Its not inflation if its food & energy

You're on a one-man campaign.

I don't care how people define inflation/deflation, all I know is my monthly expenses keep increasing. Not one single category is down year over year in my household.

"Could A Family Of Four Possibly Live On $50K These Days?"

http://www.businessinsider.com/could-a-family-of-four-possibly-live-on-50k-these-days-2010-9

Same convenience of how the government chooses to calculate unemployment by not including those who have given up on looking for work, despite not being employed. Funny how things can always be spun to "soften" reality.

http://www.youtube.com/watch?v=YCX5gsCTsg0

Funny how analysts say China is manipulating the inflation numbers. US has been doing so for years but fewer and fewer analysts care to mention it. But is not in the gov't's interest to modify the calculation of inflation since that will jack up the COLA for all the pension and medicare recipients.

There are some articles discussing Chinese GDP statistics which aren not consistent with Western methods. Ron Paul makes some good points, If someone has switched from Steak to Hamburger or Dog Food, the politicians can call this substitution, but common sense dictates this is a decline in the standard of living.

http://www.youtube.com/watch?v=zPkTItOXuN0

This thread is only 4 hours old and it already has three elements of a Riversider classic: 1) title that lets you know it's River-spam before you even click through to the thread, 2) irrelevent economic article (relationship of global meat prices to Manhattan real estate = ???) and 3) YouTube. And all within the first 6 posts. Impressive. SE's message the other week really seems to have gone out the proverbial other ear quite quickly.

Hedonics: 'miracle' tonic for an ailing economy
For those of you who don't know, hedonics is the way the government transforms price declines into quality improvements. To wit, you buy a PC with twice as much power, so the government concludes that you really paid only half as much money for it. Hedonics is also the government's way of taking quality improvements and converting them into price declines when calculating the CPI. Sure, that brand-new Chevy you just bought cost 40% more than it used to, but it's a 40%-better car for a variety of reasons. So, the government says, the price didn't really go up. (I have oversimplified these examples, but you get the point.)

The idea behind the first case at least makes some sense, though the government carries it too far by acting as though improvements can be precisely measured. The problem with the second case is that those quality improvements are not voluntary. Since you have to pay the new price, it's sheer silliness to say that the price really didn't go up.

There are other ramifications as well. It turns out that the computer-spending component has materially warped GDP calculations in many of the last eight quarters. To put the numbers into perspective, from the second quarter of 2000 through the fourth quarter of 2003, the government estimated that real tech spending rose from $446 billion to $557 billion, when nominal spending only increased to $488 billion. That extra $72 billion represents the value the government imagines the improvement in computer quality is worth.

Now $72 billion doesn't sound like a huge amount in a $10 trillion economy, but at the margin, it makes a difference. And in fact, the contribution of this tech component to real GDP comprised about 12% of growth in the third quarter of 2003 and more than 30% of growth in the first quarter of 2003, i.e., a big chunk of the growth. Since real growth is a factor in the calculation of productivity and productivity growth, these statistics are also distorted.

http://moneycentral.msn.com/content/p72746.asp

Riversider, you've managed to contradict yourself in just a few easy messages and without help for anyone else.

First you argue that switching from steak to dog food isn't a real "substitution"; then you argue against hedonics, which tries to make exactly those sorts of comparisons (i.e., if you buy steak for the same price of dog food, that's actually deflation).

Riversider....great post!

I argue that the gov't uses the substitution effect to avoid counting a price increase in beef as inflation arguing that consumers will buy hamburger, chicken or dog food. I understand the substitution effect, but also argue that consumers making the switch are not equally well off and have undergone a decrease in their standard of living.

I also agree that the hedonics effect is reasonable to account for (i.e. todays' car is better than the model T) but that the gov't abuses this massaging of data.

May I suggest one child and vegetarianism? Much cheaper and environmentally friendly.

"I understand the substitution effect, but also argue that consumers making the switch are not equally well off and have undergone a decrease in their standard of living."

That's a value judgment: steak is better than chicken? Why?

Yeah, riversider. I'd much prefer pizza at $.50 slice, $1 subway tokens and 14,400 baud phone line aol connection to a chat room.

As long as my I can get the same cut of cow loin, the govt can do what it wants.

