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?
Well, yes, but that's also from the expectation of higher standards. Combine that with the sheer mass of consumption for - pick a product, pork - and the costs soon become very high indeed.
Scary thought: very little of our actual total food produced and imported is actually examined. If we insisted on complete examination it would be prohibitively expensive.
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.
For good reason: if you don't take care of the regular maintenance people die. Homeowners are notorious for not doing maintenance until it is too late unless the maintenance is also cosmetic. (fortunately for roof and siding when it looks bad it is bad, and most other parts of a house don't wear out)
The original comment was almost certainly about zoning regulations, not safety regulations. Obviously inspecting elevators so people don't plunge to their deaths is something we know how to do.
Yes, I was a being tongue-in-cheek at the expense of clarity. The elevator, in combination with advances in building materials and engineering, allows for construction of high-rise condominiums. These lower the cost of housing by improving the efficiency of land use. Regulation prevents this technology from being used in many of the areas where it is needed most.
It's not that part of regulations that are causing housing affordability issues. More zoning regulations that say you have to have x parking spaces with x lot sizes under x height with x impact fees and x long bureaucratic processes.
The problem is you can't compete with cash buyers, or people who can qualify to borrow hundreds of thousands of dollars when you can't (along with the influx of foreign money from China and South America, and stagnant middle class wages for 40 or so years).
Remove government support for mortgages, remove tax deductions, and put in place higher taxes for non-owner occupied dwellings. This will (mostly) fix the affordable housing issue. Work will still have to be done on pushing wages up.
Textbooks are more highly regulated than cell phone service? I doubt it.
As the article tries to point out, the things we need are largely dominated by human costs. TV manufacturing is automated and scaled, but child care is not.
Textbooks are not particularly regulated, but they are an interesting monopoly. You probably don't think of them as a monopoly, but they are. If you just want to learn calculus, any text will do, but if you are taking a college class, you have to have the text the instructor says. You'd better even have the same edition. So the publisher can charge pretty much any price, because you (the buyer) have no choice.
More often than not, you have to have the text the professor (and or department head) had a hand in writing/editing/producing, and therefore gets royalties from. It's corrupt as all hell.
Sounds similar to the monopoly on SIM chips by cell service providers.
We were not always required to have the same (or any) textbook in some of my college classes. Sometimes, multiple alternatives (with brief reviews) were given.
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.
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.
I think the issue might be people requiring better and better products. Cost vs. utility is decreasing, but the absolute cost rises.
Graphics cards are a great example. The new gtx1080 is faster, and half(?) the cost, of the previous generation Titan, but costs a lot more than the gtx980 (previous gen card it replaced).
So you could say Nvidia cards are getting more expensive, but not really. Price vs. performance is falling.
Ten times more expensive over 30 years? What was inflation over those 30 years? Was it a factor of 10?
Even if not... how were the airbags in a VW 30 years ago? Oh, it didn't have them? You're literally not buying the same thing, even if it serves the same function.
The statement from the mid-to-late 1980s was that the computer you want always costs $2000. That quit being true from about 2000 to about 2010. But if you don't need high-end graphics (by current standards), you can buy a quite nice computer for $700.
> The other day I read a Volkswagen (VW Golf) today is ten times more expensive today then thirty years ago.
After adjusting for inflation? I'm gonna need a citation on that. This number sounds bogus.
> A modern graphic card nowadays costs 500$, 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.
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.
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).
> while the older models still work like a clock if there is no rust issue it will last another thirty years (if well maintained).
There is every reason to believe that a modern VW will last for 60 years as well in similar situations. I would guess the new one will last longer than the old one: VW has been improving quality over the years.
Of course most cars are wrecked long before that 60 years: humans make bad drivers. People also tend to not want to take care of old cars as well. Cars don't hold value in general so keeping the car on the road for 60 years will more than once call for more maintenance dollars than the car is worth.
> There is every reason to believe that a modern VW will last for 60 years as well in similar situations. I would guess the new one will last longer than the old one
That's funny and must be a joke.
Cars since at least the late nineties are completely designed in 3D CAD (computer aided design). The manufacturer knows exactly what each part weights, how much each part costs, how long each part lasts and they increased the revenue margin tremendously while lowering the car quality to last just as long enough and earn a lot of money additionally with car parts that break exactly two weeks after the 3 or 5 year warrent. Or vital parts that aren't protected to corrosion, and transform a good car in a few years.
