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I recommend people use many different indicators to get a mental model of inflation, and you will notice that CPI does not represent inflation well. The memes

I recommend people use many different indicators to get a mental model of inflation, and you will notice that CPI does not represent inflation well. The memes of Arby’s 5 for $5 becoming 4 for $10 are more informative than the CPI numbers. Don’t let the shock at the grocery store wear off – it’s real and painful despite what the news tells you. True inflation would measure the amount of prosperity achieved per hour worked. Take 1963 as an Example. Sears sold entire two story home kits with all materials for $1600. An Italian rifle in 1963 was $20. McDonalds burgers were 15¢ . Postage was 5¢ and had only increased 5 times in the previous 100 years. You might retort that average household income is $70000 now vs $6200 in the early 60s– a tremendous boon. Remember in 1963 only the man was working, and typically supported 4 kids, a wife and often parents in the home. In other words you had 1 man working 50 hours a week afford a house and support 5-6 other people. Today you have 2 people working 100 hours a week to support 1-2 additional people , while living in an apartment and living in a run down and crime infested neighborhood. In case you think this is academic, look at the occupations for those who lived in today’s wealthiest neighborhoods. Today Palo Alto, Menlo Park, and other super zips are exclusively $500k incomes and up. In the 1960 census records you will find these good neighborhoods occupied with plumbers, painters and other blue collar workers. My point is that inflation isn’t abstract and it isn’t a law of nature. It’s a deliberate approach to stealing your prosperity while you cheer it on. Summers is right more than he’s wrong. Real inflation has always been higher than the bogus CPI numbers, and the past 5 years it’s been accelerating.

