patrick.net

The Great depression spawned "the Greatest Generation"
The current depression has spawned "The lost generation"

Yet Bernanke considers him self a success, go figure.

indigenous says

Since 1933, inflation has increased 1,627.23%.  To calculate its decimal
equivalent you need to move the decimal point two places to the left.  So
1,627.23%=16.2723 in decimals.  This means that what cost $1.00 in 1933
costs approximately $16.27 today

So what? If wages increase faster, then you're ahead. The only thing that matters is real wages. The nominal cost of a gallon of milk is really not important. I don't care that it costs $100 as long as I'm making $10,000,000 per year.

tatupu70 says

So what? If wages increase faster, then you're ahead. The only thing that matters is real wages. The nominal cost of a gallon of milk is really not important. I don't care that it costs $100 as long as I'm making $10,000,000 per year.

Do you think that has occurred?

ost of a new house 1933: $5,750.00 (equivalent to $93,565.72 in 2010)

Is 94k the average price of a house?

Cost to rent a house in 1933: $18.00 per month (equivalent to $292.00 in 2010)

Is 292 the average price to rent a house?

Brand New Plymouth in 1933: $445.00 (equivalent to $7241.17 in 2010)

is 7241 the avg price of a car?

Gallon of gas in 1933: 10 Cents (equivalent to $1.62 in 2010)

1.62?

Loaf of Bread in 1933: 7 Cents (equivalent of $1.13 in 2010)

1.13?

1 Lb. Of Hamburger Meat in 1933: 11 Cents (equivalent to $1.79 in 2010)

1.79?

Can of Campbell’s Vegetable Soup in 1933: 10 Cents (equivalent to $1.62 in 2010)

1.62?

Dozen Eggs in 1933: 5 Cents (equivalent to 81 Cents today)

81 cents?

Give me a break

The Professor says

So if milk went down to $1 a gallon you would want to make $100,000 a
year?

Way to miss the point entirely.

tatupu70 says

Way to miss the point entirely.

Right back at ya

OK--we're back to the same story again. You don't believe the inflation rate. Without going into every one of your examples, let me remind you again that the official rate is an AVERAGE. Some items have increased faster than the official rate, some slower.

And a quick search seems to show that your 1933 numbers may not be correct.

indigenous says

Right back at ya

You had a point?

indigenous says

It would seen irrefutable that inflation has increased more than the wages.

Wow--I would say it's irrefutable that wages have increased more than inflation.

In any event, the last 30 years or so have clouded the picture because the income/wealth disparity has gotten so out of hand. If you want wages to rise again, stop voting Replubican.

tatupu70 says

In any event, the last 30 years or so have clouded the picture because the income/wealth disparity has gotten so out of hand. If you want wages to rise again, stop voting Replubican.

Dems or Reps are 2 sides of the same coin. They both spend too much Dems and Keynes, Reps and Monetarist

Yous disagree but the problem is a spending problem not political.

The one reason this depression, the Second Great Depression, feels better than the First Great Depression is technology.

Technology makes poverty more bearable.

indigenous says

Brand New Plymouth in 1933: $445.00 (equivalent to $7241.17 in 2010)

You could buy a car for 7k today that would blow a 1933 Plymouth off the track and be 10 times safer.

indigenous says

The reason the spending went up was because of Tip O'neil was a lying sack of
shit. Just like the reason spending went down in the Clinton (another lying sack
of shit) administration was because of Gingrich .

And that logic doesn't disturb you in the slightest?

indigenous says

The result of the 1930s policy was the 1930s

I can play this game too:

And the result of the 1980s spending boom? The 1990s.

bmwman91 says

I'm just curious, but what is the main point that is being argued in here? Is it that inflation has blown up the cost of living and ruined everyone?

I disagree, if that is the case. A lot of people argue that housing, in particular, has blown away anyone's hope of affording it in just the last 30 years. My parents bought a house in 1981, and from talking to them, the house that my wife and I just purchased cost 7.4x as much as theirs. My wife's and my combined income is 7.2x what theirs was at the time. Mortgage interest rates today are 24% what they were then (3.625% now versus 15% then). As far as I am concerned, the "housing has blown-away what any normal person can afford" argument holds no weight. People are cash-strapped, DEFINITELY, but as far as I can tell that is largely a byproduct of over-consumption of credit.

Your example is but one data point. You should also clarify your example to show its validity:

Are you and your wife similarly educated to your parents?

Are you and your wife in similar professions as your parents?

Are you and your wife of a similar age as your parents when they purchased their house?

Do you and your wife have a comparable level of job security as your parents?

