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Comment by sushshshsh | Hacker News Reader

It's a cold hard fact of life that things are expensive.

Our ancestors were able to afford things in the year 1900 by building them themselves. They often lived on free farmland, worked the land to grow their food, had one pair of clothes, had no need for transportation or entertainment expenses. If you got sick or there was a drought, well...

Then in the 1950s suddenly Americans were able to afford everything with just a basic job. Wife, house, car, kids. However in Germany and Japan at the same time, a family was precisely able to afford dirt.

Gradually, as this imbalance has rightfully been corrected through economic competition, we Americans have just been crying about all the luxuries we can't afford anymore.

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It's a cold hard fact of life that most necessary things (not luxuries) really aren't that expensive anymore. It's mostly just housing and healthcare.

Healthcare is weird, maybe it will never be cheap without socialized medicine.

Housing is way overpriced though. The fed has continued to artificially inflate the price (despite a significant amount of housing that goes unused) by buying unprofitable mortgage backed securities and zoning prevents development restricting supply. Go outside and look around. Even in wealthy developed places most of the land in the US sits completely unused (not farms, just unused woods.) Where there are buildings they're often mostly empty because that's profitable (because the debt owed by the owners isn't called.) Because taking out loans to build luxury housing is profitable despite demand for low/medium income housing, low/medium income housing never gets built.

The crying is because if in the 50's we could afford these things with just a basic job then why 70 years later do many struggle to afford the same things? Has technology and society not evolved to be more effective and efficient since then?

Most of the things you pay for costs more the more other people earn. A doctors visit will cost more as he earns more, as do all other jobs demanding access to others people time. Land (and therefore housing) costs more as other people get more money to bid on it, as do all other things with strict limits to supply.

Goods that doesn't follow this tend to either be vastly more affordable or vastly superior today than 70 years ago. The exception would be goods requiring fossil fuel which has gotten more expensive for obvious reasons.

Housing, medical, and education have gone insane with respect to price.

Additionally lot's of work has gone to poor people around the world - modern transportation and communication has allowed the living standard of the world to greatly increase. When looking at the global level, the reduction in poverty has been amazing.

So this problem has 2 sides - heavily regulated domains have seen a huge price increase, and low skill work has been stagnant as it's been spread around the world.

Global society has indeed become far more efficient today than in the 1950s. That's precisely why a working class job no longer affords a middle class lifestyle.

All industrialized countries except the United States were physically destroyed by World War II. The US was the only place where any significant amount of industrial infrastructure still existed, so the US had a massive postwar economic boom as the nearly sole supplier of industrial goods as the rest of the world lay in ruins.

American workers thus enjoyed a brief period where a basic working class industrial job could pay for a middle class lifestyle, entirely due to that inefficiency.

Nowadays, things are far more equal and efficient globally. American workers no longer enjoy exclusive access to industrial infrastructure, so having a basic job once again yields only a basic lifestyle.

A very well articulated version of the neoliberal quip “why do you hate the global poor?” :)

You may find this perspective by Russ Roberts, host of EconTalk, to be interesting: https://www.youtube.com/watch?v=3dL5G4QYEhc . Explores this very question in his series.

I'm curious about what you mean by "crying about all the luxuries we can't afford anymore". Who is doing that (crying)? What exactly are they saying? Is this just some sentiment that you picked up on social media or is there substantial evidence?

Thanks for the question, I'm happy to give my perspective:

In the 1950s, the reason that the US consumer was able to afford a $10,000 house on $2,500 of yearly gross income is because A) houses were available at that price and B) income was available at that level. If you fast forward 70 years, A and B are a lot less true, but I would like to focus more on B.

High wages are not available for the majority of Americans (e,g Amazon warehouse employees, not doctors and software engineers) because of two reasons:

1) Middle class manufacturing jobs have rightly or wrongly been shipped overseas

2) There are no American companies capable of employing 150 million Americans at $100,000+ per year. Instead these American companies are collectively only employing a few million people at most.

The result is a two tier society, with a small group of rich individuals and a large group of poor individuals who rightfully are wondering how can they obtain the money/"luxuries" of life like a house, a car, good medical insurance (or fair medical prices), vacations, good schooling, etc, all of which were possible in the 1950s.

The answer sadly, for those who are not gainfully employed, is that they need to somehow find a way to land a $100,000 a year job, which is not easy when there are not many on offer. Like I said earlier, I'm sure 150 million people could learn how to code or be doctors, but I very highly doubt that the government and corporations that control this country would ever want to see that happen, because of course they are the ones who need to pay the salaries.

The de facto result of all this is that corporations and governments find ways to cut expenses by cutting services or outsourcing jobs to cheaper countries with cheaper labor.

It is a political problem that can only be solved politically, unless the world suddenly decided to start engaging in technological subversion of worldwide systems by choosing Bitcoin instead of Visa, bitmessage instead of Facebook, and solar panels instead of grid electricity.

I'm curious if you could elaborate more on "it's a political problem that can only be solved politically"

I think I agree with you, but do you imply this would be a rein in of the international corporate greed with heavy regulations and trade enforcement?

It is hard to say, because I am not sure what the impetus was exactly for corporations to leave the United States. It's not even possible to say it was a "good" or "bad" thing they left because if an American loses a job and an Indian gains one, is it good or bad? If a factory that pollutes the environment leaves for another country, is it good or bad? If a shareholder extracts value from increased cost efficiency from offshoring, is it good or bad? For me, very hard to say.

What I will say though is that the world needs to do a much better job of lowering prices for consumers. Right now much of the excess riches generated in this world is from screwing customers, not serving a large number of customers fairly. An example of this would be the American medical industry, or Chinese construction industry.

>The result is a two tier society, with a small group of rich individuals and a large group of poor individuals who rightfully are wondering how can they obtain the money/"luxuries" of life like a house, a car, good medical insurance (or fair medical prices), vacations, good schooling, etc, all of which were possible in the 1950s.

>The answer sadly, for those who are not gainfully employed, is that they need to somehow find a way to land a $100,000 a year job, which is not easy when there are not many on offer.

That's just not true. There are plenty of places where you can get the things in your first paragraph on far less than 100k a year.

And they are dwindling, because there is no area in the U.S. that is building sufficient housing supply.

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