Interesting lecture comparing the finances of families from the past and now
- Thread starter Sclamoz
- Start date
Few of us will read anything from Berkeley. It's way over our heads. That liberal thinking is too hard to understand.
bamacre
Lifer
- Jul 1, 2004
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Is this the one which she talks about necessities (food, health care, and education, etc.) becoming a much larger cost as a percentage of peoples' incomes? If so, it's very good. She's a very intelligent person, and seems to be pretty honest, too. She even came out and said the economic threats pushing the bailouts were exaggerated. So, maybe some might call her a loon rather than honest.
OP - can you give us some cliffs on the main points? I'd like to watch it right now, but I'm at work, and unless I have something more to go on, I won't think to watch it after I get home.
You got a point Conservative thinking revolves around paranoia,Bible,Corporation greed, morality(lmfao), self righteousness and I got mine so fuck everyone else.
*sigh* I look forward to the day when the face of conservatism bears no resemblance to the pitfalls of religion. We could nix four of the six items on that list just doing just that.
Pancakes, anyone?
Cliffs:
(Kinda skerry how the) median income for males did not increase from 1970 - 2005 (actual decline of $800 ? )
Contributions to savings as a percentage of disposable income: +11% in 1984 to -1% in 2006.
Revolving debt as a percent of annual income: Less than 1.5% in 1972 --- around 15% in 2005.
She then compared saving rate / revolving debt on the same graph. Yes. It was as ugly as you may suspect.
She wonders: How are we spending differently now than we were in 1772?
A family of four was spending 32% less in 2005 for clothing than in 1972. 18% less for food. 52% less for major appliances. 24% less for automobiles (Major factor: Americans keep cars 2 years longer than they used to in 1972).
So where is the money going?
76% increase in the cost of housing (mortgage payment). Employer-sponsored health insurance: 74% more. Cars (families have more of them): 52% more. Child Care: 100% more (She makes the point that this expense did not really exist in 1972 so this is really a new category of expenditure). The 'tax rate' has gone up approximately 25% (Before you Cons get your panties in a bunch, remember: The average family has 2 wage earners now).
She then compares the 'ups and downs' and provides a look at a families 'fixed costs'.
Whereas a generation ago a single income family would have 50% of their income dedicated to 'fixed costs' ---- today, 75% of a two-income families' cash goes to 'fixed costs'. The family MUST have a second income to make ends meet.
That gets you around 50% of the way through the video .....
Cliffs:
(Kinda skerry how the) median income for males did not increase from 1970 - 2005 (actual decline of $800 ? )
Contributions to savings as a percentage of disposable income: +11% in 1984 to -1% in 2006.
Revolving debt as a percent of annual income: Less than 1.5% in 1972 --- around 15% in 2005.
She then compared saving rate / revolving debt on the same graph. Yes. It was as ugly as you may suspect.
She wonders: How are we spending differently now than we were in 1772?
A family of four was spending 32% less in 2005 for clothing than in 1972. 18% less for food. 52% less for major appliances. 24% less for automobiles (Major factor: Americans keep cars 2 years longer than they used to in 1972).
So where is the money going?
76% increase in the cost of housing (mortgage payment). Employer-sponsored health insurance: 74% more. Cars (families have more of them): 52% more. Child Care: 100% more (She makes the point that this expense did not really exist in 1972 so this is really a new category of expenditure). The 'tax rate' has gone up approximately 25% (Before you Cons get your panties in a bunch, remember: The average family has 2 wage earners now).
She then compares the 'ups and downs' and provides a look at a families 'fixed costs'.
Whereas a generation ago a single income family would have 50% of their income dedicated to 'fixed costs' ---- today, 75% of a two-income families' cash goes to 'fixed costs'. The family MUST have a second income to make ends meet.
That gets you around 50% of the way through the video .....
novasatori
Diamond Member
- Feb 27, 2003
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First to note, the speaker is from Harvard Law School, she was only at Berkeley to give the speech.
Sorry if its hard to read and long, it was an hour long speech after all.
Sorry if its hard to read and long, it was an hour long speech after all.