Look at the BBC TV show Top Gears (pre 2016). For their christmas special the hosts drove with older cars around the world in sheer unbelievable tortious conditions for the cars. An american or european car build in 2000s/2010s is made to last for x years, and need to replace several parts after every y thousends miles. If you take an old Mercedes, Volvo, etc from the 1970-1990s you can use it for thirty or fourty years even in demanding regions of the world. Such cars run in their later life after being a taxi vehicle in US/Europe for twenty years with the same car engine or a replacement another thirty years in Africa or parts of Asia. You can't do that with newer models, at all (with the exception of a few models like Mercedes G perhaps, but certainly not with Mercedes E or S class - the last "well" built ones are from 1999, the same or often a lot worse with most other US/European car manufactorer - like the 1970s VW cars run fine today, but don't even think about owning a new model for more than ten years - it would get very expensive fast).
The Golf is not ten times more expensive today than 30 years ago, not even close, non even in nominal dollar value. Adjusted for inflation, a 1986 Golf would have to have retailed for less than $1000 for the 10x number to hold (the 2016 starts at $20k, which is about $9k in 1986).
Also, FWIW, the Golf of today seems to be more of a upscale car, where the 80's models felt substantially more of a no-nonsense workaday car.
You are a bit off on the increase in auto prices. For instance, A 1978 VW Rabbit (Golf predecessor) cost around $5000. A 2016 Golf starts at $18,500. I haven't had a VW in a long time, but the Rabbit was a pretty bare bones automobile. Almost anything these days is way more luxurious than cars back then and way more reliable.
A nVidia GForce GT580 was less than $500 (like $400), and a mid-to-highend GT570 around $250. The same class of cards the GTX 1080 costs now $650-$700 and the GTX 1070 $450.
"GTX 1070 prices start at $429 instead of $379, while GTX 1080 prices start at $649 (and if you actually want a card in stock, that’ll be $699). These are prices that are closer to last generations GTX 980 Ti/980 prices than they are 980/970, and it means that the actual GTX 1000 series price premium is much higher as it stands, at $100+ compared to the last generation. Given that these cards keep selling out, clearly there are enough buyers willing to pay these prices – it’s the free market in action – but it means NVIDIA’s MSRPs are for the moment an imaginary number."
Fact is computer components got more expensive, as less people buy a PC. It correlates with the stagnation of single core performance of Intel/AMD (aka no need to replace a years old PC at all) and the less than inviting situation that Microsoft introduced with Windows 8 and continues even more aggressive with Windows 10. The users simply buy an iOS or Android tablet and a Playstation 4 to prevent continues frustration.
I wouldn't go so far as "most of us". Having a home is a necessity; having a home with "character" is a luxury. Inexpensive housing needs to exist too.
Mass producing homes would likely mean more density/taller apartment complexes, not prefab mobile homes. And the necessity part of housing is having a decent home you can afford, having one with outward 'character' is a nice-to-have.
If we're talking about cost here, "character" is a luxury. I personally would welcome lower rent (or lower building costs) in exchange for something generic.
Actually prefab houses can have as much character as any other suburban house (many will argue this is zero, but even those people will get an idea of what they can look like). Several of my neighbors live in one, and I didn't even know if for years: they look like a normal house. The need to bring it to the lot on a truck places some limits on the size of rooms and where walls much be to resist shipping issues. However a quality mass produced house is cheaper than regular construction.
Manufactured houses earned their bad reputation though. Many of them are/were junk. A lot of them are made by the same guys (and quality) who make trailer houses. Many city (suburban) codes, or HOAs will not let you put one up at all. This means that you don't see many of the quality ones. Most people are not actually qualified to judge quality of construction, some of them even today look nice for 10 years and then the maintenance nightmare begins: the parts are not standard home center sizes so it is a lot of labor to fix anything.
For most suburban houses you can take tens of thousands $$$ off the cost of new construction, get a good floor plan, and have your house built in 1/4th the time as regular construction. Anyone who is thinking about building their own house should look into this option (remember what I said about quality above though), but there are more energy efficient options that I think you should pay extra for even though it drives you back to site built.
I was frankly shocked the first time I saw Blu Homes. They look a helluva lot nicer than just typical 50 yr old wood frame ranches I see in the Peninsula. Including the one I live in.
How do you mass produce childcare? Build a nice loving robot? It's a crappy job that pays minimum wage.
