[Outcast_Searcher]

$this->bbcode_second_pass_quote('Hawkcreek', '')$this->bbcode_second_pass_quote('marmico', 'S')hadowstats and Chapwood are nutters. 1300% inflation since 1980. LOL.
View some 2016 consumer energy prices relative to 1980.
https://www.eia.gov/outlooks/steo/realprices/
Electricity (cents per kilowatthour) from 5.4 to 12.6 or 135%.
Natural gas (dollars per thousand cubic feet) from 3.7 to 10.1 or 175%.
Regular gasoline (dollars per gallon) from 1.25 to 2.15 or 75%.

[donstewart]

quality adjustments
The factor that is most relevant to the 'cost of living' is the 'cost of making a living'. Driving to work is a cost of living in most jobs in most places in the United States. Whether the car has no radio, a good radio, or a super-deluxe sound system is not really relevant. Likewise, in 1950 the median household in the US was satisfied with around 1800 square feet, which furnished shelter. The fact that many Americans now think they need 4000 square feet does not furnish shelter which was not available in 1950.

Charles Hugh Smith has done some work figuring out how the basic cost of living has been increasing over the last couple of decades. His cost increase numbers are generally in line with Shadowstats. I'm not willing to search Charles' postings to find it. If you are interested, you can look.

The point is that many people in the US now need to have their basic cost of living subsidized in ways that was not true decades ago. Consequently, we may say that their standard of living has fallen. Whether they have toys like smart phones is basically not relevant.

Don Stewart

[onlooker]

I think two factors attest to this generally downward trend in the standard of living, First percentage of debt carried by typical households. This has been going steadily up. Second, is the fact that unlike in the years just after WWII, whereby only one wage earner was required to support a household above poverty levels, now two are needed

[donstewart]

@onlooker
I will relate a conversation I had with a University professor from a college in a small town. Like most small towns in the US, the town is economically depressed. The Board of the college challenged the economics department to develop some 'economic development' plans, especially to help poor people.

The unspoken assumption is 'to make poor people rich enough to live here without government support'. I pointed out that there are two strategies. The first is to figure out a way for poor people to make more money. (Good luck with that. Donald Trump is trying.). The second is to figure out a way for poor people to live comfortably without much in the way of government support, by adopting more third world strategies. For example, letting them construct their own houses a piece at a time and not hassle them with building codes and restrictive zoning.

The professor was astonished. Of course, he just assumed that his charge was the first strategy. He was briefly enthused about the second strategy, and could understand all the ways that the government increases the cost of living for poor people. But as we continued to talk, he began to recognize the cold reality. The government officials would like nothing better than to move the poor people into the next county or the next state (in the good old days, it was 'send them to California').

Don Stewart

[donstewart]

Charles Hugh Smith on inflation
http://www.oftwominds.com/blog.html
This is today's blog post. Note the skyrocketing cost of college and medical care, as compared to an automobile. Also note the declining wages of those with bachelor's degrees.
Don Stewart

[onlooker]

I think Don, the dollar being taken off the gold standard paved the way for inflation. Also, lending creates spurts of boosted demand also raising prices. A bloated Govt creates extra fees, fines and taxes for the average person. Additionally, every human need and want seems affixed with a price tag

[Outcast_Searcher]

$this->bbcode_second_pass_quote('donstewart', 'C')harles Hugh Smith on inflation
http://www.oftwominds.com/blog.html
This is today's blog post. Note the skyrocketing cost of college and medical care, as compared to an automobile. Also note the declining wages of those with bachelor's degrees.
Don Stewart

[GHung]

$this->bbcode_second_pass_quote('donstewart', 'q')uality adjustments
The factor that is most relevant to the 'cost of living' is the 'cost of making a living'. Driving to work is a cost of living in most jobs in most places in the United States. Whether the car has no radio, a good radio, or a super-deluxe sound system is not really relevant. Likewise, in 1950 the median household in the US was satisfied with around 1800 square feet, which furnished shelter. The fact that many Americans now think they need 4000 square feet does not furnish shelter which was not available in 1950.

Charles Hugh Smith has done some work figuring out how the basic cost of living has been increasing over the last couple of decades. His cost increase numbers are generally in line with Shadowstats. I'm not willing to search Charles' postings to find it. If you are interested, you can look.

