
The stuff we need is getting more expensive, other stuff is getting cheaper - jseliger
https://www.washingtonpost.com/news/wonk/wp/2016/08/17/the-stuff-we-really-need-is-getting-more-expensive-other-stuff-is-getting-cheaper
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fredliu
It looks to me whether or not a "stuff" can be "Made In China" is a strong
indicator of whether it's becoming more expensive or affordable. Basically if
it can be "Made In China" it'll be cheaper, otherwise it'll go the other
direction. "Made In China" is used loosely here referring to anything that can
be outsourced anywhere else, not limited to China.

~~~
HillaryBriss
Yes. Another aspect of this same idea is: if a service or good _must_ be
performed or manufactured by credentialed or union workers in the US (e.g.
heart surgery, college education, building inspection, electrical grid
maintenance, etc) -- it's probably getting more expensive.

Selective labor protectionism.

~~~
scottkduncan
While there is certainly a credentialed labor issue in higher education, we
don't exactly have a shortage of PhDs and it's not like there has been a rapid
ramping up in compensation for professors. In fact it has been the opposite as
colleges have moved to use more adjuncts who have far fewer protections than
tenured professors and yet the costs continue to rise unabated.

In healthcare too I don't think the credentialing of doctors and nurses is the
predominant reason for why healthcare is so expensive. It is rather a complex
mix of tremendous overhead and administrative costs, drug/device monopolies,
over-consumption of medical services, etc.

~~~
HillaryBriss
Ok. Fair points. There are other causes of high prices in certain domestic
sectors.

For higher ed, I do think the people who work in the administrative layer are
"credentialed" too. Maybe that's wrong. But these administrators and even
their assistants frequently hold post-grad degrees. And it's true that the
admin layer has ballooned.

Others point to federal educational loan guarantees as a big reason for higher
prices in higher ed.

For health care, it's true that Doctors are behind the push to keep their own
numbers limited through licensing requirements enforced by state laws. And
Medicare is not allowed to reimburse patient care provided by MDs in other
countries where costs are lower and systems are more efficient. I believe
domestic doctors are helping to keep that constraint in place.

But, yes, sure, there's also big pharma, big hospital corporations and big
medical device manufacturing -- all of which appear to have captured their
governmental regulatory agencies.

The main theme seems to be that a system of laws creates and maintains an
expensive domestic market for goods and services with well paid domestic
workers.

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nerdcity
Most of the stuff we need is more highly regulated than the other stuff...

~~~
CyberDildonics
Healthcare fits that description, food possibly, housing and education not so
much. Have they become more regulated? Are regulations the reason for
education prices increase?

~~~
twblalock
The main reason for the increase in education costs is the availability of
student loans.

Lenders will loan huge amounts of money to students, who have often never
worked and have no assets, because the loans are almost impossible to
discharge or otherwise get out of. In many cases, students qualify to borrow
more money than even their parents could.

State governments know that students can get student loans in pretty much all
circumstances, and they use that as a justification to cut funding to state
colleges -- after all, aid is available for those who need it.

Colleges increase tuition to make up for the shortfall in state funding. They
also need to attract students who have the means, via the loans, to attend the
school of their choice. So, colleges build amenities, such as luxurious
student housing and health clubs, which increase operating costs and
necessitate further increases in tuition.

Meanwhile, students are being told by their parents that they will have no
problem paying back their loans, but that's not generally true. Their parents
went to school before this vicious cycle of loans and funding emerged, and
don't fully understand the burden these loans can cause for new grads,
especially in non-STEM fields. The students borrow more than they ought to.

This is a parable of unintended consequences.

~~~
Avshalom
[http://www.demos.org/publication/pulling-higher-ed-ladder-
my...](http://www.demos.org/publication/pulling-higher-ed-ladder-myth-and-
reality-crisis-college-affordability)

------
ars
> We can afford the things we don’t need, but we need the things we can’t
> afford.

Isn't that how it's supposed to work?

If you don't need it better be cheap or I won't get it.

If I need it, I'll buy it even at a higher cost.

It's basic economics.

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throwanem
That's funny. Their thesis is that luxuries are getting cheaper while
necessities grow more expensive, but their chart of price deltas has a pair of
severely outlying luxuries right at the top.

~~~
atombath
Are you saying education is a luxury in the 'knowledge' economy?

~~~
throwanem
More or less. Knowledge and education, while maybe not wholly orthogonal, are
certainly not all that strongly correlated, and the credential itself has
perhaps never held a lower value. What is something that's very costly and not
worth much, if not a luxury?