What I like best about RS is that nothing that he says makes any sense but he keeps on saying it anyhow, demonstrates that he doesn't know enough about economics to understand that banks create money out of thin air, thinks money is worth more when you dig it up out of the ground (in which case, let's switch to the Truffle Standard, as they're worth more by weight than gold and they taste better!), and when questioned on why he believes certain things - why if steak is better than chicken trout would be better than catfish - he just blithely ignores these simple challenges.

I say if lobster costs too much, let them eat cake.

yea but that cake today costs more than it did yesterday. thats inflation

unless it costs more due to preservatives. then it's hedonics.

But the f'king cake portions are huge!!! WTF? Is that deflationary? Or is it riversider voodooo that gonna put a dent in my social security chk, inflationary. I know, say to the cake shop, since I live alone with 15 cats, 'may I have half the cake for 1/2 the price, pretty please?' - from a coop owning social security chk cashing inflation watch-dog.

Fuck refuse MRI or cancer treatment, bc well you know they are 'inflationary'. Flmaozzzzzzzzzzzz. Ooops I fell asleep.

On Hedonics....amazing ....and quite faulty.

Reminds me of my days relying heavily on Corel Draw software for making simple product artwork.
The ol' 3.0 was great, worked reasonably fast, got the job done on 486 and jeeze don't remember anymore....12 megs of ram?
Then you had to get 4.0...but too slow, have to get more ram...then 5.0, have to get 5.0 because it gets you a cup of coffee....of course more ram, bigger chip....6.0 etc, etcetera...

Of course, no one calculated that it took twice as long to finish a project because, a) yes more and better choices sometimes...however led to b)twice as long to decide...and c) three times as long to figure out how the new and the old tools on the program work.

You wanna go old school crayons?!

Ha, of course not, computers made a completely talentless drawer as myself able to create and market packaging all by my lonesome.
But at least 50% of the tradeups are redudant.

A good example of Hedonics is ethanol. It raises the price of gasoline, but the gov't erases it from CPI saying it makes the air better. With that logic, if bmw raised the price of cars to comply with higher fuel standards by way of a turbo diesel, the gov't might come up with a hedonistic rationale.

Ho shit, no wonder you are so financially stupid, riversider. You skipped school when 'free ridership' concept was taught, probably picking up garbage at your union job.

Yes, pollution, has ZERO cost to society. By that measure let's fill in central park with garbage. I hear there are states willing to pay other states if you take their garbage. I mean central park pays zero to NYC, I mean can you imagine the re taxes we are losing by not allowing extell to build shanty towns there?

You know when I was in graduate school, I wanted to do a study on the economics of multiple wives ala Mormons. As a 'man', you would pay $x for one wife and some offspring, probably 2.5x$X for two wives, and 4x$X for 3 wives, and so on.

More offsprings, less house chores, more sex..... Yet, it seems the Mormons have figured out a way to pay less and less for more wives, genius! Shit I'm gonna get crap for this post :)

BMW has actually deflated. MSRPs have been between 79K and 89K for the last 15 years! (7 series base model)

67, it's not worth the effort.

The wives or telling riversider, he's dumb as rocks.

LOL, You guys are two knuckle heads who'v read too many Samuelson text books.

Well ethanol is interesting for a number of reasons. It both raises the price of gasoline, and food since now more uses are competing for it. And corn is used to feed animals so here you have the law of unintended consequences where because we are now burning our food we have less of it to eat, so we pay more for it.

It's been far too long since you've tubed us.

It's been so long, give 'me a hot long YouTube riversider.

http://www.youtube.com/watch?v=anwy2MPT5RE

Can I get a tissue x

RS's problem is that his economic "theories" are giving him answers that don't conform to reality, so he tries to change reality to conform to his theories.

Banks aren't supposed to create money. Only God can.

HAHAHAHAHAHA!

"I say if lobster costs too much, let them eat cake."

You mean crab cake?

RS, I've never taken an economics course. Just have had to use my common sense, you know, not gotten brainwashed by that Samuelson crap.

Say I'm BMW's CEO. Engineering team #1 figured out a way for me to produce 10% more cars out of my factories at no additional cost. Engineering team #2 figured out a way for me to produce, at no additional cost, cars that are better in enough ways such that people will pay 10% more for them (plusher seats, softer-touch ashtray covers, plug in your iPhone, greener, whatever) even if the other car were available at the same price as before.