As for school, you could easily argue that we already have mass produced education. There is an abundance of low-grade colleges, pseudo-colleges and fake universities that charge fortunes (in debt of course) for an "education" that is worth about as much as grass clippings.
There already is mass produced housing too, they are mobile homes. Do you want to lift whatever local zoning regulation is preventing a mobile home park from popping up nextdoor to you?
Or maybe - and this is a crazy idea - but for thousands of years, the parents looked after their kids?? Having someone else do it for you, definitely counts as a luxury not a necessity.
Just in the middle of the last century, so within living memory, a household with a single earner, even blue-collar, could afford a house, a car, and to send the kids to college. So we do know how to do this.
Out of couriosity (non-us guy here), what kind of unnecessary regulations has the US in that matter?
But I don't think the analogy to cars or other goods is completely valid: You'd also have to mass produce the land to build the houses on, which, from what I know, isn't possible yet today...
Of course you can go another route and try to build many cheap apartments in a small amount of space. That's basically what has been done in Germany (both of them) in the 1950s and onwards: They were building many large, very dense apartment complexes with architecture optimized for easy construction and for providing living space for as many people as possible. (Typically implemented as high-rise "apartment towers")
Cities are still dealing with the after-effects of those projects today: The apartments are typically very small and far away from parks or playgrounds. Maintenance is slso lacking as the owners try to minimize cost. This has made them unattractive for almost everyone who can afford something better. The result of of course that the tenants are for a high part very low-income or "problematic" persons who couldn't get any other apartment. This creates an unsafe environment and makes the apartments even less attractive, leading to a downward spiral...
Modern urban planning had tried to learn from those disasters. We know today that "living quality" isn't just a luxury, it can have a direct effect on vandalism, the crime rate, etc.
The regulations that are overwhelming and unnecessary exist mostly in San Francisco (the biggest audience of HN).
In SF, zoning limits prevent you from building too high, and you have things like abandoned warehouses sitting unused because they are zoned for "light industrial" instead of residential.
And even IF your awesome new project to increase the housing supply follows all the zoning rules, it is likely to be blocked anyway. This is because the not in my back yard community will retroactively change the zoning laws to prevent the construction of new buildings.
And I'm not talking about governments preventing shitty buildings from being created. I'm talking about developers who want to build extremely high quality luxury apartments, while offering the community 30 percent of the units as rent controlled apartments and still getting blocked, because apparently some people prefer 100 percent rent controlled of a 5 story building instead of 30 percent of a 50 story building.
none of these things can be mass produced, even in principle.
housing supply can be increased to a certain extent but it's not straightforward. increasing housing supply in marginal areas leads to untenable situations. increasing housing supply in high demand areas is incredibly difficult for many reasons, some of which are regulatory (and solveable) others are simply the hard fact that you can't add more square miles to the surface of the earth.
healthcare can't be mass produced. it is strictly limited by availability of medical facilities, doctors, nurses, and health care administrators.
education can't be mass produced. it is strictly limited by availability of educational institutions. the university is a smoldering ruin these days, if you hadn't noticed. its possible that alternative approaches to education might be a good way to dramatically increase the supply available. it's a conversation we need to start having as a society.
essential food products CAN be mass produced and they already are. increases in commodity prices are heavily linked to geopolitics, energy economies (processing, refrigeration, and distribution tend to dominate costs and those are all functions of energy price), and long established dietary habits. it would be much more efficient for people to eat 90% less meat than they presently do but good luck changing the habit on a mass scale.
There's certainly a correlation between necessities and government regulation, but I think that's an oversimplification. A more nuanced way to look at it is to consider the context in which a consumer needs to decide what to spend their money on...
* Necessities have a much different demand than luxuries. The free market may play against consumers when not getting healthcare or food is not an option.
* Markets like healthcare and education make the cost benefit analysis for the consumer so hard as to be effectively not done by most of the population. people find out the cost after they already owe the money a lot of the time. gov programs can exacerbate this but so can free market loans and insurance.
* As the article points out it's also got a lot to do with the production of goods. Mfg costs have come way down, innovations for lowering healthcare costs are much more complicated.
* Also consumers may have less money in their pockets to begin with because of some of the same reasons luxuries are cheap. Cheap mfg = cheap or no mfg paycheck in the us.
1. Largely above inflation are everything requiring local work.
2. Below inflation are everything mass produced in Asia.
3. Staying at 0 are the mix of the first 2, your car is built locally with automation and parts coming from everywhere in the world.
