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Discussion: (104 comments)

  1. Max Planck

    Tomorrow, Professor Perry will compare health insurance costs.

    Stay tuned.

    1. John Dewey

      Well, he could compare the price of a heart transplant in 1956 with the price today. Oh, wait. Hearts couldn’t be transplanted in 1956.

      Ok. How about the cost to perform a laparascopic appendectomy in 1956 vs the cost today? Let’s see. The first laparascopic appendectomy was performed in 1981 ….

      I know. Let’s compare the 1956 and 2012 costx of LASIK eye surgery. Darn! LASIK surgery wasn’t developed until the 1980s and not allowed in the U.S. until 1992.

      I don’t know, Max. I think health insurance today covers a lot more than it did in 1956. How are we going to make an accurate comparison?

      1. Max Planck

        Given that creating something as exotic as the Ipod in 1958 would have cost the equivalent of a moon shot to develop in those days, Mr. Perry’s comparison’s and yours, are not even worth considering.

        1. John Dewey

          That’s sort of the point, Max Planck. What would have been prohibitively expensive 65 years ago is pretty much routine in 2012. That’s called “progress”, which is the subject of the Don Boudreaux post to which Mark referred.

          1. Max Planck

            I can live without an IPod- even a toaster. I still find good health useful, even now.

          2. John Dewey

            max planck: “I can live without an IPod- even a toaster. I still find good health useful, even now.”

            I can also live without a portable entertainment device and without a toaster, Max. But why would I want to?

          3. morganovich

            “That is what regulation does. It makes sure that things work.”

            this is absolutely false. that is NOT what regulation does. regulation stifles innovation.

            you are confusing regulation with standards.

            standards make sure things work together. you do not need government nor regulation to get them.

            look at usb, hdmi, 4g, phillips head screws and a zillion other things.

            a standard is fine and good. it promotes interoperability. it is also voluntary.

            a regulation is not. it REQUIRES you to use a standard. this prevents innovation and experimentation. you have to use USB and cannot try firewire. you must use ethernet and cannot use fibre channel.

            worse, regulation is ALWAYS behind the market. before a regulator can issue a decree, the technology must already be widely available. worse, it prevents innovators from coming up with something better and proprietary and putting it into use.

            this prevents the most important part of a market: trial and error to move technology forward.

            standards emerge on their own. if they are good standards, then no one needs to be force to comply with them. the minute they stop being good/the best, new tech emerges and possibly drives a new standard later. there is no legislative lag and political interference in letting the best tech win.

            to claim that somehow regulation is superior to emergent innovation driven standards is simply absurd and demonstrates a complete failure to grasp how technological innovation works.

            i have spent my whole career in and around technological innovation. i can tell you with absolute certainty that regulation is not what makes everyhting work. it is what gets in the way and prevents innovation.

          4. Max Planck

            “a regulation is not. it REQUIRES you to use a standard. this prevents innovation and experimentation. you have to use USB and cannot try firewire. you must use ethernet and cannot use fibre channel.”

            By your own answer, nothing was stifled. All of these methods were released into the market, and the market made it’s choice based on cost and convenience.

          5. morganovich

            max-

            you appear to have completely missed the point.

            a standard is not the same as a regulation. USB is a standard. it is a voluntary thing. it sets out a way to establish a connection. it requires no one to use it.

            it has been supplanted several times already.

            has it been a regulation, it could not have been. a regulation comes from government. it REQUIRES you to use X.

            if there was a regulation requiring use of USB, there could have been no firewire or usb 2 etc.

            you seem to be continuing to mistake standards for regulations.

            the difference is in where they come from and whether they are compulsory.

            regulations are requirements handed down by government.

            standards are interoperability agreements reached voluntarily and have no compulsory aspect.

            you are free to follow them or not.

            that is what makes them different and able to support and drive innovations as opposed to regulations which hamper it.

            it’s clear that you did not understand my answer nor the key issue here around voluntary vs mandated design.

          6. Max Planck

            Without you, I’m nothing.

        2. I wonder how much an iPod would cost, or even if it would have been invented, if consumer electronics were as highly regulated and government subsidized as is medical care.

          We do know how far telephone technology advanced when that service was subsidized, and how far it has advanced since.

          1. Max Planck

            “I wonder how much an iPod would cost, or even if it would have been invented, if consumer electronics were as highly regulated and government subsidized as is medical care.”

