Time to Step Up, JU Conservatives!

Put your economic theory where your mouth is!

Published on January 19, 2006 By stutefish In US Domestic

Alrighty, JU, here's the deal. I'm stumped.

A certain outspoken and intensely focused member of our community has recently made the following comment:

"For the average American to be unable to buy as much this year as they did last year with their income is not economic growth. As far as jobs are concerned it depends of how much they pay and what benefits are included. IF A PERSON HAS A JOB(S) THAT DO NOT PROVIDE THE INCOME NEEDED TO LIVE, THAT IS NOT A SOLUTION."

I guess I missed the edition of Conservative Sheep Magazine that covered this, but I have no idea what to say to this.

Anybody else want to take a crack at it?

Argue on the merits only, please. No namecalling or brush-offs. If you can't make a substantial and constructive comment, please stay away from this article.

Comments (Page 1)

Dr Guy

on Jan 19, 2006

The statement is the same as:

I am alive and deserve a VCR and Color TV. That I am not able to afford it means you are discrimating against me. And that shows your lack of compassion.

See? I can do it as well. It means nothing. What it does mean is that due to energy price increases (duh!), most Americans did not keep up with inflation with their raises.

Guess what? I did! how? Did I get a BIG raise? (no just 3% and my wife got 0%). Hmmm....scratches chin....

I stopped driving so much! We cut our driving by 40%! How? Well, we both have 'second' jobs (those are the ones that we enjoy!). But instead of "driving" to the customer site, we did WHAT?

GoToMyPC!

We negotiated with the customer and they agreed to pay us the cost of the fee (about $20/mn) in exchange for being on call and available 24x7. Not a bad swap! (I love it! Already fixed one problem and my wife has already nailed a na'er do well trying to hide in bankruptcy!)

In other words, we adapted, we overcame. And we would still be eating Pizza if she was not on another diet!

stutefish

on Jan 19, 2006

Dr. Guy, if I could afford a VCR and Color TV last year, but cannot afford one this year, doesn't that mean the economy is worse this year than last year?

Assuming, of course, that I've kept the same job from last year to this.

And if the consumer price index has gone up, while the average income has gone down, doesn't that mean that I'm paying more not only for luxuries like VCRs and Color TVs, but also for necessities like baby formula and fresh produce? In fact, wouldn't that mean that my cost of living has gone up across the board, while my wages have gone down? And wouldn't that, in turn, mean that the economy had gotten worse?

cactoblasta

on Jan 19, 2006

I can do it as well. It means nothing. What it does mean is that due to energy price increases (duh!), most Americans did not keep up with inflation with their raises.

Which suggests that economic growth is being stifled by rising oil prices. I'm no economist but that'd be my conclusion. Hardly something unexpected (forecasters have been warning of approaching oil crises for decades) and the cause is fairly clear.

I don't think there's anything the US government can rationally do about it apart, perhaps, from ceasing the market-worrying posturing towards Iran or legislating out of existence the country's reliance on oil. Neither fits in with current thinking on either side of politics though so I don't see that happening.

Dr Guy

on Jan 19, 2006

Assuming, of course, that I've kept the same job from last year to this.

And assuming you bought disposable stuff!

BenUser

on Jan 19, 2006

I am alive and deserve a VCR and Color TV.

Who the hell wants a VCR any more? Those things are boat anchors.

stevendedalus

on Jan 20, 2006

Who the hell wants a VCR any more?

Hey, watch it, buddy, I have nearly a hundred Betas and over a hundred VHS!

"For the average American to be unable to buy as much this year as they did last year with their income is not economic growth. I assume the writer was addressing the fact that purchasing power is not what it was because of a dearth and disappearance of decent paying jobs. At a $15 hr wage one could handle escalating energy prices, but when he is reduced to $8 hr he has a problem.

garsgolfer

on Jan 20, 2006

if I could afford a VCR and Color TV last year, but cannot afford one this year, doesn't that mean the economy is worse this year than last year?

Actually, what it means is you're over-spending in other areas including credit purchases which eat up excess reserves affecting your ability to repeat like purchases the next year.

I've kept the same job from last year to this. And if the consumer price index has gone up, while the average income has gone down, doesn't that mean that I'm paying more not only for luxuries like VCRs and Color TVs, but also for necessities like baby formula and fresh produce?

No.

Consumer Price Index is a statistical measure of a weighted average of prices of a specified set of goods and services purchased by wage earners. Income taxes and investment items are not included. Which means if CPI has increased and baby formula prices increase along with other foods, at the same time you purchase a home, your spendable income is less, affecting your ability to purchase a TV or VCR while your asset base has increased and you still have the same job.

Dr Guy

on Jan 20, 2006

No. Not everything goes up in lockstep. The CPI is made up of averages from everything. One of the key components is fuel. And yes it did go up very much. So to maintain your SOL, you can cut back on other things, or on the higher priced things.

