The stuff we need is getting more expensive, other stuff is getting cheaper
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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.
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.
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.
They are not gonna ask you 'What's the third letter on the second line of page 317?' are they?
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.
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.
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.
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.
* 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.
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.
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.
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).
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.
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.
The US has one of the least socialized and least efficient healthcare systems in the OECD, so I'm quite skeptical about that.
This is pretty rich. What world do you live in where healthcare is an efficient market?
At the very least housing could be mass produced if there werent so many regulations getting in the way.
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.
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.
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.
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.
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?
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.
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).
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.
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..
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.
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).
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.
"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.