Why wait? Check out the 2008 retail sales results for Christmas. I thought it was clear that this recession is demand side driven. Though I agree it could possibly get worse.
That thing you’re talking about in the second paragraph there? That’s increased purchasing power. Is it happening or not?
I’d say it’s self evident, but why don’t you tell me. What percentage of money does it take to buy, say, a computer today? Clothing? Consumer goods? Is it cheaper, or more expensive as an over all percentage of median income?
-XT
What a positively irrelevent question - what matters is whether, like you said, “we all pay less for products and services today than we did 20 years ago.” What we pay now is meaningless unless compared to what we paid then - inflation adjusted, of course.
Of COURSE it matters…assuming I’m correct. Big assuming, to be sure. If one is buying a PC and it costs $600.00 (in today’s dollars), that’s a hell of a lot less of ones income than paying $3000 (in 1990’s dollars)…which is pretty much why more people today have PC’s than they did in the 90’s. Clothing also costs less today…if one pays $15 for Levis blue jeans (which is what I pay, anyway), then that is less than paying $30 for them in the 90’s in both absolute terms and in adjusted terms. Food is also cheaper, in similar ways and for similar reasons. Even if we factor in housing and things like gas, my guess (and I admit it’s only a guess…could be wrong and probably am) is that over all we pay less (adjusted for inflation) today for every day staples than we did 20, 30, 40 etc years ago.
-XT
/rant on/
I am so fed up with this wealth crap. Being rich can be defined in two ways. The first is standing in the distribution of assets or income, and in the amount of money which someone in a decile has. In that respect most people are not richer today than they were.
The second way is psychological. Someone who sees himself getting further and further behind those in income levels above him is not going to feel rich, no matter how big his TV is. And there is a security aspect. Part of being rich is not having to worry where your next meal, or your next doctor visit, is going to come from. Someone with a lot of gadgets who worries nearly every day about losing it all is not going to feel rich. He may have that PC, but the money that paid for that PC is sitting in his unpaid credit card balance, and costing him more every month. Our middle class got “rich” during the Bush years in exactly this way. Not keeping up with inflation and having possessions only from borrowing against an inflated house value is not being rich.
Then there is the number and quality of possessions vs what is available. When I was a kid we had no microwave, no VCR, no DVD, no flat screen TV, not even a color TV - because they either hadn’t been invented or were not common. Saying I’m richer now than I was then because I now have these things is nonsense.
I’m richer than my father was because I’m in a higher income decile, but on the other hand, he never worried about his job, and when he came home he was home, and not checking email.
You go tell the guy worrying about losing his house that he’s richer than his father because he owns a cellphone, go ahead.
Honestly, I think the flaw in your thinking (and of course, this is from my own perspective and world view), Voyager, is that this theoretical guy SHOULD be (by right) ‘richer’ than his father…that this is the natural course of events, just like the rising of the sun or the changing of the seasons. It’s the EXPECTATION that everyone should be ‘richer’ than their parents simply because we are Americans…or simply because rich people in America are perceived (or perhaps actually) to be getting richer than ‘poor’ people.
-XT
But that behavior has nothing to do with the “rich”, and has everything to do with the “stupid”
If people choose to work in a high-pressure job that requires him to check his email at home, then that’s the decision they make. No electronic gadget or McMansion is necessary to live a full and complete life. If you measure your worth by what the guy next door is doing, then you’re a fool. IMO, much of this debate is based on envy - the “rich” have it all, and poor Joe down at the cubicle farm doesn’t.
And, although this is never a popular position, maybe the guy who’s losing his house should get rid of the cell phone. Barring a catastrophe like a job loss, perhaps one of the reasons he’s losing his house is because he has too much crap, and didn’t save or pay down his mortgage.
If you look at tax breaks and the like as a “reward”, I think that “reward” should go to a big company who creates jobs and wealth, before Poor Old Dumb Joe, and his cell phone. Fact is - Big Company can hire me, create a new, cheaper kind of product I need, pay me a dividend, hire others who then have disposable income to spend, etc., while Joe doesn’t do much for the nation as a whole.
The other side of your mouth is saying that we are richer than our parents.
Assuming for a moment that staples do indeed cost less in real dollars than they used to, and that the median person’s income hasn’t dropped to a degree to make the cheaper staples irrelevent, then there’s another problem - not everything has gotten cheaper across the board. Correct me if I’m wrong but certain critical things like houses, medical, and retirements are no longer as affordable to the average joe. And when those are out of reach, the deal you got on that nifty T-shirt is poor consolation.
Since there are obviously forces working in opposite directions, wouldn’t the best answer be derived from the most direct empirical data you can find? Maybe the best places to start would be the economic impacts of the Reagan/Bush presidencies, and and then one must decide if the outcome was ‘good’ or ‘bad’.
My simple analysis would be immediate stimulus at the expense of massive debt. After all, it’s a ‘trickle down’, not an ‘avalanche’. If they changed the name maybe I would like it more.
Very complicated question that might be beyond ‘yes’ or ‘no’ answers. I think the answer must tie in with one’s worldview.
Is it? To me, the ‘other side of (my) mouth’ is saying we pay less for (many) goods and services today than we did in the past, and that anyone categorically saying that ONLY the rich benefit from today’s economy (which was the comment I was responding too originally with my own statement) is basically attempting to blow smoke up our collective assess, or has been totally captured by their own rhetoric…take your pick.