adriand 3y ago
But it’s not like our standard of living has remained static while we need to work more. A lot has changed. In 1960 the average single family home was 1300 square feet, now it’s more than double that, and it’s packed with amazing amenities and entertainment options. What would an iPad cost in 1960? Obviously the question is kind of nonsensical and yet on the other hand, if you were to try and quantify the price of our ability to work from home, for instance, we have a way better deal going than they did in 1960. You could retort that this is the inevitable march of technological progress, but could it be the result of hard work and innovation including the hard work and innovation of women in the work force?
- fulafel 3y ago
  The opulent space per inhabitant (as families are also smaller) is now viewed by many as a negative in face of the climate crisis, not to mention the cost of housing and the resulting need to work more.
- tossandthrow 3y ago
  The main thing is, that I could actually support a household of 6 people on a single income if I was allowed to fix the comfort at the 60s level. 1. No flying on vacation and only simple camping as vacation 2. No technology: Computers, phone, television. Nothing, and no associated costs with subscriptions, etc. 3. Eat like it was the 60s, mainly potatoes (I am from Northern Europe). That said: I truly believe in the parent commenters key idea. We need to create more real prosperity for people. But in order to do that, we need to adjust the activities – Marketing and expensive dead-end projects (read: projects that occupy a lot of person-hours) does not achieve real prosperity.
  - woodruffw 3y ago
    No, you couldn't. The average working male earning 6200 USD a year in 1963 was supporting 2-3 other people (i.e., the nuclear family), not 5. This is almost directly in line, via inflation, with the average US household income and size in 2024. I agree with the larger point about prosperity, and I think there are ways in which the US (and other developed countries) have gone backwards in QoL metrics. But a serious conversation about that needs to start with numbers rooted in reality, not a rose-glass view of the past.
    - Retric 3y ago
      Take your typical family of 4 living on 2 incomes today. Are they living in a 1,500sf house (median size in 1960)? Without AC, no cable TV, no computers, 1 car, no exotic / organic foods except from the garden, few toys, 60’s era medicine. Do they actually repair or even make clothes? How about home repairs? My mother was a teen in the 60’s and while objectively they were well above the median income for the time period in many ways they lived like extremely poor people do in 2024. Some of that was actually saving money for retirement, but mostly it was just far lower expectations.
ProfessorLayton 3y ago
There are 153 million more people in the U.S. today than in 1963. The reason these neighborhoods are exclusive to the wealthy is that housing there is scarce despite growing demand due to job growth. Housing in places like the Bay Area is such a big portion of monthly expenses that stuff like Arby's 4 for $10 or whatever isn't whats hurting people the most. Lots of these issues just come down to housing and restrictive zoning.
- tonymet 3y ago
  95% of zips in 1963 were safe and livable. Now everyone is competing to live in 15% of zipcodes You address the supply side of the "housing crisis", what about demand?
  - decremental 3y ago
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  - ProfessorLayton 3y ago
    >You address the supply side of the "housing crisis" Why the scare quotes especially when no such term was used? >what about demand? "...growing demand due to job growth" <- demand side was indeed mentioned. It's literally illegal to build enough housing in many, many places where jobs are via low height limits, absurd parking requirements, and large setbacks etc.
  - bryanlarsen 3y ago
    > 95% of zips in 1963 were safe and livable. 95% of white suburban zips might have been safe and livable, but nowhere close to 95% of all zips.
    - thfuran 3y ago
      Pay no attention to the red lines behind the curtain.
  - kibwen 3y ago
    > 95% of zips in 1963 were safe and livable. I've been trying to give your comments the benefit of the doubt, but now it's abundantly clear that you're fundamentally unserious about having a conversation grounded in reality.
woodruffw 3y ago
> Remember in 1963 only the man was working, and typically supported 4 kids, a wife and often parents in the home. This is a ridiculous exaggeration: the average US household was 3.7 people in the 1960s, not over 6[1]. There are good reasons to hold politicians to task for recent abnormally high inflation. But this comment is more of an atavistic fever dream of the past than an expression of those reasons. Edit: another source puts it at 3.3[2]. [1]: https://www.statista.com/statistics/183657/average-size-of-a-family-in-the-us/ https://www.statista.com/statistics/183657/average-size-of-a... [2]: https://www.statista.com/statistics/183648/average-size-of-households-in-the-us/ https://www.statista.com/statistics/183648/average-size-of-h...
- WarOnPrivacy 3y ago
  >> Remember in 1963 only the man was working, and typically supported 4 kids > This is a ridiculous exaggeration: the average US household was 3.7 people The avg figure in your rebuttal doesn't well reflect the commonality of large US households in the 20th century nor their change during that time. According to US Census data, the % of US families with 4 or more children fell 10fold during 20th century. Early 1900s: About 35% Early 1910s: About 26% Early 1920s: About 23% Early 1930s: About 19% Early 1940s: About 18% Early 1950s: About 21% Early 1960s: About 21% Early 1970s: About 10% Early 1980s: About 5% Early 1990s: About 3% Early 2000s: About 3% Early 2010s: About 3% Multiple refs inc: https://files.eric.ed.gov/fulltext/ED231528.pdf https://files.eric.ed.gov/fulltext/ED231528.pdf
- tonymet 3y ago
  the average lifespan in the middle ages was 35 too. does that mean there were no old people?
  - abduhl 3y ago
    No, but the “typical” person isn’t old. Just like the “typical” man didn’t support 6 people in the 1960s.
    - 3y ago
randomdata 3y ago
> In other words you had 1 man working 50 hours a week afford a house... With inflation, we want to know about the change in value of the dollar only. We don't want to factor in the change in value of houses, food, etc. There is a place for understanding that too, but inflation is not it. Something like a cost of living index is more suitable to that kind of information. On that note, houses are unquestionably more valuable today. For one, they are twice the size they were 60 years ago. We can all agree that a bigger house has more value than a small house, at least within reason. You can fit more in it, it is more comfortable, etc. and that is valuable. They are also a lot safer. That too is more valuable. As such, a housing costing x% more today than as compared to some time in the past does not mean that inflation is x%. Again, we only want to know about how the dollar changed in value, not housing. Of course, if you only have numbers, it is impossible to know what share is due to housing being more valuable and what share is the dollar being less valuable, although we can say with great certainty that it is some combination of both. CPI tries to tess out what is the dollar portion only by looking at a large basket of goods of things people buy frequently. Where you see common moment in the change in price across all items in the basket, that is assumed to be the change in value of the dollar. It's not perfect. There is no perfect metric. You are quite right that one should look at many different models, even though none of them will be perfect either. It is all good information, none of it great, but at some point you have to pick a single number. On average, it will be close enough.
- Valakas_ 3y ago
  >On that note, houses are unquestionably more valuable today. No. They are better, not necessarily more valuable. Simple example: Today you can get a phone with a chip more powerful than the best supercomputers 50 years ago. Is today's chip more valuable (ie. price-value) than that supercomputer? No. An equivalent supercomputer back then would cost WAY more. You're bringing other variables into play and confusing things. Technology has improved, manufacturing costs have gone WAY down for higher quality products. The fact that we can get higher quality things nowadays has little to do with purchasing power and everything to do with science and technology. The fact we can afford a better quality house nowadays, is also much more related to material improvements, manufacturing, logistics, overall system efficiency (transportation, company competition,...) improvements than purchasing power. What we can compare is what other poster's are doing: time vs functions. For example, working time needed to have an average place to live in by the time's standards. And if you do that, you'll see today it requires A LOT more working time.
hklijlyh 3y ago
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- whateveracct 3y ago
  Also it's not hard to find cheap food at the grocery store. Whole free-range, locally grown chicken for 99c/lb is commonplace in my neck of the woods. It's the convenience/brand power stuff that is really spiked. Fast food falls into that.
  - lispisok 3y ago
    Honestly, calling BS on this. The cheapest large package mass produced factory farmed chicken at my local big retailer grocery store is $2/lb. The nicer stuff is more like $5/lb.
    - adriand 3y ago
      If people want cheaper food, they should eat less meat or no meat at all. It blows my mind how cheap it is to eat a vegetarian diet. Dried black beans are $1/pound. That is a lot of food for very little money! Rice is super cheap. Potatoes are super cheap. If you rely on staple vegetarian food for the bulk of your calories and then “decorate” with fresh fruits and vegetables, you can eat very well for not a lot of money.
      - whateveracct 3y ago
        Heh the $1/lb isn't a lie - you can get whole chicken for as cheap as your dried beans! Just gotta pay attention to sales.
    - whateveracct 3y ago
      Maybe it's because I'm in WA - a huge agricultural state. I get Draper Valley Farms whole chickens for 99c/lb on the regular. It's $2.89/lb (already a good price) when not on sale, but the sale has been happening a couple times a month like clockwork now. The Draper Valley Farms stuff is generally cheaper than the Kroger-branded stuff, no matter the cut. Like right now, boneless thighs are 50c cheaper per lb (no sales). It's $6/lb vs $6.50/lb. Bone-in is $3.79/lb! The Kroger brand doesn't even offer that variety for some reason. A few lbs of that + some orzo (cheap) + some staple produce (shallot, cherry tomatoes, garlic) can make you 6 very filling and delicious meals. When you compare it to fast food, the difference is staggering - definitely a divergence compared to the diff years ago. It's the convenience stuff that is truly spiking. Groceries are definitely a lower % of my income than half a decade ago. The barrier to most people is they can't process a whole chicken.
nytesky 3y ago
The “one income household” model of the 50s worked for two reasons. 1) the rest of the world was in ruins, so for 50s-60s US was sole industrial power more or less. 2) artificial labor “scarcity” where POC and women were banned from many occupations. The remaining available labor (ie white men) had more leverage.
- tonymet 3y ago
  Is the argument that true inflation should be worse than CPI because it helps with diversity?
  - riskable 3y ago
    It has more to do with a hidden class structure below your average white family, working for much less, providing goods and services at a discount. Inflating the means of the average white family in a way that wouldn't be possible today because we're not as purposefully racist or sexist as we used to be. In order to make a better comparison one should compare what was affordable to the average black family in the 1960s (or whatever previous time period you choose for which we have figures) to today. There's other factors like the aftermath of WW2, the real and "soft" power the US held back then in comparison to today, and the role women played in the economy. Today's world is a lot different from then but the truth is that the wealth and power we've amassed since then should have us in a better position, not worse. The factors at play in today's economy are not benefiting the common man nearly as much as they should. We're beginning to look more and more like a post-scarcity economy every day yet our laws, regulations, and culture are not evolving with the times. The fact that land and homes are vastly inflated compared to regular every day goods and even the "durable" kind is strong evidence that our entire economic system stands on precipice of great change. Either we're just getting started on a great collapse or a great sea change in politics and economic systems. I very much doubt things are going to go back to the way they were... Ever. We as a society can decide to spread our prosperity around or we can increasingly suffer for the lack of it by continuing the status quo.
  - grobbyy 3y ago
    I think the argument is that inflation is complicated by globalism.
throw0101c 3y ago