            We DO regulate consumer electronics. The FCC, along with other global bodies, maintain standards so everything works in conjunction with our infrastructure. There is an FCC logo on just about every electronic device you own, with a notice that the device conforms to those standards.

            That is what regulation does. It makes sure that things work.

          2. John Dewey

            max planck: “That is what regulation does. It makes sure that things work.”

            Oh, that’s really funny.

            Government regulations prevent competition and, thus, stifle innovation. Anyone who has been a consumer the past 50 years and observed the partial deregulation of several industries would know that.

          3. Max Planck

            “Government regulations prevent competition and, thus, stifle innovation. Anyone who has been a consumer the past 50 years and observed the partial deregulation of several industries would know that.”

            Nonsense- look at what the gutting of regulation and anti-trust has done to certain industries. Its given some firms monopoly status and the ability to fix prices and markets to their own suiting.

            And if the government doesn’t have a hand in it, the private sector will do it on their own. Look how Intel tried to run AMD out of business, even AFTER they captured over 85% of the market.

          4. That was an especially careful reading of what I posted, Max.

            I am well aware that consumer electronics are regulated. That’s why I wrote “AS highly regulated…” I am also aware that consumer electronics are subsidized. That’s why “as” is such an important word.

            I am not aware that, in order to win FCC approval, the iPod was subject to years of clinical trials requiring added billions in research costs before being allowed on the market. Hence the word “as”.

          5. Max Planck

            “I am not aware that, in order to win FCC approval, the iPod was subject to years of clinical trials requiring added billions in research costs before being allowed on the market. Hence the word “as”.”

            We generally do that with pharmaceuticals so people don’t die. As it is, every major “Big Pharma” firm, and God knows how many smaller ones, have been caught and fined for sending in dummied up results.

            You people are astounding. You hate your government to hell, but you’ll cheerfully lick the boots of people who would make people ill, or even kill them, to boost their own paychecks.

            http://www.nytimes.com/2012/07/03/business/glaxosmithkline-agrees-to-pay-3-billion-in-fraud-settlement.html?pagewanted=all&_r=0

            http://healthland.time.com/2012/09/17/pharma-behaving-badly-top-10-drug-company-settlements/

          6. Max

            Nonsense- look at what the gutting of regulation and anti-trust has done to certain industries. Its given some firms monopoly status and the ability to fix prices and markets to their own suiting.

            Can you point to some examples please?

            And if the government doesn’t have a hand in it, the private sector will do it on their own. Look how Intel tried to run AMD out of business, even AFTER they captured over 85% of the market.

            And they tried to run AMD out of business by doing…what? Better products at lower prices? Yeah, I hate that too when those big bullies force me to pay lower prices for things.

            Isn’t it the nature of a business to try to take market share from their rivals? Isn’t that called competition?
            I think they do it by charging lower prices. What would you prefer?

          7. Max Planck

            “And they tried to run AMD out of business by doing…what? Better products at lower prices?”

            No, they did not. Intel was tried, convicted and fined in South Korea for bribing the companyies who would consider purchasing AMD products. The were effective in doing this. They were tried convicted, and fined in the EU for doing the same thing.

            In the US, when the matter was scheduled to go to trial, Intel simply wrote a check for one half billion dollars to AMD to settle the matter, as always, without admitting guilt.

            No wonder you guys think the way you do. You imagine the business community as benevolent people just doing their best every day to serve you little elves.

          8. Max Planck

            And just the finish the point: I have NO RESPECT for any organization that bribes its way into an order. That’s not capitalism.

            On a week where banks are being fined in the billions for laundering drug money and fixing interest rates, you still nurse the idea that your markets are “free” and governments “get in the way.”

            Infantile…

          9. We generally do that with pharmaceuticals so people don’t die. As it is, every major “Big Pharma” firm, and God knows how many smaller ones, have been caught and fined for sending in dummied up results.

            Do you really think that what turn out to be major life saving drugs should take so long to get FDA approval?

            If FDA has delayed a drug for five extra years to insure it’s safety, and that drug starts saving 1400 lives/yr when it hits the market, what would you tell the survivors of those 7000 people who died while waiting for it?

          10. “You people are astounding”

            And one more time you ignore my point in order to incorrectly assert that you hate cronyism more than we do because you want to give the very government that thrives on cronyism even more power so that they can clean up cronyism.

            Libertarians believe that cronyism would be such a problem if the State didn’t have the power to give the cronies what they want. As long as it’s more profitable for cronies to buy a senator than to please the market, then senators will offer themselves for sale.

