7 ms·

I am sorry, but this guy is an idiot. He is referring this study: http://www.conferenceboard.ca/hcp/hot-topics/caninequality.aspx http://www.conferenceboard.ca

by bearmf 14y ago

I am sorry, but this guy is an idiot. He is referring this study: http://www.conferenceboard.ca/hcp/hot-topics/caninequality.aspx http://www.conferenceboard.ca/hcp/hot-topics/caninequality.a... It has a chart of INFLATION-ADJUSTED median after-tax income in 2009 dollars, from 1976 to 2009. He then takes a figure for 1984 from this chart, around $48500, and proceeds to compare it to prices in 1984 dollars, without converting them to 2009 dollars. So from a house price of 100k in 1984, he infers it was only 2x times median income then. While in fact, he needs to convert 100k in 2009 dollars and get around 200k and 4x times median income.

tosseraccount 14y ago
Yeah, I though he was, too. but ... "Average family after-tax income back then was close to $50,000." 1984???? He's got to be adjusting for inflation in some cases. (or he is an idiot)
- bearmf 14y ago
  He is adjusting median income but not prices.
liber8 14y ago
Not only that but his other example (cars) is ludicrous. Cars are by far, without a doubt, cheaper, safer, better made, more reliable, and more feature-laden than at any point, ever. For $12k (roughly 1/4 the median income), you can get a brand new, pretty decent car. Also, just about everything else (save maybe gas) is much cheaper and more plentiful today than 30 years ago. The Russian athletes and dancers who came here to compete/perform in the 70's and 80's told many tales of being awed by common supermarkets. I think if you took Americans from the 80's and brought them to a Costco, they might not be awed, but they'd be pretty surprised.
- JamisonM 14y ago
  Although he opens mentioning buying a car in 1986 what he actually says is that cars have pretty much matched the rate of inflation. Seems to me he is saying cars are about as good a deal today as they were back then. I do not find that ludicrous. The other point to be made about cars is that all those improvements do not really matter that much in terms of the value you are getting out of them, cars in the '80s got you from point A to point B just like a brand new one does today. (To be completely off topic I would add that computerization in the modern cars has always been a concern for me, when a 2012 car's computer starts acting up in 2032 what are we going to do with them? I have a late-ninties highway tractor and every time I have a wiring problem with it I am pretty worried it will become more expensive to fix than it is worth despite being mechanically sound.)
  - learc83 14y ago
    >The other point to be made about cars is that all those improvements do not really matter that much in terms of the value you are getting out of them. Cars today on average run much longer than cars did 30 years ago, the get better gas mileage on average, and go longer between scheduled maintenance. How is that not added value?
    - JamisonM 14y ago
      For one thing the better gas mileage is not much of an improvement from the mid-eighties, gas was much cheaper then ('78-'84 prices were high, inflation-adjusted still not as high as right now though except maybe in 1981). If you buy a new car and your issue is capital or cash-flow how long the car lasts will not be a significant factor in your purchase. Don't get me started on car maintenance! You can hardly touch a modern car anymore yourself, you pretty much have to pay someone to do anything. But I will concede that a modern car needs a lot less work.
  - Daniel_Newby 14y ago
    > ... when a 2012 car's computer starts acting up in 2032 what are we going to do with them? The same place you get a computer for a 1982 car: a salvage company. Whenever a car rusts out, gets totally wrecked, and so forth, the specialty parts are stripped and warehoused.
    - JamisonM 14y ago
      This is what is sad about it, are we now building cars that could last forever but their electronics will end up making them disposable? I hope not. Sending an otherwise good car to a wrecker because the little (and not very powerful) computer can not be replaced seems very inefficient. Is someone figuring out how to make commodity platforms for cars yet?
      - Daniel_Newby 14y ago
        The electronics are generally very reliable. I have only had difficulty replacing electronics once, on a 1972 Mercedes, and that could have been worked around if the car had been worth saving. Which is the real point. When a once-popular model becomes hard to repair, it is much more economical to buy a 10 year old used car than to keep the "antique" running. Driving a car older than you are is only for broke teenagers and rich hobbyists.
ikirill 14y ago
While that's definitely a blunder, if you look at the right figures (in the article: inflation-adjusted median income of $48,500 then and $60,000 now, and inflation-adjusted average house price of $154,587 then and $369,677 now), the average house price went from 3.2 times the median income to 6.2. That's a lot, his point still stands, and there's no need to call him an idiot. I think even if you ignore the question of whether the economy is fair, it should at least be quite clear that the younger generation will be poorer than the previous one.

