DOOM! (Insert extra Os as you see fit)

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JasonL
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Post by JasonL »

He has squeezed discretion out of spending to call everything thriving. If I take housing and do apples to apples on size and say "ok we are extracting the 5 most expensive zip codes or the 25 most expensive neighborhoods", which by the way totally can be done and supply still does exist, I can cut 90% of his index to shreds. It is overwhelmingly about housing, the choice of neighborhood and the choice of size. Then it's about healthcare where I agree we have a real problem if the person is not in a corporate plan. Then it is about higher ed if we want to insist that's part of thriving. There is a robust used car market that tons of people use so his whole thing about cars is just wrong.

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D.A. Ridgely
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Post by D.A. Ridgely »

It's almost entirely college costs and medical costs, which I'd argue the employee is paying as lost wages even if the employer is providing the health insurance, combined with significantly better standard of living expectations. Having grown up in one of those expensive zip codes, I can vouch for the fact that houses were significantly smaller, most people did not take anything close to luxury vacations or travel overseas or go very often to restaurants and there was by no means the expectation that every high school graduate would go on to college. Yes, single income families, but also single car families and nothing even remotely approaching the eventual financial security of stock ownership via IRAs, 401(k)s, etc.

True, where I lived most people worked for the federal government which had a very generous pension plan, but the standard of living even there was decidedly below what I see in pretty much any middle class neighborhood these days.

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Jennifer
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Post by Jennifer »

D.A. Ridgely wrote:
20 Feb 2020, 12:30
and there was by no means the expectation that every high school graduate would go on to college.
To be fair, in those days there's wasn't as much of a necessity for a high school graduate to get additional education before having a shot at a decent-paying job (excluding the military, perhaps--yeah, base pay for a low-rank enlisted person sucks, but there's also all the housing allowances [or at least free housing in a barracks], dependents' allowances, free healthcare and other benefits).
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Mo
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Post by Mo »

I pay more out of pocket for my corporate plan than I did 5 years ago and more 5 years ago than I paid 5 years prior. His point about not having access to old quality is a fair point because the old “starter homes” of yore no longer exist. And yes, now there are more dual incomes, but now dual incomes or a large single income have become table stakes. But dual income also means additional costs, like child care. There’s a lot missing, but it does also capture quite a bit.
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JasonL
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No such thing as starter home is an an elite perspective for areas that are already super expensive. The 1200 sqft bi level is real out in the world man.

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Warren
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JasonL wrote:
20 Feb 2020, 20:16
No such thing as starter home is an an elite perspective for areas that are already super expensive. The 1200 sqft bi level is real out in the world man.
But back in the day, good neighborhoods also had good starter homes. Like one block of 1200 sqft bilevels on postage stamp lots next to a block of 2000 sq ft ranch and craftsman houses on 1/8 acres.
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JD
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Last time I was talking to my father-in-law, I was surprised when he told me that his community has minimum-permitted house sizes. I could have understood maximum sizes (so some jerk doesn't build right up to the property line, say) but minimum surprised me. He explained that it was an explicit effort to keep property values up by preventing people from building cheap houses.
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JasonL
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Right. That's a thing in developments. I'm just saying there's a lot of housing not in those developments and those neighborhoods aren't "bad" like you gonna die they just aren't the coolest most popular most expensive.

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Warren
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JasonL wrote:
21 Feb 2020, 11:04
Right. That's a thing in developments. I'm just saying there's a lot of housing not in those developments and those neighborhoods aren't "bad" like you gonna die they just aren't the coolest most popular most expensive.
They're not ghetto, but they're either ghetto adjacent or rural adjacent.
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JasonL
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I feel like there is a defining-up of "okay place to live" into something unreasonable going on. Those ghetto adjacent places (I don't accept that btw) have more amenities, lower crime, better standard of living in almost every way. I don't dispute that the most expensive places to live have seen unreal housing inflation due to nimby nonsense, but it's simply untrue that "normal" housing stock doesn't exist in many many places.

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Ellie
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Post by Ellie »

Even South Saint Paul has a minimum size rule for new construction. Like, I don't need to live in the hippest part of downtown Minneapolis, but it would be nice to find something affordable in the suburb so janky and depressed it can barely support a chicken restuarant AND a Dairy Queen.

