4 ms·

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

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.
- lowkey 3y ago
  From the article, the biggest discrepancy between CPI and true inflation is a result of a change in the formula made in 1987 that removed interst rates aka the cost of money from CPI. The CPI formula replaced the actual cost of financing homes and autos with a new term, owner's equivalent rent. The argument made by the underlying paper [1] is that the older calculation better reflects the cost of living increases experienced by consumers and more closely correlates with the widely used University of Michigan Index of Consumer Sentiment. Also, notable is that consumers care much more about the cumulative multi-year effect of inflation while economists only worry about year/year changes in the rate of inflation as can be seen here [2] (worth a click) [1] https://www.bls.gov/pir/journal/gj02.pdf https://www.bls.gov/pir/journal/gj02.pdf [2] https://twitter.com/darioperkins/status/1770783161330323925/photo/1 https://twitter.com/darioperkins/status/1770783161330323925/...
  - disgruntledphd2 3y ago
    The really interesting thing about their proposed measure is that it reduces the period of extremely low interest rates post GFC. We'd be living in a very different world had this been our north star throughout that decade.
decremental 3y ago
[dead]
EnigmaFlare 3y ago
3) Lack of technology meant housework was so much more difficult that it actually required a full-time housewife or maid.
hackerlight 3y ago
Housing costs.
impossiblefork 3y ago
The 1950s situation can be restored without introducing gender inequality or occupational bans though. A four day work-week would bring us at least a little bit closer to the 1950s situation, and improve the leverage of workers. 4 x 2 > 5, of course, but 4 x 2 is still less than 5 x 2.
lupire 3y ago
Artificial labor scarcity is a good thing, to keep wealth in the hands of labor instead of capitalists. But it needs to be equitably distributed (more households working fewer hours each).

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.
lowkey 3y ago
From the article, the biggest discrepancy between CPI and true inflation is a result of a change in the formula made in 1987 that removed interst rates aka the cost of money from CPI. The CPI formula replaced the actual cost of financing homes and autos with a new term, owner's equivalent rent. The argument made by the underlying paper [1] is that the older calculation better reflects the cost of living increases experienced by consumers and more closely correlates with the widely used University of Michigan Index of Consumer Sentiment. Also, notable is that consumers care much more about the cumulative multi-year effect of inflation while economists only worry about year/year changes in the rate of inflation as can be seen here [2] (worth a click) [1] https://www.bls.gov/pir/journal/gj02.pdf https://www.bls.gov/pir/journal/gj02.pdf [2] https://twitter.com/darioperkins/status/1770783161330323925/photo/1 https://twitter.com/darioperkins/status/1770783161330323925/...
- disgruntledphd2 3y ago
  The really interesting thing about their proposed measure is that it reduces the period of extremely low interest rates post GFC. We'd be living in a very different world had this been our north star throughout that decade.

decremental 3y ago

[dead]

EnigmaFlare 3y ago

3) Lack of technology meant housework was so much more difficult that it actually required a full-time housewife or maid.

hackerlight 3y ago

Housing costs.

impossiblefork 3y ago

The 1950s situation can be restored without introducing gender inequality or occupational bans though. A four day work-week would bring us at least a little bit closer to the 1950s situation, and improve the leverage of workers. 4 x 2 > 5, of course, but 4 x 2 is still less than 5 x 2.

lupire 3y ago

Artificial labor scarcity is a good thing, to keep wealth in the hands of labor instead of capitalists. But it needs to be equitably distributed (more households working fewer hours each).