          11. WOULDN’T be such a problem.

          12. No wonder you guys think the way you do. You imagine the business community as benevolent people just doing their best every day to serve you little elves.

            Heh! Hardly.

            And just the finish the point: I have NO RESPECT for any organization that bribes its way into an order. That’s not capitalism.

            How do you feel about organizations that buy politicians?

            On a week where banks are being fined in the billions for laundering drug money and fixing interest rates, you still nurse the idea that your markets are “free” and governments “get in the way.

            You are naive at best.

          13. Max Planck

            “How do you feel about organizations that buy politicians?”

            The same way. No doubt you’re pleased with a handful of bllionaires having the ability to out contribute millions of voters all by themselves. After all: they “earned” it.

            “On a week where banks are being fined in the billions for laundering drug money and fixing interest rates, you still nurse the idea that your markets are “free” and governments “get in the way.”

            You are naive at best.

            No, you are tolerant of corruption and hypocrisy. Which, given your answers, is hardly surprising.

        3. Thank you Max Planck!

      2. I agree and the point is proven by the increase in life expectancy. We could control medical costs by saying that only those procedures and drugs developed before X could be used (fill in the year of your choice for X). Of course back then the rule for blood pressure was 100+ your age for the top number which would result in treatment today. Further back then a lot of cancers were a certain to cause death before old age caught up with one as well.
        As with much of the cost of living issue the question is how to compare like with like.

        1. John Dewey

          Lyle,

          Life expectancy is certainly an important measure of health care progress. But it is not the only measure, and critics of the U.S. health care system are mstaken when they focus only on that measure.

          Many important health care developments over the past 50 years did little to increase life expectancy. Instead, the developments have improved the quality of life of those who take advantage of them.

          The hearing aid I purchased this morning will not increase my life expectancy. But it represents an order of magnitude improvement in my ability to hear compared to the first one I purchased in 1977.

          My golf buddy and former NFL player Jim had laparscopic surgery on his knee in October and was back playing golf in November. Knee surgery was available in 1956. But the recovery time and the results from such surgery were far different.

          1. John Dewey:
            “Government regulations prevent competition and thus, stifle innovation.”

            There are instances where this occurs, no doubt.
            However, who would you have regulate the food you eat,the drugs you take, or the planes you fly in or the airspace they fly in? To summarily dismiss government regulation means what?- that leaves it to the food companies, drug makers and airlines to look out for our safety and best interest? No thanks, we are really low men on those totem poles.

          2. Actually as you suggest morbidity and mortality combined provide a pretty good measure, that is combined the indicate years of useful life. In 1958 life expectancies were 66.6 for men and 72.2 for women, where as in 2010 75.7 and 80.8. The census projects in 2020 77.1 for men and 81.9 for women. Taking the 2010 numbers thats .19 years for men and 8.6 for women. As has been observed how much are 9 more years of life worth?

          3. John Dewey

            Lyle,

            The reason I urge caution about using life expectancy is that factors other than health care impact life expectancy. IMO, the U.S. has the best medical system on the planet. But our life excpectancy is not the highest. That’s because all the medicine in the world cannot overcome lifestyle choices, violence, and genetics.

            Also, many liberals make the claim that because life expectancy has not increased much since 1980, all the extra spending on health care was wasted. But, as I tried to explain above, increasing life expectancy is not the only goal of a medical system. Improving quality of life is just as important – or perhaps even more important.

          4. Moe

            There are instances where this occurs, no doubt.
            However, who would you have regulate the food you eat,the drugs you take, or the planes you fly in or the airspace they fly in? To summarily dismiss government regulation means what?- that leaves it to the food companies, drug makers and airlines to look out for our safety and best interest? No thanks, we are really low men on those totem poles.

            I would have consumers regulate those industries. We are not low on the totem pole but on top of it. Brand and reputation are far too important to risk by harming or killing customers.

            Independent testers such as Consumer’s Union do a good job of alerting people to problems, and with almost instantaneous communication and access to information these days, problems don’t go unnoticed for long.

            Surely you don’t believe that inspectors watching whole chickens whiz by on a conveyor belt are protecting you from illness, do you? there must be something else going on.

    2. Steven Hales

      The best measure between the two periods is the constant fall in the rate of increase in all cause mortality. It has especially accelerated its fall in the past 10 years. If we wanted to quantify that we could value those extra years and subtract that value from the annual cost of healthcare. It might be that the cost of healthcare is today negative when compared to the 1950s. IOW the consumer benefits of advancements in treatments cannot be fully captured by healthcare providers just as Apple can’t capture all of its products’ consumer benefits.