> Take 1963 as an Example. Sears sold entire two story home kits with all materials for $1600. How big (area-wise) were those houses? What kind of heating did they have? How air-tight/leaky/drafty were they (which would dictate OpEx on heating)? Did they have air conditioning? What kind of electrical service could they handle (60A? 100A? 200A?)? Did that include the foundations/footings/slab? Were those parts insulated (i.e., how cold were your feet)? Did they come with sprinklers or even smoke/fire alarms? > And you weren’t getting an HGTV-approved home in the 1950s. Those cheap homes everyone was buying were 700-900 square feet with two to three bedrooms and one bathroom. Most had no basement, porch or back deck. You were lucky if you got a one-stall garage. > No open floor plans, granite countertops, stainless steel appliances, walk-in closets, man caves or room to entertain. Most homes were bare bones. * https://awealthofcommonsense.com/2024/01/americans-are-better-off-than-you-think/ https://awealthofcommonsense.com/2024/01/americans-are-bette... I'm not sure how many folks would like to live in a current $1600-equivalent house. > My point is that inflation isn’t abstract and it isn’t a law of nature. It’s a deliberate approach to stealing your prosperity while you cheer it on. If you think inflation is bad, try deflation (1930s). > Summers is right more than he’s wrong. Real inflation has always been higher than the bogus CPI numbers, and the past 5 years it’s been accelerating. The pre-1983 algorithms were moved away from for a reason: do you know that reason? Was it a good or bad reason(s)? Why? > In 1983, the government switched from using home prices — which also included mortgage payments and maintenance costs — to using rental prices to gauge the cost of housing. > The cost of housing for people who own their property is now measured using what is called “owners’ equivalent rent”: how much their house would cost to rent if they did not own it. > The idea is that homes are an investment. House prices appreciate, and you may eventually sell for a profit a property that you have purchased. Rent, however, represents consumption. It does not leave you with an asset that you can sell down the road. > Critics often argue that by leaving home prices out of the equation, the inflation metric underestimates the cost of living at moments when home prices are increasing markedly and when it costs first-time buyers more to get a foothold in the market. Some even claim that if the government used the old methodology, its reported inflation rate would be much higher today than it was during the 1980s. * https://archive.ph/zvtPw https://archive.ph/zvtPw / https://www.nytimes.com/2022/05/24/technology/inflation-measure-cpi-accuracy.html https://www.nytimes.com/2022/05/24/technology/inflation-meas... Housing prices are not considered in the CPI ("cost of living") because they are mostly an asset: > House prices are an interesting case. Houses are considered capital investment by the [US] BLS. So, when the value of your home increases that's a good thing as you didn't consume the house. In other words, you don't need to replace the house. Consumption goods are different in that you need to replace the thing you bought. Inflation is very bad for consumption goods because it costs you more to replace that thing each time you need it (food, for instance). * https://web.archive.org/web/20210929154549/https://www.pragcap.com/forum/topic/assflation/#postid-2165 https://web.archive.org/web/20210929154549/https://www.pragc... > The BLS views housing as a mostly “investment” item as opposed to a consumption item. So, for instance, when you consume a hot dog and have to replace it then the cost of replacement is a direct reflection on your well-being. A $1 hot dog that costs $2 one year later is a material change in living standards, all else equal, since the hot dog is an asset that you literally consume. A house is much more complex. [...] > Of course, anyone who owns a house knows that it’s not that simple. You do basically consume your house over time. For instance, my home has appreciated substantially since I purchased it just 5 years ago and underwent a hellish remodel. At that time the cost of replacement was roughly $300 per square foot. But in the ensuing years the cost of replacement has increased to $400 per square foot. As my physical home falls apart over the years I will need to replace it. But the key point is that, as I replace these components the housing market is likely to revalue the total home value to account for this investment. So even though I am consuming my house over time I am very likely to recoup those costs. * https://www.pragcap.com/should-house-prices-be-in-the-cpi/ https://www.pragcap.com/should-house-prices-be-in-the-cpi/ Upkeep is a part of the CPI (as is Rent, under the broader Shelter category), but house/land prices are not. The "C" in CPI stands for consumer. Housing assets aren't in the CPI for the same reasons stocks and bonds are not: we don't consume them to live. 'Shelter' is considered in the CPI generally though (and with-in that things like home repair (lumber, plumbing) are accounted for); for Canada: * https://www150.statcan.gc.ca/n1/pub/71-607-x/2018016/cpi-ipc-eng.htm https://www150.statcan.gc.ca/n1/pub/71-607-x/2018016/cpi-ipc... And as the Bank of Canada notes, there is no internationally agreed upon method: > International statistical agencies have unanimously adopted the net acquisition approach for durables, but there is no consensus about the best approach to the treatment of OA in the CPI16 (Table 1). Rental equivalence is the most popular approach among countries belonging to the Organisation for Economic Co- operation and Development.17 Johnson’s (2015) recent review of the U.K. CPI proposes using CPIH, which includes the costs of OA and is based on a rental- equivalence approach, as the U.K.’s main measure of inflation. Several countries in the European Union have refrained from incorporating OA into their CPI, although Eurostat is currently conducting a pilot study for the euro area based on the net acquisition approach. Australia and New Zealand use a net acquisition approach, while Sweden and Finland—like Canada—are using a partial user-cost approach. No country has adopted a full-fledged user-cost approach. * https://www.bankofcanada.ca/wp-content/uploads/2015/11/boc-review-autumn15-sabourin.pdf https://www.bankofcanada.ca/wp-content/uploads/2015/11/boc-r... In the StatCan CPI paper there is some explanation towards the complexities of shelter / owner accommodation: * https://www150.statcan.gc.ca/n1/pub/62-553-x/2019001/chap-10-eng.htm https://www150.statcan.gc.ca/n1/pub/62-553-x/2019001/chap-10... * https://www150.statcan.gc.ca/n1/pub/62f0014m/62f0014m2017001-eng.htm https://www150.statcan.gc.ca/n1/pub/62f0014m/62f0014m2017001...
deleted 3y ago
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abeppu 3y ago
> True inflation would measure the amount of prosperity achieved per hour worked. I think this isn't a measure of inflation per se, because productivity changes are big over the decades. But I do think looking at costs in terms of hours of work is really helpful. I think back to an event in some HS extracurricular when a group of students got to ask questions of a gubernatorial candidate, and one kid asked if he was going to do anything to make college more affordable at state schools, and this candidate (perhaps keenly aware that almost none of the students could vote) basically laughed it off and talked about working at restaurants to put himself through school (I think in the 70s). How many hours of (unskilled?) labor was a semester of tuition then, versus 30 years later? How many hours was a tankful of gas, or rent for half an apartment, or a heating bill? How feasible is it really to work one's way through even a public school?
- woodruffw 3y ago
  I agree with the point about the cost of education. In real terms, however, the cost of a tank of gas is about what it was in the 1960s[1]. Today's average is $3.63[2], which is about $0.34 in 1960 dollars. [1]: https://www.creditdonkey.com/gas-price-history.html https://www.creditdonkey.com/gas-price-history.html
  - listenallyall 3y ago
    I never understand the "in X dollars" argument, especially when looking back longer than about a decade. The CPI only considers a certain basket of goods, it's not representative of a cost of living (that's what this thread is about), various things change price at radically different rates. How much was an iPhone or Xbox in 1960 dollars? What was the typical cable TV bill? What did a typical American pay for a California roll or a burrito in 1960? Alternatively, given your 10x price boost, why isnt the cost of a television set or vacuum cleaner in the multiple thousands?
    - tastyfreeze 3y ago
      The comparison doesn't work on manufactured products. You can really only compare commodities. Anything that is manufactured has a multitude of factors that will reduce cost of a product significantly over time. If the circuitry in an Xbox were constructed in 1960 no government on the planet would have been able to afford it. It would also be difficult to find enough power to run it or a place big enough to build it with the technology of the time.
TMWNN 3y ago
>The memes of Arby’s 5 for $5 becoming 4 for $10 are more informative than the CPI numbers. Don’t let the shock at the grocery store wear off – it’s real and painful despite what the news tells you. "The thing I have noticed is when the anecdotes and the data disagree, the anecdotes are usually right. There's something wrong with the way you are measuring it". —Jeff Bezos <https://sports.yahoo.com/amazon-ceo-jeff-bezos-explains-212315127.html https://sports.yahoo.com/amazon-ceo-jeff-bezos-explains-2123...>
- ben_w 3y ago
  Huh, so that looks like a way to deal with Goodhart's law?
- tonymet 3y ago
  Very good quote. “Data” is not conclusive , it’s just one piece of evidence. Usually it’s a noisy observation , with even noisier statistics applied. People think “data” is the conclusion, when in fact it’s just a signal to ask more questions.
mint2 3y ago
There’s a number huge flaws in all that logic. Comparing Palo Alto circa 1960 to Palo Alto circa 2020 is frankly bizarre. But if we’re using that logic why stop at 1960? Coulda had that land for almost nothing in 1700, so there was infinite inflation from 1700 to 1960! Gasp! But what’s the result if we look at the price of a compute that a 1960 worker could buy vs a 2020 person? Let’s see a modern household has the equivalent to a very large number of 1960 mainframe computers, looks like their buying power has gone up infinitely! Or lots in prime La neighborhoods, super affordable in 1860! That means people have lost so much purchasing power because they’re hard to afford now!
- roenxi 3y ago
  > so there was infinite inflation from 1700 to 1960 Infinite is exaggerating but the US dollar has lost >95.0% of its value since the 1700s. So that observation is technically wrong but intuitively is fairly reasonable. If you assumed infinite inflation since then you'd be accurate enough for casual conversation.
- cmmeur01 3y ago
  Love to eat and live in compute.
gumby 3y ago
> Today Palo Alto, Menlo Park, and other super zips are exclusively [A slight exaggeration] $500k incomes and up. In the 1960 census records you will find these good neighborhoods occupied with plumbers, painters and other blue collar workers. This was unfortunately a deliberate consequence of the dot com boom, not something that happened in previous tech booms. Until around 2000 Palo Alto actually had a lower median income than some surrounding towns due to a policy of promoting section 8 housing, some SRO residences for the homeless etc. Those prior booms didn't suck in as many outsiders and mostly were nerds making fun tech (think of the mac). NYT amusingly published an article were they said how weird the SV was because people who drove mercedes cars still shopped at Costco rather than at "proper" shops appropriate to their "station". Dot com sucked in a bunch of people who came only for the money ("I'm starting a company -- need a tech cofounder" is the complete opposite of those days when it was "I'm starting a company -- we're big enough that we need some business people"). Then we started to have fancy restaurants and pretentiously-named magazines about how to spend your money. And then in 2000 the real estate people got control of the city council. The SROs were turned into boutique hotels and the city was re-organzied for the lucky. PA used to be a town where the Grateful Dead, Jefferson Airplane, and the like got started. Harold and Maude was (partially) filmed here. But such things are now inconceivable.
- epicureanideal 3y ago
  Although what goes up can come down... if some other state or region within California permitted large amounts of construction, enabled businesses to move in, and threw a few hundred million at building a great university, property values here would drop a lot. With less intention and planning it will take longer, but could still happen, and there are some natural pressures pushing things in that direction.
  - gumby 3y ago
    If only. Palo Alto is one of the few cities fighting the state’s efforts in this regard. It’s really shameful.
- flakeoil 3y ago
barfard 3y ago
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sanp 3y ago
Perhaps a Cost of Thriving Index? https://manhattan.institute/article/the-cost-of-thriving-index-reevaluating-the-prosperity-of-the-american-family https://manhattan.institute/article/the-cost-of-thriving-ind...
brandonmenc 3y ago
> Remember in 1963 only the man was working, and typically supported 4 kids, a wife and often parents in the home. Yeah, and unless they were like, a doctor or a lawyer, they were living in borderline poverty.
jmyeet 3y ago
I agree with this: inflation as an economic measure is an intentional policy tool to transfer wealth from the poor to the wealthy. In the last few months we've seen headlines about inflation "levelling off" but that just means prices aren't growing as fast. The 20-30% increases in housing in particular aren't going down. In fact, it's intentional government policy to make sure house prices and rents never go down. You mention Silicon Valley and others dismiss this as a result of the dot com bubble but it's really not. It's zoning policy. IIRC the smallest lot in Menlo Park or Mountain View is ~10,000 square feet. But you see it elsewhere. The average house price in London is ~706k GBP. 30 years ago it was ~70k. Inflation is used to justify wage suppression. Whatever the formula, it doesn't accurately reflect to cost-of-living crisis we're in.
jogjayr 3y ago
I randomly ran across this blog post https://economistwritingeveryday.com/2024/04/10/grocery-inflation-is-under-control-fast-food-prices-arent/ https://economistwritingeveryday.com/2024/04/10/grocery-infl... today. It says fast food prices have gone up faster than grocery prices or inflation. I don't eat fast food so I don't know if it's true. But it got me thinking. Maybe the likes of Doordash are to blame, at least indirectly. Food delivery companies have proved that people will pay $15 for a lukewarm McDonald's burger if it's brought to their doorstep. So there is obviously some room to increase prices even for in-store purchases.
- tonymet 3y ago
  You're right a lot of unhealthy habits increased during covid, including alcohol, junk food binging, marijuana/ vaping, anti-social behavior -- which led to greater inflation in unhealthy products and healthcare.
thebigman433 3y ago
> In case you think this is academic, look at the occupations for those who lived in today’s wealthiest neighborhoods. Today Palo Alto, Menlo Park, and other super zips are exclusively $500k incomes and up. In the 1960 census records you will find these good neighborhoods occupied with plumbers, painters and other blue collar workers. How much is this related to inflation compared to the complete refusal of the Silicon Valley suburbs to building new housing? If rich people want to move somewhere, and people living in that area dont build houses for them to move into, its going to drive the prices up, because the wealthy people will go there no matter what. Also your whole bit about the past being so much better is insane. Hard to tell what is you exaggerating and what is a serious argument. My partner and I make ~100k + 40k combined a year, and we rent an apartment in one of the nicest SF neighborhoods, save for retirement, go out and do (paid) things every weekend, and still save a good chunk of money every month. We also have gym memberships, own cars, buy nice groceries, etc. Inflation does suck, and the sticker shock is bad, but the high inflation also stems from policies that have let us have insanely good unemployment levels. Post 2008 we saw less inflation, but unemployment stayed high for almost a decade. Unemployment is already down to super low levels post 2020, which is better for everyone. Average and lower wage workers have also seen large growths in what they make.
- tonymet 3y ago
