Ohio miners forced to attend Romney rally without pay...
#81
(09-13-2012, 02:31 AM)Jester Wrote: They exist to do nothing more than provide support for conspiracy theorists who want to think the government is cooking the books about everything.
You often resort to this method of claiming "tinfoil" hat -- but, really? You think William Hunt "Bill" Gross (the co-founder of PIMCO) is a conspiracy theorist? The BLS is run by whom? You really need to stop following Krugman -- he really seems more of a partisan shill -- although, I will credit him for being critical of most anyone (except himself).

Why Inflation Seems To Have Sharper Teeth Than the CPI Suggests - WSJ While the gist of that article is that perception is not reality, I think the opposite for the exact same reasons. When an average desktop computer increases in price by 20% and they count it as a decrease because this one is 30% faster. The fact is, if my computer dies and I need a new computer, I need a computer. I could buy the obsolete model, but I would be screwing myself out of a year or two of future utility. Same with autos -- when you buy the same average model for the same utilitarian reasons and it costs more -- that is inflation. Sometimes, like with wrist watches, a commodity is a commodity and doesn't really change so much year over year. Then, you can measure apples to apples.

The fact is (or at least my analytical perspective is)... The books are cooked to make the government look good.

Quote:So, growth was high in 2008-2009, and should be slowing down now? Because that's what the graph tells me, if oil is what's driving all this...
Growth was high in the summer of 2008, until we hit the economic ceiling, and it contributed to the destabilization of the markets. The weak link was a market predicated on growth, so in that case, it helped to pop the real estate bubble. A bubble built by reckless borrowing, and ... a monetary policy which persistently attempted to keep short-term real interest rates low that eventually...
”There are more things in heaven and earth, Horatio, Than are dreamt of in your philosophy." - Hamlet (1.5.167-8), Hamlet to Horatio.

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#82
(09-13-2012, 02:59 AM)kandrathe Wrote: You often resort to this method of claiming "tinfoil" hat -- but, really?

Yes, really. Stop linking us to people wearing tinfoil hats, and I'll stop telling you what they are. Or do you actually believe that the US economy has been shrinking, year on year, since 1990, to the point where it's now poorer than most Latin American countries? That an apple bought for a dollar in 1990 now costs five dollars?

Quote:You think William Hunt "Bill" Gross (the co-founder of PIMCO) is a conspiracy theorist?

Well, his fund was holding about 35% US treasuries until earlier this year, so, if he actually believed those numbers, he needs to have his head examined. (Now it's all the way down to 20-ish%, which is still completely insane, if you think US inflation is and has been 10% annually, and will be even higher...) It's one thing to predict inflation. It's another to believe you're living in it, it's just being somehow hidden from you by the government. But it's something else entirely to put your money on it - and he hasn't.

So, no, I don't think he's a conspiracy theorist. I think he's a self-interested blowhard, like everyone else on wall street kvetching about inflation. It's not THEM who are unemployed.

Quote:The BLS is run by whom?

A bunch of wonkish statisticians and econ quants? Who do you think runs the BLS? Or, for that matter, who works at MIT? Or Google? Just how far does this conspiracy reach?

Quote:Growth was high in the summer of 2008, until we hit the economic ceiling, and it contributed to the destabilization of the markets. The weak link was a market predicated on growth, so in that case, it helped to pop the real estate bubble. A bubble built by reckless borrowing, and ... a monetary policy which persistently attempted to keep short-term real interest rates low that eventually...

What is the "economic ceiling"?

The price of oil tracks the crisis almost precisely - in the wrong direction for an oil argument. The high water mark for oil prices marks the peak of the bubble, and the low water mark the depth of the trough. Isn't that the precise opposite of what should happen if oil prices are driving this pattern? The alternative, which seems much more reasonable to me, is that it's the economy that's driving oil prices, not the other way around...

You can't switch horses in midstream. If oil is carrying the business cycle, then it's oil. If the business cycle is a monetary phenomenon, then it's money. If it's both, they need to be modelled together somehow. It can't be whichever is more convenient for the explanation.

-Jester
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#83
(09-13-2012, 03:16 AM)Jester Wrote: You can't switch horses in midstream. If oil is carrying the business cycle, then it's oil. If the business cycle is a monetary phenomenon, then it's money. If it's both, they need to be modeled together somehow. It can't be whichever is more convenient for the explanation.
Why can't oil price be both the cause of economic stress, and then affected by the resulting crash in demand for goods and services? The issue is that oil (energy) is intrinsic to the operation of the system -- the economic engine stops when the price of oil begins to make profit equal or less than zero (the ceiling). A crash occurs, until confidence (price stability) in the economy is restored. Then we begin recovery again, until demand drives prices back up above the tipping point. Monetary policy (zero interest rate) is just the foot on the accelerator pressing it all the way to the floor. (as opposed to QE, which is like dumping a gallon of Jack Daniels** in the tank). And, like I've said before... Energy is multiplicative, and so it's price is far more important to the economy than any other commodity. The buyer, seller, and producer all require energy to enact the transaction.

** A gallon of JD we don't really own, and end up paying way too much for as well.

Ok... A model linking oil, and an easy money monetary policy... lemme see... The Petrodollar? Another side effect of a bust cycle due to the linkage of oil and US dollars is a loss of liquidity.

Also of interest in my quest... (Peak Oil)

"The peaking of world oil production presents the U.S. and the world with an
unprecedented risk management problem. As peaking is approached, liquid fuel
prices and price volatility will increase dramatically, and, without timely mitigation,
the economic, social, and political costs will be unprecedented. Viable mitigation
options exist on both the supply and demand sides, but to have substantial
impact, they must be initiated more than a decade in advance of peaking."