Of course, what you may be READING from what I’m saying and what I’m intending could be two different things, as I’m not exactly the most coherent poster in the universe…and when I’m drinking sometimes even I forget what my point was. Could you quote the part of what I’ve said that seemingly has me lying (or talking out the other side of my mouth, if you will)?
No, you are quite correct…housing, medical, even transport has all increased. It’s not an across the board bonanza of goodness and light, and over all I think that our standard of living has been fairly stable for a while now. Which is another way of saying it’s been stagnating at a certain fixed level, or even dropping slighting, depending on ones skill set, experience and career or job type.
-XT
Certainly.
Like I said, this is a statement that we have increased purchasing power than our parents - that because prices have dropped, real wages are higher than what our parents got, despite the fact that we’re making the same or fewer actual dollars. Which is to say, you’re asserting that we’ve had negative inflation since the time of our parents.
The thing is, of course, that if some prices have gone up and some have gone down, then you can’t just point at the ones that have gone down and say that we’re richer. If my tshirts are 20% cheaper and my rent (which I spend orders of magnitude more on per year) has gone up 10%, then I’m poorer, plain and simple.
Personally, I don’t think we’ve had negative inflation.
I think that the magnitude of expenses for housing, medical, and transport kicks the ass of the amount we spend on beer and peanuts. Seriously, I think that “stagnating” is very much an optomistic statement about how the change in all prices has played out. But maybe that’s just my impression as somebody who only makes five digits…
You are really inserting a lot of extra language into my statement that is not only there but that I didn’t intend to be there either. I never said anything about how our theoretical workers wages have increased, nor that they are better off than their parents…what I said was that everyone benefits from increased productivity and lower costs for goods and services than they did 20 years ago. And I don’t see the quibble…we DO pay less for a wide range of goods and services than we did 20 years ago. No where did I say, afaik, that this translates into a higher standard of living across the board, or indicates ‘we’ve had negative inflation since the time of our parents’…that’s all extra stuff you are reading into my statement, and extra stuff that I’ll say right here that I neither intended nor believe.
Assuming you make no more today than you did 20 years ago, and assuming that the composite of all the goods and services you use that, adjusted for inflation and that cost less today are outweighed by the other goods and services that you regularly use that cost more, then you are correct. However, if you are speaking from the perspective of the country as a whole I’d need some compelling data to show me that the country is poorer than it was, over all, in the past (and other than a comparison between today, during a major recession, and the 90’s, during a major boom).
Frankly, neither do I. So, where does that leave us in our little side discussion here?
And my own perception, and what I seem to recall from reading on this subject, seems to indicate that I’m not being overly optimistic at all, and that at worse US standards of living have leveled off, neither increasing by any large degree nor decreasing by any large degree. Of course, INDIVIDUALLY things vary widely, with some segments of the working population doing a lot better, some being stagnant, and some decreasing, depending on how marketable ones skills and experience are and what profession one is in.
Of course, that’s just my impression as someone who has gone from being on welfare and food stamps and working multiple jobs to make ends meet to…not being on those things…
-XT
I guess I was assuming you had a point you were trying to make. Because otherwise I’d have to assume that your point was, “People’s wages don’t go any further and in fact in practical terms they’re poorer than they used to be, but at least their t-shirts are cheaper!”, and that would be a silly thing for you to mean.
That’s what I get for assuming, I guess…
And according to this (found after a quick google), the CPI has been increasing steadily. You may dispute the veracity or relevence of the numbers if you like, I suppose.
Some things are more expensive, some less.
In the past 30 years things like clothes, food, appliances, etc. have gone down in cost because reliability/lifespan has gone up and price has gone down.
However real estate, education, health care, child care, regressive taxes and transportation (since most families have 2 people in the workforce, so they need 2 cars) have gone up.
According to Warren, a far larger % of our incomes go to necessary staples (housing, health care, education, taxes) than it did 30 years ago.
Was there actually a time when the working and middle classes felt they made enough money to make ends meet? Because my own personal theory is “no”. It seems logical to me that any increase in wages would soon be offset by a corresponding increase in prices, resulting in little real gain. It’s sort of like if we suddently paid everyone an extra $10,000. More people would be able to buy stuff so stuff would rise price.
During the 1950s, I think. Postwar prosperity ran pretty high. I know lots of people in blue-collar jobs who bought second homes then (generally vacation homes) and luxuries like motor boats. I can’t see most of the folks I know nowadays getting a vacation home.
Yes I agree, and are childern going to have a better life than their parents? The answer is no for the most part and that was the heart of the American dream which has been outsourced to India, to quote George Will “American’s should not be doing those jobs anyway”.
If you used $4 daily lattes as an example I’d be cheering on in agreement, but I can’t let this slide.
There’s a lot of useless shit people purchase, but in this day and age cell phones are very cheap and have a lot of utility. Without going into too much detail about my personal life, I am very poor (I have a job, but I’m very underemployed). I eat a lot of rice, beans, potatoes, lentils to save money. Even the dollar menu at fast food places are a luxury to me. I’ve cut out just about every unnecessary expense from my life that I can think of, and I’ve even been delaying necessary stuff.
But one thing I won’t do is get rid of my cell phone.
The initial purchase price of my cell phone was $20. I pay 25 cents a minute. I keep it around for only two reasons: 1. Potential employers calling. 2. Emergencies. I don’t use it for chatting with friends about crap.
Even if I were homeless, I’d still keep it around. How the hell else is an employer supposed to contact me?