      1. John Dewey

        I disagree. As I’ve tried to explain above, many important medical developments have nothing to do with increasing life expectancy. Anyone who tries to simplify the results of medical care by focusing on the single variable life expectancy is missing most of the huge advances in medical care since 1980.

      2. Max Planck

        You make a very good point, and you cannot put a price on well being, but my point was that even though these toys are cheaper, there are genuine needs people have that are bleeding us dry.

        In many ways, our quality of life is better for all kinds of technology, even music players and sonograms. Oddly, I have the sense that even with all this, people are somehow less empowered than they were back in those days. Maybe we don’t have the sense and excitement of opportunity we did back then.

        1. Steven Hales

          We have met the enemy and “it” is the devilish properties of a superior good. Quite apart from pervese incentives in healthcare; free employer provided health benefits, the mess that are DRGs, comprehensive and scheduled health insurance encouraging over-utilization, defensive medicine, an aging population and duplicative testing it is the nature of a superior good that drives demand higher with a regular identifiable trend. It is this nature, even in single payer countries, that is inescapable and has no easy solution save the potential information technology aspect to genetic and regenerative therapies whose cost should follow a “Moore’s Law” of healthcare.

          1. John Dewey

            Steven,

            Government interference in free markets is the cause for the high cost of health care today. Government limits the number of health care practitioners, limits the number of hospitals, forces costly delays on the implementation of pharmaceuticals and new equipment. At the same time, by providing senior citizens and low income families with nearly-free medical care, the government destroys the rationing provided by price.

            Employer provided health benefits are hardly the cause of higher costs. Employers carefully balance the cost of health care against the motivational and retentional benefits of providing that care.

            Economists who argue that the tax shield of employer-provided health care promotes overuse are exaggerating that impact. The tax shield for most employees is just not that significant.

            A far more costly aspect of employer-provided health care is the state mandates imposed on medium and small employers. Those would quickly get reduced if the ban on interstate sales of health insurance were removed.

          2. Max Planck

            “Quite apart from pervese incentives in healthcare; free employer provided health benefits, the mess that are DRGs, comprehensive and scheduled health insurance encouraging over-utilization, defensive medicine, an aging population and duplicative testing it is the nature of a superior good that drives demand higher with a regular identifiable trend. It is this nature, even in single payer countries, that is inescapable and has no easy solution save the potential information technology aspect to genetic and regenerative therapies whose cost should follow a “Moore’s Law” of healthcare.”

            The Canadians would seem to have a lot of these problems licked, based on the relatively meagre costs to their citizens for health care.

            The medical industrial complex is also exceptionally greedy, in case you haven’t noticed.

          3. John Dewey

            max: “The medical industrial complex is also exceptionally greedy, in case you haven’t noticed.”

            No idea what is meant by the term “medical industrial complex”. I do know that pharmaceuticals and medical equipment manufacturers compete fiercely against each other. Absent government interference, that competition would provide American consumers with the most effective drugs and the best equipment at the lowest price. Also, absent government interference, the insurors of those companies would make sure that those pharmaceuticals and the medical equipment sold in the U.S. would be the safest in the world.

          4. Max Planck

            “No idea what is meant by the term “medical industrial complex”. ”

            No doubt. The rest of your comment is straight from the Hymnal. Blind repitition of standard slogans.

          5. John Dewey

            max planck: ” The rest of your comment is straight from the Hymnal. Blind repitition of standard slogans.”

            Why insult someone because they disagree with your view? Wouldn’t your comments have more credibility if you offerred counter arguments?

          6. Max Planck

            Because your comments are devoid of any rationality. All you can say is “government bad,”

          7. Steven Hales

            John, I said “Quite apart from the perverse incentives…” and went on to point out that the primary driver of healthcare costs is consumer demand for a rapidly improving ‘superior good’. Supply adjustments in healthcare, primarily physicians, is one with long time lags so in the short run, that can stretch to years, costs will rise faster. All other drivers from government distortions, provider inefficiencies and over-utilization as a result of comprehensive and scheduled coverages paid for by third parties these could all be solved tomorrow with a more consumer directed orientation but we would still be left with a rising cost curve arising out of the nature of superior goods. We can disagree on the slope of that curve after many one time cost savings are captured but we cannot easily dismiss the many cost drivers that remain including demographics.

