Warren Buffett - escalators

[Brock]

I posted many years ago about inflation, how it creates the impression that people are moving forward, but in fact they're walking on a stage that is moving in the opposite direction. While from a recent Warren Buffett quote he uses this same analogy, but instead refers to an escalator. I think my analogy is better though, because I use a stage, and the person on the stage can see the wall and furniture around them, and see that he is passing them, whereas on an escalator you can see the wall beside you that is not moving. This creates kind of a "Matrix" for the population, that they think they are moving forward, but in fact are not. As I posted many years ago it's actually worse then this. The human race shouldn't just be moving forward, but should be at an exponential rate, as technology, and worker productivity does. The cost of a loaf of bread should not be going up, that's one dynamic, in fact the cost of a loaf should be going down, as the cost to produce that load of bread decreases hugely as technology improves.

Warren Buffet "The average tax paying investor is now running up a down escalator whose pace has accelerated to the point where his upward progress is nil."

https://www.cnbc.com/2018/02/12/warren- ... rises.html

[John Galt]

[spacemonkey]

Wealth and debt only exist in our minds. It is what ever we say it is, or isn't. However fresh water and food is a requirement to survive. We have 0% say in that.

[Brock]

[John Galt]

My bad. i looked at a different number. this is the cost of loaf of bread

https://www.bls.gov/regions/mid-atlanti ... _table.htm

loaf of bread is $1.26/lb for white today as average. last year it was more expensive.

(just to be thorough, here is cost in 1915, along with average household income https://money.usnews.com/money/personal ... -years-ago )

anyway. so it's really way cheaper than that. it's really 0.00002229% of yearly income for a loaf of bread, if you get the cheap stuff. To put it another way, if the price for a loaf of bread as a percentage of income was the same today as it was in 1915, it would cost $5.75 for a loaf. And it would be less than a hay-penny for our ancestors in 1915 if they were paying what we are currently paying.

And also, you can't assume we worked the same hours. people worked way more hours in 1915, between 50 and 60 on average depending on job https://eh.net/encyclopedia/hours-of-wo ... s-history/ . plus they got their kids to help out -- it's household income, afterall. so no i don't think your argument holds water. and again, the quote from buffet was when inflation was actually high. right now it's very very low.

i'm also mostly upset that no one cared about my Lyceum Address joke

[Brock]

Work week in 1915 =60h * 52 = 3120hrs

yearly income 687

Cost of loaf 0.07 = 0.01% of income * 3120 = 31.2 man hours per loaf.

That can't be right because if you ate only bread and had no other expenses, I don't think you can survive off of 2 loaves per week.


Work week in 2015 = 40h * 52 = 2080hrs

yearly income 53000

Cost of loaf 1.26 = 0.00238% of income * 2080 =4.95 man hours per loaf.


I think the man hours to produce one loaf have decreased by way more then 1/6th. In early 1900s they were still using 20+ horses to pull a small combine, over a much lower yielding crop.

[John Galt]

It doesn't cost 4 hours of work to afford a loaf of bread. I don't understand your math here.

Household income doesn't mean single person working either. But it can be simplified to that, sure. If it is you can buy 20 loafs per hour of work today and you could buy 3 loafs per hour of work in 1915 and almost 5 if they worked 40 work weeks. We can split the difference and say each hour gets you 5x as much bread today as it did 100 years ago

Your entire argument that money doesn't go as far today as it used to if I recall, because of inflation. And yet, I can buy a heck of a lot more bread today, can't I?

[Brock]

My math is wrong, but my argument is that although we can buy more today per hours worked, worker productivity has outpaced that, by a long shot, and we should be able to buy a whole lot more per hours worked.

The increase in productivity should put a deflationary pressure on money. 3% inflation indicates that the money supply grew by more then 3%, because productivity also increased during the same time. The sectors of the economy who are producing more real value, are not getting rewarded as they should, there is a fake economy in the financial sector that is sucking them like a tick.

[John Galt]

[Brock]

3.5x buying power is not enough to represent the increase in productivity. You can't just look at the cost of a loaf of bread you also have to look at the cost to make a loaf of bread, and doing so in man hours is a more stable measurement, because time is constant across all things, and the rate always stays the same. We can't compare the future with the past by only adjusting for inflation because if money, and the financial system was not tampered with there would naturally be deflation.

One HP = the power of 1 horse, that means that anyone with a vehicle has the power of over 100 horses sitting in their driveway. A typical 120V outlet gives the power of 2.4 horses. I never hear about an Amish famine, and they don't even use electricity, but I do hear about non Amish kids going to school hungry. I also hear that kids in the 70s could move out on their own, get married to a stay a home wife, and have a house, and a car.