Edited to add: but I want to live in a bus so what do I know :lol: :lol: :lol: :lol: :lol:
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thoreau
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Post by thoreau »

Why live in a bus when you could live in a van... down by the river?
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Warren
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Post by Warren »

thoreau wrote:
21 Feb 2020, 11:58
Why live in a bus when you could live in a van... down by the river?
4 kids
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D.A. Ridgely
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Post by D.A. Ridgely »

Jason is correct that there are plenty of places where there is a stock of "starter" type, affordable homes. Whether any of us would want to move to those places and live in those houses is another matter. Back East, many communities arose where you bought a lot and had your house built or some builder would come along and build maybe four houses and sell them, then find another acre somewhere and start over, so if you drive along the streets you see a variety of shapes and sizes, some quite small and some quite large but none tiny or huge. As housing development became big business after WW II and especially as you moved west, more and more homogeneous housing began to be the norm. Then zoning laws became more and more rigorous, first perhaps for at least facially legitimate health and safety reasons, then later to preserve property values, keep out "the wrong sort of people," etc.

Anyway, you can still buy a 1200 sq ft house in a reasonably decent neighborhood in parts of DFW for under $200k. It was closer to $100k when we moved here but that's housing inflation for you. Hell, our Arlington VA house cost under $300k when we bought it in the 90s and that seemed like an astronomical sum back then.

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Ellie
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Post by Ellie »

Warren wrote:
21 Feb 2020, 12:07
thoreau wrote:
21 Feb 2020, 11:58
Why live in a bus when you could live in a van... down by the river?
4 kids
This!

Although, obviously, it will be a SHORT bus. I've seen myself driving. And especially, I've seen myself parking. Putting me behind the wheel of a 40-foot flatnose rear-engine bus would singlehandedly move the Doomsday Clock closer to midnight.
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JasonL wrote:
21 Feb 2020, 11:04
Right. That's a thing in developments. I'm just saying there's a lot of housing not in those developments and those neighborhoods aren't "bad" like you gonna die they just aren't the coolest most popular most expensive.
When you don't live in flatland, distances add time on a much different scale. I live 12 miles from Seattle as the crow flies, and my commute would still be over an hour one-way to get there, and that's if I spent the small fortune to take my car in a ferry every day. And even the untrendy bedroom community I'm living in is still becoming massively expensive because of commuters
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Jennifer
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Post by Jennifer »

D.A. Ridgely wrote:
21 Feb 2020, 12:09
Jason is correct that there are plenty of places where there is a stock of "starter" type, affordable homes. Whether any of us would want to move to those places and live in those houses is another matter.
Also, how far are those affordable houses from where the actual jobs and amenities are? There's places in America today where you can buy a move-in-ready house for about the cost of a mid-range new car ... but there is nothing else out there. (I recall some time ago there was a discussion here about some Georgetown dipshit who wrote a WaPo column along the lines of "I'm convinced we'll see total economic collapse, food riots and outright famine before my tweenage son reaches adulthood ... which is why I have a hydroponic garden in my basement and am letting the WHOLE WORLD know about it in this-here WaPo column." Whereas I thought "Hey, dumbass, if you really expect food riots to decimate your pricey neighborhood in five years, within three hours' driving distance of where you are, you can buy an off-grid West Virginia cabin for under 50k and then stock it with canned food, and that would make a lot more sense than keeping a hydroponic garden in the basement of the townhouse you think will be Ground Zero of those upcoming food riots.")

But of course, while such a cabin would make a nice bugout spot if you think you'll need one, or even a nice vacation home if you like rural wilderness areas, it is NOT a place where you could live while commuting to any type of professional job ... and even getting a job cashiering at the nearest Walmart would entail a commute of at least an hour.
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Painboy
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Post by Painboy »

What I did is what most people I know do around here and they find roommates. Or if you have a little more money buy a house and rent out a room to help cover the costs.

I don't live in a particularly nice house but it does the job, and the neighborhood is decent enough, and I live 10 mins from work. As with most things it's about what you are willing to make trade offs for to work were you want.

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"Fucking qualia." -Hugh Akston

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Jennifer
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Post by Jennifer »


Weeks the median male worker needed to work to afford a year's worth of major expenses (house, a car, health care and education) for a family of four in

1985: 30 weeks (out of 52)
2018: 53 weeks (out of 52)

https://americanaffairsjournal.org/2020 ... -thriving/
From the linked article:
...The standard economic view holds that price indices designed to measure inflation overstate the actual rise in “cost of living.”2 Such indices fail to account fully for the savings that consumers can enjoy by switching to newer and lower-cost products or sales channels, or the constant but subtle improvements in the things they buy. If “inflation” describes the increased price of buying the exact same set of things as in the past, then any new opportunities that emerge for consumers to substitute new and different things must leave them better off, or at least no worse off. Hence the price of replicating one’s 1979 level of well-being in 2018 could not possibly have risen as much as inflation suggests.