  Unemployment (U3) is an even worse indicator than CPI . 95% + of the recent employment rates have been part time employment. U3 doesn't account for the historically low participation rate (about 60%)
usaar333 3y ago
> Remember in 1963 only the man was working, and typically supported 4 kids, a wife and often parents in the home. Things are a lot cheaper if you keep them in a 1200 square foot house > Today you have 2 people working 100 hours a week to support 1-2 additional people , while living in an apartment and living in a run down and crime infested neighborhood. Highly doubt people at this income rank were buying houses in 1960 and living comfortably. > Summers is right more than he’s wrong Entire argument is whether you should count interest or not. I can see arguments both ways
demondemidi 3y ago
Crime infested neighborhoods? You mean like living with a bunch of billionaires as neighbors?
panarky 3y ago
Price inflation tells you very little about how well the average person lives. The average person today has a far higher standard of living than the average person in 1963.
seanmcdirmid 3y ago
> Remember in 1963 only the man was working, and typically supported 4 kids, a wife and often parents in the home. They used older kids to watch younger kids, and generally let the kids fend more for themselves (my boomer dad was the oldest of 8 kids, and that was his experience, but having his grandparents die of spanish flu after WW2 hurt and helped a bit). I actually kind of admire that, and think we've lost something with more hands on parenting. I totally agree. In a sense, FAANG salaries aren't especially high by historical standards, it is just that everyone else has fallen so far behind. $500k/year household income is firmly middle class, and is like earning $135k in 1980, my dad made more than that contracting in building nuclear plants with an associates degree from Spokane Community College.
- thfuran 3y ago
  >In a sense, FAANG salaries aren't especially high by historical standards You can't be serious. >$135k in 1980, my dad made more than that contracting in building nuclear plants That's over six times the median household income in 1980. $135k today would still be nearly twice the median household income.
  - seanmcdirmid 3y ago
    It wasn't that much back then, especially when the industry was feast or famine (and it did implode in 1986 or so). But really, my only point was "a guy who had an associates degree from a CC could earn that much." My buying power is essentially worse than my dad's, although I put in a lot more time in school for it, and supposedly made the right career choice, things just suck these days and techies are keeping their heads above water but not much more.
    - ethanbond 3y ago
      It’s the land price. Gets baked into every single good and service and goes up in lockstep with productivity gains.
mikelitoris 3y ago
The extremely short summary of where all that prosperity went: up and abroad. The capitalist class hollowed out the middle income USA by siphoning solid jobs off abroad and pocketing the difference. You can thank all the neolib useful idiots for that. It is not really the result of interest rates.
dennis_jeeves2 3y ago
>It’s a deliberate approach to stealing your prosperity while you cheer it on. Excellent way to put it. To put things in perspective if one works for 5 days a week, you are paying the govt (all taxes + inflation) about 3 days of your earnings. You only get to keep what you earn for 2 days.
- paulryanrogers 3y ago
  Does most of the inflation go to the government? Lately a significant portion seems to be going to the capital class and land owners.
WA 3y ago
- People lived in way smaller houses back then. - People had only one car. - People ate meat once per week. - People had way fewer things in their houses. You gotta consider increases in material possessions as well if you want to calculate inflation properly.
- tonymet 3y ago
  You're right, but it doesn't account for the entire loss in prosperity. Prosperity was also growing 1880-1960 at at even faster rate, but inflation was much flatter. We went from scarse food, horses, no telecomms, no planes, almost-no electricity, moderate running water to nearly modern conditions 1880-1960 with minimal inflation
- agensaequivocum 3y ago
  No people ate more meat and animal products. https://twitter.com/Outdoctrination/status/1694842326211043722/photo/1 https://twitter.com/Outdoctrination/status/16948423262110437... https://twitter.com/Outdoctrination/status/1694842322872381719/photo/1 https://twitter.com/Outdoctrination/status/16948423228723817...
bjornsing 3y ago
> Today you have 2 people working 100 hours a week to support 1-2 additional people , while living in an apartment and living in a run down and crime infested neighborhood. Is that really true, or is it more a feeling many Americans have? As a Swede it’s a bit hard to relate to.
- ethanbond 3y ago
  Crime is much much lower than it was decades ago almost everywhere in the US. Also “run down” in reference to cities is just not true outside of a few failed areas like Detroit. NYC today is dramatically nicer than it was decades ago.
  - lupire 3y ago
    Your data on New York "today" appears to be pre-opiod.
    - ethanbond 3y ago
      The opioid issue is absolutely a big degradation in QOL from recent years, but no the current crime rate is still well below decades ago, especially on a per capita basis. https://www.nyc.gov/assets/nypd/downloads/pdf/analysis_and_planning/historical-crime-data/seven-major-felony-offenses-2000-2023.pdf https://www.nyc.gov/assets/nypd/downloads/pdf/analysis_and_p...
jlmorton 3y ago
> McDonalds burgers were 15¢. Okay, it was the McDonald's hamburger that seems to have been $0.15 in 1963. That is $1.53 in CPI-inflated 2024 dollars. The cost today is $2.19. That's about a 0.6% difference in the compounding inflation rate over 61 years.
- johnfn 3y ago
  Shouldn't the price of a burger go down, not up? We should be more efficient at manufacturing and distributing food in 2024.
- tzekid 3y ago
  Isn't using compounding inflation rate on top of CPI-inflated dollars double counting? It looks and feels like 40+% to me and everybody else
  - deleted 3y ago
    [deleted]
  - jlmorton 3y ago
    It's not double counting, it's just the average difference from CPI vs McDonalds hamburger inflation
philwelch 3y ago
I also have like six different machines in my house that would each, single-handedly, put the entire computing infrastructure of the Apollo program to shame. And my corneas have been reshaped into the ideal form by a computer-controlled laser, giving me 20/10 vision. I haven’t done it yet, but I could get my entire genome sequenced. A $20 Italian rifle sounds like a good deal but today you can buy a machine that literally prints guns (some assembly required). Any one of these things would be worth millions if not billions of dollars in the 1960’s. This also explains why Palo Alto is so much more expensive these days. Some the things I mentioned were invented around there, which made a lot of those people rich. Other things have become more affordable too. In 1960, a round trip flight from New York to London cost $550. I can find similar fares right now. In 1984, a Macintosh cost $2500, had 128 KB of RAM and a 9 inch 512 by 342 pixel display. For half as many dollars today, you can buy an iMac with a 24 inch 4.5K display and 8 GB of RAM. Now, I will admit that many things are needlessly more expensive, and while the reasons for this are complicated, I don’t think it’s any coincidence that many of these cost increases are directly associated with institutions getting taken over by parasitic classes of administrators and bureaucrats. If you go to college, you’re not just paying for the inherent costs of the college; you’re also paying for the growing administrative bureaucracy that has infested the institution. If you go to the doctor, you’re not just paying your local family doctor; you’re paying an entire bureaucracy that has reduced your family doctor—who used to own a private practice—to the status of a corporate employee, plus a completely separate “health insurance” bureaucracy. (It turned out that the doctor who reshaped my corneas with lasers was happy to just take cash though!) Governments are some of the worst effected. The cost to build the US interstate highway system was, adjusted for inflation, about 618 billion dollars. The 2021 infrastructure bill totaled 1.2 trillion dollars, but are we really getting the equivalent of two complete interstate highway systems? But hey, it could be worse—it’s not like they actually collected all the tax dollars they needed to pay for it! That’s a problem for future America. I don’t envy those guys!
Amorymeltzer 3y ago
>Remember in 1963 only the man was working Others have pointed out the flaws in the rest of this, but the labor force participation rate of Women[1] was around 33% in 1950, 38% in 1963, and 60% in 2000; it's 57% now. That's a huge change, but 1963 is a far cry from 0%. See also men[2]. As noted elsewhere, this ignores race. Compare white women under 20 <https://fred.stlouisfed.org/series/LNS11300029 https://fred.stlouisfed.org/series/LNS11300029> to black women under 20 <https://fred.stlouisfed.org/series/LNS11300032 https://fred.stlouisfed.org/series/LNS11300032>; dramatically different numbers. Labor force participation rate isn't ideal, but it gives the picture. 1: <https://fred.stlouisfed.org/series/LNS11300002 https://fred.stlouisfed.org/series/LNS11300002> 2: <https://fred.stlouisfed.org/series/LNS11300001 https://fred.stlouisfed.org/series/LNS11300001>
- Majromax 3y ago
  Also look at the prime-age participation rates (https://fred.stlouisfed.org/graph/?g=1k7Vy https://fred.stlouisfed.org/graph/?g=1k7Vy), which help control for demographic changes over the decades. The 1963 prime-age LFPRs were 44/99% for women/men respectively, and today those figures are 77/89%.
ethanbond 3y ago
This is easy: how much did an acre of land in Palo Alto cost then, and how much does it cost now? Why? Why does the price of land “need” to go up? It pays no wages, no rent, no suppliers, no anything. It’s just there being land, no matter what price it is. So why has its price gone up and who benefits from that?
- lupire 3y ago
  Everyone who lives there benefits from that. Otherwise they wouldn't want to live there.
  - ethanbond 3y ago
    What? People benefit from higher land prices?
IG_Semmelweiss 3y ago
I'll add 1 more to the mix. Subway fares for NYC [1] - 2 fare increases in the first 60 years of operation. - 17 fare increases in the next 60 years. Note that even with the fare increases in the last 60 years, once adjusted for inflation, the cost of MTA fares were actually going down until 1984 or 40 years or so, when fares really exploded [2] [1] https://en.m.wikipedia.org/wiki/New_York_City_transit_fares https://en.m.wikipedia.org/wiki/New_York_City_transit_fares [2] https://old.reddit.com/r/nyc/comments/11u0s3z/nyc_subway_fare_over_last_120_years_adjusted_for/ https://old.reddit.com/r/nyc/comments/11u0s3z/nyc_subway_far...
- fasa99 3y ago
  All of this is very tricky stuff, I would just call it shades of grey and leave it at that, no black and white. Similar lore happened in the DC metro, everything was fine until it got to be XX years old and then they jacked up the prices and starting shutting things down all the time -- because the infrastucture was all getting dangerously old (subway fires and such) and so they had to quasi-build-new infrastucture, so that got a guy that basically said "we're gonna fix it and it will be painful but we will still fix it" for example - https://thehill.com/policy/transportation/291651-dc-metro-expands-repair-project-after-train-derailment/ https://thehill.com/policy/transportation/291651-dc-metro-ex... The crux of it is, it's generally easy to maintain a pretty new system than an aging one (bathtub curve type scenario like in the hard drives). As such we see China sitting real pretty presently but say 50 years from now it will inevitably be a different tune. Now in the case of NYC I wouldn't be surprised if some of that had to do with crumbling, very very old infrastructure, and I wouldn't deny either by the same token it had to do with macro-economic factors as well, all shades of grey. First 60 years of operation NYC probably had a lot of "brand new" stuff at any given time.
brnaftr361 3y ago
This is an interesting take and it got me thinking. The replacement rate in the US is not 4. In fact, I would imagine that 4 is probably unsustainable. I like to see money more as a chemical gradient a la chemotaxis, though more clever people than I call it a carrot. With inflation the carrot is being removed, perhaps even being used as a stick. A superfluity of resources without controls of some sort may well lead to runaway growth, and I presume with the relative expenses of everything that there is an unsustainable imbalance at the fundamental level excess demand for intrinsically limited supply. Of course the inflation model is applicable outside of the purely monetary. The more people you have the larger the labor army, and with each number added to that the less valuable the individual becomes even in terms of highly specialized labor, because ostensibly this can essentially be predicted with a distribution and with the way people are commoditized in most positions and companies these day, excellence is neither expected, sought for, nor wanted. This is still within the realms of the economists wheelhouse. I would argue there's a third inflation, social inflation, as well. And this essentially hinges on the same principal that the labor army does: more people, less individual value (“a single death is a tragedy, a million deaths are a statistic”). And I would posit that the decrements have been seriously exacerbated in this realm by social media, television, celebrity, and so forth. I would also point out that the civil rights movement and women's lib has also (rightly) had a profound effect on social orientation that has yet to fully manifest itself. If I recall correctly many developed nations have declining "native" populations. I'm unsure of the causal factors, but I wouldn't be surprised if it was in some ways an instinctual aversion to these sorts scaling laws. If I'm not mistaken Dunbar's number is roughly adhered to in nature, so it makes sense that there is somewhat of a drive to limit pack/civilizations size.
czhu12 3y ago
As a counter point, this post by Matthew Yglesias might be interesting. Basically makes the case that the standard of living today is significantly higher than back then, and we wouldn’t be okay living today like we did back then. https://www.slowboring.com/p/nostalgia-economics-is-totally-wrong https://www.slowboring.com/p/nostalgia-economics-is-totally-...
- tonymet 3y ago
  sure but when you add it up it doesn't feel like much. an additional car and some luxuries. And it doesn't account for qualities that have degraded. it assumes that since we have more possessions that life is better.
cyanydeez 3y ago
I believe in 1963, black people were still second class citizens. Hard to believe this example is worth it's weight in freedom units per capitalist product. The reality is the economy and government were weaponized to enforce the lost of freedom to discriminate.
- tonymet 3y ago
  inflation makes all american's poorer, especially black americans