Is the house you are buying a true comp to theirs? Not just similar in size, location, and the other usual criteria but also as it was . If you bought the same house with an additional 32 years of wear and tear you need to factor in the expense of upgrades to bring the two in line.

How about the down payment and interest rates? Did you take out the same type of loan as your parents?

Can you anticipate similar appreciation and the possibility of refinancing at a lower rate as your parents did?

I had numerous family members who went through the depression of the 30's. There is absolutely no comparison between then and now. Back then for example there were hardly any safegaurds in place. If your bank went under then you instantly lost all your money. If you were out of work you instantly had no income as there was no such thing as unemployment insurance.

I'll just put it this way: To this day those in my family who are still alive from that generation still keep their fridges and freezers absolutely stuffed full of food as well as all of the pantries and basements too. Things were so bad back then that even food was in some cases a scarcity.

The recession of the 2000's was and is nothing in comparison.

tatupu70 says

So what? If wages increase faster, then you're ahead. The only thing that matters is real wages. The nominal cost of a gallon of milk is really not important. I don't care that it costs $100 as long as I'm making $10,000,000 per year.

Obligatory:

I am not going to try to make an argument that housing is not expensive, because it is. However, it is not "out of reach of anyone that works for a living" as some people say. It is going that way, and will do so for a good few years probably, and then something will break again. However, I realized that sitting on the sidelines forever isn't the only solution. There is more to it than just finances, and I have a lot of things that I want to do with my time and space that are either difficult or impossible in an apartment. I'd rent a house if it cost less than owning one, but that is not the case around here unfortunately.

edvard2 says

I had numerous family members who went through the depression of the 30's. There is absolutely no comparison between then and now. Back then for example there were hardly any safegaurds in place. If your bank went under then you instantly lost all your money. If you were out of work you instantly had no income as there was no such thing as unemployment insurance.

I'll just put it this way: To this day those in my family who are still alive from that generation still keep their fridges and freezers absolutely stuffed full of food as well as all of the pantries and basements too. Things were so bad back then that even food was in some cases a scarcity.

The recession of the 2000's was and is nothing in comparison.

Yup. By today's standards my grandparents looked like "hoarders", but they lived through the great depression and had their reasons. One thing that I noticed about them was that they rarely, if ever, complained about any sort of inconvenience in life, whereas people today go nuts if they can't find 3G data coverage while waiting in line for a whopping 5 minutes at Starbucks.

I think a crucial thing missing from this argument if I were to even entertain that the depression and recession are at all related ( which they aren't) and the argument is over house prices, well most of the country is still pretty affordable. For example where my parents live in NC, they own acres of land, a 2 story house, a large shop, and a pool. The value is about $150,000. $100,000 houses are still common in their area. Its just that certain areas of the country are still grossly more expensive than others.

tatupu70 says

And that logic doesn't disturb you in the slightest?

You mean the logic that shows the cause. Uh let me think about that, oh ok, Nope none what so ever

indigenous says

You mean the logic that shows the cause. Uh let me think about that, oh ok,
Nope none what so ever

OK--that's what I figured. As long as it fits your preconceived notion, then it's right. Fit the data to your view, not the other way around, is how you operate, right?...

tatupu70 says

OK--that's what I figured. As long as it fits your preconceived notion, then it's right. Fit the data to your view, not the other way around..

Whatcha talkin bout Willis

indigenous says

ost of a new house 1933: $5,750.00 (equivalent to $93,565.72 in 2010)

Is 94k the average price of a house?

population growth.

/thread

tatupu70 says

Wow--I would say it's irrefutable that wages have increased more than inflation.

Yeah, especially if we use those gigged CPI metrics cooked up by that coward Boskins in a way which significantly understates the inflation that is so readily perceptible to the end consumer.

http://www.multpl.com/case-shiller-home-price-index-inflation-adjusted/

Notice how house prices increased dramatically following federal intervention in the mortgage market, and how CPI continued to increase even as the housing component fell.

indigenous says

Ok then what about these numbers?

Cost of a new house 1933: $5,750.00 (equivalent to $93,565.72 in 2010)

Cost to rent a house in 1933: $18.00 per month (equivalent to $292.00 in 2010)

Brand New Plymouth in 1933: $445.00 (equivalent to $7241.17 in 2010)

Gallon of gas in 1933: 10 Cents (equivalent to $1.62 in 2010)

Loaf of Bread in 1933: 7 Cents (equivalent of $1.13 in 2010)

1 Lb. Of Hamburger Meat in 1933: 11 Cents (equivalent to $1.79 in 2010)

Can of Campbell’s Vegetable Soup in 1933: 10 Cents (equivalent to $1.62 in 2010)

Dozen Eggs in 1933: 5 Cents (equivalent to 81 Cents today)

What were median wages back then?

bmwman91 says

What were median wages back then?