- Mar 20, 2000
- 102,396
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my statement is: well what do you expect when married women join the labor force in large numbers? no sh!t male compensation hasn't budged and may have gone down.
and what did people do when married women joined the workforce? they spent it on the middle class dream: a decent house in a safe neighborhood with good schools. so what happens when demand for those goes up? price goes up. which meant that those middle class families who had a stay at home mom now needed the extra income to stay in the middle class dream.
figure out drugs and schools and we'll all be better off.
and what did people do when married women joined the workforce? they spent it on the middle class dream: a decent house in a safe neighborhood with good schools. so what happens when demand for those goes up? price goes up. which meant that those middle class families who had a stay at home mom now needed the extra income to stay in the middle class dream.
figure out drugs and schools and we'll all be better off.
bamacre
Lifer
- Jul 1, 2004
- 21,029
- 2
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She does a fantastic job of describing the problems, which are very real.
Where your ideology and opinion comes into play is in recognizing the cause of, and thus, the solution to, these problems.
So for me, obviously these are the results of government intervention in and control of the marketplace. Where consumers have the most control and most choices, costs go down. Where government has more control, where consumers have less choices, costs go up.
Where your ideology and opinion comes into play is in recognizing the cause of, and thus, the solution to, these problems.
So for me, obviously these are the results of government intervention in and control of the marketplace. Where consumers have the most control and most choices, costs go down. Where government has more control, where consumers have less choices, costs go up.
Slew Foot
Lifer
- Sep 22, 2005
- 12,379
- 96
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I personally blame housing prices the most. When peoplre are stuffing 30-50% of their income away on (common in CA) they dont have money left over for anything else.
A lot of that comes from demand inflation, as was stated above, when he went to a two earner society, instead of saving that extra money, we increased consumption and the increased demand led to inflation.
A lot of that comes from demand inflation, as was stated above, when he went to a two earner society, instead of saving that extra money, we increased consumption and the increased demand led to inflation.
Consumption didn't lead to inflation, especially since inflation has been relatively low overall and long-term wages have kept up with it. Housing appreciated something like .2% above inflation up until 1999 or so.
I do agree that the biggest problem is consumption of all goods, in general. When you look at all of the other bills that people have now, it's grossly out of proportion to 50 years ago. People see "wants" as "needs" these days. You NEED to have a cell phone, you NEED to have cable/internet, you NEED to have 2 cars, you NEED to have a bigger house (can't have 2 kids in the same bedroom...gosh!), you NEED to have HD DVRs hooked up to HDTVs in every room, you NEED a Wii/PS3/360.
Of this shit that you NEED that add thousands of dollars to costs over the year.
That isn't an input into inflation as far as I know.
fleshconsumed
Diamond Member
- Feb 21, 2002
- 6,486
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Watching the lecture right now, first graphs are shown.
Nothing we haven't known before. However, amidst all this doom and gloom I think it would be interesting to know how US compares to Europe in this regard. Have the real income for one earner come down for Europeans as well, what about their savings rate or what about their revolving debt? Is this a uniquely American situation, or has it affected everybody on this globe?
Nothing we haven't known before. However, amidst all this doom and gloom I think it would be interesting to know how US compares to Europe in this regard. Have the real income for one earner come down for Europeans as well, what about their savings rate or what about their revolving debt? Is this a uniquely American situation, or has it affected everybody on this globe?
Praxis1452
Platinum Member
- Jan 31, 2006
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The lecture went over that point also, and concluded that overall consumption was equal or less than 1970's. Spending on electronics did go up, but was nowhere near enough to cover the decrease for food and clothing. As for need for cell-phones and need for 2 cars, I think those are valid needs. 2 workers = 2 transportation needs. Mom not in the house because she's working? Call her on the cellphone. Your view on "wants" are a little skewed and exaggerated.
The lecture's point about rising education cost affecting middle class was the most poignant part for me. College tuition alone accounts for $100,000+. Add up the cost of K-12, day care, tutoring, supplemental classes, and extra-curricular costs, it's insane how much you have to spend to make sure your child has a fair-shot at earning roughly the same income you did 30 years ago.
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