4. The last, housing and food is basically the center mass of the inflation calculations, this is basically normal that it is following the inflation.
The particular case of college tuition and textbooks is a US issue, we do not have it in the rest of the world. So, we just learnt that the higher education system in the US is broken or maybe we knew it already?
higher education, housing, healthcare, and many forms of essential food products (particularly produce and grains) have gone up in price by a hugely significant amount.
The market for healthcare is not free. If you don't buy it, you die or suffer in pain. There's no other transaction where that would be considered a free consumer choice.
If you walked into Best Buy and they said "Buy this TV or we'll kill you" that would be robbery, not a free market transaction, but that's pretty much the choice you have when you decide to buy healthcare or not.
Nonsense. Most cases of people going to the doctor are not immediately lethal. Broken bones, large skin lesions, rashes and the flu, back pain and tooth aches. With all of these things, it is really nice to go to the doctor, but you don't necessarily have to: You "just" face large amounts of pain and possibly long-term damage. Rational decision making takes place in a free market: You weigh your pain and the damage against the money spent at the doctor.
By socializing healthcare, we destroy its efficiency and drive up prices. If everyone goes to the doctor because of a little cough because it's "free", that is precisely the irrational uncapitalistic decision making we do not need. Another aspect is dumping millions into old people with end-stage cancer who die anyway, just prolonging the massive suffering by a couple of months or years (I personally know of such a case and it's heartbreaking how the greed of the doctors and the socialist health care system work together).
I think there's significant evidence that socialized healthcare does not increase medical costs vs a system like the us has. Quite the opposite. In the us our costs grow dramatically compared to the rest of the world yet our outcomes are worse than many socialized systems.
Socialized healthcare can absolutely include limits on what they will pay for and not to reduce overuse. There's zero reason it has to allow for unconstrained spending.
> By socializing healthcare, we destroy its efficiency and drive up prices. If everyone goes to the doctor because of a little cough because it's "free", that is precisely the irrational uncapitalistic decision making we do not need.
You say that like you are predicting the outcome of an experiment that hasn't been tried -- but socialized medicine has been tried in dozens of countries, and the price and efficiency outcomes you predicted have not happened in any of them!
In fact, people going to the doctor more often for things like a "little cough" is a good thing, because it increases the likelihood that serious conditions will be discovered early, in the course of treating less-serious conditions. The life expectancy of Japanese people, which is the highest in the world, has been largely credited to the fact that they visit doctors more frequently than most other people.
but socialized medicine has been tried in dozens of countries, and the price and efficiency outcomes you predicted have not happened in any of them
This is factually wrong. In countries where such a socialization has happened, a vast increase in medical spending happened as a result (depending on how much it was socialized). And there seems to be no end to the increasing prices of insurances and doctors.
You know, even if that were true (which I doubt) due to vast numbers of people now getting treatment they would have done without before, who is to say that the value rendered to society by that does not exceed the expenditure?
I don't think your idealized "market will fix everything" capitalist model takes account, among many other things, of the very true fact that people are frequently shortsighted and stupid.
> If you've had a cough for three weeks or more, tell your doctor. It's probably nothing serious, but you're not wasting anyone's time by getting it checked out. Call your GP today.
> By socializing healthcare, we destroy its efficiency and drive up prices. If everyone goes to the doctor because of a little cough because it's "free", that is precisely the irrational uncapitalistic decision making we do not need.
We know you're wrong by looking at rates of medication compliance. People who are prescribed medication often don't take it correctly. This is the case for minor and severe illnesses; it's the case for life-threatening illnesses; and it's the case if people get their meds for free or if they pay market price for their meds.
Worth noting that that website - probably the most down-to-earth, accessible public health resource on the internet - is the product of a socialized health care system.
Not only that but a lot of the time you have no reasonable way to know what a medical service will cost you until it's already done. You can't even reason about shopping around for a better price much of the time. Insurance coverage rules are so complicated and astoundingly open to evaluation by your provider after the fact that consumer choice is basically nullified. There's effectively no downward price pressure at all for this reason. Insurers and medical providers have built a feedback loop of ever increasing prices that consumers have virtually no power to stop except by risking their own health.
Contrast that with a typically optional and not insured procedure like laser eye surgery where prices have fallen over time and are clearly advertised. Consumers can shop around and know ahead of time what the price will be thus prices fell.