What choice should I make, and should the government incentivize me to choose one over the other? If I am to understand the RS school of economics, the former should be encouraged (since 10% more cars is more productivity) while the latter should be discouraged (since it is simply inflationary because hedonic adjustments are hogwash).

Is that right?

Funny Samuelson has textbooks published, and Hayek doesn't.

When I was H.S. that Spam skit killed me.
Now it seems kind of retarded (I'm sorry...mentally challenged)

Money is created in exploding stars.

HAHAHAHAHA!

I thought money was created in the basement of the White House.

"Hey Michelle look at this machine I found in the basement".
"Barry...Turn it on and see what it does".
Together the say,"OMG"!
Then they sing...
Well we're movin on up,
To the east side.
To a deluxe apartment in the sky.
Movin on up,
To the east side.
We finally got a piece of the pie.
Fish don't fry in the kitchen;
Beans don't burn on the grill.
Took a whole lotta tryin',
Just to get up that hill.
Now we're up in the big leagues,
Gettin' our turn at bat.
As long as we live, it's you and me baby,
There ain't nothin wrong with that.
Well we're movin on up,
To the east side.
To a deluxe apartment in the sky.
Movin on up,
To the east side.
We finally got a piece of the pie.

Barry bums a little because he's Lionel

Funny Samuelson has textbooks published, and Hayek doesn't.
True(but not surprising if you understand that most teachers are left wing),

and yet Greg Mankiw outsells Krugman

http://www.amazon.com/gp/bestsellers/books/2596/ref=pd_ts_b_nav

Most teachers are left wing? Data? Or....made up?

No inflation here either. We'll just wear nylon.
http://www.bloomberg.com/news/2010-09-02/u-s-commodities-cotton-closes-at-highest-price-since-1995.html

Cotton futures rose, closing at the highest price since 1995, on concern that supplies will trail rising demand from Asia.

Global consumption will rise 2 percent in the year ending July 31 to 25.1 million metric tons, the International Cotton Advisory Committee said yesterday. China and India, the top consumers, will account for most of the gain, the group said. The ratio of year-end inventories to mill use may drop to 36 percent, the lowest level since 1990.

“The rally is based on the continuation of tightness of supply worldwide,” said Tom Reardon, the president of Delta Brokerage in New York. “The demand versus the available supply is just what’s pushing us up,” he said, citing imports by China and Brazil.

"but not surprising if you understand that most teachers are left wing"

OMG. It's like, "The Left Coast," "Hollywood Lefties" until you discuss Ronald Reagan, Arnold, Mel, Charlton, Ted Nugent, etc., who are all "Hollywood Righties."

Really, Riversider, instead of a) making excuses; and b) trying to contort reality to your "theories" that have never worked, you should just go back to school, and learn that money is not created by God and buried in the sand along with your head.

Sometimes a majority of people believe things to be true because THEY ACTUALLY ARE TRUE. Gosh darn it, it hurts, I know, but them's da factz.

RS, can you answer my question, or are you ignoring it on purpose?

Sorry, did not see your question, can you repeat?

Sure:

RS, I've never taken an economics course. Just have had to use my common sense, you know, not gotten brainwashed by that Samuelson crap.

Say I'm BMW's CEO. Engineering team #1 figured out a way for me to produce 10% more cars out of my factories at no additional cost. Engineering team #2 figured out a way for me to produce, at no additional cost, cars that are better in enough ways such that people will pay 10% more for them (plusher seats, softer-touch ashtray covers, plug in your iPhone, greener, whatever) even if the other car were available at the same price as before.

What choice should I make, and should the government incentivize me to choose one over the other? If I am to understand the RS school of economics, the former should be encouraged (since 10% more cars is more productivity) while the latter should be discouraged (since it is simply inflationary because hedonic adjustments are hogwash).

Is that right?

I'm still waiting for steve to write anything substantive here, instead of just conclusory statements that RS doesn't know what he is talking about.

How are those borrow and spend policies working out steve????