The point is that many people in the US now need to have their basic cost of living subsidized in ways that was not true decades ago. Consequently, we may say that their standard of living has fallen. Whether they have toys like smart phones is basically not relevant.

Don Stewart

[Outcast_Searcher]

$this->bbcode_second_pass_quote('onlooker', 'I') think two factors attest to this generally downward trend in the standard of living, First percentage of debt carried by typical households. This has been going steadily up. Second, is the fact that unlike in the years just after WWII, whereby only one wage earner was required to support a household above poverty levels, now two are needed

[GHung]

"Pretending like first world "I don't have all the money I WANT" equates to widespread poverty and doom is simply not credible."

What it will equate to is even more unreasonable expectations when all of this goes to shit. Admit it or not, we are running out of Planet to exploit, even as more people feel entitled to consume more, and as our economy has become more locked into increasing levels of consumption, collectively and as individuals.

[onlooker]

http://www.marketwatch.com/story/americ ... 2015-12-09
$this->bbcode_second_pass_quote('', 'H')owever, the share of income held by middle-income families has plunged to 43% of households in 2015 versus 62% in 1971; lower-income households have remained stable (at around 9% in 2015) while the share of income held by upper-income households has surged to 49% in 2015 from 29% in 1971. (The demographic and income data were derived from the government’s nationwide and nationally representative “Current Population Survey, Annual Social and Economic Supplements” (or ASEC), which serves the basis for the U.S. Census Bureau reports on income and poverty.)

“The hollowing of the American middle class has proceeded steadily for more than four decades since 1971,” researchers Richard Fry and Rakesh Kochhar wrote. “Each decade has ended with a smaller share of adults living in middle-income households than at the beginning of the decade, and no single decade stands out as having triggered or hastened the decline in the middle.” That said, the last 15 years have been particularly brutal for the middle class: In 2014, the median income of these households was 4% less than it was in 2000. What’s more, their median wealth — that is, their assets minus their debts— fell by 28% from 2001 to 2013, due in part to the housing market crisis and the Great Recession of 2008.

[GHung]

Yeah, Squill, the toilet made my point better. Besides, my daughter-in-law is a total clean freak.

As for those structural costs, they increase as the costs of maintaining growth go up. Our property taxes have actually gone down somewhat because I challenged them; forced the county to justify previous increases, which they couldn't do. Our vehicle taxes have gone down because we keep vehicles longer and the taxes drop as they age. Point being, those structural costs can be mitigated somewhat, but not if you are 'driven' to move into a bigger house, drive newer cars, etc. Insurance is the one area that I consider extortion, but, again, they go up because the costs of claims (many of which could have been avoided) go up. Industries also have to pay for all of those intermediaries they employ; many who don't produce much of anything.

[Outcast_Searcher]

$this->bbcode_second_pass_quote('pstarr', 'L')ook above: housing inflation at %450+- for same period.

Yes, Iphone are cheap. Selfies are cheap. But those toys don't bring home the bacon

[dissident]

We actually have people in this thread defending hedonics adjustments. Wow.

Get a grip. Extra air bags don't justify the price increases and following this "logic" no products can ever be compared if they are from different periods (sufficiently removed in time as is the case here) since there will be some extra feature that was not there before. Therefore the concept of inflation is ill defined. What is ill defined is nitpicking fixation on irrelevant details. Since I can't buy an F-150 without all the new features it makes no difference that they are there. But the category of light pickup truck remains a valid one. Maybe if the F-150 could fly me to Jupiter, then it would be in a different category.

It's funny that land prices are never included in inflation calculations. Land is the only thing that does not get new features with time and municipal services (sewers, electricity, which are a type of value added to the land) are also "invariant". But so much effort is spent on adjusting prices of TVs (etc) to fictional values based on the number of gimmick features they have. This is outright fraud. The only price the TV has is the one in the store and not some concocted price by a government agency.

Another joke aspect of the official CPI is the inflation category weights. So food is always scaled by 0.13 as if the fraction of food costs in domestic budgets is an invariant. We are seeing around 7% food price inflation for many years now. This is a price doubling every 10 years. Wages do not inflate by 7% per year and, in fact, are falling in real terms for most people. So the fixed 0.13 weight is simply nonsense.