            What you might call free medical care is a result of Medicare contributions by that recepient during their working life which if had instead been voluntarily deposited into an investment account would now be providing premium support to that retiree. But I would posit that the market outcome would likely be very similar if both comprehensive and scheduled insurance coverage was purchased because the patient is only aware of the co-pay.

          8. John Dewey

            Why insult someone because they disagree with your view? Wouldn’t your comments have more credibility if you offerred counter arguments?

            Max has no counter arguments, as he is an economic illiterate. He thinks insults somehow add weight to his otherwise content free comments.

          9. Max Planck

            “Max has no counter arguments, as he is an economic illiterate.”

            The joke is that you flatter yourself by thinking that YOU are, Again, there is nothing in your remarks that evinces any expertise of any kind. Just a template of ignorance for you to blindly follow.

        2. John Dewey

          max planck: “The Canadians would seem to have a lot of these problems licked, based on the relatively meagre costs to their citizens for health care. ”

          Jarrett Wollstein, writing in Freeman, provides a few facts about Candian health care:

          “A quarter of a million Canadians (out of a population of only 26 million) are now on waiting lists for surgery. The average waiting period for elective surgery is four years. Women wait up to five months for Pap smears and eight months for mammograms. Since 1987, the entire country spent less money on hospital improvements than the city of Washington, D.C., which has a population of only 618,000. As a result, sophisticated diagnostic equipment is scarce in Canada and growing scarcer. There are more MRIs (magnetic resonance imagers) in Washington State, which has a population of 4.6 million, than in all of Canada, which has a population of 26 million.”

          http://www.fee.org/the_freeman/detail/national-health-insurance-a-medical-disaster#axzz2FbJIm8Tp

          1. Max Planck

            Again, what do you think you’re proving when you quote from websites that are funded by interests who are buttering their own bread?

            Are you gullible enough to take this crap as gospel?

            Know this- it is irrefutable:

            In ANY nation that has a system of nationalized health care, there is ABSOLUTELY NO CONSTITUENCY of any kind to replace it with a system like ours.

            My wife’s family lives in the UK. They wouldn’t trade the NHS for our our bloodsucking system, where hospitals can charge $100.00 to administer an aspirin.

            You keep cutting and pasting. Try talking to people who live under these systems and see if they would trade places with you.

          2. Max Planck

            Again, keep indoctrinating yourself.

          3. John Dewey

            Max,

            As I understand it, Canada does not have a national health care system. Hospitals are pretty much organized the same way they are organized in the U.S.: some are owned by cities, some are independent non-profits, and most are profit-seeking businesses. Health insurance is not nationalized, either. Each Canadian province has its own insurance system. Those government-run health insurance systems do not cover all medical expenses. Employers provide health incurance plans which cover vision and dental care, and prescription drugs.

            The Canadian health insurance programs are, like U.S. Medicare and Medicaid, headed for disaster. According to research by the Fraser institute, Canada’s two largest provinces, Quebec and Ontario, are already spending over 50% of government revenues on health care. Four other provinces will reach that level of spending by 2017. Health care spending in Canada is rising 8% annually, much faster than GDP.

          4. Max Planck

            http://en.wikipedia.org/wiki/Health_care_in_Canada

            Canadians strongly support the health system’s public rather than for-profit private basis, and a 2009 poll by Nanos Research found 86.2% of Canadians surveyed supported or strongly supported “public solutions to make our public health care stronger.”[7][8]

            A Strategic Counsel survey found 91% of Canadians prefer their healthcare system instead of a U.S. style system.[9][10] Plus 70% of Canadians rated their system as working either “well” or “very well”.[11]

            There is no constituency in any nation in the world for a US style health insurance system. None whatsoever. No one would trade their system for ours, anywhere in the world.

          5. re: “There is no constituency in any nation in the world for a US style health insurance system. None whatsoever. No one would trade their system for ours, anywhere in the world.”

            BLASPHEMY! Max!

            everyone here at AEI knows that the Canadian health care system sucks big time and they all run to the US for their needs!

            How dare you LIE about this – in AEI of all places!

            ;-)

            I can hear the footsteps now Max.. shortly you will be pronounced as stupid and confused…as well as a conniving liar

            ;-)

          6. Max Planck

            Don’t you find it odd that the same people who are losing their minds about a piddling tax increase on less than 3% of the population have absolutely no problem with the near quadrupling of health care premiums in the past decade?

            Why is that?

          7. Don’t you find it odd that the same people who are losing their minds about a piddling tax increase on less than 3% of the population have absolutely no problem with the near quadrupling of health care premiums in the past decade?