DOE, 2005, PEAKING OF WORLD OIL PRODUCTION: IMPACTS, MITIGATION, & RISK MANAGEMENT
”There are more things in heaven and earth, Horatio, Than are dreamt of in your philosophy." - Hamlet (1.5.167-8), Hamlet to Horatio.

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#84
(09-13-2012, 03:47 AM)kandrathe Wrote: Why Inflation Seems To Have Sharper Teeth Than the CPI Suggests - WSJ While the gist of that article is that perception is not reality, I think the opposite for the exact same reasons. When an average desktop computer increases in price by 20% and they count it as a decrease because this one is 30% faster. The fact is, if my computer dies and I need a new computer, I need a computer. I could buy the obsolete model, but I would be screwing myself out of a year or two of future utility. Same with autos -- when you buy the same average model for the same utilitarian reasons and it costs more -- that is inflation. Sometimes, like with wrist watches, a commodity is a commodity and doesn't really change so much year over year. Then, you can measure apples to apples.

This deserves its own explanation, although the BLS has a plenty good one themselves for anyone that cares to read it.

You say that, if a computer costs 20% more, but is 30% faster, that should be counted as an increase, not a decrease, because when "[you] need a new computer, [you] need a new computer." Because we need to compare "apples to apples."

So, let's do just that! Imagine apples* were like computers - every few years, they doubled in nutrition and tastiness.

When you went to the store, you still bought one apple, but you can't help but be blown away by how much nicer they are now than in the 1990s. Your "applications" - things like apple pie, or applesauce - are far more delicious today than before. Things that nobody would ever do with 1990 apples are now commonplace with 2012 apples, because of how much tastier and more nutritious they are. Apples are not only being served as main courses at top restaurants, but they're also being used as food aid, because it's just so efficient, now that so much nutrition can be packed into one little apple. The total caloric value of apples consumed in the world has increased a thousandfold, and the price per calorie has dropped by the same. Nobody but crazy reactionaries and culinary history hobbyists use 1990 apples anymore. If you found 1990 apples sold in a retail store, you'd laugh your head off - who on earth would buy them? You can literally rummage through the trash for old appleseeds - people will pay you to take them off your hands. Everyone agrees: 2012 apples are awesome, 1990 apples are not.

Now, tell me, should those apples be measured, "apples to apples," as the same item? No adjustment for quality increase? That is *precisely* what you are asking us to do. And it's crazy. And the longer we calculate in this bizarre way, the crazier it gets.

-Jester

*apples the fruit, not Apple Computers - although feel free to think of the two side by side if it helps.
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#85
(09-13-2012, 04:10 AM)Jester Wrote: So, let's do just that! Imagine apples* were like computers - every few years, they doubled in nutrition and tastiness.

When you went to the store, you still bought one apple, but you can't help but be blown away by how much nicer they are now than in the 1990s. Your "applications" - things like apple pie, or applesauce - are far more delicious today than before. Things that nobody would ever do with 1990 apples are now commonplace with 2012 apples, because of how much tastier and more nutritious they are. Apples are not only being served as main courses at top restaurants, but they're also being used as food aid, because it's just so efficient, now that so much nutrition can be packed into one little apple. The total caloric value of apples consumed in the world has increased a thousandfold. Nobody but crazy reactionaries and culinary history hobbyists use 1990 apples anymore. If you found 1990 apples sold in a retail store, you'd laugh your head off - who on earth would buy them? You can literally rummage through the trash for old appleseeds - people will pay you to take them off your hands. Everyone agrees: 2012 apples are awesome, 1990 apples are not.

Now I really want to eat an apple.
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#86
(09-13-2012, 04:10 AM)Jester Wrote: This deserves its own explanation, although the BLS has a plenty good one themselves for anyone that cares to read it.

You say that, if a computer costs 20% more, but is 30% faster, that should be counted as an increase, not a decrease, because when "[you] need a new computer, [you] need a new computer." Because we need to compare "apples to apples."

So, let's do just that! Imagine apples* were like computers - every few years, they doubled in nutrition and tastiness.
Tastiness adds no utility, so I will ignore it (other than possibly fueling my apple addiction). If they double in nutrition, I can eat half as many apples. The other half may spoil, but let's say I can store it until tomorrow. I can't defer my cost by buying (storing) half a computer, or car, or wrist watch. I wish I could convince my boss that buying the Quad Dual Core, ultra machine would increase my productivity eight-fold -- but alas, he's not that stupid.

Quote:Now, tell me, should those apples be measured, "apples to apples," as the same item? No adjustment for quality increase? That is *precisely* what you are asking us to do. And it's crazy. And the longer we calculate in this bizarre way, the crazier it gets.
Now, if we don't fantasize about a Moore's law applying to apple nutrition, but deal in the *real* world of apples, or wrist watches. Then an 1990 1$ apple is about as nutritious and filling as a $9.93 2012 apple. And, it's an apple that suffers a 11% annual inflation rate. A wrist watch still just tells me the time.

The productivity of a person at a 1990 computer does not follow Moore's law. Crazy, I know. A person, using a shovel or a computer, still works at the same speed -- assuming they aren't sitting around idle half their time (i.e. no processing bottlenecks). My car still mostly transports me between work and home -- even though it may be safer or have more features, it still should be measured by it's utility.

The real productivity increase in computing in really not the computing power (although for some applications power must be sufficient to make the application possible). Having spent 30 years implementing process improvements via technology, I'd have to say that the productivity improvements are in the application of technology to systems that were otherwise un-automated. For example, a simple addition of a credit card processing step in an online application process obviates the need for people(employees) in managing that financial transaction, and in the process speeds up the delivery to the applicant during that same online session. It's faster, less cumbersome, less expensive, and produces a better customer experience. The only losers are the employees who are no longer needed in the process.