This view is wrong, however, because it relies upon the unrealistic assumptions that (1) the things available in 1979 will also be available in 2018, and (2) having the same set of things in each time period would lead to the same level of well-being. That’s not how life, or a market economy, works. To use one obvious example: Consider the period when the car was invented and widely adopted. A new invention has no effect on inflation and advancements in manufacturing that lower its price would appear deflationary. A new invention, therefore, cannot increase the cost of living as defined above because a household can always choose whether to shift consumption toward cars (if they improve welfare) or stand pat with horses and buggies. And yet, from the household’s perspective, the level of “well-being” achieved previously with no car may now require a car, whether to access retail establishments that have moved to the town’s periphery, to get to work, or to socialize with friends—in short, to remain full participants in society. The household might also face the problem that horses and buggies are no longer for sale.

Alongside both the formal concept of “inflation” that measures the economy-wide price level, and a technical “cost of living” that aims to price a fixed level of material consumption, an accurate depiction and understanding of economic trends requires a measure that tracks the evolving basket of things a family needs to achieve the financial security and social engagement typical of a flourishing middle class. Call it the “cost of thriving.” Much work could be done in constructing the most accurate possible measure or, more likely, a series of measures that tests sensitivity to various assumptions and accounts for regional and demographic differences....
Does a good job, IMO, of explaining why it's a fallacy to handwave away certain affordability issues a la "Sure, houses may be more expensive now, but they're also much bigger!" Or "Cars are more expensive but they're also much nicer!"
...A new car, according to BLS, costs no more in 2018 than in 1996.7 Anyone who has watched car advertisements over the past twenty years, let alone shopped for a car, knows this is not true. Prices have increased substantially. Typical cars that a family might consider for their primary vehicle are illustrative: the manufacturer’s suggested retail price (MSRP) for a base-model, four-door Toyota Camry increased by 40 percent, from $16,8008 to $23,600;9 the MSRP of the lowest-cost minivan, the Dodge Caravan, increased 47 percent, from $17,90010 to $26,300.11 BLS reports these prices as flat because a base-model vehicle has many more features than one did 20 years ago. In effect, estimates BLS, the 2018 Toyota Camry would have cost $23,600 back in 1996. Or, put another way, the right comparison for a base-model 2018 Camry is not a base-model 1996 Camry, but a midrange 1996 Camry SE, whose MSRP was $24,100.12

This dynamic has important implications for how economists think about substitution and their assumption that the cost of living will rise less quickly than inflation. The claim that substitution can only improve a household’s well-being requires that the same basket of goods available in year zero remain available in year one—in which case, any change must reflect the household preferring the year‑one basket. But if price increases are accompanied by changes in the available baskets of goods, a quality-adjustment analysis can yield a situation where no inflation occurs yet households must change their consumption in ways that reduce their well-being. If large and costly necessities become unaffordable while other components of the consumption basket plummet in price and become ubiquitous, inflation can seem tame and households better off, even as they lose access to the things they care about most....
Luxury items are cheaper but necessities are more expensive so officially, on paper, they cancel each other out and the "cost of living" remains about the same -- except this makes no difference for the people who can't afford those necessities.
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Jadagul
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Post by Jadagul »

Jennifer, I think that's actually the less interesting part of his point. The more interesting one to me is that if, say, the cheapest-available car becomes twice as expensive and three times as valuable, that's great for people who have no problem affording a car, but is really rough on people who were struggling to buy a cheap car before.

That said, if Nicole's link is correct, that really undermines his central claim.

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Kolohe
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Post by Kolohe »

It’s genuinely totes bizarre to me that we have near record deficits at the top of the business cycle, there’s a greater than 80% chance that either Donald Trump or Bernie Sanders will be President this time next year - but the 30 yr treasury is yielding under 2% interest.
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D.A. Ridgely
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Post by D.A. Ridgely »

Kolohe wrote:
26 Feb 2020, 18:27
It’s genuinely totes bizarre to me that we have near record deficits at the top of the business cycle, there’s a greater than 80% chance that either Donald Trump or Bernie Sanders will be President this time next year - but the 30 yr treasury is yielding under 2% interest.
It's like stagflation. They said it couldn't be done, but by God, this is America, where anything is possible!

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Pham Nuwen
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Post by Pham Nuwen »

Manufacturing and farming are in recession as I understand it. But asset prices and consumer spending are as high as ever. I missed this class in economics that day I think. Nothing makes sense to me.
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JasonL
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Our treasuries are being bid down globally. Nobody trusts any other instruments in the same way.

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