Sunday, September 10, 2017

We are richer than we realize Martin Feldstein

Op ed piece in the Wall St Journal.  Feldstein, economist, Reagan's chairman of Council of Economic Advisers, argues that although wages have been stagnant for decades, improvement in the quality of products amounts to an improvement in the standard of living.  He cites television sets and audio speakers as examples.  Strange choice of examples though.  TV sets have been good to us, a 1950's RCA color TV, table model in a cheap sheet metal cabinet, 21 inch round picture tube sold for $500 in the 1950's.  I bought a new Sony flat screen 31 inch recently for $400 at Walmarts.  But audio speakers are not the glamour product they were back when Acoustic Research AR-2's ruled the land.  I don't think they even sell decent stereo speakers up here anymore.  Clearly a product whose time has passed.
   Feldstein should have mentioned automobiles.  Back in the day you could buy a brand new low end six passenger Chevy sedan for around $2800.  It got 18-20 mpg, and only lasted 60,000 miles or 6 years, what ever came first. Today you can buy a 4 passenger Chevy Cruz, which will get better than 20 mpg, and last for 100,000 miles or 15 years, but it costs $17,000.  Better quality, off set by six times the price.
   Dunno if I buy Feldstein's argument.  Modern products are better, but they mostly cost like crazy.  If you haven't had a decent pay raise since the 1950's, you are hurting.   

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