Your question has already been answered in your own mind, is hypetical and I'm not sure speaks to what I'm discussing. Companies look to maximize their profits. Car demand is relatively inelastic. BMW'S business model is to offer a base car for relatively attractive price but to chrge very high margins for options.

I do believe that car prices have not been rising at a very fast clip, but that's not my point. My point is that the government has been very liberal in negating price increases by over-application of Hedonics. My "hypoethical" BMW example wsa that if BMW did away with their normal engines and only offered turbo diesels that cost more and gained a few miles per gallon of gasoline efficiency, the CPI would over-zealously erase the price increase. Perhaps another two example would be anti-lock breaks and air-bags. I always wear a seat belt and keep a safe distance between myself and other drivers. The mandate of the two systems has raised car prices more than they would have been otherwise but the gov't erases that off of CPI.

I think one can make a valid argument for Hedonics, but my sense is the gov't applies it in too many cases or over-estimates it's value. Same thing for substitution. The average person who was eating beef and switches to chicken will not say they are indifferent and would view their inability to consume beef as making them feel worse off.

According to the Congressional Budget Office, the Bureau of Economic Affairs, and independent economists all over the globe, the actions taken since September 2008 averted a major international depression. Of course you and RS deny those studies, because they don't fit into your twisted little corner of economic extremism.

The real problem was under George II and Reagan, when the deficit was allowed to grow under flush economic times, squandering (in the case of George II) a perfectly healthy budget SURPLUS of billions of dollars, to fund unnecessary and rather stupid tax cuts, and an unnecessarier and rather stupider unfunded war of aggression in search of a) weapons of mass destruction; and/or b) the Holy Grail, neither of which has ever been found.

Those policies of fiscal abandon led us to where we are today, which is not a pretty place. Your alternative - doing what was done in 1937 - would be truly disastrous.

who are these independent economists?

I agree that the Fed's actions at the time and since averted a major depression. I didn't ask about that. The borrow and spend policies have been a disaster, and I posted the names of hundreds of economists who agree.

steve is stuck with an ultra-liberal, outdated and disproven economic theory that he clings to because it fits his political preferences. He tries to make reality fit the theory rather than the theory resulting from reality.

Gold is speaking loud and clear.
An inflation storm is right around the corner. You don't prepare for the storm AFTER it hits. Might be hard for you peanut bear brains of yours, but you midgets should think about that.

Market is trading range for over 8 months after hitting a high of 11,250. We should test that and exceed that later this year.

One more notes for all you bears out there. What if you're wrong?

I actually think the Fed was right to drop rates precipitously after Lehman & AIG. We had an emergency and the credit money markets froze. But we're not in that situation now. I agree with Thomas Hoenig that the Fed should be raising rates at this point to a more neutral stance. He suggests 1% and that makes sense to me. If the Fed were to consider actions to promote lending, they might do better with ceasing the new practice initiated by Bernanke of paying banks interest on their reserves.

In my mind, the current poliicy is not so much about promoting lending, but transferring money from the public to the big banks. We do not currently have a liquidity crisis. To the extent the banks have a problem it is a solvency one.

To have a debate on inflation, one first needs to have a view on what kind of inflation one is worried about. Clearly with unemployment high we're not expecting wage inflation. And Urban Digs makes an excellent point that when the Fed speaks deflation they are not discussing commodities or basic staples, but rather credit contraction and asset values( which is something very differeent).

I would add to that, with five banks now controlling an even larger share of the financial sector of our economy(thanks to the bail-outs, and failure of the gov't to tackle too-big to fail) we are seeing lending spreads that are higher than they would otherwise be. An example is mortgage lending where Lenders are making more profits than they would have made if their were more competition.

The problem was and is runaway federal entitlement spending and runaway local government spending on unproductive public employee union benefits. There are other problems too- earmarks, certain inefficient military spending, subsidy and trade policies- but the major problems are entitlement spending and unproductive unions. Another major problem was the FNMA and FHLMC government (more Dem but at fault)-pushed explosion of credit while lowering of standards.

Both Reagan and Bush II inherited recessions and under both, tax revenues eventually increased. I think Bush II was a poor president and domestically, one of his biggest negatives was his lack of fiscal responsibility. Obama has taken that and multiplied it.

"I think Bush II was a poor president.."

Agree.

