The epic tales of Corn Pop’s young companion (POTUS46 complaint department)

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aurelius
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Re: The epic tales of Corn Pop’s young companion (POTUS46 complaint department)

#541

Post by aurelius » Fri Sep 09, 2022 3:51 pm

brkriete wrote: Fri Sep 09, 2022 6:32 amI read more carefully and that site is using the "CPI for gas" to normalize gas prices. It's essentially backing into a number that makes gas prices a constant. At least that's how I'm reading the methodology. So...not surprising that when you normalize the cost for gasoline to be constant it stays pretty constant.
The site I posted is using the Bureau of Labor Statistics methodology. All price comparisons of different eras normalize the price to a specific era. But the price is not being 'normalized' how you are inferring (forced to a specific value). I reproduced a generic version of the formula below.

X-year consumer good price for Z x (Y-year CPI for Z / X-year CPI for Z) = Adjusted Gas Price for Z in Y-year Dollars

We want to know the relative value or purchasing power of money for consumer goods at a previous era. Using CPI allows us to compare the price of gasoline to all other consumer goods. It would not be appropriate to use CPI for non-consumer goods. Just like it is not appropriate to use other inflation measures (other price indexes or GDP inflation) and apply them to consumer goods. We like to discuss inflation as one monolithic variable. It is not.

Common critics of CPI are that it can overestimate the rate of inflation* and it does not account for consumers substituting goods of lesser or higher quality. CPI also attaches 'weights' to various goods and services. There is disagreement with the BLS on how they weight things. Like all models, CPI is wrong. But has proven useful.

*I would argue it has underestimated the rate of inflation since the Great Recession as CPI does not include the price of housing.

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Re: The epic tales of Corn Pop’s young companion (POTUS46 complaint department)

#542

Post by brkriete » Mon Sep 12, 2022 6:03 am

Yeah but unless I'm reading wrong the specific page being referenced used a CPI specific to gasoline and not the "entire cost of living we all experience and collectively call inflation." Which is why it's showing e.g., 36% inflation in 2 years - because that's what gasoline went up by relative to the ~5% of general inflation of which gasoline was a part. So the cost of gasoline went up 7 times as much as the general cost of living did from 2020 > 2021.

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Re: The epic tales of Corn Pop’s young companion (POTUS46 complaint department)

#543

Post by mikeylikey » Mon Sep 12, 2022 9:15 am

aurelius wrote: Fri Sep 09, 2022 3:51 pm *I would argue it has underestimated the rate of inflation since the Great Recession as CPI does not include the price of housing.
Yes, although the phenomenon predates the Great Recession by decades.

This tremendous theft of wealth from the young by the old is why I have a hard time getting too worked up about the relatively meager (though stupid I agree) student loan forgiveness deal.

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Re: The epic tales of Corn Pop’s young companion (POTUS46 complaint department)

#544

Post by aurelius » Mon Sep 12, 2022 3:58 pm

brkriete wrote: Mon Sep 12, 2022 6:03 am Yeah but unless I'm reading wrong the specific page being referenced used a CPI specific to gasoline and not the "entire cost of living we all experience and collectively call inflation." Which is why it's showing e.g., 36% inflation in 2 years - because that's what gasoline went up by relative to the ~5% of general inflation of which gasoline was a part. So the cost of gasoline went up 7 times as much as the general cost of living did from 2020 > 2021.
The CPI for gas value is an average value of all gas types over a 12 month period.

I think your are conflating price fluctuations due to supply and demand with inflation. Supply and Demand explains gas price swings from 2019 to the present. Inflation in real time is difficult (read impossible) to suss out from price increases. We can only really look back and suss out trends overtime.

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Re: The epic tales of Corn Pop’s young companion (POTUS46 complaint department)

#545

Post by brkriete » Tue Sep 13, 2022 5:40 am

aurelius wrote: Mon Sep 12, 2022 3:58 pm
brkriete wrote: Mon Sep 12, 2022 6:03 am Yeah but unless I'm reading wrong the specific page being referenced used a CPI specific to gasoline and not the "entire cost of living we all experience and collectively call inflation." Which is why it's showing e.g., 36% inflation in 2 years - because that's what gasoline went up by relative to the ~5% of general inflation of which gasoline was a part. So the cost of gasoline went up 7 times as much as the general cost of living did from 2020 > 2021.
The CPI for gas value is an average value of all gas types over a 12 month period.