by bearmf 14y ago

tosseraccount 14y ago

Yeah, I though he was, too. but ... "Average family after-tax income back then was close to $50,000." 1984???? He's got to be adjusting for inflation in some cases. (or he is an idiot)

bearmf 14y ago
He is adjusting median income but not prices.

liber8 14y ago

Not only that but his other example (cars) is ludicrous. Cars are by far, without a doubt, cheaper, safer, better made, more reliable, and more feature-laden than at any point, ever. For $12k (roughly 1/4 the median income), you can get a brand new, pretty decent car. Also, just about everything else (save maybe gas) is much cheaper and more plentiful today than 30 years ago. The Russian athletes and dancers who came here to compete/perform in the 70's and 80's told many tales of being awed by common supermarkets. I think if you took Americans from the 80's and brought them to a Costco, they might not be awed, but they'd be pretty surprised.

JamisonM 14y ago
Although he opens mentioning buying a car in 1986 what he actually says is that cars have pretty much matched the rate of inflation. Seems to me he is saying cars are about as good a deal today as they were back then. I do not find that ludicrous. The other point to be made about cars is that all those improvements do not really matter that much in terms of the value you are getting out of them, cars in the '80s got you from point A to point B just like a brand new one does today. (To be completely off topic I would add that computerization in the modern cars has always been a concern for me, when a 2012 car's computer starts acting up in 2032 what are we going to do with them? I have a late-ninties highway tractor and every time I have a wiring problem with it I am pretty worried it will become more expensive to fix than it is worth despite being mechanically sound.)
- learc83 14y ago
  >The other point to be made about cars is that all those improvements do not really matter that much in terms of the value you are getting out of them. Cars today on average run much longer than cars did 30 years ago, the get better gas mileage on average, and go longer between scheduled maintenance. How is that not added value?
  - JamisonM 14y ago
    For one thing the better gas mileage is not much of an improvement from the mid-eighties, gas was much cheaper then ('78-'84 prices were high, inflation-adjusted still not as high as right now though except maybe in 1981). If you buy a new car and your issue is capital or cash-flow how long the car lasts will not be a significant factor in your purchase. Don't get me started on car maintenance! You can hardly touch a modern car anymore yourself, you pretty much have to pay someone to do anything. But I will concede that a modern car needs a lot less work.
- Daniel_Newby 14y ago
  > ... when a 2012 car's computer starts acting up in 2032 what are we going to do with them? The same place you get a computer for a 1982 car: a salvage company. Whenever a car rusts out, gets totally wrecked, and so forth, the specialty parts are stripped and warehoused.
  - JamisonM 14y ago
    This is what is sad about it, are we now building cars that could last forever but their electronics will end up making them disposable? I hope not. Sending an otherwise good car to a wrecker because the little (and not very powerful) computer can not be replaced seems very inefficient. Is someone figuring out how to make commodity platforms for cars yet?
    - Daniel_Newby 14y ago
      The electronics are generally very reliable. I have only had difficulty replacing electronics once, on a 1972 Mercedes, and that could have been worked around if the car had been worth saving. Which is the real point. When a once-popular model becomes hard to repair, it is much more economical to buy a 10 year old used car than to keep the "antique" running. Driving a car older than you are is only for broke teenagers and rich hobbyists.

ikirill 14y ago

While that's definitely a blunder, if you look at the right figures (in the article: inflation-adjusted median income of $48,500 then and $60,000 now, and inflation-adjusted average house price of $154,587 then and $369,677 now), the average house price went from 3.2 times the median income to 6.2. That's a lot, his point still stands, and there's no need to call him an idiot. I think even if you ignore the question of whether the economy is fair, it should at least be quite clear that the younger generation will be poorer than the previous one.