Without that option there's nothing free about the market for consumers.
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.
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.
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?
Hilarious coming from wapo. Considering they espouse the socialist agenda and money printing that has lead to this happening. "Give everyone free money" food gets expensive. "ahh!, food is getting too expensive, give everyone free money." food gets even more expensive. "Aah, healthcare is too expensive, give everyone free healthcare, especially since food is so high!" Food and healthcare get super expensive, until everyone needs government assistance to live and we all vote democrat. It would seem they aren't without a sense of irony.
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.
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.
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.
Definitely a good point, and a puzzling one as well. A follow up question to think about would be: what's the reason for those overhead/administrative cost/monopolies, etc? And more intriguingly, what if there were no "Made In China", would have everything's price gone up like in healthcare/education?
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.
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.)
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.
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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[ 2.9 ms ] story [ 172 ms ] threadScary thought: very little of our actual total food produced and imported is actually examined. If we insisted on complete examination it would be prohibitively expensive.
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.
The problem is you can't compete with cash buyers, or people who can qualify to borrow hundreds of thousands of dollars when you can't (along with the influx of foreign money from China and South America, and stagnant middle class wages for 40 or so years).
Remove government support for mortgages, remove tax deductions, and put in place higher taxes for non-owner occupied dwellings. This will (mostly) fix the affordable housing issue. Work will still have to be done on pushing wages up.
Why exempt owner occupiers? There are the worst NIMBYs.
(https://www.dartmouth.edu/~wfischel/Papers/00-04.PDF)
As the article tries to point out, the things we need are largely dominated by human costs. TV manufacturing is automated and scaled, but child care is not.
We were not always required to have the same (or any) textbook in some of my college classes. Sometimes, multiple alternatives (with brief reviews) were given.
They are not gonna ask you 'What's the third letter on the second line of page 317?' are they?
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.
Graphics cards are a great example. The new gtx1080 is faster, and half(?) the cost, of the previous generation Titan, but costs a lot more than the gtx980 (previous gen card it replaced).
So you could say Nvidia cards are getting more expensive, but not really. Price vs. performance is falling.
I'm not sure the price comparisons you give make sense because $200 today still buys you a better CPU/GPU than $200 did back then..
Even if not... how were the airbags in a VW 30 years ago? Oh, it didn't have them? You're literally not buying the same thing, even if it serves the same function.
The statement from the mid-to-late 1980s was that the computer you want always costs $2000. That quit being true from about 2000 to about 2010. But if you don't need high-end graphics (by current standards), you can buy a quite nice computer for $700.
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.
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).
There is every reason to believe that a modern VW will last for 60 years as well in similar situations. I would guess the new one will last longer than the old one: VW has been improving quality over the years.
Of course most cars are wrecked long before that 60 years: humans make bad drivers. People also tend to not want to take care of old cars as well. Cars don't hold value in general so keeping the car on the road for 60 years will more than once call for more maintenance dollars than the car is worth.
That's funny and must be a joke.
Cars since at least the late nineties are completely designed in 3D CAD (computer aided design). The manufacturer knows exactly what each part weights, how much each part costs, how long each part lasts and they increased the revenue margin tremendously while lowering the car quality to last just as long enough and earn a lot of money additionally with car parts that break exactly two weeks after the 3 or 5 year warrent. Or vital parts that aren't protected to corrosion, and transform a good car in a few years.
Look at the BBC TV show Top Gears (pre 2016). For their christmas special the hosts drove with older cars around the world in sheer unbelievable tortious conditions for the cars. An american or european car build in 2000s/2010s is made to last for x years, and need to replace several parts after every y thousends miles. If you take an old Mercedes, Volvo, etc from the 1970-1990s you can use it for thirty or fourty years even in demanding regions of the world. Such cars run in their later life after being a taxi vehicle in US/Europe for twenty years with the same car engine or a replacement another thirty years in Africa or parts of Asia. You can't do that with newer models, at all (with the exception of a few models like Mercedes G perhaps, but certainly not with Mercedes E or S class - the last "well" built ones are from 1999, the same or often a lot worse with most other US/European car manufactorer - like the 1970s VW cars run fine today, but don't even think about owning a new model for more than ten years - it would get very expensive fast).
Also, FWIW, the Golf of today seems to be more of a upscale car, where the 80's models felt substantially more of a no-nonsense workaday car.
