Economics has met the enemy, and it is economics

[KrazyHorse]

Whatever you say, sweetheart...

[The Mad Monk]

Sweethearts

[Kidlicious]

I remember several threads when he WAS the ******.

[DaShi]

No, not if the median household income rises faster than the price of the basket of goods included in the CPI...

Then what is your point?

[DaShi]

You have no idea what cpi is supposed to measure. Before arguing with somebody, you should make at least a minimal effort to understand the ideas you're talking about.

Thanks for sharing good sharing.

[Kuciwalker]

You mean, what was my point in the original thread? I was debunking the claim that the median real household income in 2010 was the same as the median real household income in 1970, and then going into reasons why this was so despite the CPI-adjusted median nominal incomes were equal.

My purpose here is to figure out WTF OB thinks I said.

[KrazyHorse]

Thanks for sharing good sharing.

You're welcome. The information to make you less retarded is freely available to anybody with an internet connection and the ability to use Google.

[DaShi]

You mean, what was my point in the original thread? I was debunking the claim that the median real household income in 2010 was the same as the median real household income in 1970, and then going into reasons why this was so despite the CPI-adjusted median nominal incomes were equal.

My purpose here is to figure out WTF OB thinks I said.

Alright. But CPI allows you to quantify the difference, which is why it is often used to make such comparisons. I'll agree that quality is certainly an important factor in purchasing decisions, but it is too qualitative to be used in such comparisons. There are probably many old people who would prefer to return to the 1970s than live in 2010, with all its new fangled contraptions. Then there's Disco Stue.

[Uncle Sparky]

[Kidlicious]

Alright. But CPI allows you to quantify the difference, which is why it is often used to make such comparisons. I'll agree that quality is certainly an important factor in purchasing decisions, but it is too qualitative to be used in such comparisons. There are probably many old people who would prefer to return to the 1970s than live in 2010, with all its new fangled contraptions. Then there's Disco Stue.

Young people didn't live in the 70s. I remember that records were funner than digital music.

[MikeH]

No they weren't. They took up loads of space, they were unreliable.

It was really hard to share music with your friends, it was really hard to hear new music, you were limited to the radio.

It sucked.

I mean, they are quite cool to look at, but modern times are SO much better for kids.

[Jon Miller]

By this reasoning, those on welfare are richer than the Queen Elizabeth 1.

One of the things which matters is social mobility, the ability to become wealthy/powerful, the ability to have more than you need, and so on. On these matters, society has been failing to improve the lives of the majority of it's constituents.

JM

[MikeH]

those on welfare are richer than the Queen Elizabeth 1.

Well, I think the poorest in the UK have average lifespans longer than nobles in tudor times. They have access to more, better quality and more varied food, they have access to technology vastly superior to what was available in those times and travel options. They have access to much better education, even than the rich.

I suspect, the social mobility of the poor now is vastly superior to what it was in Tudor times.

[Jon Miller]

I suspect, the social mobility of the poor now is vastly superior to what it was in Tudor times.

Oh, most definitely. But I was comparing the poor now to the rich in Tudor times and am suggesting that the quality of goods/etc you buy is not the most reasonable metric.

JM

[Kuciwalker]

Alright. But CPI allows you to quantify the difference, which is why it is often used to make such comparisons.

Yes, but that's not terribly relevant when it gives you the wrong answer.

I'll agree that quality is certainly an important factor in purchasing decisions, but it is too qualitative to be used in such comparisons.

#@$%#$@$

MY ARGUMENT IS NOT THIS:

1. CPI-adjusted median household income is the same in 2010 as in 1970, implying that the real median household income has not improved over that period
2. But CPI doesn't account for the changing quality of goods, therefore (1) is wrong.

THIS IS MY ARGUMENT:

1. CPI-adjusted median household income is the same in 2010 as in 1970, implying that the real median household income has not improved over that period
2. But that's obviously false
3. Therefore CPI does not let us make useful comparisons of the real value of dollars over that kind of timespan.
4. The fact that CPI does not account for the changing quality of goods is probably one reason for this.

There are probably many old people who would prefer to return to the 1970s than live in 2010, with all its new fangled contraptions. Then there's Disco Stue.

I strongly suspect the overwhelming majority of people would take the second of these two options:

1. The quantity of 1970 goods purchasable at 1970 prices with the 1970 median household income
2. The quantity of 2010 goods purchasable at 2010 prices with the 2010 median household income

Preferences are, obviously, subjective, which means that there is no super-duper-objective way to measure inflation at all. However, preferences for consumer goods are widely similar across most of the population, otherwise we never would have noticed this whole "inflation" thing in the first place.