Ok, another example; Auto dealers buying used cars. The old way was to have a (employee) buyer fly from Las Vegas to St. Louis to a live auto auction, inspect, and buy a bunch of cars and have them shipped to your dealership. The seller had all the cars in California, so had to ship them all to St. Louis for the live auction, and along the way they get dinged and beat up a little. The Auction has an army of workers to clean, detail, and repair your slightly beat up vehicles. With the advent of the internet, you can now have a certified inspector in California take digital HD photos of the vehicle, and write up a detailed inspection report. Post the vehicles to an online auction, the dealer (buyer) logs in, reads the independent inspection report, and bids on the cars. If he wins them, he arranges for transport. The vehicle only moves once, instead of twice. Their is no need to fly someone around the US to buy the cars anymore. And, the entire live auction business is un-needed. The only new job is the one of independent vehicle inspection, many jobs, transport costs, and travel costs are eliminated. The price savings are now reflected in the lower cost for used vehicles (but still subject to laws of supply and demand though).

Here is another analytical wonk looking at food inflation (as it relates to energy too). --> http://gregor.us/poverty/the-inflations-in-the-poverty/
”There are more things in heaven and earth, Horatio, Than are dreamt of in your philosophy." - Hamlet (1.5.167-8), Hamlet to Horatio.

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#87
(09-13-2012, 04:59 AM)kandrathe Wrote: The productivity of a person at a 1990 computer does not follow Moore's law. Crazy, I know.

Yes, it is crazy. Because unless you are just using a 1990 computer for simple letter typing or a very basic spreadsheet program, (hey nothing wrong with that, I use an old comp for such purposes) no one uses them anymore. Or it is supporting another legacy system that is not currently replaceable. But that's not what Jester was talking about I'm guessing.

Even places that takes computers in for donations can have a limit on how old the tech they can take in.

Quote: A person, using a shovel or a computer, still works at the same speed -- assuming they aren't sitting around idle half their time (i.e. no processing bottlenecks). My car still mostly transports me between work and home -- even though it may be safer or have more features, it still should be measured by it's utility.

Right...except can you explain to me how if I'm in a digital graphic arts industry, that uses such software like Photoshop, a 3D sculpting program, 3D animation\modelling program, digital film editing, that good ole win 95 beige box of mine can still be productively utilized, today?

I mean yes that box still is just as fast as the day it was bought. But please, tell me how I can make the latest version of Autodesk Mudbox even run on that thing. Because it's utility is still the same, it's just calculating zeroes and ones after all right.

Sorry to be blunt, but your computer logic might apply to -your- personal standard, but it sure don't apply to mine.

With that old beige box I have, I can create an animated shiny chrome 3d sphere bouncing on a checkerboard floor and background, and I would've been called a genius. If I was back in the early 80's. Last I checked the calendar has turned a couple of pages.
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#88
(09-13-2012, 04:59 AM)kandrathe Wrote: Tastiness adds no utility, so I will ignore it (other than possibly fueling my apple addiction).

You, sir, have a strange definition of utility. Do you not prefer tasty apples to not-tasty apples? Because that's what you're saying, economically speaking.

Quote:If they double in nutrition, I can eat half as many apples. The other half may spoil, but let's say I can store it until tomorrow. I can't defer my cost by buying (storing) half a computer, or car, or wrist watch.

No dice. Even buying a single unit, costs are a fraction of what they were, at equivalent quality. Hell, in computers, you can't even buy equivalent quality anymore - the cheapest feasible unit is overwhelmingly faster, better, smaller, an improvement in every conceivable way.

Quick experiment: I can buy a Dell inspiron desktop for a whopping $330, in 2012 dollars. That's no magic deal, that's retail price at a major store. If I saw those stats on a computer in 1990 (1.8 GHz processor? 500 GB hard drive? 2 GB of ram?) I would have crapped myself. To buy that kind of power in 1990 was impossible. Top of the line retail was a 386. (I have more power than that on by cell phone, by a lot.) If you tried to come as close as you could, you'd be looking at at barest minimum, $5000, in 1990 dollars. (Which, if we use your preferred inflation calculator, is about the price of a new Camry in 2012 dollars. Realistic? I think not. A 1990 Camry cost more than twice that.) Did there even exist a computer you could buy retail or $330 in 1990? (Or, using shadowstats, for just about $57?)

Quote:Now, if we don't fantasize about a Moore's law applying to apple nutrition, but deal in the *real* world of apples, or wrist watches. Then an 1990 1$ apple is about as nutritious and filling as a $9.93 2012 apple. And, it's an apple that suffers a 11% annual inflation rate. A wrist watch still just tells me the time.

Nothing would please me more than to deal in the real world of apples. It would demonstrate just how crazy those figures are.

You're telling me that we've experienced 893% inflation in APPLES since the 1990s? No bloody way. BLS says apples (specifically, a pound of Red Delicious apples) have increased by double in that period, 100% inflation in 22 years. Bureau of Agriculture tells me roughly the same thing, for producer prices, only slightly less than doubling.

Do you have a source that gives me a number even in the ballpark of Shadowstats' figures? I doubt you can for *any* commodity. Even gold (GOLD!), which is sky high right now, and dirt cheap in the 1990s, is only 370% higher. What ARE these commodities, that they supposedly cost ten times as much today as 1990?

Quote:The productivity of a person at a 1990 computer does not follow Moore's law. Crazy, I know.

