consumers may have less money in their pockets to begin with because of some of the same reasons luxuries are cheap. Cheap mfg = cheap or no mfg paycheck in the us.

Loic 10y ago

I see 4 groups: 1. Largely above inflation are everything requiring local work. 2. Below inflation are everything mass produced in Asia. 3. Staying at 0 are the mix of the first 2, your car is built locally with automation and parts coming from everywhere in the world. 4. The last, housing and food is basically the center mass of the inflation calculations, this is basically normal that it is following the inflation. The particular case of college tuition and textbooks is a US issue, we do not have it in the rest of the world. So, we just learnt that the higher education system in the US is broken or maybe we knew it already?

metaphorm 10y ago
higher education, housing, healthcare, and many forms of essential food products (particularly produce and grains) have gone up in price by a hugely significant amount.

imgabe 10y ago

The market for healthcare is not free. If you don't buy it, you die or suffer in pain. There's no other transaction where that would be considered a free consumer choice. If you walked into Best Buy and they said "Buy this TV or we'll kill you" that would be robbery, not a free market transaction, but that's pretty much the choice you have when you decide to buy healthcare or not.

Kenji 10y ago
Nonsense. Most cases of people going to the doctor are not immediately lethal. Broken bones, large skin lesions, rashes and the flu, back pain and tooth aches. With all of these things, it is really nice to go to the doctor, but you don't necessarily have to: You "just" face large amounts of pain and possibly long-term damage. Rational decision making takes place in a free market: You weigh your pain and the damage against the money spent at the doctor. By socializing healthcare, we destroy its efficiency and drive up prices. If everyone goes to the doctor because of a little cough because it's "free", that is precisely the irrational uncapitalistic decision making we do not need. Another aspect is dumping millions into old people with end-stage cancer who die anyway, just prolonging the massive suffering by a couple of months or years (I personally know of such a case and it's heartbreaking how the greed of the doctors and the socialist health care system work together).
- baconner 10y ago
  I think there's significant evidence that socialized healthcare does not increase medical costs vs a system like the us has. Quite the opposite. In the us our costs grow dramatically compared to the rest of the world yet our outcomes are worse than many socialized systems. Socialized healthcare can absolutely include limits on what they will pay for and not to reduce overuse. There's zero reason it has to allow for unconstrained spending.
- twblalock 10y ago
  > By socializing healthcare, we destroy its efficiency and drive up prices. If everyone goes to the doctor because of a little cough because it's "free", that is precisely the irrational uncapitalistic decision making we do not need. You say that like you are predicting the outcome of an experiment that hasn't been tried -- but socialized medicine has been tried in dozens of countries, and the price and efficiency outcomes you predicted have not happened in any of them! In fact, people going to the doctor more often for things like a "little cough" is a good thing, because it increases the likelihood that serious conditions will be discovered early, in the course of treating less-serious conditions. The life expectancy of Japanese people, which is the highest in the world, has been largely credited to the fact that they visit doctors more frequently than most other people.