            Why is that?

            because no matter the reason, it’s the governments fault.

            simple!

          8. Don’t you find it odd that the same people who are losing their minds about a piddling tax increase on less than 3% of the population have absolutely no problem with the near quadrupling of health care premiums in the past decade?“…

            A truly remarkable display of your tenuous grip on reality there maxie boy

          9. In ANY nation that has a system of nationalized health care, there is ABSOLUTELY NO CONSTITUENCY of any kind to replace it with a system like ours.

            Of course there isn’t. Everybody loves free stuff. Just don’t ask where the money will come from. In Canada, as in the US, the fit will soon hit the shan.

          10. Max Planck

            “Of course there isn’t. Everybody loves free stuff. Just don’t ask where the money will come from. In Canada, as in the US, the fit will soon hit the shan.”

            Again, this is the content of your answers. Nothing of the kind is going to happen, because they LIKE their system and they think ours is a basket case, as does the rest of the world.

            Keep telling yourself this stuff. There’s no reality in it. No one would trade health care systems with us.

          11. Again, this is the content of your answers. Nothing of the kind is going to happen, because they LIKE their system and they think ours is a basket case, as does the rest of the world.

            Huh?

            Apparently you didn’t understand my comment. Read it again – slooooowly.

          12. Max Planck

            I DID read it- your comment is devoid of substance.

          13. I DID read it- your comment is devoid of substance.

            This from the king of substance-free comments!

            Never mind, Maxie, it’s OK. Don’t trouble yourself about it.

          14. Max Planck

            “This from the king of substance-free comments!”

            Right. Got it.

          15. Jeeze, Max… you stole my crown!

    3. Marty Flattullato

      Who makes $19 and hour nowadays — and better yet who has a job? You could buy a house for $10,000 in 1956 too, try doing that now! The government should start printing its own money again and nationalize the FED — if they complain about the interest we owe them, hand them the bill for WWI and WWII in todays dollars! Tell them that is what they owe for our boys dying over there to protect the banks and the corporations they run!

      1. Marty

        Who makes $19 and hour nowadays…

        It turns out that about half of all workers make more than that.

        — and better yet who has a job?

        Actually, according to the BLS, more than 92% of all people who want jobs, have them.

        You could buy a house for $10,000 in 1956 too, try doing that now!

        OK, how about these?

        The government should start printing its own money again…”

        You got it! In a statement released last Thursday the Fed announced it would purchase $85 billion in bonds a month for the rest of 2012. In 2013, the Fed will then continue to purchase $40 billion per month of mortgage backed securities indefinitely…

        — if they complain about the interest we owe them, hand them the bill for WWI and WWII in todays dollars! Tell them that is what they owe for our boys dying over there to protect the banks and the corporations they run!

        Huh? No idea what that means.

  2. The S&P 500 and gold too?!?

  3. That old toaster is going for ~$25 on EBAY. “A market in everything”.

    1. Actually, I think that old toaster is the one of the three products being compared that is superior to the new product. It’s been so long since I’ve toasted bread that came out evenly toasted (and not just from one side to the other, but even across one side) that the toaster may have been made in 1956.

      As for the iPod, there were turntables being made in 1956 that played back with higher fidelity than an iPod is capable of, but they weren’t sold at Sears, and they weren’t portable.

      1. To me, the most impressive of the three is the TV. Not only is it cheaper in hours worked, it is cheaper in actual price, and it is dramatically superior to its 1956 counterpart by every technical measurement, and is superior to any TV made in 1956 – period.

        1. John Dewey

          In 1956, my family in Lake Charles, LA, could regularly view two television channels, and sometimes three. Today, my relatives still living there can choose from at least 200 channels.

          Not only is today’s cheaper device far superior to what was available to anyone back then, but the uses one can get out of it would be mind-boggling to a 1950s consumer.

          1. Max Planck

            “Today, my relatives still living there can choose from at least 200 channels. ”

            So how come I still can’t find anything worth watching?

          2. John Dewey

            I find plenty worth watching on:

            – the several history channels;
            – the Discovery channel;
            – the Do-It-Yourself channel;
            – the Smithsonian channel;
            – the National Geographic channel;
            – the HGTV channel;
            – the Fox business channel;
            – CNN;
            – CNBC;
            – RFD-TV;
            – Blue Highways;
            – Animal Planet;
            – the Food Network;
            – Turner Classic Movies.