So? The productivity of a person eating apples doesn't change with the price of an apple. Nor does it have to. This is irrelevant.

Quote:My car still mostly transports me between work and home -- even though it may be safer or have more features, it still should be measured by it's utility.

Surely I don't have to explain to a follower of Ludwig von Mises the serious fallacy of measuring "absolute" utility? Prices express values, and values are subjective. Your car's "utility" (to you) is expressed by what you'd trade it away for on one end, and what you'd trade away to get it back if it disappeared on the other.

Ask yourself: How many 1990 computers would someone have to trade you, to make you give up your 2012 computer? (Remembering you can trade them or sell them - so no "I only need one" explanations.) That expresses your subjective preferences, your "utility." I don't know about you, but I wouldn't trade at anything less than 50 to 1, and at that point, I'd be selling the things for scrap.

-Jester

Afterthought: Someone built a java applet to calculate inflated values, including an option to use Shadowstats' numbers! http://www.halfhill.com/inflation.html The good news is, his numbers are less crazy than the ones you're ascribing to him (477% inflation, 1990-2012, not 893% - I think you're compounding when you shouldn't be.) The bad news is, this is still completely nuts. Even using PURE GOLD as our commodity, doing the full Ayn Rand/Murray Rothbard, we've still only at 370% or so.
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#89
(09-13-2012, 05:53 AM)Jester Wrote: Do you not prefer tasty apples to not-tasty apples? Because that's what you're saying, economically speaking.
An apple only needs to be tasty enough to be palatable. A frugal (utilitarian) man would sell the tasty ones to Deebye, and buy meager ones for eating.

Quote:No dice. Even buying a single unit, costs are a fraction of what they were, at equivalent quality. Hell, in computers, you can't even buy equivalent quality anymore - the cheapest feasible unit is overwhelmingly faster, better, smaller, an improvement in every conceivable way.
Ok, what if I only need the power of a 1990 computer. I still need to pay today's price for a unit that is hundreds times more powerful than the one I need. I don't need to play donkey kong on my phone, I just need to make a phone call. The cell phone doesn't make me talk faster, although there is some added utility in it's mobility where mobility is needed.

Quote:Quick experiment:...
I could have used the power of a Cray XMP in 1985, but due to the price -- it was not pragmatic to do so. Yes, that level of power existed but was beyond practical use. If apples cost a years salary each, we wouldn't eat apples.

Quote:Nothing would please me more than to deal in the real world of apples. It would demonstrate just how crazy those figures are.

You're telling me that we've experienced 893% inflation in APPLES since the 1990s? No bloody way. BLS says apples (specifically, a pound of Red Delicious apples) have increased by double in that period, 100% inflation in 22 years. Bureau of Agriculture tells me roughly the same thing, for producer prices, only slightly less than doubling.
I made up those numbers for illustrative purposes. I'll trust your 100% inflation (doubling) over the 22 years. The price of food matters within the context of our ability to feed a family. If food increases 100% over 22 years, but wages only increase by 80%, then we've lost ground.

So now, these are real numbers (1990 to 2008) for the average middle class American family (Parents + 2 kids) adjusted for inflation;
  • Wages +20%
  • Housing costs +56%
  • Health Care +155%
  • College +60%
... and consider that participation in government Food aid has gone from under 20 million to 37 million over the same period (~doubled). I've charted real income for my metro area, and was surprised to find that median household income has actually dropped about $10,000 over the past few years, while the trends on inflationary goods and services continue rising at a consistent annual rate (e.g. about 6-7% for college costs).

[Image: US_real_median_household_income_1967_-_2010.jpg]

Quote:So? The productivity of a person eating apples doesn't change with the price of an apple. Nor does it have to. This is irrelevant.
Ah, it is so hard when we mix metaphors. You don't eat computers, or shovels, or watches. Their value comes from use. Whereas, the value in the apple is in the nutrition and sustenance it provides, and not in the physicality of the thing, such as in throwing. Unless I see some pinko anarcho communist... Big Grin

Quote:Prices express values, and values are subjective. Your car's "utility" (to you) is expressed by what you'd trade it away for on one end, and what you'd trade away to get it back if it disappeared on the other.
Of course. I'm sure it would be more valuable to me if I had to walk (the 45 miles) to and from work even one time (because it would take most of a day to make it one way). But, there is a point when the cost negates the necessity, and it would be more reasonable to change my way of living to accommodate the lack of affordability in transportation. I'd find employment closer, buy a mule, or grow my own apples (for eating).
”There are more things in heaven and earth, Horatio, Than are dreamt of in your philosophy." - Hamlet (1.5.167-8), Hamlet to Horatio.

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#90
(09-13-2012, 06:25 AM)kandrathe Wrote: An apple only needs to be tasty enough to be palatable. A frugal (utilitarian) man would sell the tasty ones to Deebye, and buy meager ones for eating.

Since when are you a utilitarian? (Apparently an unreconstructed Benthamite, too! Let's all wear burlap and eat tofu gruel!) A utilitarian-Austrian... well, let's just say this reminds me of McBain. Does not compute.

Besides, we have no reason to compute "utilitarian" indices. We need to model average consumers, not zen monks, or survivalists.

Quote:Ok, what if I only need the power of a 1990 computer. I still need to pay today's price for a unit that is hundreds times more powerful than the one I need.

If you want the power of a 1990s computer, it's yours (and vastly more) for about 330 bucks, or less, but I'm too lazy to check. Just consider the extra power a free upgrade. That's about $200 in 1990 dollars. Could you buy a 1990 computer for $200, retail? I think not.