adriand 3y ago

But it’s not like our standard of living has remained static while we need to work more. A lot has changed. In 1960 the average single family home was 1300 square feet, now it’s more than double that, and it’s packed with amazing amenities and entertainment options. What would an iPad cost in 1960? Obviously the question is kind of nonsensical and yet on the other hand, if you were to try and quantify the price of our ability to work from home, for instance, we have a way better deal going than they did in 1960. You could retort that this is the inevitable march of technological progress, but could it be the result of hard work and innovation including the hard work and innovation of women in the work force?

fulafel 3y ago
The opulent space per inhabitant (as families are also smaller) is now viewed by many as a negative in face of the climate crisis, not to mention the cost of housing and the resulting need to work more.
tossandthrow 3y ago
The main thing is, that I could actually support a household of 6 people on a single income if I was allowed to fix the comfort at the 60s level. 1. No flying on vacation and only simple camping as vacation 2. No technology: Computers, phone, television. Nothing, and no associated costs with subscriptions, etc. 3. Eat like it was the 60s, mainly potatoes (I am from Northern Europe). That said: I truly believe in the parent commenters key idea. We need to create more real prosperity for people. But in order to do that, we need to adjust the activities – Marketing and expensive dead-end projects (read: projects that occupy a lot of person-hours) does not achieve real prosperity.
- woodruffw 3y ago
  No, you couldn't. The average working male earning 6200 USD a year in 1963 was supporting 2-3 other people (i.e., the nuclear family), not 5. This is almost directly in line, via inflation, with the average US household income and size in 2024. I agree with the larger point about prosperity, and I think there are ways in which the US (and other developed countries) have gone backwards in QoL metrics. But a serious conversation about that needs to start with numbers rooted in reality, not a rose-glass view of the past.
  - Retric 3y ago
    Take your typical family of 4 living on 2 incomes today. Are they living in a 1,500sf house (median size in 1960)? Without AC, no cable TV, no computers, 1 car, no exotic / organic foods except from the garden, few toys, 60’s era medicine. Do they actually repair or even make clothes? How about home repairs? My mother was a teen in the 60’s and while objectively they were well above the median income for the time period in many ways they lived like extremely poor people do in 2024. Some of that was actually saving money for retirement, but mostly it was just far lower expectations.

ProfessorLayton 3y ago

There are 153 million more people in the U.S. today than in 1963. The reason these neighborhoods are exclusive to the wealthy is that housing there is scarce despite growing demand due to job growth. Housing in places like the Bay Area is such a big portion of monthly expenses that stuff like Arby's 4 for $10 or whatever isn't whats hurting people the most. Lots of these issues just come down to housing and restrictive zoning.

tonymet 3y ago
95% of zips in 1963 were safe and livable. Now everyone is competing to live in 15% of zipcodes You address the supply side of the "housing crisis", what about demand?
- decremental 3y ago
  [dead]
- ProfessorLayton 3y ago
  >You address the supply side of the "housing crisis" Why the scare quotes especially when no such term was used? >what about demand? "...growing demand due to job growth" <- demand side was indeed mentioned. It's literally illegal to build enough housing in many, many places where jobs are via low height limits, absurd parking requirements, and large setbacks etc.
- bryanlarsen 3y ago
  > 95% of zips in 1963 were safe and livable. 95% of white suburban zips might have been safe and livable, but nowhere close to 95% of all zips.
  - thfuran 3y ago
    Pay no attention to the red lines behind the curtain.
- kibwen 3y ago
  > 95% of zips in 1963 were safe and livable. I've been trying to give your comments the benefit of the doubt, but now it's abundantly clear that you're fundamentally unserious about having a conversation grounded in reality.

woodruffw 3y ago

> Remember in 1963 only the man was working, and typically supported 4 kids, a wife and often parents in the home. This is a ridiculous exaggeration: the average US household was 3.7 people in the 1960s, not over 6[1]. There are good reasons to hold politicians to task for recent abnormally high inflation. But this comment is more of an atavistic fever dream of the past than an expression of those reasons. Edit: another source puts it at 3.3[2]. [1]: https://www.statista.com/statistics/183657/average-size-of-a-family-in-the-us/ https://www.statista.com/statistics/183657/average-size-of-a... [2]: https://www.statista.com/statistics/183648/average-size-of-households-in-the-us/ https://www.statista.com/statistics/183648/average-size-of-h...

WarOnPrivacy 3y ago
>> Remember in 1963 only the man was working, and typically supported 4 kids > This is a ridiculous exaggeration: the average US household was 3.7 people The avg figure in your rebuttal doesn't well reflect the commonality of large US households in the 20th century nor their change during that time. According to US Census data, the % of US families with 4 or more children fell 10fold during 20th century. Early 1900s: About 35% Early 1910s: About 26% Early 1920s: About 23% Early 1930s: About 19% Early 1940s: About 18% Early 1950s: About 21% Early 1960s: About 21% Early 1970s: About 10% Early 1980s: About 5% Early 1990s: About 3% Early 2000s: About 3% Early 2010s: About 3% Multiple refs inc: https://files.eric.ed.gov/fulltext/ED231528.pdf https://files.eric.ed.gov/fulltext/ED231528.pdf
tonymet 3y ago
the average lifespan in the middle ages was 35 too. does that mean there were no old people?
- abduhl 3y ago
  No, but the “typical” person isn’t old. Just like the “typical” man didn’t support 6 people in the 1960s.
  - 3y ago

randomdata 3y ago

> In other words you had 1 man working 50 hours a week afford a house... With inflation, we want to know about the change in value of the dollar only. We don't want to factor in the change in value of houses, food, etc. There is a place for understanding that too, but inflation is not it. Something like a cost of living index is more suitable to that kind of information. On that note, houses are unquestionably more valuable today. For one, they are twice the size they were 60 years ago. We can all agree that a bigger house has more value than a small house, at least within reason. You can fit more in it, it is more comfortable, etc. and that is valuable. They are also a lot safer. That too is more valuable. As such, a housing costing x% more today than as compared to some time in the past does not mean that inflation is x%. Again, we only want to know about how the dollar changed in value, not housing. Of course, if you only have numbers, it is impossible to know what share is due to housing being more valuable and what share is the dollar being less valuable, although we can say with great certainty that it is some combination of both. CPI tries to tess out what is the dollar portion only by looking at a large basket of goods of things people buy frequently. Where you see common moment in the change in price across all items in the basket, that is assumed to be the change in value of the dollar. It's not perfect. There is no perfect metric. You are quite right that one should look at many different models, even though none of them will be perfect either. It is all good information, none of it great, but at some point you have to pick a single number. On average, it will be close enough.

Valakas_ 3y ago
>On that note, houses are unquestionably more valuable today. No. They are better, not necessarily more valuable. Simple example: Today you can get a phone with a chip more powerful than the best supercomputers 50 years ago. Is today's chip more valuable (ie. price-value) than that supercomputer? No. An equivalent supercomputer back then would cost WAY more. You're bringing other variables into play and confusing things. Technology has improved, manufacturing costs have gone WAY down for higher quality products. The fact that we can get higher quality things nowadays has little to do with purchasing power and everything to do with science and technology. The fact we can afford a better quality house nowadays, is also much more related to material improvements, manufacturing, logistics, overall system efficiency (transportation, company competition,...) improvements than purchasing power. What we can compare is what other poster's are doing: time vs functions. For example, working time needed to have an average place to live in by the time's standards. And if you do that, you'll see today it requires A LOT more working time.

hklijlyh 3y ago

[flagged]

whateveracct 3y ago
Also it's not hard to find cheap food at the grocery store. Whole free-range, locally grown chicken for 99c/lb is commonplace in my neck of the woods. It's the convenience/brand power stuff that is really spiked. Fast food falls into that.
- lispisok 3y ago
  Honestly, calling BS on this. The cheapest large package mass produced factory farmed chicken at my local big retailer grocery store is $2/lb. The nicer stuff is more like $5/lb.
  - adriand 3y ago
    If people want cheaper food, they should eat less meat or no meat at all. It blows my mind how cheap it is to eat a vegetarian diet. Dried black beans are $1/pound. That is a lot of food for very little money! Rice is super cheap. Potatoes are super cheap. If you rely on staple vegetarian food for the bulk of your calories and then “decorate” with fresh fruits and vegetables, you can eat very well for not a lot of money.
    - whateveracct 3y ago
      Heh the $1/lb isn't a lie - you can get whole chicken for as cheap as your dried beans! Just gotta pay attention to sales.
  - whateveracct 3y ago
    Maybe it's because I'm in WA - a huge agricultural state. I get Draper Valley Farms whole chickens for 99c/lb on the regular. It's $2.89/lb (already a good price) when not on sale, but the sale has been happening a couple times a month like clockwork now. The Draper Valley Farms stuff is generally cheaper than the Kroger-branded stuff, no matter the cut. Like right now, boneless thighs are 50c cheaper per lb (no sales). It's $6/lb vs $6.50/lb. Bone-in is $3.79/lb! The Kroger brand doesn't even offer that variety for some reason. A few lbs of that + some orzo (cheap) + some staple produce (shallot, cherry tomatoes, garlic) can make you 6 very filling and delicious meals. When you compare it to fast food, the difference is staggering - definitely a divergence compared to the diff years ago. It's the convenience stuff that is truly spiking. Groceries are definitely a lower % of my income than half a decade ago. The barrier to most people is they can't process a whole chicken.

