Comments on: In Case You Were Dying For More Polemics On the Chained CPI…Here Ya Go:

By: D Cohen

D Cohen — Tue, 01 Jan 2013 07:51:43 +0000

An employee of HP once told me – “We’re not in the printer business, we’re in the ink business”. Cost comparisons for printers need to be made with info on cost of replacement ink or toner, and the number of pages a replacement cartridge is expected to give. Once you know the price per page, you can more effectively price comparison.

By: nNomad

nNomad — Mon, 31 Dec 2012 09:37:05 +0000

Cutting social security is morally wrong and economically stupid. We need to lower the retirement age to 55 and increase social security so that it keeps up with inflation.

For 40 years, productivity has increased while wages stagnated and capital investment has stolen middle class financial security. It is time to reverse this trend and for my money, any plutocrat that isn’t prepared to reign in his or her greed can take flight and don’t let the door hit you in the &^% on your way out the door.

By: readerOfTeaLeaves

readerOfTeaLeaves — Fri, 28 Dec 2012 09:24:52 +0000

From what I see, ‘the elderly’ are a huge profit center. If you wanted to goose the economy, you’d increase the money going to the elderly. As earlier comments have noted, they need transportation, medical, and often assisted living care. They also benefit from wellness and fitness programs. You want more money flowing in the economy? Build up senior services, including fitness classes and senior center activities.

As for computer pricing:
As earlier commenters have noted, the $99 printer price is simply the gateway to get you to buy the print cartridges. HP has to make their money off the ink cartridges, not off the printer.

As for lower computer costs, they are partly due to lower costs for hardware. But it is also a factor of the transition to mobiles and devices: to smaller, more mobile types of computing.
In 2012, tablets and smartphones outshipped PCs. That was a tipping point.

Between 2008 – 2012, PC use declined more than 20%. (PC use probably dropped from around 78% down to 57% of computer use; many people did not see this shift coming with this velocity.)

Tablets did not exist in 2009; however, in the past three years, Apple has sold over 100,000,000 iPads. That enormous figure doesn’t include Samsung or Win-based tablets. It also does not include Nooks, Kindles, Kobo’s, or other eReaders.

In other words, part of the drop in computer pricing is because people are purchasing smaller, less expensive devices. (And at least in my family and acquaintance group, some of those elderly are getting a lot of benefit from tablets and eReaders. However, most of the published data that I track focuses on Millenials and Baby Boomers; I don’t have any good stats on adoption rates of tablets among seniors.)

Stats from: http://www.economistgroup.com/leanback/new-business-models/moving-from-mobile-first-to-touch-first/

By: Ryan

Ryan — Fri, 28 Dec 2012 07:00:29 +0000

I get the whole substitution idea behind this, but my problem (conceptually) is, what if I’ve made it this far by doing that, and there’s little additional savings to be gained? Sure, beans and rice could be lost and cat food gained, but is there any gauge as to how many have already sacrificed over the last 20-30 years just to stay middle class?

By: J. St.

J. St. — Fri, 28 Dec 2012 06:12:53 +0000

Right on, brother or sister!

By: cfaman

cfaman — Fri, 28 Dec 2012 04:18:06 +0000

Hey Jared, we’ve already had one big such change in Soc sec, and you can see it in the data.

Plot an index of avg payments against an index of GDP per capita and you’ll see we used to effectively boost payments at GDP/capita, much bigger than inflation. Then around 1981 that changed. Recipients are now relatively poorer by some 20% and their position in the income distribution ineluctably declines.

The chained CPI is the new gambit to further impoverish the elderly.

By: rana

rana — Fri, 28 Dec 2012 03:24:20 +0000

The real problem with the CPI and the elderly is the treatment of housing. It uses imputed rents for owner occupied housing. Thus, when rents go up the cost of living for the elderly that OWN their homes rises. But in reality they are paying no more–they own the house remember–and their wealth has gone up. (Note taxes and utilities are treated separately, so the rise in property taxes is captured correctly.)

By: Tom

Tom — Fri, 28 Dec 2012 00:38:25 +0000

Hey Jared : hope you and family are having a great holiday season. Do you know what happened to the comment I posted around 6pm last night? It was “Awaiting ModerAtion” when I saw it last? Did it get dinged? If so, can you please just send it back my way? Otherwise can you help me find it? Thanks. Tom McManus

By: denim

denim — Thu, 27 Dec 2012 22:29:49 +0000

They are Social Security recipient haters, not just Social Security haters. No sane individual does this to the weakest among us. These are clones of Amelek.

By: Procopius

Procopius — Thu, 27 Dec 2012 20:59:52 +0000

As I understand it they use surveys to find the substitution effects. The Bureau of Labor Statistics evidently has a web page that explains it in great detail; I haven’t read it.