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I will go even further - since I was present for all of this stuff.
The Savings and Loan Crisis which went from about 1987 to 1991 broke the back of the economy...it was very large...and mostly a Republican Construct (Neil Bush was involved - so was John McCain)...sunk Real Estate for 8-10 years. It was about 1998 before our house (in a typical nice burb of a typical big eastern city) went back to the value it had been in 1990. It started rising again and peaked in 2008 at about 360K.
You could buy our same house - the exact one - for 249 at one point. Today, after someone put in 100K it is back up to about what we sold it for in 2005....of course, that does figure in inflation, so it has gone nowhere in many decades.
Wages are ridiculously low for most people...benefits taken away...working conditions (hours, expectations) worse...and inequality getting worse each year.
But, wow, those interest rates have been low!
It makes me chuckle to turn the radio on and have some GOP Congress Critter tell me and the world how our economy has NEVER been better. This after trillions were lost in the Great Recession (effects still being felt) and the only way the country didn't go belly up was to lower interest rates to zero or lower. Things are SO GREAT that they have to increase debt and deficit (this BOOM somehow isn't making people pay more taxes??)....and give free money away in the hopes of making things look good?
Wow...I mean - the Dow and S&P are up 1 to 2% over the past 6 months.
I've been through a lot of decades and things have basically gotten worse since about 1979...maybe before. My unskilled job in TN started at $5 an hour in the early 70's----the equiv. of $28+ today.
Do you think I can get a $28 an hour job to start carrying studs on a house framing site in rural TN today?
there are workers in low end jobs who used to have very good paying union jobs and wish their companies they worked for bought back their stock .
not buying back enough of your own stock leaves you vulnerable to take over by foreign companies who then control the fate of american companies . like mircea said in another thread , those zenith employees wish LG was never able to get control of 58% of their companies stock
In many, perhaps most, cases I would rather work for a foreign manufacturer who set up a plant in the USA...than for an American corporation.
This is because many of the (Euro and other) companies that set up factories here actually care about a decent wage, decent working condition and human beings.
Such is not the case with MANY American companies I personally know about.
I'm not claiming it is black and white....but the entire reason many of these companies come here is that they understand America is the new Bangledesh. You can just hear them in their offices planning "hey, we can go to the USA and the government doesn't have rules about vacation time and medical care - and we can pay less and get more"...
But they also figure "Hey, we'll split the baby - we will pay those Americans more than their own lousy corporations do, treat them like human beings and they will work their arses off for us and beg for the jobs".....
and, of course, they are 100% correct.
Despite the rhetoric thrown around in our country, those lower on the totem pole don't really matter...to Wall Street or Capital Hill....or most anyone else.
You wouldn't need $28/hour to live in rural Tennessee today.
Per capital income is about 43K average in TN (much of which is rural)....and the average household is about the same (not many double incomes...it looks like)...
My money was with no benies (paid as sub-contractor), so it would be about average in TN today at $28.....
But I don't understand the point. Wages have not kept pace with inflation or with productivity..which IS the point. By most every measure, the American Dream is fading and that is what you are measuring the "current cost" against.
So...just to compare.....what do you think that job should pay today? I was working 40 hours a week and basically carrying studs from a big pile to a sawhorse....and cutting some square (to a fixed length). No skills but maybe helped to lift up a framed wall and banged the hammer roughly.
It's 40 years later - and I hear we have the best economy ever. This should make the demand for house framers shoot up even higher than inflation. I'm sure the basics like Health Care are up vastly more than the inflation calculator I used....that's perhaps the biggest expense.
By one reckoning, the fact that manual labor paid such comparatively good wages 40 years ago, was a distortion, and an unstable one. What we have seen in recent decades has simply been a return to the equilibrium present in prior eras.
yes , unions artificially created wage levels that should never have been .
but what happens is like nasdaq in the dot com era hitting 5000 or gold at 850 in the 1980's. they become benchmarks even though they were aberrations .
Replacement cost of houses is a factor as well especially for growing new cities. I have heard but seen direct documentation of the fed rules for homes has added something like $60k to new construction homes. Is that part of the conspiracy too lol?
Do not forget the role zoning pays in home costs/prices. Ive lived in no zoning Houston, light zoning Plano Texas and heavy zoning NJ. Simplistic observations are heavy zoning in suburbs drives higher lot cost as more land is required per site in some of these areas. Look at the avg lot size in Houston where the market decides what lot size rather them the establishment who has a vested interest in keeping their home prices high and constraining supply thru some zoning techniques serves them not new buyers.
These two factors are small impacts to price in comparision to those mentioned but are a factor too. I do not know the trend line on zoning rules.
We have a high cost economy. Not hard to know why. Low property taxes , high income and sales taxes, no money down, public rescue of sloppy credit means that everything is paved on golden streets. We pay high fees to landlords and bankers.
The higher real estate prices are driven up the poorer labor in relation to it it must be.
Love it when the economist wannabees got it all figured out
Have you ever noticed how automobiles wear out? Isn't the value of that called DEPRECIATION?
When was the last time you heard an economist talk about how much American consumers lose on the depreciation of automobiles every year? Hertz can file that depreciation with the IRS because those cars are Capital Goods. But the Laws of Physics do not care about the IRS or the Economy.
There were 200,000,000 cars in the US in 1994. If the average annual depreciation was $1,500 per car that would amount to $300,000,000,000 in total depreciation just for cars. What about refrigerators, air conditioners, TVs and microwave ovens.
That is the funny thing about Expertism. Experts can dazzle us with the complicated stuff they do talk about, but if there is any important information that they leave out then most people never notice. So we buy more consumer junk and it gets added to GDP. That is economic growth. The junk gets thrown away and is never subtracted.
Oh yeah, and the junk was purchased with credit cards so the interest was part of GDP.
there is nothing that does not wear out in life . not sure what your whole post is about
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