nytesky 3y ago

The “one income household” model of the 50s worked for two reasons. 1) the rest of the world was in ruins, so for 50s-60s US was sole industrial power more or less. 2) artificial labor “scarcity” where POC and women were banned from many occupations. The remaining available labor (ie white men) had more leverage.

tonymet 3y ago
Is the argument that true inflation should be worse than CPI because it helps with diversity?
- riskable 3y ago
  It has more to do with a hidden class structure below your average white family, working for much less, providing goods and services at a discount. Inflating the means of the average white family in a way that wouldn't be possible today because we're not as purposefully racist or sexist as we used to be. In order to make a better comparison one should compare what was affordable to the average black family in the 1960s (or whatever previous time period you choose for which we have figures) to today. There's other factors like the aftermath of WW2, the real and "soft" power the US held back then in comparison to today, and the role women played in the economy. Today's world is a lot different from then but the truth is that the wealth and power we've amassed since then should have us in a better position, not worse. The factors at play in today's economy are not benefiting the common man nearly as much as they should. We're beginning to look more and more like a post-scarcity economy every day yet our laws, regulations, and culture are not evolving with the times. The fact that land and homes are vastly inflated compared to regular every day goods and even the "durable" kind is strong evidence that our entire economic system stands on precipice of great change. Either we're just getting started on a great collapse or a great sea change in politics and economic systems. I very much doubt things are going to go back to the way they were... Ever. We as a society can decide to spread our prosperity around or we can increasingly suffer for the lack of it by continuing the status quo.
- grobbyy 3y ago
  I think the argument is that inflation is complicated by globalism.

throw0101c 3y ago

> Take 1963 as an Example. Sears sold entire two story home kits with all materials for $1600. How big (area-wise) were those houses? What kind of heating did they have? How air-tight/leaky/drafty were they (which would dictate OpEx on heating)? Did they have air conditioning? What kind of electrical service could they handle (60A? 100A? 200A?)? Did that include the foundations/footings/slab? Were those parts insulated (i.e., how cold were your feet)? Did they come with sprinklers or even smoke/fire alarms? > And you weren’t getting an HGTV-approved home in the 1950s. Those cheap homes everyone was buying were 700-900 square feet with two to three bedrooms and one bathroom. Most had no basement, porch or back deck. You were lucky if you got a one-stall garage. > No open floor plans, granite countertops, stainless steel appliances, walk-in closets, man caves or room to entertain. Most homes were bare bones. * https://awealthofcommonsense.com/2024/01/americans-are-better-off-than-you-think/ https://awealthofcommonsense.com/2024/01/americans-are-bette... I'm not sure how many folks would like to live in a current $1600-equivalent house. > My point is that inflation isn’t abstract and it isn’t a law of nature. It’s a deliberate approach to stealing your prosperity while you cheer it on. If you think inflation is bad, try deflation (1930s). > Summers is right more than he’s wrong. Real inflation has always been higher than the bogus CPI numbers, and the past 5 years it’s been accelerating. The pre-1983 algorithms were moved away from for a reason: do you know that reason? Was it a good or bad reason(s)? Why? > In 1983, the government switched from using home prices — which also included mortgage payments and maintenance costs — to using rental prices to gauge the cost of housing. > The cost of housing for people who own their property is now measured using what is called “owners’ equivalent rent”: how much their house would cost to rent if they did not own it. > The idea is that homes are an investment. House prices appreciate, and you may eventually sell for a profit a property that you have purchased. Rent, however, represents consumption. It does not leave you with an asset that you can sell down the road. > Critics often argue that by leaving home prices out of the equation, the inflation metric underestimates the cost of living at moments when home prices are increasing markedly and when it costs first-time buyers more to get a foothold in the market. Some even claim that if the government used the old methodology, its reported inflation rate would be much higher today than it was during the 1980s. * https://archive.ph/zvtPw https://archive.ph/zvtPw / https://www.nytimes.com/2022/05/24/technology/inflation-measure-cpi-accuracy.html https://www.nytimes.com/2022/05/24/technology/inflation-meas... Housing prices are not considered in the CPI ("cost of living") because they are mostly an asset: > House prices are an interesting case. Houses are considered capital investment by the [US] BLS. So, when the value of your home increases that's a good thing as you didn't consume the house. In other words, you don't need to replace the house. Consumption goods are different in that you need to replace the thing you bought. Inflation is very bad for consumption goods because it costs you more to replace that thing each time you need it (food, for instance). * https://web.archive.org/web/20210929154549/https://www.pragcap.com/forum/topic/assflation/#postid-2165 https://web.archive.org/web/20210929154549/https://www.pragc... > The BLS views housing as a mostly “investment” item as opposed to a consumption item. So, for instance, when you consume a hot dog and have to replace it then the cost of replacement is a direct reflection on your well-being. A $1 hot dog that costs $2 one year later is a material change in living standards, all else equal, since the hot dog is an asset that you literally consume. A house is much more complex. [...] > Of course, anyone who owns a house knows that it’s not that simple. You do basically consume your house over time. For instance, my home has appreciated substantially since I purchased it just 5 years ago and underwent a hellish remodel. At that time the cost of replacement was roughly $300 per square foot. But in the ensuing years the cost of replacement has increased to $400 per square foot. As my physical home falls apart over the years I will need to replace it. But the key point is that, as I replace these components the housing market is likely to revalue the total home value to account for this investment. So even though I am consuming my house over time I am very likely to recoup those costs. * https://www.pragcap.com/should-house-prices-be-in-the-cpi/ https://www.pragcap.com/should-house-prices-be-in-the-cpi/ Upkeep is a part of the CPI (as is Rent, under the broader Shelter category), but house/land prices are not. The "C" in CPI stands for consumer. Housing assets aren't in the CPI for the same reasons stocks and bonds are not: we don't consume them to live. 'Shelter' is considered in the CPI generally though (and with-in that things like home repair (lumber, plumbing) are accounted for); for Canada: * https://www150.statcan.gc.ca/n1/pub/71-607-x/2018016/cpi-ipc-eng.htm https://www150.statcan.gc.ca/n1/pub/71-607-x/2018016/cpi-ipc... And as the Bank of Canada notes, there is no internationally agreed upon method: > International statistical agencies have unanimously adopted the net acquisition approach for durables, but there is no consensus about the best approach to the treatment of OA in the CPI16 (Table 1). Rental equivalence is the most popular approach among countries belonging to the Organisation for Economic Co- operation and Development.17 Johnson’s (2015) recent review of the U.K. CPI proposes using CPIH, which includes the costs of OA and is based on a rental- equivalence approach, as the U.K.’s main measure of inflation. Several countries in the European Union have refrained from incorporating OA into their CPI, although Eurostat is currently conducting a pilot study for the euro area based on the net acquisition approach. Australia and New Zealand use a net acquisition approach, while Sweden and Finland—like Canada—are using a partial user-cost approach. No country has adopted a full-fledged user-cost approach. * https://www.bankofcanada.ca/wp-content/uploads/2015/11/boc-review-autumn15-sabourin.pdf https://www.bankofcanada.ca/wp-content/uploads/2015/11/boc-r... In the StatCan CPI paper there is some explanation towards the complexities of shelter / owner accommodation: * https://www150.statcan.gc.ca/n1/pub/62-553-x/2019001/chap-10-eng.htm https://www150.statcan.gc.ca/n1/pub/62-553-x/2019001/chap-10... * https://www150.statcan.gc.ca/n1/pub/62f0014m/62f0014m2017001-eng.htm https://www150.statcan.gc.ca/n1/pub/62f0014m/62f0014m2017001...

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abeppu 3y ago

> True inflation would measure the amount of prosperity achieved per hour worked. I think this isn't a measure of inflation per se, because productivity changes are big over the decades. But I do think looking at costs in terms of hours of work is really helpful. I think back to an event in some HS extracurricular when a group of students got to ask questions of a gubernatorial candidate, and one kid asked if he was going to do anything to make college more affordable at state schools, and this candidate (perhaps keenly aware that almost none of the students could vote) basically laughed it off and talked about working at restaurants to put himself through school (I think in the 70s). How many hours of (unskilled?) labor was a semester of tuition then, versus 30 years later? How many hours was a tankful of gas, or rent for half an apartment, or a heating bill? How feasible is it really to work one's way through even a public school?

woodruffw 3y ago
I agree with the point about the cost of education. In real terms, however, the cost of a tank of gas is about what it was in the 1960s[1]. Today's average is $3.63[2], which is about $0.34 in 1960 dollars. [1]: https://www.creditdonkey.com/gas-price-history.html https://www.creditdonkey.com/gas-price-history.html
- listenallyall 3y ago
  I never understand the "in X dollars" argument, especially when looking back longer than about a decade. The CPI only considers a certain basket of goods, it's not representative of a cost of living (that's what this thread is about), various things change price at radically different rates. How much was an iPhone or Xbox in 1960 dollars? What was the typical cable TV bill? What did a typical American pay for a California roll or a burrito in 1960? Alternatively, given your 10x price boost, why isnt the cost of a television set or vacuum cleaner in the multiple thousands?
  - tastyfreeze 3y ago
    The comparison doesn't work on manufactured products. You can really only compare commodities. Anything that is manufactured has a multitude of factors that will reduce cost of a product significantly over time. If the circuitry in an Xbox were constructed in 1960 no government on the planet would have been able to afford it. It would also be difficult to find enough power to run it or a place big enough to build it with the technology of the time.