            IMO, this is truly the golden age of television.

            Perhaps you just have interests that are not shared by many other Americans, Max.

  4. “So how come I still can’t find anything worth watching?”

    Because liberals dominate the entertainment industry :D

  5. morganovich

    http://store.apple.com/us/product/HA847VC/A/bose-sounddock-series-iii-digital-music-system?fnode=77

    wouldn’t we need to include somehting like this with an ipod to make the system more comparable?

    that record player has an amp and stereo speakers.

    an ipod does not.

    still cheaper in hours, but by more like 50% as opposed to 75%.

    1. John Dewey

      So how much did the 1956 cabinet cost which holds the 40,000 records – the equivalent of the storage available on the IPOD?

  6. you could compare apples to apples

    appendectomy? Child birth? Broken Bone? Dr. Visit?

    BTW – Walmart sells pretty nifty toasters for 6 bucks.

    1. John Dewey

      I don’t think so, Larry. Just comparing the cost of a procedure in 1956 and in 2012 ignores the quality of life improvements made possible by medical advances.

      The real 2012 surgery cost of an appendectomy may be fairly close to the real 1956 surgery cost. But laparascopy changed that procedure radically. Total hospital time for today’s appendectomy patient is much shorter. Post-hospital recovery time for an appendectomy is a fraction of what it was in 1956. The permanent scar left by laparscopic surgery today is far smaller than the ones left on humans prior to the development of minimally invasive surgery.

      Surgical treatments of 2012 are so different from those of 1956 that cost comparisons are meaningless.

      1. perhaps but using that approach would invalidate comparing things like TVs also because the TVs today are nothing like the TVs of old in terms of technology….

        surely there must be some things that can be compared apple to apple… like perhaps a doctor visit or the cost of a day in a hospital room or the cost of a band aid or suture?

        1. surely there must be some things that can be compared apple to apple… like perhaps a doctor visit or the cost of a day in a hospital room or the cost of a band aid or suture?

          Band-aid. Try comparing the cost of a band-aid. Everything else involves so many improvements or potential improvements that they are hard to compare.

      2. Agreed. My then 36 year old son had an appendectomy on Monday and on Wednesday we left on a 1400 mile drive to Yellowstone. He carried his 2 year old on his shoulders most of the time when we walked places while we were there. In 1956 he would have been in the hospital at least 2 weeks and recovering at home 2 more.

        1. re: food and drug regulation

          so the prevailing opinion here is that it is not needed and actually harms the market available to people?

          I see food and drug regulation as a net benefit, not without some flaws and downsides but necessary and needed.

          1. John Dewey

            larry: “so the prevailing opinion here is that it is not needed and actually harms the market available to people?”

            Not sure about the prevailing opinion, but that’s certainly my opinion.

  7. Benjamin Cole

    If Perry and Boudreaux are correct in their sentiments, then the CPI has been overstating inflation for years. Product and service improvements have ranged all over the board from cars to medical care to low-cost haircuts.

    If the Fed hits 2 percent inflation, it may actually be targeting deflation.

    That might explain why getting stuck at zero bound is so easy.

    The Fed might have to target 4 percent inflation to keep real growth going.

    There is a central bank that targeted 0 percent inflation for the last 20 years, and another that targeted 4 percent inflation.

    That is the Bank of Japan at 0 percent and the People’s Bank of China at 4 percent.

    Guess how the economies of those two nations are working out?

    Japan and China, Guesssed how the stry tuned out.

    1. Benjamin: To suggest or imply that China’s growth is primarily a result of higher interest rates rather than, say, North American and European corporates outsourcing manufacturing and labour requirements would be misleading. You may also wish to see rural life — a better indication of how the economy *really* is — in China and Japan before making a decision.

      What I do find curious about the article is that although we talk about the costs of goods compared over time, the article doesn’t look at housing or other costs over that time. I’d also be curious to know how the ‘hour costs’ of these goods would compare if median income were used rather than average.

      Also, I rather enjoy the delicious irony of a Communist planned economy — one admittedly being opened up but still very highly controlled — being held up as an example to emulate on the AEI website by a market-oriented commenter…

  8. This is a terrific article! I’m an economics student at George Mason University and I think that all-too-often I get caught up in the complex equations and marginal changes of economics that I lose sight of the big picture.