I think your are conflating price fluctuations due to supply and demand with inflation. Supply and Demand explains gas price swings from 2019 to the present. Inflation in real time is difficult (read impossible) to suss out from price increases. We can only really look back and suss out trends overtime.
We're talking past each other at this point - I bet we'd mostly agree if this was in person.

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Re: The epic tales of Corn Pop’s young companion (POTUS46 complaint department)

#546

Post by mikeylikey » Tue Sep 13, 2022 7:16 am

tl/dr

1) The price of gas is probably a little high right now vs. long term trends in "constant" dollars, and part of this is due to the war in Ukraine.

but also

2) Comparing $4 gas this summer to $1.75 gas during week 6 of Covid lockdown and blaming the Biden admin.'s support for Ukraine is stupid.

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Re: The epic tales of Corn Pop’s young companion (POTUS46 complaint department)

#547

Post by brkriete » Tue Sep 13, 2022 7:29 am

mikeylikey wrote: Tue Sep 13, 2022 7:16 am tl/dr

1) The price of gas is probably a little high right now vs. long term trends in "constant" dollars, and part of this is due to the war in Ukraine.

but also

2) Comparing $4 gas this summer to $1.75 gas during week 6 of Covid lockdown and blaming the Biden admin.'s support for Ukraine is stupid.
LOL agreed.

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Re: The epic tales of Corn Pop’s young companion (POTUS46 complaint department)

#548

Post by aurelius » Tue Sep 13, 2022 3:56 pm

mikeylikey wrote: Mon Sep 12, 2022 9:15 am...I have a hard time getting too worked up about the relatively meager (though stupid I agree) student loan forgiveness deal.
I paid off my student loans. I'm not mad that some people are getting a benefit I did not. Good for them.

I am frustrated that this does not address the issues of how higher education is financed. Long-term, setting the expectation the government will forgive student loans, probably only makes the existing issues worse!

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Re: The epic tales of Corn Pop’s young companion (POTUS46 complaint department)

#549

Post by aurelius » Tue Sep 13, 2022 3:59 pm

brkriete wrote: Tue Sep 13, 2022 5:40 amWe're talking past each other at this point - I bet we'd mostly agree if this was in person.
Agreed. And IMO, a lot of this is voodoo. There is not a 'right' answer. We can't truly compare what the value of a dollar today is compared to some arbitrary point in the past.

I believe a common sentiment is we all feel poorer compared to 10, 20, and 30 years ago. That I agree with. And that is much bigger than inflation.

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Re: The epic tales of Corn Pop’s young companion (POTUS46 complaint department)

#550

Post by SnakePlissken » Wed Sep 14, 2022 5:05 am

aurelius wrote: Tue Sep 13, 2022 3:59 pm
brkriete wrote: Tue Sep 13, 2022 5:40 amWe're talking past each other at this point - I bet we'd mostly agree if this was in person.
Agreed. And IMO, a lot of this is voodoo. There is not a 'right' answer. We can't truly compare what the value of a dollar today is compared to some arbitrary point in the past.

I believe a common sentiment is we all feel poorer compared to 10, 20, and 30 years ago. That I agree with. And that is much bigger than inflation.
As someone who was working my first job 10 years ago I remember getting paid $9/hr and only working about 20 hours a week. I saved about 80-90% of my paychecks and spent the rest on gas and some spending money. I paid for community college with that job and I don't really know how the numbers worked out looking back now. 20 dollars felt way more powerful than a measly 20 bucks now.

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Re: The epic tales of Corn Pop’s young companion (POTUS46 complaint department)

#551

Post by mikeylikey » Wed Sep 14, 2022 11:34 am

aurelius wrote: Tue Sep 13, 2022 3:56 pm
mikeylikey wrote: Mon Sep 12, 2022 9:15 am...I have a hard time getting too worked up about the relatively meager (though stupid I agree) student loan forgiveness deal.
I paid off my student loans. I'm not mad that some people are getting a benefit I did not. Good for them.

I am frustrated that this does not address the issues of how higher education is financed. Long-term, setting the expectation the government will forgive student loans, probably only makes the existing issues worse!
Almost certainly.

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Re: The epic tales of Corn Pop’s young companion (POTUS46 complaint department)

#552

Post by Philbert » Wed Sep 14, 2022 6:47 pm

aurelius wrote: Tue Sep 13, 2022 3:56 pm
mikeylikey wrote: Mon Sep 12, 2022 9:15 am...I have a hard time getting too worked up about the relatively meager (though stupid I agree) student loan forgiveness deal.
I paid off my student loans. I'm not mad that some people are getting a benefit I did not. Good for them.