Quote:I could have used the power of a Cray XMP in 1985, but due to the price -- it was not pragmatic to do so. Yes, that level of power existed but was beyond practical use. If apples cost a years salary each, we wouldn't eat apples.

... all true, but this is my point. Computers, and computing power were expensive. We didn't use them for so many things due to the cost. Now they are cheap, and so is computing power, so we use them for everything. This is precisely my point.

Quote:I made up those numbers for illustrative purposes. I'll trust your 100% inflation (doubling) over the 22 years. The price of food matters within the context of our ability to feed a family. If food increases 100% over 22 years, but wages only increase by 80%, then we've lost ground.

Prices didn't quite double. 1.8, or so. Nominal GDP, by contrast, almost tripled, from about 5.8 trillion to 15.1 trillion. Convert that all into real terms, and the US is now 147% as rich as it was in 1990. Now, the vast majority of the increase has accrued to the top percentiles, which sucks. But the bottom % are still richer, *adjusted for inflation*, than they were in 1990.

Unless, of course, you believe shadowstats. Then you would apparently think that US inflation-adjusted GDP is HALF what it was in 1990 - and considering the rise in inequality, that means that the average household is earning something like 25% of its 1990 earnings, adjusted for inflation. This beggars belief.

-Jester

*please note: the graph you showed is in real terms, that is, already adjusted for inflation. It shows across the board growth since 1990, although better for whites than blacks or hispanics. That this is much less than GDP growth is increasing inequality, which is terrible, but a different issue. It's also household income, and therefore does not reflect the change in household dynamics away from dual-income households.
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#91
(09-13-2012, 06:48 AM)Jester Wrote: *please note: the graph you showed is in real terms, that is, already adjusted for inflation. It shows across the board growth since 1990, although better for whites than blacks or hispanics. That this is much less than GDP growth is increasing inequality, which is terrible, but a different issue. It's also household income, and therefore does not reflect the change in household dynamics away from dual-income households.
It's hard to get accurate sources for this type of information. For example, on the chart I'm sure that "income" includes government aid and unemployment benefits -- which would be it's own line on my chart allowing one to see the change in "earning" power rather than deficit fueled GDP.
”There are more things in heaven and earth, Horatio, Than are dreamt of in your philosophy." - Hamlet (1.5.167-8), Hamlet to Horatio.

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#92
(09-13-2012, 06:25 AM)kandrathe Wrote: An apple only needs to be tasty enough to be palatable. A frugal (utilitarian) man would sell the tasty ones to Deebye, and buy meager ones for eating.

Uh huh.

[Image: n725075089_288918_2774.jpg]

Ok really. You're now just arguing 'nuh uh, no it isn't'. How are you going to determine which apples are tasty and which one is just tasty enough exactly? Let's say it's just your attempted humour. Because that's the only plausible explanation at this point.

There is no such frugal man that exists in this current reality that would measure which apples are too tasty, and which are tasty enough. For frugality and 'practical' sake. Even if he did, what happens if even the 'meager' apples on sale are still far too decadent for this mythical frugal saint of a man?



Quote:Ok, what if I only need the power of a 1990 computer. I still need to pay today's price for a unit that is hundreds times more powerful than the one I need.

My dad is looking for a new computer. He will use it for typing, and some light web surfing. Even at the lowest price, let's ball park it at 300-500 dollars. It will look like alien technology compared to one's he's used for 15 years. No such beast existed 15 years ago, 300$ do not get you very far back then if you're comparing tech bang for dollar ratio.

My first work station cost me close to 5k. And this was considered a revolution compared to the 10k SGI -ENTRY LEVEL- machine before it.
My current machine cost half that, and runs circles around it. And it's now considered 'long in the tooth'. For my next upgrade, I can see the price dropping to slightly below 2k, maybe even 1.5k dollars, and it will run circles and do parkour backflips compared to what I now have.

What exactly, are you kvetching about? I'm not as nuanced as Jester, so forgive my bluntness. It's a 'Good Thing' that every time I look at a comp store parts flyer, the dollar to power ratio I can get just keeps increasing.

Do you want to buy a 1990's computer as a museum piece antique or something? I'll sell you mine for a bushel of apples. Only the most delicious ones though, I don't take meager tasting ones.

Quote:I could have used the power of a Cray XMP in 1985, but due to the price -- it was not pragmatic to do so. Yes, that level of power existed but was beyond practical use.

Quote:Yes, that level of power existed but was beyond practical use.


...There is. No. Such. Thing. It's one thing to say so due to cost at the time, but the cost dropped. The power of past supercomputers are now in some game consoles that can be bought at Walmart.

I can do digital sculpting with an -off the shelf parts- 2k machine where 15 years ago it might only be possible at some super secret high tech graphics lab.

Dude, seriously. What are you -really- kvetching about. Do you want a return to the 90's? Jeesus, if you have a working time machine to go back to that period I'd sell ALL of my delicious apples for a seat next to you. I had more hair on top and I was chasing so many more chicks back then.
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#93
(09-13-2012, 07:57 AM)Hammerskjold Wrote: Dude, seriously. What are you -really- kvetching about.
We are talking about adjusting the price of goods to account for "increased utility" when factoring in inflation. Computers were the example. If your dad buys an average model $1500 computer this year that is speed X, and next year your dads evil twin buys the same average model computer that is $2000 and it's speed is 2X, the government counts that as a 33% decrease in price (1500/X > 2000/2X). Even though your dad and his evil twin will still only type 30 WPM. I'm saying a tool is a tool, and limited by the user.

They don't measure cars this way, but if they did treat cars like computers, if the top speed increased from 100mph to 200mph, and the price doubled --- they'd call it even.

