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You typing this post from your cell phone or affordable computer?
We are talking dollars not computers here. Sky rocketing prices of housing, medical care, education, child care, services, energy, etc., etc., etc. more than made up for the falling prices of consumer electronics (helping poor and middle to escape this reality, it's their #1 utility). You can't eat your cell phone neither you can take your big screen under a bridge to enjoy. Inflation adjusted wages, income and "wealth" of the bottom percentiles stagnate even according to mainstream economist.com. If there are no social "pressures", capitalism comes back to its natural oligarchical and sweatshop roots. That's the natural state of capitalist economy. Mass middle class is an aberration caused by the social movements.
How in the hell one could maintain economics "trends" shown on the graph below without spiraling out of control financial pyramids and personal debts? Financial fruits of productivity growth are privatized by the top percentiles, wages are being "expropriated" to be lend back (at interest), pyramids of debt piles up, everybody knows that this cannot go on forever, and everybody prefer to "believe" that the mega bust can be avoided through "personal responsibility" of those at the bottom. Which is absolutely INSANE proposition since namely personally IRRESPONSIBLE keep this economy of absurd running and YOU fed and sheltered.
Just look at the graph. If lower percentiles would consume what they make and don't pile up debt, it would mean the only thing the GREATEST Depression right now. Sure, the reckoning day that would reload debt pyramids is coming, but we prefer to behave like those proverbial ostriches.
The Standard of Living for the average Middle Class Person is going down, down, down!
I am not sad about this because the middle class has been living WAY higher lifestyle than they should have for WAY too long. It was unsustainable because it was based on a false premise.
Inflation adjusted wages, income and "wealth" of the bottom percentiles stagnate even according to mainstream economist.com.
If inflation adjusted wages are stagnating then the purchasing power of the bottom percentiles isn't falling.
You talk of sky rocketing prices of housing but accord to Real Estate Charts: Graphs of inflation-adjusted, historical housing prices. the inflation adjusted cost of a house right now is about the same as 25 years ago, and I suspect the average home today is much larger with more features and energy efficiency.
Services? That cell phone is a service. You can't eat your cell phone but how do you quantify being able to call grandma 3000 miles away with unlimited minutes? I remember a child the kids being allocated 5 minutes each on a rotating basis when talking to grandma, it was a big event because long distance was expensive.
How about you throw away the cell phone and computer, cancel the internet/cable/cell, buy a smaller home, buy an older car that requires more maintenance and lacks so many of the safety features we take for granted, send letters with stamps, etc. just go back to living like in 1980. I suspect you'll find your cost of living is substantially lower, and that right there is your purchasing power.
If inflation adjusted wages are stagnating then the purchasing power of the bottom percentiles isn't falling.
You talk of sky rocketing prices of housing but accord to Real Estate Charts: Graphs of inflation-adjusted, historical housing prices. the inflation adjusted cost of a house right now is about the same as 25 years ago, and I suspect the average home today is much larger with more features and energy efficiency.
Services? That cell phone is a service. You can't eat your cell phone but how do you quantify being able to call grandma 3000 miles away with unlimited minutes? I remember a child the kids being allocated 5 minutes each on a rotating basis when talking to grandma, it was a big event because long distance was expensive.
How about you throw away the cell phone and computer, cancel the internet/cable/cell, buy a smaller home, buy an older car that requires more maintenance and lacks so many of the safety features we take for granted, send letters with stamps, etc. just go back to living like in 1980. I suspect you'll find your cost of living is substantially lower, and that right there is your purchasing power.
I partially agree with you but you're missing out on one huge factor; food and energy.
Futures on food stuff raw materials and neergy have easily outpaced inflation over the past 10 years. For the wealthier, spending 15 or 20% more on food or energy isn't a problem but for the poorer it's a major problem. Food and energy expenses already made up a large portion of their outlays. Food and energy demand is relatively inelastic and poorer people get killed on rising prices.