"GTX 1070 prices start at $429 instead of $379, while GTX 1080 prices start at $649 (and if you actually want a card in stock, that’ll be $699). These are prices that are closer to last generations GTX 980 Ti/980 prices than they are 980/970, and it means that the actual GTX 1000 series price premium is much higher as it stands, at $100+ compared to the last generation. Given that these cards keep selling out, clearly there are enough buyers willing to pay these prices – it’s the free market in action – but it means NVIDIA’s MSRPs are for the moment an imaginary number."
-- http://www.anandtech.com/show/10325/the-nvidia-geforce-gtx-1...
Fact is computer components got more expensive, as less people buy a PC. It correlates with the stagnation of single core performance of Intel/AMD (aka no need to replace a years old PC at all) and the less than inviting situation that Microsoft introduced with Windows 8 and continues even more aggressive with Windows 10. The users simply buy an iOS or Android tablet and a Playstation 4 to prevent continues frustration.
At the very least housing could be mass produced if there werent so many regulations getting in the way.
Manufactured houses earned their bad reputation though. Many of them are/were junk. A lot of them are made by the same guys (and quality) who make trailer houses. Many city (suburban) codes, or HOAs will not let you put one up at all. This means that you don't see many of the quality ones. Most people are not actually qualified to judge quality of construction, some of them even today look nice for 10 years and then the maintenance nightmare begins: the parts are not standard home center sizes so it is a lot of labor to fix anything.
For most suburban houses you can take tens of thousands $$$ off the cost of new construction, get a good floor plan, and have your house built in 1/4th the time as regular construction. Anyone who is thinking about building their own house should look into this option (remember what I said about quality above though), but there are more energy efficient options that I think you should pay extra for even though it drives you back to site built.
Maybe it was this place: https://www.huf-haus.com/en.html
So, these homes lack character?
In the US, Sears used to sell homes in a similar fashion.
The problem with trying to do this in the US is the diversity of building codes across the country which limits the economy of scale significantly.
As for school, you could easily argue that we already have mass produced education. There is an abundance of low-grade colleges, pseudo-colleges and fake universities that charge fortunes (in debt of course) for an "education" that is worth about as much as grass clippings.
There already is mass produced housing too, they are mobile homes. Do you want to lift whatever local zoning regulation is preventing a mobile home park from popping up nextdoor to you?
And yes, the economy is broken if both parents must work.
But I don't think the analogy to cars or other goods is completely valid: You'd also have to mass produce the land to build the houses on, which, from what I know, isn't possible yet today...
Of course you can go another route and try to build many cheap apartments in a small amount of space. That's basically what has been done in Germany (both of them) in the 1950s and onwards: They were building many large, very dense apartment complexes with architecture optimized for easy construction and for providing living space for as many people as possible. (Typically implemented as high-rise "apartment towers")
Cities are still dealing with the after-effects of those projects today: The apartments are typically very small and far away from parks or playgrounds. Maintenance is slso lacking as the owners try to minimize cost. This has made them unattractive for almost everyone who can afford something better. The result of of course that the tenants are for a high part very low-income or "problematic" persons who couldn't get any other apartment. This creates an unsafe environment and makes the apartments even less attractive, leading to a downward spiral...
Modern urban planning had tried to learn from those disasters. We know today that "living quality" isn't just a luxury, it can have a direct effect on vandalism, the crime rate, etc.
In SF, zoning limits prevent you from building too high, and you have things like abandoned warehouses sitting unused because they are zoned for "light industrial" instead of residential.
And even IF your awesome new project to increase the housing supply follows all the zoning rules, it is likely to be blocked anyway. This is because the not in my back yard community will retroactively change the zoning laws to prevent the construction of new buildings.
And I'm not talking about governments preventing shitty buildings from being created. I'm talking about developers who want to build extremely high quality luxury apartments, while offering the community 30 percent of the units as rent controlled apartments and still getting blocked, because apparently some people prefer 100 percent rent controlled of a 5 story building instead of 30 percent of a 50 story building.
housing supply can be increased to a certain extent but it's not straightforward. increasing housing supply in marginal areas leads to untenable situations. increasing housing supply in high demand areas is incredibly difficult for many reasons, some of which are regulatory (and solveable) others are simply the hard fact that you can't add more square miles to the surface of the earth.
healthcare can't be mass produced. it is strictly limited by availability of medical facilities, doctors, nurses, and health care administrators.
education can't be mass produced. it is strictly limited by availability of educational institutions. the university is a smoldering ruin these days, if you hadn't noticed. its possible that alternative approaches to education might be a good way to dramatically increase the supply available. it's a conversation we need to start having as a society.
essential food products CAN be mass produced and they already are. increases in commodity prices are heavily linked to geopolitics, energy economies (processing, refrigeration, and distribution tend to dominate costs and those are all functions of energy price), and long established dietary habits. it would be much more efficient for people to eat 90% less meat than they presently do but good luck changing the habit on a mass scale.