The average American’s annual income in 1933 was $1,550.00. Today, that would be the equivalent of $25,218.00. According to the last Bureau of Labor Statistics report for 2009(4), the average American’s annual income was $28,592.00 (mid range between highest and lowest by State for 1 person). This may seem like we’re ahead of the game compared to the Great Depression. However, when you consider that the lowest bracket of income tax was levied at 4% in 1933 compared to 15% in 2010, you can see that we are almost on par. But you also must consider the plethora of other taxes and deductions that have since been siphoned out of the average American’s paycheck. Contemporary sales taxes and compulsory enrollments like mandatory insurance (both auto and health) must also be added into the equation to get a better gauge as to where we are now compared to days gone by.(5)

indigenous says

The average American’s annual income in 1933 was $1,550.00. Today, that would be the equivalent of $25,218.00.

Yet, the median income is only about $46k/yr even though workers today are easily 10 times as productive due to technology. Think about that.

indigenous says

Contemporary sales taxes and compulsory enrollments like mandatory insurance (both auto and health) must also be added into the equation to get a better gauge as to where we are now compared to days gone by.(5)

You're leaving out cheap credit as a stopgap, which was not available to the average slob in the thirties.

indigenous says

The average American’s annual income in 1933 was $1,550.00. Today, that would be the equivalent of $25,218.00. According to the last Bureau of Labor Statistics report for 2009(4), the average American’s annual income was $28,592.00 (mid range between highest and lowest by State for 1 person). This may seem like we’re ahead of the game compared to the Great Depression. However, when you consider that the lowest bracket of income tax was levied at 4% in 1933 compared to 15% in 2010, you can see that we are almost on par. But you also must consider the plethora of other taxes and deductions that have since been siphoned out of the average American’s paycheck. Contemporary sales taxes and compulsory enrollments like mandatory insurance (both auto and health) must also be added into the equation to get a better gauge as to where we are now compared to days gone by.(5)

Next question. Are you arguing that people were better off back then?

I would like to know buying power of median salary by looking at price to income ratios for single family homes, as well as other stats like % of median income to pay for health insurance.

SFace says

I think average income and median income is being mixed. $1,550 does not make sense in 1933 when unemployment was 20%+ and rent was $18 a month average.

Median income is way lower in 1933 or we are mixing median with average with household/individual between 1933 and 2009. While median income is a 28K or so, average is closer to 45K.

In any case, it is no surprise housing price is higher. Housing eats up excess margins and is a function of accumulated wealth first, and income at the margins.

I don't know. To some extent this reminds me of talking about modern baseball players compared to players from the past. They were two different games

But I still don't see a reconciliation of much of this information, even with what you said housing prices should be lower along with food costs.

indigenous says

But I still don't see a reconciliation of much of this information, even with what you said housing prices should be lower along with food costs.

Globalization is also a factor now, much more than was then. Much of the rest of the world has pretty nasty income to living expense ratios, and America is sliding in that direction. We were much more of an isolationist nation prior to WWII. Just like how baseball is a different game now, America is a different nation now.

bmwman91 says

Globalization is also a factor now, much more than was then. Much of the rest of the world has pretty nasty income to living expense ratios, and America is sliding in that direction. We were much more of an isolationist nation prior to WWII. Just like how baseball is a different game now, America is a different nation now.

That infers that this is a problem to the U.S. In reality it is not though benefits of comparative advantage.

An example to how the isolation thing does not work as whoever practices it does not benefit from comparative advantage is China. Once the most advanced nations in the world they decided to build the great wall to create isolation and languished as a result, only recently did they start recovering because they re instituted free trade and comparative advantage.

bmwman91 says

Are you arguing that people were better off back then?

But the CPI refers only to the consumer, not people. The American people are clearly better off in many ways (though, arguably, less interesting and much less discerning); American consumers? No, not so much.

When was the last time you heard a politician refer to people as people? We are either taxpayers or consumers.

The Professor says

If your point was rich people don't care about the price of milk, you made it.

Didn't know you were such a troll professor.

tatupu70 says

Didn't know you were such a troll professor.

Be nice, Tatupu70.

My thinking on this subject is that the costs have been increased by government regulations and taxes. I can't find the numbers but have read in the past that there are the same number of worker in farm bureau now as there was in the 1920s but now there is a fraction of the number of farms. Or the energy department cost I think 20 billion per year who's stated purpose was to lessen the U.S. dependency on foreign oil. Both cases are laughable.

Technology decreases the cost so if any thing government burdens have made up for the difference plus some as indicated by the numbers.

This a theory not a fact and perhaps you lefties are correct and the numbers in the article are bogus?