There are some similarities between Bush II & Obama
Both worked hard to expand the role of the Executive Office in ways not everyone appreciated.
Both worked hard to improve relations with Moslem countries(Bush did this with Africa)
Both increased the deficit
Both supported the auto bailout....

Funniest thing ever said on Streeteasy: Bush "worked hard to improve relations with Moslem countries."

HAHAHAHAHA!

Yes, by invading them for no reason as part of Operation Crusade. WORKED LIKE A CHAMP! (And it's "Muslim," not "Moslem."

"tax revenues eventually increased"

Of course they did - years and years later, after the deficit was run up.

Please, you two: completely discredited and disowned economic policies supported only by a far-right fringe. LICC, if you think the policies you support are aimed at people who live in Long Island City, you're wrong. They're aimed at people who could BUY Long Island City; that is, OWN it.

There is great anticipation in Africa as the inauguration of Barack Obama draws near, but President George W Bush may turn out to have been the continent's best friend.

While Mr Bush has been severely criticised for the invasion of Iraq, his green credentials and the general deterioration of relations with the rest of the world, his African record has won considerable support.

Even normally critical voices, like the aid activist and former rock star, Bob Geldof, gives Mr Bush credit for what he has achieved.

At the top of the list is the President's Emergency Plan for Aids Relief (Pepfar), initiated in 2003.

At the time just 50,000 Africans were on anti-retroviral drugs.

Since then the US has pumped $18bn (£12bn) into fighting HIV/Aids - much of it in Africa.

By 2007, 1.3 million Africans were on medication, much of it paid for by the Bush administration.

Not that Pepfar is without its critics.

Some have attacked the US for preventing any funding for programmes that support abortion in any form.

Others suggested that it has downplayed the need to promote the use of condoms.

But no-one denies that the funding has made anti-retrovirals widely available, saving hundreds of thousands of lives.

The story on aid is much the same.

The US has backed programmes to cancel $34bn (£23bn) worth of debt for 27 African states.

At the same time aid to Africa has risen to $5.7bn (£4bn) dollars a year by 2007.

And, as anyone who has ever been to a refugee camp in Africa will testify, almost all the food aid to be seen comes from American farmers - aid worth $1.23bn (£0.85bn) in 2007.

Mr Bush's Malaria initiative has seen the disease halved in 15 African countries.

Travelling to the continent with the president in February last year, Bob Geldof concluded: "The Bush regime has been divisive - but not in Africa.

The US put considerable pressure on Sudan to end the 21-year conflict with rebels in the south, leading to the signing of a peace deal in January 2005.

And Mr Bush's envoys in eastern Democratic Republic of Congo have been working hard to prevent fighting with the dissident general, Laurent Nkunda, becoming a regional conflict, involving Rwanda and Uganda.

"I read it has been incompetent - but not in Africa. It has created bitterness - but not here in Africa. Here, his administration has saved millions of lives."

The Bush legacy on Africa has won support from Todd Moss, Senior Fellow at the Center for Global Development in Washington.

"I don't think it's too strong to say that President Bush's Africa policy is the most distinguished foreign policy legacy of the administration," he said.

"Although few expected such interest eight years ago, the president has clearly been deeply and personally committed to strengthening US - Africa relations."

More controversially, Mr Bush led the international community in declaring that the atrocities in Darfur amounted to genocide.

The US put increasing pressure on Sudan, but since Mr Bush refused to recognise the International Criminal Court in The Hague, refused to back its attempts to indict Sudanese President Omar al-Bashir.

The administration has also been active on the diplomatic front.

http://news.bbc.co.uk/2/hi/africa/7831460.stm

http://www.telegraph.co.uk/news/worldnews/northamerica/usa/2262217/Analysis-How-George-W-Bush-became-an-African-hero.html

Yet the most right-wing president in recent memory has become the unlikely darling of anti-poverty activists for his unsung efforts to help Africa.

Under Mr Bush's leadership, America is firmly among the countries who Oliver Buston, a prominent campaigner specialising in tracking the G8's promises, calls the "good guys".

Mr Buston places America among the G8 nations doing everything possible to redeem the Gleneagles pledge on raising aid budgets.

In the last year of Bill Clinton's presidency, America's direct bilateral assistance to Africa was only Pounds 700 million. Mr Bush has almost quadrupled this sum.