Look at futures of nearly any (save for Nat Gas; 20 year low because of the fracking boom) commodity ( wheat, corn, soybeans, feeder cattle, oil, cotton , pork bellies, etc.) and they're all up at least 100% in a 10 year period. We've had currency inflation of about ~25% in the that period and wage inflation of about 18% (median income basis; the bottom third of incomes have surely seen way less than that.)
There's your problem. Inflation outpacing wage growth and both are dwarfed by the rise in commodity and energy prices.
Look at futures of nearly any (save for Nat Gas; 20 year low because of the fracking boom) commodity ( wheat, corn, soybeans, feeder cattle, oil, cotton , pork bellies, etc.) and they're all up at least 100% in a 10 year period.
Raw commodity prices are only one (often small) component in the price that a consumer pays at the grocery store for an item. They are paying to process it, package it, ship it, market it, put it on a shelf, etc. if the price of corn goes up 100% you don't see a 100% increase in the price of a frozen bag of corn you put in your cart.
Is there food inflation? Sure. But it isn't measured accurately by comparing commodities futures to rising wages.
Many need to realize their expectation shouldn't be their lifestyle during the boom. Many were overpaid and homes were over-valued. Your perspective of lifestyle should be back to around 2000.
Many need to realize their expectation shouldn't be their lifestyle during the boom. Many were overpaid and homes were over-valued. Your perspective of lifestyle should be back to around 2000.
Nothing is wrong with having high expectations, so long as you are willing to work hard enough for it. Far too many people stick their noses in the air regarding working anything over 60 hours a week, getting a second job, cooking instead of eating out all the time, ditching expensive cable packages... And I would say 2000 is not far enough. Try 1980 perhaps? People working at fast food joints and retail tend to have nicer phones than me, as well as expensive data packages... Something tells me folks have their priorities skewed...
Raw commodity prices are only one (often small) component in the price that a consumer pays at the grocery store for an item. They are paying to process it, package it, ship it, market it, put it on a shelf, etc. if the price of corn goes up 100% you don't see a 100% increase in the price of a frozen bag of corn you put in your cart.
Is there food inflation? Sure. But it isn't measured accurately by comparing commodities futures to rising wages.
Who said there's a 1:1 relationship. Rising commodity costs across the supply chain may account for a 25% increase. That's 25% more that the poor cannot afford without severely curtailing other expenditures.
Food and energy costs are outpacing inflation and wage growth rather easily.
Who said there's a 1:1 relationship. Rising commodity costs across the supply chain may account for a 25% increase. That's 25% more that the poor cannot afford without severely curtailing other expenditures.
May, might, and you seem to be assuming a 0% increase in incomes vs. your guess at 25% increase in food costs over time.
Quote:
Food and energy costs are outpacing inflation and wage growth rather easily.
Agreed, and other areas of people daily costs could be lowering.
If inflation adjusted wages are stagnating then the purchasing power of the bottom percentiles isn't falling.
You talk of sky rocketing prices of housing but accord to Real Estate Charts: Graphs of inflation-adjusted, historical housing prices. the inflation adjusted cost of a house right now is about the same as 25 years ago, and I suspect the average home today is much larger with more features and energy efficiency.
Services? That cell phone is a service. You can't eat your cell phone but how do you quantify being able to call grandma 3000 miles away with unlimited minutes? I remember a child the kids being allocated 5 minutes each on a rotating basis when talking to grandma, it was a big event because long distance was expensive.
How about you throw away the cell phone and computer, cancel the internet/cable/cell, buy a smaller home, buy an older car that requires more maintenance and lacks so many of the safety features we take for granted, send letters with stamps, etc. just go back to living like in 1980. I suspect you'll find your cost of living is substantially lower, and that right there is your purchasing power.
i suspect that many americans are doing just that, along with 46 million americans on food stamps right now, 25 million adults living at home with mom and/or dad, and only 66 percent of americans now owning homes.
but their sacrifice doesn't mean a thing if the government keeps leveraging up:
The data shows us this with household market debt falling by $569 billion from October of 2007. However, if we are to look at the total credit market we will see that it has roughly increased by $3 trillion over this period. Where is the money (aka debt) going? It certainly isn’t more debt for your average household. Much of this has gone to bailout large banks and government spending.
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