I am frustrated that this does not address the issues of how higher education is financed. Long-term, setting the expectation the government will forgive student loans, probably only makes the existing issues worse!
Agreed. I have not thought of a good solution for the conflicting goals of higher education funding. As I see it, we need:
1. Market forces to impose some cost discipline on colleges
2. Bankruptcy dischargability to impose some underwriting standards on educational loans
but at the same time
3. Some mechanism for those without two competent parents to get a higher education
Current policy has eliminated #1 and #2 in favor of #3

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Re: The epic tales of Corn Pop’s young companion (POTUS46 complaint department)

#553

Post by mikeylikey » Thu Sep 15, 2022 6:56 am

Philbert wrote: Wed Sep 14, 2022 6:47 pm
3. Some mechanism for those without two competent parents to get a higher education
Current policy has eliminated #1 and #2 in favor of #3
There is no reason for #3, at least as stated, to be incompatible with 1 and 2.

Purdue University says it costs 23k/year to attend with room and board, before financial aid. If you are poor you will get some financial aid. Work part time and there is no reason you should graduate with more than a few tens of thousands in student loan debt. Get a degree that qualifies you for a good job (isn't this the point of college?) and this is not a crisis.

Making college attainable for poor kids should never result in anyone having 150k in debt with a useless degree.

The problem is not that we decided to make higher education accessible to poor people, per se. The problem is we decided there should no no barriers whatsoever to anybody getting any degree(s) from any institution regardless of the cost. Because if being poor means you can't get a masters degree in pottery from Harvard that's just not fair.

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Re: The epic tales of Corn Pop’s young companion (POTUS46 complaint department)

#554

Post by hector » Sat Sep 17, 2022 8:24 pm

mikeylikey wrote: Thu Sep 15, 2022 6:56 am
Philbert wrote: Wed Sep 14, 2022 6:47 pm
3. Some mechanism for those without two competent parents to get a higher education
Current policy has eliminated #1 and #2 in favor of #3
There is no reason for #3, at least as stated, to be incompatible with 1 and 2.

Purdue University says it costs 23k/year to attend with room and board, before financial aid. If you are poor you will get some financial aid. Work part time and there is no reason you should graduate with more than a few tens of thousands in student loan debt. Get a degree that qualifies you for a good job (isn't this the point of college?) and this is not a crisis.

Making college attainable for poor kids should never result in anyone having 150k in debt with a useless degree.

The problem is not that we decided to make higher education accessible to poor people, per se. The problem is we decided there should no no barriers whatsoever to anybody getting any degree(s) from any institution regardless of the cost. Because if being poor means you can't get a masters degree in pottery from Harvard that's just not fair.
People should be able to test out of lower level courses that can be easily tested at testing centers. Studying on your own and paying $100 to test out of the classroom portion of a lab science or a math class isn't for everyone, but it would work for some.

Community College as a whole should be publicly funded, little to no expense imposed on the student.
Low cost options that got you halfway through your Bachelors would be a game changer.

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Re: The epic tales of Corn Pop’s young companion (POTUS46 complaint department)

#555

Post by mgil » Sun Sep 18, 2022 5:44 am

Most community colleges are heavily funded by the public. Locally, it used to be about $1200 a semester for 12 credit hours. Anything more was no charge. Now, if you’re a full time student, the cost is $0 for tuition for the first two years of community college. I think the increased tax burden to the citizens amounts to about $10 a year per person.

Colleges are profit centers, regardless of tax status (just put excess revenue into future allocations or administration pay). The lower tier liberal arts colleges are the worst, imo, since they have the most degree sprawl to cater to degrees that often are far too niche for an undergraduate. But this allows them to compete in a smaller market where profits are higher.

The Ivies and top tier institutions don’t cost much more than some of these other Grade B and lower liberal arts schools. Wherein even if studying at an Ivy, your degree has intrinsic value (there’s typically a heavy bias for academic excellence for acceptance), yet with these other schools that have a 1200 SAT and 3.0GPA as an acceptance threshold and they still cost $70-80K a year, no one cares about the institution, but they will take notice of your degree and transcripts. If you’ve got a STEM degree with a solid GPA, you’ll be able to pay off loans. If you’ve got an undergrad in gender studies, the employment opportunities are slim. So much so that these people end up doubling down and running out to a terminal degree and racking up more debt because the only jobs are in academia. And that track is brutal.

I’m of the opinion that if the government is going to be called on to subsidize secondary education even more, then we might as well make people sign up for compulsory service (like some countries elsewhere) and run them through basic and get them some life skills and discipline for a couple of years and then set them free with a GI Bill.