Computing power is probably the most extreme case... In 1984, the cost per GFLOPS was $33,000,000, and today it's about $1.80. The change is so dramatic that the average user can't use the power they are buying.

It's like New Improved Tide is more expensive per ounce, but counted as less since it's "better". I still wash my clothes at the same rate, and it costs me more. But, the government doesn't think that is inflation. So, yes, the apples thing was my twisted sense of humor. Deebye values yummy apples, and I don't eat apples. When I'm crunching on a project, I sometimes do choose food more for its nutritional value than its taste.
”There are more things in heaven and earth, Horatio, Than are dreamt of in your philosophy." - Hamlet (1.5.167-8), Hamlet to Horatio.

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#94
(09-13-2012, 08:47 AM)kandrathe Wrote:
(09-13-2012, 07:57 AM)Hammerskjold Wrote: Dude, seriously. What are you -really- kvetching about.
We are talking about adjusting the price of goods to account for "increased utility" when factoring in inflation. Computers were the example. If your dad buys an average model $1500 computer this year that is speed X, and next year your dads evil twin buys the same average model computer that is $2000 and it's speed is 2X, the government counts that as a decrease in price (1500/X > 2000/2X). Even though your dad and his evil twin will still only type 30 WPM.

Then you have your model of example wrong. I have never seen a real world example where next years model computer is twice as fast, for an increased price.

All the flyers I have seen, it's more the opposite. You don't need government accounting to see it. We're not talking about picking a bone with government accounting.

I do have a WTF face with your insistence in this weird price comparison of tech to dollar ratio, that seems to have little to no basis in the real world. Go pick up any flyer, walk into any big box store even. Jeesus honestly I could go to Costco, and pick up their mid grade comp that would kick my first work station power level, at a quarter of the price.

Even if my dad does not use all the increased power and utility that you seem to find so abhorrent, it's still winds up cheaper to buy compared to what he could get during the 1990's. This is even without fancy graphs and links to charts.

What he could get for 500$ in 2012, is incredible compared to what 500$ would get you in 1990. Jester already said it, and it's not hard to prove.

Why you continue with a frankly bizarre theory of overall computer tech price increase that has never happened yet, is again. Bizarre. We're not talking about blips that temporarily does a price change with components like RAM.

The first gen DVD player we got was valued at 200$+. Regular, Blue ray didn't come in the market yet. Some years later a regular DVD player were 30-60$ at Sprawlmart. We can kvetch that well the movies story quality doesn't change much. What utility does this 'moving picture' have over my growing my meager tasting apple, and raising my homely mule.

But it still doesn't change the fact that the price for that piece of technology dropped. 50$ at 2012, is still cheaper than 200$ a decade ago.
What do you find so hard and abhorrent about that.

edited reply to your edited post:

Quote:I'm saying a tool is a tool, and limited by the user.

And understand that it also goes the other way. A user can be limited by the tool.

While I can only type so many words a minute, what happens if I need the computer
to do more than just typing and simple spreadsheet? What happens if I need to use any and all
power (MORE POWER SCOTTY!) because that's what the software for my field -requires-?

Sorry dude, I'm glad I'm living in a world where my dollar purchases more tech power with
each new generation. Not just because I'm getting more, but I can do more with less money,
and I am not only playing high end vidya games with my rig.

As much as I love chasing girls and having more hair in the 90's. Back then I would need at least 20k for the kind of rig
I have in 2012, that I bought for 2k. I can be more productive since I don't have to work 2 side jobs to save for
20k, instead I can plunk down 2k and I can be on my way editing, sculpting, making wireframes etc. Even have
some leftover to invest in a digital camera, and business cards, a web site etc. All that and still quite under
20k.

At least that's my own observation. If you still want to cling to this hypothetical example of tech increasing in cost as well as power that has no correlation to the actual world we're living in right now. Well we'll just agree to disagree then. It's not worth getting an apple cart turned over. Mmmmmm.....apple turn overs.....
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#95
(09-13-2012, 08:47 AM)kandrathe Wrote: They don't measure cars this way, but if they did treat cars like computers, if the top speed increased from 100mph to 200mph, and the price doubled --- they'd call it even.

And if they doubled the gas mileage, the safety, and the comfort, as well as the speed? Still counting a car as a car? Hell, shouldn't we count all cars, from a Lada to a Lamborghini, as the same, by your logic? They all get you from point A to point B, and since we apparently don't care about improvements, why not?

Quote:It's like New Improved Tide is more expensive per ounce, but counted as less since it's "better". I still wash my clothes at the same rate, and it costs me more.

How about using less of the better stuff? Seems like the obvious solution.

To flip that argument around to its logical implication, if your detergent got worse every single year, but not cheaper, would you still see that as no inflation? You're getting less washing power for your money - practically the definition of inflation. The Argentines played this game to disguise their own inflation for years, lowering quality of goods rather than raising prices per se. Packets of spices would slowly fill up with stems and dust. But, I guess, since spices give no "utility," (by your notion, certainly not mine, or any Economist's) maybe that doesn't matter? What if your car got slower every year? Or your computer? Surely you would start to feel you're getting less and less for your money?

-Jester
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#96
(09-13-2012, 09:22 AM)Hammerskjold Wrote: Then you have your model of example wrong. I have never seen a real world example where next years model computer is twice as fast, for an increased price.
It's just an example. Ok, say the price stays exactly the same for the almost the same model of Dell WTF9000. If the GFLOPS increased 10% between the models -- the government would call that a price decrease since I'm buying more computing power with the same dollars.