Combating Aids once played virtually no part in America's development policies. Mr Bush has established the biggest fund ever devoted to fighting an epidemic.

The President's Emergency Plan for Aids Relief, funded to the tune of Pounds 7.5 billion, is paying for hundreds of thousands of Africans to receive the life-saving drugs which hold Aids at bay.

Mr Bush has also made America the biggest single donor to the Global Fund for Aids, tuberculosis and malaria, contributing one third of its Pounds 5 billion.

No other leader has given as much money to the World Food Programme as Mr Bush. America now provides about half of all the emergency food aid distributed across the globe.

Trade not aid. Why am I saying that while Riversider promotes welfare for African states?

George W increased trade with African countries. He also helped provide necessary drugs and aide.

You can't expect a Country or Continent afflicted with famine, war & AIDS to not need some help.

Got it, RS. You're not against hedonics, you just believe that it's being over-applied in a way that under-states true inflation.

So current US GDP is around $14.5 trillion. In 1990, it was $5.76 trillion (not inflation-adjusted). CPI was at 130 vs. 218 now. As such, these people believe that of the 4.72% average annual growth in prices, 2.62% has been due to inflation, and 2.05% has been due to productivity improvements.

What's your breakdown of inflation vs. productivity on this 4.72%?

"Gold is speaking loud and clear.
An inflation storm is right around the corner. You don't prepare for the storm AFTER it hits. Might be hard for you peanut bear brains of yours, but you midgets should think about that"

and 10 months ago
"First the Gold...then the stock market...now Oil. Breakouts left and right.

Can you smell it??? No, not my fart..but inflation my friends"
http://streeteasy.com/nyc/talk/discussion/15434-can-you-smell-inflation

You know the funny thing with rain dances is they always worked........you know why?

They didn't stop dancing until it rained.

Inonada, I would defer to people who actually calculate the numbers. The only person I know that does something like this is John Williams of Shadow Government Statistics.

truthskr10,
You are one of those typical dumb investors out there. Truly dumb and ignorant.
Beside gold, Dr. Copper is screaming at you.

http://www.finviz.com/futures_charts.ashx?t=HG&p=w1
Almost back to new highs. Who's buying all these 'economic' sensitive material? No you dumbass, not the housing speculators. Take another guess.

How's it feel to be wrong for so long?

Copper is more of an industrial metal, and tied to construction. Can't see it with copper. It's been going up recently more on supply fears(i.e. strikes)

http://finance.yahoo.com/q/bc?s=SHIAX&t=5y&l=on&z=l&q=l&c=

Yields on junk bonds continue to consolidate. If things are as bad as you bears claim, then why troubled companies paying to borrow? We're truly living in a period of 'TOO MUCH MONEY CHASING TOO FEW OPPORTUNITIES'.

"Copper is more of an industrial metal, and tied to construction. Can't see it with copper. It's been going up recently more on supply fears(i.e. strikes)"

350% off the lows? I thought we are still in a deflationary spiral?

China & Germany?

China has been building empty sky-scrapers. To expect that to continue sounds like a bad bet. We had an over-building of real estate. Can't see real estate construction leading us out of a recession. Unless Obama convinces congress to undertake a stimuls where we build bridges, rail-roads, schools, new power grid, etc I would not be a buyer....

Oil, Food & strategic metals sounds better.

Huh yuh yuh yuh ..Huh yuh yuh yu ...Hu yuh yuh yuh

"Huh yuh yuh yuh ..Huh yuh yuh yu ...Hu yuh yuh yuh"

My exact point. Typical of an idiot that have no words.

Sure thing rain man.

Dad lets me drive slow on the driveway every saturday.... yeah....every saturday....yeah 'course the seats were originally brown leather now they're a pitiful red....yeah....10 minutes to Woppner.

Riversider: "Inonada, I would defer to people who actually calculate the numbers. The only person I know that does something like this is John Williams of Shadow Government Statistics. "

The government numbers say that we as a country produce 150% of what we produced back in 1990 in terms of real GDP. Meanwhile, population has grown 24%. That means per-capita productivity is now 26% higher than what it was in 1990. About a 1% annual per-capita improvement came from productivity gains (think of all the technological and other sorts of improvements we've had since 1990).