TMWNN 3y ago

>The memes of Arby’s 5 for $5 becoming 4 for $10 are more informative than the CPI numbers. Don’t let the shock at the grocery store wear off – it’s real and painful despite what the news tells you. "The thing I have noticed is when the anecdotes and the data disagree, the anecdotes are usually right. There's something wrong with the way you are measuring it". —Jeff Bezos <https://sports.yahoo.com/amazon-ceo-jeff-bezos-explains-212315127.html https://sports.yahoo.com/amazon-ceo-jeff-bezos-explains-2123...>

ben_w 3y ago
Huh, so that looks like a way to deal with Goodhart's law?
tonymet 3y ago
Very good quote. “Data” is not conclusive , it’s just one piece of evidence. Usually it’s a noisy observation , with even noisier statistics applied. People think “data” is the conclusion, when in fact it’s just a signal to ask more questions.

mint2 3y ago

There’s a number huge flaws in all that logic. Comparing Palo Alto circa 1960 to Palo Alto circa 2020 is frankly bizarre. But if we’re using that logic why stop at 1960? Coulda had that land for almost nothing in 1700, so there was infinite inflation from 1700 to 1960! Gasp! But what’s the result if we look at the price of a compute that a 1960 worker could buy vs a 2020 person? Let’s see a modern household has the equivalent to a very large number of 1960 mainframe computers, looks like their buying power has gone up infinitely! Or lots in prime La neighborhoods, super affordable in 1860! That means people have lost so much purchasing power because they’re hard to afford now!

roenxi 3y ago
> so there was infinite inflation from 1700 to 1960 Infinite is exaggerating but the US dollar has lost >95.0% of its value since the 1700s. So that observation is technically wrong but intuitively is fairly reasonable. If you assumed infinite inflation since then you'd be accurate enough for casual conversation.
cmmeur01 3y ago
Love to eat and live in compute.

gumby 3y ago

> Today Palo Alto, Menlo Park, and other super zips are exclusively [A slight exaggeration] $500k incomes and up. In the 1960 census records you will find these good neighborhoods occupied with plumbers, painters and other blue collar workers. This was unfortunately a deliberate consequence of the dot com boom, not something that happened in previous tech booms. Until around 2000 Palo Alto actually had a lower median income than some surrounding towns due to a policy of promoting section 8 housing, some SRO residences for the homeless etc. Those prior booms didn't suck in as many outsiders and mostly were nerds making fun tech (think of the mac). NYT amusingly published an article were they said how weird the SV was because people who drove mercedes cars still shopped at Costco rather than at "proper" shops appropriate to their "station". Dot com sucked in a bunch of people who came only for the money ("I'm starting a company -- need a tech cofounder" is the complete opposite of those days when it was "I'm starting a company -- we're big enough that we need some business people"). Then we started to have fancy restaurants and pretentiously-named magazines about how to spend your money. And then in 2000 the real estate people got control of the city council. The SROs were turned into boutique hotels and the city was re-organzied for the lucky. PA used to be a town where the Grateful Dead, Jefferson Airplane, and the like got started. Harold and Maude was (partially) filmed here. But such things are now inconceivable.

epicureanideal 3y ago
Although what goes up can come down... if some other state or region within California permitted large amounts of construction, enabled businesses to move in, and threw a few hundred million at building a great university, property values here would drop a lot. With less intention and planning it will take longer, but could still happen, and there are some natural pressures pushing things in that direction.
- gumby 3y ago
  If only. Palo Alto is one of the few cities fighting the state’s efforts in this regard. It’s really shameful.
flakeoil 3y ago

barfard 3y ago

[dead]

sanp 3y ago

Perhaps a Cost of Thriving Index? https://manhattan.institute/article/the-cost-of-thriving-index-reevaluating-the-prosperity-of-the-american-family https://manhattan.institute/article/the-cost-of-thriving-ind...

brandonmenc 3y ago

> Remember in 1963 only the man was working, and typically supported 4 kids, a wife and often parents in the home. Yeah, and unless they were like, a doctor or a lawyer, they were living in borderline poverty.

jmyeet 3y ago

I agree with this: inflation as an economic measure is an intentional policy tool to transfer wealth from the poor to the wealthy. In the last few months we've seen headlines about inflation "levelling off" but that just means prices aren't growing as fast. The 20-30% increases in housing in particular aren't going down. In fact, it's intentional government policy to make sure house prices and rents never go down. You mention Silicon Valley and others dismiss this as a result of the dot com bubble but it's really not. It's zoning policy. IIRC the smallest lot in Menlo Park or Mountain View is ~10,000 square feet. But you see it elsewhere. The average house price in London is ~706k GBP. 30 years ago it was ~70k. Inflation is used to justify wage suppression. Whatever the formula, it doesn't accurately reflect to cost-of-living crisis we're in.

jogjayr 3y ago

I randomly ran across this blog post https://economistwritingeveryday.com/2024/04/10/grocery-inflation-is-under-control-fast-food-prices-arent/ https://economistwritingeveryday.com/2024/04/10/grocery-infl... today. It says fast food prices have gone up faster than grocery prices or inflation. I don't eat fast food so I don't know if it's true. But it got me thinking. Maybe the likes of Doordash are to blame, at least indirectly. Food delivery companies have proved that people will pay $15 for a lukewarm McDonald's burger if it's brought to their doorstep. So there is obviously some room to increase prices even for in-store purchases.

tonymet 3y ago
You're right a lot of unhealthy habits increased during covid, including alcohol, junk food binging, marijuana/ vaping, anti-social behavior -- which led to greater inflation in unhealthy products and healthcare.

thebigman433 3y ago

> In case you think this is academic, look at the occupations for those who lived in today’s wealthiest neighborhoods. Today Palo Alto, Menlo Park, and other super zips are exclusively $500k incomes and up. In the 1960 census records you will find these good neighborhoods occupied with plumbers, painters and other blue collar workers. How much is this related to inflation compared to the complete refusal of the Silicon Valley suburbs to building new housing? If rich people want to move somewhere, and people living in that area dont build houses for them to move into, its going to drive the prices up, because the wealthy people will go there no matter what. Also your whole bit about the past being so much better is insane. Hard to tell what is you exaggerating and what is a serious argument. My partner and I make ~100k + 40k combined a year, and we rent an apartment in one of the nicest SF neighborhoods, save for retirement, go out and do (paid) things every weekend, and still save a good chunk of money every month. We also have gym memberships, own cars, buy nice groceries, etc. Inflation does suck, and the sticker shock is bad, but the high inflation also stems from policies that have let us have insanely good unemployment levels. Post 2008 we saw less inflation, but unemployment stayed high for almost a decade. Unemployment is already down to super low levels post 2020, which is better for everyone. Average and lower wage workers have also seen large growths in what they make.

tonymet 3y ago
Unemployment (U3) is an even worse indicator than CPI . 95% + of the recent employment rates have been part time employment. U3 doesn't account for the historically low participation rate (about 60%)

usaar333 3y ago

> Remember in 1963 only the man was working, and typically supported 4 kids, a wife and often parents in the home. Things are a lot cheaper if you keep them in a 1200 square foot house > Today you have 2 people working 100 hours a week to support 1-2 additional people , while living in an apartment and living in a run down and crime infested neighborhood. Highly doubt people at this income rank were buying houses in 1960 and living comfortably. > Summers is right more than he’s wrong Entire argument is whether you should count interest or not. I can see arguments both ways

demondemidi 3y ago

Crime infested neighborhoods? You mean like living with a bunch of billionaires as neighbors?

panarky 3y ago

Price inflation tells you very little about how well the average person lives. The average person today has a far higher standard of living than the average person in 1963.

seanmcdirmid 3y ago

> Remember in 1963 only the man was working, and typically supported 4 kids, a wife and often parents in the home. They used older kids to watch younger kids, and generally let the kids fend more for themselves (my boomer dad was the oldest of 8 kids, and that was his experience, but having his grandparents die of spanish flu after WW2 hurt and helped a bit). I actually kind of admire that, and think we've lost something with more hands on parenting. I totally agree. In a sense, FAANG salaries aren't especially high by historical standards, it is just that everyone else has fallen so far behind. $500k/year household income is firmly middle class, and is like earning $135k in 1980, my dad made more than that contracting in building nuclear plants with an associates degree from Spokane Community College.

thfuran 3y ago
>In a sense, FAANG salaries aren't especially high by historical standards You can't be serious. >$135k in 1980, my dad made more than that contracting in building nuclear plants That's over six times the median household income in 1980. $135k today would still be nearly twice the median household income.
- seanmcdirmid 3y ago
  It wasn't that much back then, especially when the industry was feast or famine (and it did implode in 1986 or so). But really, my only point was "a guy who had an associates degree from a CC could earn that much." My buying power is essentially worse than my dad's, although I put in a lot more time in school for it, and supposedly made the right career choice, things just suck these days and techies are keeping their heads above water but not much more.
  - ethanbond 3y ago
    It’s the land price. Gets baked into every single good and service and goes up in lockstep with productivity gains.

mikelitoris 3y ago

The extremely short summary of where all that prosperity went: up and abroad. The capitalist class hollowed out the middle income USA by siphoning solid jobs off abroad and pocketing the difference. You can thank all the neolib useful idiots for that. It is not really the result of interest rates.

dennis_jeeves2 3y ago

>It’s a deliberate approach to stealing your prosperity while you cheer it on. Excellent way to put it. To put things in perspective if one works for 5 days a week, you are paying the govt (all taxes + inflation) about 3 days of your earnings. You only get to keep what you earn for 2 days.

paulryanrogers 3y ago
Does most of the inflation go to the government? Lately a significant portion seems to be going to the capital class and land owners.