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whiddershins
One nasty effect of this is that people who can't afford luxuries are
experiencing a much greater practical inflation than the official rate.

------
rm_-rf_slash
1: Necessary service industries like healthcare and higher education cannot be
easily replaced with alternatives for the same price point. There's a reason
few people choose to go to SUNY Binghamton while many others fight tooth-and-
nail to get into Cornell. Likewise, if you need a medical procedure done and
are in pain/discomfort, are you really gonna go for the cheaper option?

2: Real estate is a highly regulated industry and the costs of which are baked
into nearly every facet of every local economy. It affects the price of food,
haircuts, tax consulting, name it, when those businesses are affected by the
rents, which are largely affected by property taxes, which are affected by the
local economy...it's a tough cycle, one that cannot be "innovated" or
"disrupted" by some new app or device, no matter how revolutionary.

Self-driving cars and 3D printers don't change the fact that everybody has to
live somewhere and work somewhere.

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api
Years ago I heard this called "in-deflation." It's our era's stagflation.

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squozzer
Textbooks = cartel economics, captive market. Tuition = gatekeeper for a
better life, rent-seeking, high barriers to entry. Child care = Labor-
intensive, demand > supply, probably high barriers to entry. Health care =
Labor-intensive, demand > supply, high barriers to entry, anti-competitive
activities enshrined in law. Food = Labor-intensive, high barriers to entry,
subsidized (note: not much higher than CPI.) Housing = hugely illiquid,
increasing supply / density very difficult, price dominated by other factors
(schools, commutes, crime rate) (note: not much higher than CPI, probably
because it has as many downs as ups.)

~~~
notadoc
There is practically no barrier to entry in childcare, except for a background
check and the willingness to raise someone elses children for minimum wage.

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JoeAltmaier
Isn't that just Keynesian economics?

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woodandsteel
Interesting article. However, it should be noted that housing prices and
inflation are very different for urban versus rural and different areas of the
country.

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acconrad
I mean everything is getting more expensive because wages are not outpacing
inflation, all while we're heading towards negative interest rates.

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squozzer
Instead of bickering about the causes of the paradox presented by the WP, can
we agree the CPI is BS?

~~~
notadoc
Oh don't be silly, housing has totally only inflated 0.8% a year!

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RubyMyDear
It looks like the things that are increasing the most in cost have government
programs to give people money to pay for them. Maybe that's the problem! The
free market has made TVs and even cars cheaper and better than ever.

~~~
frik
The other day I read a Volkswagen (VW Golf) today is ten times more expensive
today then thirty years ago. And the modern one is cheating so it will be hard
to sell, while the older models still work like a clock if there is no rust
issue it will last another thirty years (if well maintained).

Also computers got cheaper and cheaper, but now with smartphones and tablets a
desktop computer gets a lot more expensive again. A modern graphic card
nowadays costs 500$, whereas in 2011 you got it or 200$. And CPUs got more
expensive again as well. Five years ago you could buy a highend computer for
1200$, today you pay at least 700$ more.

~~~
Analemma_
> The other day I read a Volkswagen (VW Golf) today is ten times more
> expensive today then thirty years ago.

After adjusting for inflation? I'm gonna need a citation on that. This number
sounds bogus.

> A modern graphic card nowadays costs 500$, whereas in 2011 you got it or
> 200$.

A _high-end_ graphics card (like a 1070) costs $500. A mid-range "good enough"
card (like an RX 480) costs $200. It's a segmented market, and it was exactly
the same in 2011. Again, your claims are highly suspect and I want to see some
numbers backing them up.

> And CPUs got more expensive again as well.

That's because AMD released a garbage fire architecture in Bulldozer, and
Intel, no longer having meaningful competition, did what they always do and
jacked up prices. Boo on Intel, but there's nothing macroeconomic about it.

~~~
15charlimit
A high-end graphics card is $700+, the 1070 you mentioned is toward the upper
end of the "mid tier" market. Cards like the 1060 and RX480 are considered low
tier.

~~~
TulliusCicero
This is nowhere close to true. A 1060 is only "low tier" for someone who
subscribes to /r/pcmasterrace; for regular PC gamers it's a solid mid-range
card.

Also remember that the GeForce 3, when launched, cost $600, which would be
$800 today (and this was a consumer card equivalent to the 1080, not a
professional card like the Titans).

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toodlebunions
In other words, inflation.

~~~
twblalock
Inflation is a general increase in prices. This is an increase in prices for
some goods, and a decrease for others.