Quote:What he could get for 500$ in 2012, is incredible compared to what 500$ would get you in 1990. Jester already said it, and it's not hard to prove.
I'm not disputing that. For all practical purpose, it doesn't matter for people if the power increases, as long as the machine is adequate for the task at hand. For your application, it probably matters -- for 90-99% of computer users it does not matter. There is little increased utility in word processing, spreadsheets, and other common applications than from those 10, or even 20 years ago. Now, connectivity and the ubiquitousness of the Internet are another matter.

Why you continue with a frankly bizarre theory of overall computer tech price increase that has never happened yet, is again. Bizarre. We're not talking about blips that temporarily does a price change with components like RAM.

Quote:The first gen DVD player we got was valued at 200$+. Regular, Blue ray didn't come in the market yet. Some years later a regular DVD player were 30-60$ at Sprawlmart. We can kvetch that well the movies story quality doesn't change much.
A better item for our basket of goods. The inflation calculation people wouldn't care too much about rating the quality of the movie, but perhaps if the data density were higher -- HD versus normal. If a movie is offered on HD DVD for $50, but last year the same movie was sold on non-HD for $25 they would want to factor in the HD-ness as a technological improvement.

In the world of computing for example, there are no ball peens offered for sale, only 10 ton hammers for $1000 in today's dollars. If computers were just like other tools, then I'd be able to buy a new Apple II equivalent for pennies. They are collectible now, so they actually sell on Ebay for $30 - $150 depending on condition.

The bottom line is that when you and I go to the store, the store is selling today's merchandise which is a percentage higher in price than it was last year. The government says that number is about 3% (the inflation rate) -- but in our experience we find it's more like 10% -- why? Part of the reason is that the government is trying to factor in the improvement of the product in our pricing. Jester thinks that is fine and I don't.

Part of my argument is that increased utility is not always a purchasing decision, and often we are no longer offered the product just sufficient to meet our needs. The other reasons are regionality, and seasonality -- both factors excised by the blanket inflation rate number. Used cars cost more in northern climates because we are harder on our cars. Housing costs vary much by locality based on supply and demand. If the price of citrus spikes upwards in winter, people in California, and Florida will experience much less than is felt elsewhere since they are closer to the supply. If you lived near apple producing regions, the product would be more accessible and cheaper than for people living in Hawaii (where the price of everything is linked to the costs of shipping ).

Nobody buys the average basket of goods that constitutes the CPI -- and I feel the methodology is suspect as compared to the reality of most peoples annual purchasing decisions and price experience.

Now, why does this matter? The government uses the CPI to index things like Social Security payments -- and most employers use it as a guide how much a base raise should be to keep the worker from becoming disgruntled. So, not only is the payout rate national (where cost of living varies by locality) any inflation adjustments to your social security pension are also national, and also not based on your local experience. This causes problems for our older people on fixed pensions in a couple ways; first, they find they cannot afford to live where they have lived their entire lives and so are forced to move to areas that are cheaper. Second, if they cannot move, then they are increasingly more, and more destitute. Third, the elderly consume differently (more health care, and more expensive housing) and so their program indexes should reflect their spending habit, and not mine.

So, not only do I think that the government lies about the rate to make themselves look like they are doing a good job, I think they actively avoid increased costs to social programs that are indexed to inflation. You know I'm not a social spending guy. But, it is just *wrong* to hurt people this way.

Consider (this article from 2003); http://www.newyorkfed.org/research/curre.../ci9-5.pdf

"Some argue that social security benefits should be adjusted using a price index that reflects the
spending habits of the elderly rather than those of workers. This study suggests that if such an
index were adopted today, over the next forty years benefit levels would increase and the social
security trust fund could become insolvent up to five years sooner than projected."
”There are more things in heaven and earth, Horatio, Than are dreamt of in your philosophy." - Hamlet (1.5.167-8), Hamlet to Horatio.

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#97
(09-13-2012, 04:51 PM)Jester Wrote: What if your car got slower every year? Or your computer? Surely you would start to feel you're getting less and less for your money?
It kind of happens that way anyway... Smile The car wears out and loses its new car smell. The computer gets slower as I pile on the software and absolutely necessary system tray services...

But, backing up to ShadowStats... What do you find "Tinfoil Hat" for them calculating the CPI or the Unemployment rates as they were done by the government in the past. It's the government who has changed methodologies, and after each change the rates revise downwards (to the governments favor). I mean 1 in 12 people -- 8% unemployment doesn't seem that bad, until you dig into things like the labor participation rate (the opposite question "how many of us are working?") and then factor out the too young (<17), the too old (> ~65), too disabled, and the too rich. The U-6 rate nationally is double the rate used in the sound bites -- 1 in 6 is a more disturbing headline.

http://blogs.wsj.com/economics/2012/09/0...on-record/

Men aged 20-24 comprise 8 percent of the decline and men aged 16-19 comprise 18 percent of the decline -- Are they living at home in the basement playing WOW?
”There are more things in heaven and earth, Horatio, Than are dreamt of in your philosophy." - Hamlet (1.5.167-8), Hamlet to Horatio.

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#98
(09-13-2012, 04:58 PM)kandrathe Wrote: Nobody buys the average basket of goods that constitutes the CPI -- and I feel the methodology is suspect as compared to the reality of most peoples annual purchasing decisions and price experience.

And there is nobody of precisely average height, or weight, or intelligence. No family has 1.86 children, and nobody lives for precisely the average life expectancy. Averages do not describe *any* person. They describe a statistical property of *all* people.

Quote:This causes problems for our older people on fixed pensions in a couple ways; first, they find they cannot afford to live where they have lived their entire lives and so are forced to move to areas that are cheaper.