Here's what your data guy thinks happened with GDP:

http://www.shadowstats.com/alternate_data/gross-domestic-product-charts

According to the chart, he says real GDP averaged -1% a year since 1990. He's saying that we as a country produce only 80% as much real value as we used to back in 1990. On a per-capita basis, that amounts to us producing 64% of that which was produced in 1990 (a loss of a full third of our per-capita productivity), each year producing 2% less than the prior year for 20 years.

Do you actually believe these numbers? I don't know if you were around back in 1990, but I was, and I can surely tell you that it does not at all feel like the average person is only producing 2/3rds of what they produced back in 1990.

Tough to say, I'd need to think about it....say if a buick contains 70% non u.s. parts. Also since 1980 the product mix of our economy has changed(more service sector I'd think).... Clearly you don't agree.. It wouldn't shock me if it were true..

The fact you got old and living on welfare shouldn't color the actuality of great progress in the US economy.

In 1990, the hottest car was an Acura nsx with 270hp. Competing with the likes of 911t

My 2007 Honda minivan, 276hp, DVD players and 24 cup holders. Blowing by nxses while watching Dora. Nuff' said.

In 1990, w67th's role model, Paul Reubens aka Pee-Wee Herman, was visiting adult theaters and suffering the embarrassment of being arrested. Fast-forward to 2010, w67th's got so much available to him at his fingertips while driving that Honda minivan with the kids in the back watching Dora that it'd make ole Pee-Wee blush. Nuff' said.

Booya -- I'm out w67th-ing w67th himself. I sense a disapproval post from printer coming...

Seriously, "I'd need to think about it"? What's there to think about?

that's rent stablizer's codespeak for i'm trying to find a you tube to change the subject because you have suceded in making me look like the complete fool that i am.

I think there's a Pee-Wee YouTube coming. I'll go with Tequila.

ericho....didn't you buy an apartment in 1990?

ericho... is just the perma- financial tool... and no I have no idea what being "wrong" is... but tell us PH bubble buyer, and equity bull for 2 yrs straight.... WOW, I thinkz the equity mkt did a sideway move (me moving my hands left to right, with awkward facial expression).....

Inonada... masturbation in a gay theatre.... thatz allz you gotz....??? ? COME on....

Girlz: Pee-wee and the Playhouse Gang arrive on Broadway this fall. I'll def be there.

http://www.peewee.com/broadway/

Hedonically adjust that.

That Pee Wee, always the hedonist. Group outing?

Oh W64th, if you ever look and stop acting like a complete idiot.
Currently PH are going for $640 psf. The average psf sold is $681 based on Streeteasy's number. So, the average owners are down a measly 6%. That might be an arm and leg for a guy living with his parents like you.

15 months ago i drew the relationship between the stock market and housing and you bears call it hogwash. Now whenever the market takes a small hiccup you use it as a mean to forecast housing decline.
WTF! You think this is burger king 'have it your way'?

I just looked at two car models I have bought in the past, one back in the early 90s and a second several years ago. Keeping the models outfitted as close to what I bought I see that the annual price increases for both has been roughly 3% per annum, which is quite good. At first glance it does appear that automobile prices have been one of those items which have not increased at high rates.

The numbers appear less rosy when you consider how much extra equipment buyers often or at times have increasingly felt is basic necessity, leather seats, heated seats, four wheel drive, i-pod connectivity, GPS, larger engines....

When one considers how tastes and definitions of what is a middle class car has changed over the years, it's no wonder Americans have not been saving and why so many lease cars or have taken out home equity loans on cars they can't otherwise afford.

Do you think any of that 3% is improvement in the "base" car, or do think it is all inflation?

You're very argumentative...
I'll give you a real world answer. A car breaks down, it needs to be replaced and a check is written. If you re-read my prior post, you'll note I kept options similar. If the new model is three inches longer, weights 100 pounds more and has 15 extra horse power, I view that as a wash and of little practical importance.