I think Raises will eventualy reflect the higher fuel costs, but employers (and most people) did not see that run up coming. How much do you want to bet that wages outpace the CPI this year as employers make up for the lost purchasing power?

DJBandit

on Jan 20, 2006

I still have to wonder why is it so important for anyone to have a VCR or DVD player? But even more why do people just have to have this years model new car or SUV for that matter? I love it when people complain they don't have enough to pay their bills but have things that most people could only dream of.

Take my Bro. He had a well paying job, now he's not doing to good cause there was problem with employees in the company he worked for (stealing money)and the company closed cause their best customer left. It's ironic that after that happened he got himself a BMW, having a Honda that paid $600 a month (to long of story to explain why he pays $600 for a Honda). Now he's having a hard time paying bills. I wonder why? Specially when he and his wife both have good high paying jobs. In the end it was all his fault, not the Govts.

As time passes and technology overtakes all products most people can't live with, people have to learn to control their spending. The majority of Americans are ignorant to how much in interest they pay every time they use a credit card. Think, it maybe be cheaper online, but with the interest charge on the credit card and the small payments on makes to it, at times one pays more for the value of the item than it was at the store where you could have gotten it the same day and be able to take it back much easier if any problems occured.

I hope I'm making sense here. I know in the past I could confuse people easily.

garsgolfer

on Jan 21, 2006

I've wondered that also, especially since I live in the land of "keeping up with the Jones" or OZ....Southern California. I see it every day. What's interesting is it's OVER LOOKED social destruction which brings me to an article.

Dr Guy

on Jan 21, 2006

I live in the land of "keeping up with the Jones" or OZ....Southern California

Yea, but you got palm trees! OUrs in in the garage with a heater (dont ask me, ask my wife!)

Gideon MacLeish

on Jan 21, 2006

Walter E. Williams addressed it yesterday better than I could. He mentioned that he could not understand anyone who was standing in front of him complaining about the inability to earn a living wage. Obviously, if the person's still alive, he is earning a living wage.

That being said, the statement is highly flawed. What is considered a "living wage" by certain individuals in this country is a wage adequate to provide a two car, nice TV, DVD, VCR, game system and all the frills to make up a middle class existence...and provide it NOW! No delayed gratification here.

I support a family (5 children) on about HALF the US median income. While property values are lower here than in many areas, my family is also substantially larger. We pinch every penny, conserve energy, think about our purchases, and try to avoid unneccessary frills. A two income family making minimum wage (NOTE: the average wage for unskilled labor is substantially above minimum) makes just over $20,000 if they're both working 40 hours a week; the number hops to over $22,000 with two kids and EIC figured in. One wage earner working 60 hours a week (before you consider that oppressive, consider that the average working family in 1900 consisted of two adults working 50-60 or more hours a week, children working full time jobs, and boarders whenever the family could take them in) makes just over $15,000; again the number leaps to over $19,000 when EIC is figured in (again, assuming two or more kids). This does not even begin to factor in the numerous benefits that these families are eligible to receive at the federal and state level, which raises their "true income" substantially.

The average wage for unskilled kitchen workers (source: Bureau of Labor Statistics) is over $8.00 an hour. So a two income family at 40 hours a week where dad works as a cook and mom as a dishwasher would be pulling in about $32,000 a year...not a fortune, but not chump change either (note: I've done the homework on this and all of the appropriate links can be found on my article "We're WINNING the War on Poverty). So, this individual's information is based on sound bites, not actual fact.

I would continue in stating that, according to the World Bank, 1.1 BILLION (yes, that's with a "b", folks) individuals worldwide live on less than $1 a day, an amount obtainable by most Americans simply by walking and collecting aluminim cans (actually, you can FAR exceed that by that endeavour...but I digress). That's 1/5th of the world's total population. By comparison, only about 13% of Americans live in "poverty" by American standards, which is SUBSTANTIALLY higher than world standards.

That's where I'd start. But since I've already documented this information WITH SOURCES elsewhere, I highly doubt the individual in question will listen.

Gideon MacLeish

on Jan 21, 2006

I find it utterly ridiculous that there would be complaint about paying more for fresh produce (as well as baby formula...five kids and we've never bought a NICKEL's worth of baby formula!). The produce problem can EASILY be solved by bringing back the "Victory Gardens"; a project I've LONG advocated.

As for diapers, if you can't afford disposable, buy cloth (less impact on the environment anyway!). It worked for families for thousands of years!

Gideon MacLeish

on Jan 21, 2006

For the record, my comments on that thread went without response from our military buddy.

David St. Hubbins

on Jan 22, 2006

Bah. What the fuck do Americans know about conservatism? Watch and learn some proper conservatism from Canada, asstards, as Stephen Harper and the Conservative Party of Canada drink deeply from the cup of victory on the morrow.

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