Too many poor decisions are made regarding kids and education. Going on some college tours last summer with my oldest kid has made this all quite apparent. Also, the quality of student is starkly different between institutions.

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Re: The epic tales of Corn Pop’s young companion (POTUS46 complaint department)

#556

Post by mgil » Sun Sep 18, 2022 5:55 am

aurelius wrote: Tue Sep 13, 2022 3:59 pm I believe a common sentiment is we all feel poorer compared to 10, 20, and 30 years ago. That I agree with. And that is much bigger than inflation.
Are we? Or is our discretionary spending distributed across more “stuff” now?

30 years ago, video entertainment was either over the air, at the theater, via cable, or vcr. A lot of people were content with over the air and the occasional movie.

We weren’t psychologically burdened with maintaining new technology like computers and cellphones. Most of the population didn’t have or need one.

Cars were infinitely easier to repair by the layperson. Granted, they were also less safe and less fuel efficient, so some of those costs are likely a wash.

I bitch about money all the time, yet I have three cars, all newer than 2019, a scooter, a home gym, two big TVs and a smaller (40”) one. FiOS, cable, 4 cellphones, etc. This nickel and dime shit adds up so quick.

I am glad that there is some sort of “fixer” counterculture growing, but I fear that is too late for many consumer goods.

I absolutely agree that we all feel like we are getting crunched and that it’s getting harder to save. But some of that is because we’ve been suckered in by consumerism.

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Re: The epic tales of Corn Pop’s young companion (POTUS46 complaint department)

#557

Post by aurelius » Sun Sep 18, 2022 4:31 pm

mgil wrote: Sun Sep 18, 2022 5:55 amDiscussion of consumerism
Thanks to technological progress modern economies have an enormous comparative amount of wealth to distribute compared to earlier eras. Wealth is comparative. A ridiculous example: we are better off than a serf in the 1200's.

You mention the increase in expense of cars. But as you point out, cars today are far superior to previous eras. Justifying their cost. But that does not apply to housing. Also, consumerism, does not explain these disturbing trends of wealth accumulation in the US economy since the 1980's.

Image

The 99% percentile is increasingly poorer than the 1%. This has bad outcomes for society.

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Re: The epic tales of Corn Pop’s young companion (POTUS46 complaint department)

#558

Post by mgil » Mon Sep 19, 2022 2:01 am

Consumerism does help explain the wealth gap. Keeping up with the Jones’ is real. For the top 1%, this usually just helps further line their pockets while the others lose wealth.

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Re: The epic tales of Corn Pop’s young companion (POTUS46 complaint department)

#559

Post by SnakePlissken » Mon Sep 19, 2022 4:25 am

https://www.cbsnews.com/news/minimum-wa ... ductivity/
"Dean makes an important point. Whether or not you should argue it should be $26, it is a very strong point illustrating what has been happening with our economy," said Ken Jacobs, the chair of the University of California, Berkeley Center for Labor Research and Education. Since the 1970s, "We have seen that complete divorce between wages and productivity and massively increased inequality with most gains going to people at the top."

A $26 an hour minimum wage might strike some as unrealistic, with Baker noting that his analysis is more of a "thought experiment" than a practical proposition. For one, more than tripling the federal baseline wage would result in a host of undesirable economic effects, from a spike in unemployment (as employers would need to cut jobs in order to pay the workers they could afford to keep on) to higher inflation.

"The problem is that we have made many changes to the economy that shifted huge amounts of income upward, so that we cannot support a pay structure that gives workers at the bottom $52,000 a year," Baker wrote.
I'm not a supporter of raising the minimum wage to crazy levels after having worked with people that are completely useless to society at my Pizza Hut job, but it's a good point to make that with more advancements in Tech come greater overall wealth (or industrial capital if you exclude finance capital), but that a lot of it has been hoarded by companies, their top paid managers, and shareholders at the cost of the people that work for those companies.

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Re: The epic tales of Corn Pop’s young companion (POTUS46 complaint department)

#560

Post by mikeylikey » Mon Sep 19, 2022 8:01 am

aurelius wrote: Sun Sep 18, 2022 4:31 pm You mention the increase in expense of cars. But as you point out, cars today are far superior to previous eras. Justifying their cost. But that does not apply to housing.
Yes and no. All but the most shoddily built of houses today are going to cost far less to maintain, heat and cool than the average house built 50 years ago.

Of course, we responded by doubling the size of the average house so we're spending the same or more as % of our income.

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