Actually, in some cases cars have had negative improvement. Toyota undertook a massive program to "de-content" cars some years ago reducing the number of parts involved when building say, a Camry or Corolla than in years past. In some important ways, Today's Camry is less well made than the one it replaced in the late 1990's. You would not notice it at first glance, but a mechanic will attest and in fact they don't hold up as well as they age. You also see less old Camry's and Corollas than you used to. To keep those price increases down to 3%(more a reaction to Korean imports than improvements in technology) they had too look for ways to cut costs. To make money auto companies rely on marketing to convince everyone of the need for heated sets and video screens in the back of the mini-van.

So maybe the inflation rate isn't 3% but 4% if one can extrapolate from Toyota..
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This rapid reversal of Toyota’s fortunes indicates that its reputation as an unquestionably logical choice in car brands was already wearing thin. Having refined the most efficiency and quality-focused manufacturing system in the industry by the late 1980s, Toyota responded to currency fluctuations in the early 90s by cutting costs on the design-end of the business.

According to the company’s logic at the time, a “lean” manufacturing operation couldn’t afford to build “fat” or “overquality” products in the face of intense pressure on profitability.

The result was 20 years of decontenting, in which Toyota reduced the cost and quality of its products, while coasting on the reputation of its most famously “fat” products of the late 80s and early 90s. The fact that this occurred as America’s domestic automakers were facing their own major deficits in quality and reputation allowed Toyota to build on its reputation without incurring the high costs of overquality.

In short, Toyota’s fall from grace was decades in the making, and in retrospect, the real surprise is that Toyota maintained its perceived advantage for as long as it did. Millions of dollars are won and lost in the car business by balancing cost and scale against quality and reliability, and Toyota is no exception. Only the longevity of its reputation with consumers makes Toyota’s decline so noteworthy.

http://blogs.reuters.com/great-debate/2010/02/09/toyotas-exceptionalism-came-back-to-bite/

It's not argumentative when I ask you if you really believe conclusions inferred from positions you espouse, that's just a discussion.

OK, so you think car prices for a "base" car rose at 3% while value dropped by 1% annually.  That would mean that if I gave you a choice of $28K 2010 model vs. a $35K 1990 model with zero miles on it today, you'd equally consider buying both and wouldn't think the 1990 model being priced $7K higher was a ripoff?

Also, have you thought further about whether you believe the Shadow Stats numbers you were deferring to that say the per-capita productivity of this country was 50% higher in 1990 than it is today?  Where do you stand on that?

I think a time capsuled 2010 model year BMW 3 series may very well represent better value than a 2013 3 series. Certainly a late 1960's muscle car represented a better product than the 1975 variant. But by an large people don't want old cars with no miles, but new ones. This is a function of style and Kelly Blue book, which depreciates an older car for no reason other than the virtue of model years gone by. There are many examples of older model cars being better vehicles than the restyled updated version.

And I would take a time capsuled 1990 Toyota Supra(1990 price) in a second and would not view it as inferior technology.

OK, so you think car prices for a "base" car rose at 3% while value dropped by 1% annually.

I know.. sounds counter-intuitive and inefficient pricing, but what if I told you as a buyer the older car would last 3 years longer than the newer one. Newer example. Today BMW outfits their cars with turbos. But turbos don't last as long as normally aspirated cars and if the unit malfunctions is very expensive to fix and/or replace. Will leave it to you if a Turbo version of a car represents better value/technology. Personally I prefer a slightly a larger engine to a small turbo'd engine... and the former cost less.

As far as shadow stats, he's the highest profile person providing Pre-Boskin statisics. MY view is hes adding something very valuable to the debate. When the gov't first changed over it was very controversial, but over time people forgot and many probably don't understand the discussion.

As I said earlier I don much care for Pre-Boskin CPI. Not every country calculates CPI the same, so to argue the U.S. gov't is doing this better is debatable.

R u talking about cars or your old body? Dude your 1970 asbestos laden 100x carbon footprint rear wheel drive muscle car compared to my 25mpg four wheel 480hp twin turbo, with sat navigation, 10 air bags, 195mph top speed.

Flmaozzzzzz. By your logic, a rotary phone is ALWAYS better than a newer phone. By the same logic, when your children get sick cause of some minor infection, chopping the limb off is better than seeking better medicines! F'k you are dumb as rocks. Damn I am hung over and dehydrated.

Drop a 1982 Western Electric touch tone on the floor vs a newer model.....