The alternative being that the government pays retired people who live in wealthy neighbourhoods more than those that live in poor ones? That sounds powerfully unfair. Living in a rich neighbourhood is as much a luxury as anything else. Why should the government subsidize that? Part of living on a tight budget is living somewhere you can afford. That's as true of young people as of seniors. I support generous payments, but certainly not the idea that a senior in the Hamptons collects vastly more social security than one in the Treme!

Quote:Second, if they cannot move, then they are increasingly more, and more destitute. Third, the elderly consume differently (more health care, and more expensive housing) and so their program indexes should reflect their spending habit, and not mine.

Wouldn't it be nice if there was some program which paid for the health care of the elderly? I think that would be a good idea.

Quote:So, not only do I think that the government lies about the rate to make themselves look like they are doing a good job, I think they actively avoid increased costs to social programs that are indexed to inflation. You know I'm not a social spending guy. But, it is just *wrong* to hurt people this way.

If you're saying social security benefits should be slightly more generous, I'd agree with you wholeheartedly. If you're saying the government is involved in a Big Lie ™ to cover up a whopping 0.38% in extra inflation for seniors in order to shave pennies off the Social Security budget, I think you're bonkers.

-Jester

(09-13-2012, 05:16 PM)kandrathe Wrote: It kind of happens that way anyway... Smile The car wears out and loses its new car smell. The computer gets slower as I pile on the software and absolutely necessary system tray services...

Capital depreciation is not inflation....

Quote:But, backing up to ShadowStats... What do you find "Tinfoil Hat" for them calculating the CPI or the Unemployment rates as they were done by the government in the past.

That's what they say they're doing. What they're actually doing is a mystery, because both the method and data are proprietary. I suspect they're just crudely multiplying, given how precisely the two lines correlate, just at a much higher growth rate. Nevertheless, their results are not only out of line with the BLS, but out of line with every other developed country, every alternate measure of inflation, even the price of gold, which should be hypersensitive to inflation.

Nevertheless, despite having seen and heard the clear implications - that the US is half as rich as in 1990, that prices have risen by six times - you still believe shadowstats? Incredible.

Quote:I mean 8 in 100 people -- 8% unemployment doesn't seem that bad, until you dig into things like the labor participation rate (the opposite question "how many of us are working?") and then factor out the too young (<17), the too old (> ~65), too disabled, and the too rich.

This has nothing to do with the inflation statistics. And all of that is widely available from the government. We have discussed this before, I have linked you every single piece of information you mention there, all right here from the BLS.

Nobody is hiding anything, except Shadowstats, because they want to sell you their proprietary load of crap at $175 a pop, hoping your anti-government paranoia overwhelms your common sense.

-Jester
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#99
(09-13-2012, 08:47 AM)kandrathe Wrote: It's like New Improved Tide is more expensive per ounce, but counted as less since it's "better".

I hesitate to intrude on the conversation, but I was involved in the manufacture of the new ingredient of "new" Tide. (Though of course the history of Tide is long enough that I suspect there have been many reformulated "new" Tides.)

The issue was big government (the EPA) said phosphates in water were bad for the environment. Tide was required to switch to a lower phosphate formulation. The phosphate replacement we manufactured cleaned clothes just as well as phosphates, but was rather more expensive to produce. The new Tide did not clean any better or taste any better than the old Tide, but it did cause less polution.

Subsequently the government (Reagan) decided that the EPA had been incorrect, and that polution was OK. Phosphate replacements were no longer needed. Tide went back to cheaper old Tide, and I was unemployed.
"I may be old, but I'm not dead."
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(09-13-2012, 05:32 PM)Jester Wrote: Nevertheless, despite having seen and heard the clear implications - that the US is half as rich as in 1990, that prices have risen by six times - you still believe shadowstats? Incredible.
I don't drink the cool aid, no. William's is probably close to "tinfoil hat", but I do think it is worthwhile to question the methodology and poke holes in it.

Yes, U-6 data is available, and some of the "are you wanting a job or are you out of the labor force" questions are valid. But, we know certainly that it is also unrealistic to just stop counting the unemployed once their benefits run out. There is definitely a possible conflict of interest in the governments production of its own statistics.

Politicians (ergo the government) do cherry pick the particular statistics that make themselves look the best. It's not conspiracy theory, it's human nature. If you were evaluated by three people, getting an A-, B- and a C+ which report would you put up on the wall? I guarantee our narcissist politicians would only put up the A-, and file the others as inaccurate aberrations.

Quote:They describe a statistical property of *all* people.
Or, they describe the price experience of "no people". My feeling is that it is probably too diffuse to be of any real use. It needs to be much more targeted for particular population groups, in season, and regional.

Quote:The alternative being that the government pays retired people who live in wealthy neighbourhoods more than those that live in poor ones?
We don't need to leap to extreme either. We might change it by letting the States do more with block grants, and the Feds do less. Does it seem fair that a person who lived in NYC their entire life must leave due to cost of living issues when they retire? You could adjust the income caps, and rates by locality to absorb the costs. If you live in NYC, you probably have a job that pays a higher wage just due to cost of living. Is it fair that the person in Mobile, Alabama and NYC have the same $107K cap which the NYC person will hit precipitously more often?

Quote:If you're saying the government is involved in a Big Lie...
No, it's published in the congressional record. BI - Congress Figures Out Sneaky Way To Raise Taxes And Cut Social Security Benefits Without Anyone Noticing and more recently FP - Obama’s chained inaccuracy.
”There are more things in heaven and earth, Horatio, Than are dreamt of in your philosophy." - Hamlet (1.5.167-8), Hamlet to Horatio.

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