WA 3y ago

- People lived in way smaller houses back then. - People had only one car. - People ate meat once per week. - People had way fewer things in their houses. You gotta consider increases in material possessions as well if you want to calculate inflation properly.

tonymet 3y ago
You're right, but it doesn't account for the entire loss in prosperity. Prosperity was also growing 1880-1960 at at even faster rate, but inflation was much flatter. We went from scarse food, horses, no telecomms, no planes, almost-no electricity, moderate running water to nearly modern conditions 1880-1960 with minimal inflation
agensaequivocum 3y ago
No people ate more meat and animal products. https://twitter.com/Outdoctrination/status/1694842326211043722/photo/1 https://twitter.com/Outdoctrination/status/16948423262110437... https://twitter.com/Outdoctrination/status/1694842322872381719/photo/1 https://twitter.com/Outdoctrination/status/16948423228723817...

bjornsing 3y ago

> Today you have 2 people working 100 hours a week to support 1-2 additional people , while living in an apartment and living in a run down and crime infested neighborhood. Is that really true, or is it more a feeling many Americans have? As a Swede it’s a bit hard to relate to.

ethanbond 3y ago
Crime is much much lower than it was decades ago almost everywhere in the US. Also “run down” in reference to cities is just not true outside of a few failed areas like Detroit. NYC today is dramatically nicer than it was decades ago.
- lupire 3y ago
  Your data on New York "today" appears to be pre-opiod.
  - ethanbond 3y ago
    The opioid issue is absolutely a big degradation in QOL from recent years, but no the current crime rate is still well below decades ago, especially on a per capita basis. https://www.nyc.gov/assets/nypd/downloads/pdf/analysis_and_planning/historical-crime-data/seven-major-felony-offenses-2000-2023.pdf https://www.nyc.gov/assets/nypd/downloads/pdf/analysis_and_p...

jlmorton 3y ago

> McDonalds burgers were 15¢. Okay, it was the McDonald's hamburger that seems to have been $0.15 in 1963. That is $1.53 in CPI-inflated 2024 dollars. The cost today is $2.19. That's about a 0.6% difference in the compounding inflation rate over 61 years.

johnfn 3y ago
Shouldn't the price of a burger go down, not up? We should be more efficient at manufacturing and distributing food in 2024.
tzekid 3y ago
Isn't using compounding inflation rate on top of CPI-inflated dollars double counting? It looks and feels like 40+% to me and everybody else
- deleted 3y ago
  [deleted]
- jlmorton 3y ago
  It's not double counting, it's just the average difference from CPI vs McDonalds hamburger inflation

philwelch 3y ago

I also have like six different machines in my house that would each, single-handedly, put the entire computing infrastructure of the Apollo program to shame. And my corneas have been reshaped into the ideal form by a computer-controlled laser, giving me 20/10 vision. I haven’t done it yet, but I could get my entire genome sequenced. A $20 Italian rifle sounds like a good deal but today you can buy a machine that literally prints guns (some assembly required). Any one of these things would be worth millions if not billions of dollars in the 1960’s. This also explains why Palo Alto is so much more expensive these days. Some the things I mentioned were invented around there, which made a lot of those people rich. Other things have become more affordable too. In 1960, a round trip flight from New York to London cost $550. I can find similar fares right now. In 1984, a Macintosh cost $2500, had 128 KB of RAM and a 9 inch 512 by 342 pixel display. For half as many dollars today, you can buy an iMac with a 24 inch 4.5K display and 8 GB of RAM. Now, I will admit that many things are needlessly more expensive, and while the reasons for this are complicated, I don’t think it’s any coincidence that many of these cost increases are directly associated with institutions getting taken over by parasitic classes of administrators and bureaucrats. If you go to college, you’re not just paying for the inherent costs of the college; you’re also paying for the growing administrative bureaucracy that has infested the institution. If you go to the doctor, you’re not just paying your local family doctor; you’re paying an entire bureaucracy that has reduced your family doctor—who used to own a private practice—to the status of a corporate employee, plus a completely separate “health insurance” bureaucracy. (It turned out that the doctor who reshaped my corneas with lasers was happy to just take cash though!) Governments are some of the worst effected. The cost to build the US interstate highway system was, adjusted for inflation, about 618 billion dollars. The 2021 infrastructure bill totaled 1.2 trillion dollars, but are we really getting the equivalent of two complete interstate highway systems? But hey, it could be worse—it’s not like they actually collected all the tax dollars they needed to pay for it! That’s a problem for future America. I don’t envy those guys!

Amorymeltzer 3y ago

>Remember in 1963 only the man was working Others have pointed out the flaws in the rest of this, but the labor force participation rate of Women[1] was around 33% in 1950, 38% in 1963, and 60% in 2000; it's 57% now. That's a huge change, but 1963 is a far cry from 0%. See also men[2]. As noted elsewhere, this ignores race. Compare white women under 20 <https://fred.stlouisfed.org/series/LNS11300029 https://fred.stlouisfed.org/series/LNS11300029> to black women under 20 <https://fred.stlouisfed.org/series/LNS11300032 https://fred.stlouisfed.org/series/LNS11300032>; dramatically different numbers. Labor force participation rate isn't ideal, but it gives the picture. 1: <https://fred.stlouisfed.org/series/LNS11300002 https://fred.stlouisfed.org/series/LNS11300002> 2: <https://fred.stlouisfed.org/series/LNS11300001 https://fred.stlouisfed.org/series/LNS11300001>

Majromax 3y ago
Also look at the prime-age participation rates (https://fred.stlouisfed.org/graph/?g=1k7Vy https://fred.stlouisfed.org/graph/?g=1k7Vy), which help control for demographic changes over the decades. The 1963 prime-age LFPRs were 44/99% for women/men respectively, and today those figures are 77/89%.

ethanbond 3y ago

This is easy: how much did an acre of land in Palo Alto cost then, and how much does it cost now? Why? Why does the price of land “need” to go up? It pays no wages, no rent, no suppliers, no anything. It’s just there being land, no matter what price it is. So why has its price gone up and who benefits from that?

lupire 3y ago
Everyone who lives there benefits from that. Otherwise they wouldn't want to live there.
- ethanbond 3y ago
  What? People benefit from higher land prices?

IG_Semmelweiss 3y ago

I'll add 1 more to the mix. Subway fares for NYC [1] - 2 fare increases in the first 60 years of operation. - 17 fare increases in the next 60 years. Note that even with the fare increases in the last 60 years, once adjusted for inflation, the cost of MTA fares were actually going down until 1984 or 40 years or so, when fares really exploded [2] [1] https://en.m.wikipedia.org/wiki/New_York_City_transit_fares https://en.m.wikipedia.org/wiki/New_York_City_transit_fares [2] https://old.reddit.com/r/nyc/comments/11u0s3z/nyc_subway_fare_over_last_120_years_adjusted_for/ https://old.reddit.com/r/nyc/comments/11u0s3z/nyc_subway_far...

fasa99 3y ago
All of this is very tricky stuff, I would just call it shades of grey and leave it at that, no black and white. Similar lore happened in the DC metro, everything was fine until it got to be XX years old and then they jacked up the prices and starting shutting things down all the time -- because the infrastucture was all getting dangerously old (subway fires and such) and so they had to quasi-build-new infrastucture, so that got a guy that basically said "we're gonna fix it and it will be painful but we will still fix it" for example - https://thehill.com/policy/transportation/291651-dc-metro-expands-repair-project-after-train-derailment/ https://thehill.com/policy/transportation/291651-dc-metro-ex... The crux of it is, it's generally easy to maintain a pretty new system than an aging one (bathtub curve type scenario like in the hard drives). As such we see China sitting real pretty presently but say 50 years from now it will inevitably be a different tune. Now in the case of NYC I wouldn't be surprised if some of that had to do with crumbling, very very old infrastructure, and I wouldn't deny either by the same token it had to do with macro-economic factors as well, all shades of grey. First 60 years of operation NYC probably had a lot of "brand new" stuff at any given time.

brnaftr361 3y ago

This is an interesting take and it got me thinking. The replacement rate in the US is not 4. In fact, I would imagine that 4 is probably unsustainable. I like to see money more as a chemical gradient a la chemotaxis, though more clever people than I call it a carrot. With inflation the carrot is being removed, perhaps even being used as a stick. A superfluity of resources without controls of some sort may well lead to runaway growth, and I presume with the relative expenses of everything that there is an unsustainable imbalance at the fundamental level excess demand for intrinsically limited supply. Of course the inflation model is applicable outside of the purely monetary. The more people you have the larger the labor army, and with each number added to that the less valuable the individual becomes even in terms of highly specialized labor, because ostensibly this can essentially be predicted with a distribution and with the way people are commoditized in most positions and companies these day, excellence is neither expected, sought for, nor wanted. This is still within the realms of the economists wheelhouse. I would argue there's a third inflation, social inflation, as well. And this essentially hinges on the same principal that the labor army does: more people, less individual value (“a single death is a tragedy, a million deaths are a statistic”). And I would posit that the decrements have been seriously exacerbated in this realm by social media, television, celebrity, and so forth. I would also point out that the civil rights movement and women's lib has also (rightly) had a profound effect on social orientation that has yet to fully manifest itself. If I recall correctly many developed nations have declining "native" populations. I'm unsure of the causal factors, but I wouldn't be surprised if it was in some ways an instinctual aversion to these sorts scaling laws. If I'm not mistaken Dunbar's number is roughly adhered to in nature, so it makes sense that there is somewhat of a drive to limit pack/civilizations size.

czhu12 3y ago

As a counter point, this post by Matthew Yglesias might be interesting. Basically makes the case that the standard of living today is significantly higher than back then, and we wouldn’t be okay living today like we did back then. https://www.slowboring.com/p/nostalgia-economics-is-totally-wrong https://www.slowboring.com/p/nostalgia-economics-is-totally-...

tonymet 3y ago
sure but when you add it up it doesn't feel like much. an additional car and some luxuries. And it doesn't account for qualities that have degraded. it assumes that since we have more possessions that life is better.

cyanydeez 3y ago

I believe in 1963, black people were still second class citizens. Hard to believe this example is worth it's weight in freedom units per capitalist product. The reality is the economy and government were weaponized to enforce the lost of freedom to discriminate.

tonymet 3y ago
inflation makes all american's poorer, especially black americans