It certainly is for livestock.
* Necessities have a much different demand than luxuries. The free market may play against consumers when not getting healthcare or food is not an option.
* Markets like healthcare and education make the cost benefit analysis for the consumer so hard as to be effectively not done by most of the population. people find out the cost after they already owe the money a lot of the time. gov programs can exacerbate this but so can free market loans and insurance.
* As the article points out it's also got a lot to do with the production of goods. Mfg costs have come way down, innovations for lowering healthcare costs are much more complicated.
* Also consumers may have less money in their pockets to begin with because of some of the same reasons luxuries are cheap. Cheap mfg = cheap or no mfg paycheck in the us.
1. Largely above inflation are everything requiring local work.
2. Below inflation are everything mass produced in Asia.
3. Staying at 0 are the mix of the first 2, your car is built locally with automation and parts coming from everywhere in the world.
4. The last, housing and food is basically the center mass of the inflation calculations, this is basically normal that it is following the inflation.
The particular case of college tuition and textbooks is a US issue, we do not have it in the rest of the world. So, we just learnt that the higher education system in the US is broken or maybe we knew it already?
If you walked into Best Buy and they said "Buy this TV or we'll kill you" that would be robbery, not a free market transaction, but that's pretty much the choice you have when you decide to buy healthcare or not.
By socializing healthcare, we destroy its efficiency and drive up prices. If everyone goes to the doctor because of a little cough because it's "free", that is precisely the irrational uncapitalistic decision making we do not need. Another aspect is dumping millions into old people with end-stage cancer who die anyway, just prolonging the massive suffering by a couple of months or years (I personally know of such a case and it's heartbreaking how the greed of the doctors and the socialist health care system work together).
Socialized healthcare can absolutely include limits on what they will pay for and not to reduce overuse. There's zero reason it has to allow for unconstrained spending.
You say that like you are predicting the outcome of an experiment that hasn't been tried -- but socialized medicine has been tried in dozens of countries, and the price and efficiency outcomes you predicted have not happened in any of them!
In fact, people going to the doctor more often for things like a "little cough" is a good thing, because it increases the likelihood that serious conditions will be discovered early, in the course of treating less-serious conditions. The life expectancy of Japanese people, which is the highest in the world, has been largely credited to the fact that they visit doctors more frequently than most other people.
This is factually wrong. In countries where such a socialization has happened, a vast increase in medical spending happened as a result (depending on how much it was socialized). And there seems to be no end to the increasing prices of insurances and doctors.
I don't think your idealized "market will fix everything" capitalist model takes account, among many other things, of the very true fact that people are frequently shortsighted and stupid.
If you've had a cough for more than 3 weeks it's probably nothing, but it might be cancer.
https://www.nhs.uk/be-clear-on-cancer/symptoms/lung-cancer
> If you've had a cough for three weeks or more, tell your doctor. It's probably nothing serious, but you're not wasting anyone's time by getting it checked out. Call your GP today.
> By socializing healthcare, we destroy its efficiency and drive up prices. If everyone goes to the doctor because of a little cough because it's "free", that is precisely the irrational uncapitalistic decision making we do not need.
We know you're wrong by looking at rates of medication compliance. People who are prescribed medication often don't take it correctly. This is the case for minor and severe illnesses; it's the case for life-threatening illnesses; and it's the case if people get their meds for free or if they pay market price for their meds.
This is pretty rich. What world do you live in where healthcare is an efficient market?
The US has one of the least socialized and least efficient healthcare systems in the OECD, so I'm quite skeptical about that.
Contrast that with a typically optional and not insured procedure like laser eye surgery where prices have fallen over time and are clearly advertised. Consumers can shop around and know ahead of time what the price will be thus prices fell.
Without that option there's nothing free about the market for consumers.
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.
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.
Selective labor protectionism.
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.
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.