  9. I have to note that the ’58 toaster is probably still working (perhaps with a new cord by now), while the ’12 will inexplicably become a paperweight shortly after the warranty expires next year. Guess which one was made in America? Guess which one can survive minor voltage spikes? EMPs?
    The advances in products have largely been due to the advances in electronics & computers, but the price is more fragile and short-lived products. I live close to Boston, but give me a mechanical-timer-operated appliance every time, the fancy digital controls can’t handle the 5-second blackouts we get every few days.

  10. Missing from these “productivity wonders” are the useful lifetimes of each product. Every one of the 1958 products could still be operating but none of the 2012 products will still be operating 54 years from now.

    In fact it’s doubtful most will still be in use in 5-10 years. This is the environmental waste and oil consumption nightmare of these this difference. You can’t get something for nothing and the trade-off is product lifetime and usability which directly tie to oil and waste.

    What are the hidden costs of these aspects? I can assure you the per-unit costs of oil and waste are far higher than the meager front-end cost savings.

    Current minimum geometry transistor used in products like iPods and TVs are only expected to have a 5-10 year lifespan before end-of-life failure. I’m in the semiconductor industry 30 years and have been “the guy” to measures these things.

    1. Missing from these “productivity wonders” are the useful lifetimes of each product. Every one of the 1958 products could still be operating but none of the 2012 products will still be operating 54 years from now“…

      Absolutely jg

      I inherited and still working rare six slice toaster that was originally purchased at a Chicago Montgomery-Wards in 1961…

      I can’t imagine anything that I’ve bought over the last 20 to 25 years would stand up to daily use and lasting as long as that toaster…

      So how does one assess the real cost of that toaster?

      1. John Dewey

        Today’s automobiles regularly last beyond 200,000 miles. That was just not the norm 50 years ago.

        Today there is no reason to build household products which last 50 years – particularly kitchen appliances and electronics. The features of such products are – in the minds of most consumers – obsolete after 10 to 15 years. So why would manufacturers waste money building a product to last 3 or 4 decades?

        The beauty of the free market system is that consumers get what they want. If a 3 or 4 decade appliance was what consumers desired, competition among manufacturers would ensure that’s what they were offerred.

        1. john dewey says: “Today’s automobiles regularly last beyond 200,000 miles. That was just not the norm 50 years ago“…

          NO argument there…

          Today there is no reason to build household products which last 50 years – particularly kitchen appliances and electronics. The features of such products are – in the minds of most consumers – obsolete after 10 to 15 years“…

          Really?

          Interesting observation john dewey but anecdotally I’ve not see that particular attidude personally…

          Sti;ll you may have a pretty good point there…

          The beauty of the free market system is that consumers get what they want. If a 3 or 4 decade appliance was what consumers desired, competition among manufacturers would ensure that’s what they were offerred“…

          In theory you’re absolutely on the money if you’ll pardon the pun…

          Still in today’s market place there ‘seem‘ to be fewer choices for consumers (as in the number of different companies to chose a major kitchen appliance from) in the more expensive ticket items…

          Then again its obvious maybe that the consumers voted with their wallets…

    2. I disagree.

      The only one of those 1958 products that would have a reasonable chance of lasting this long without needing some sort of major repair is the toaster.

      Tubes seldom last this long, and the life span of capacitors isn’t indefinite, either. Styli wear out, turntable belts wear out, TV tuners fail, and transformers fail.

  11. Miss Gayle

    The problem with this comparison is that the products made back in the 50s were not made to break after a year or two in order to force people to keep replacing them. So this is a very invalid comparison. You would have to compare the cost of having the same products made of the same components today. The recent stuff above was made by defacto slave labour in third world backwaters out of cheap plastic junk not meant to last. The 50s stuff was made by people making living wages out of steel and durable components. You’re comparing apples to oranges.

    1. Miss Gayle, you are right. I have this new toaster. The lever came off the first time we used it. It can be reattached, though one must peer inside with a flashlight. Also it takes an astonishingly long tome to toast anything. So long, that on 2 occasions I forgot I was toasting. So, if I add the cost of flashlight batteries and discarded english muffins into the operating costs, it may not be a better deal than the old model. Other examples are better. I would agree with previous posters about wonderful improvements in medical procedures and autos.

  12. Nice cherry picked data there. Now, perhaps we will hear a comparison of home prices, or, say, the cost of a college education? No?

    1. Slappy McFee

      Interesting argument. Perhaps you could enlighten us on your theories why your “cherry picked” items (home prices and college education) do not fit into Mr. Perry’s examples?

    2. You’re pretty much making Mark Perry’s argument for him. Those are two commodities in which the government has had a heavy, heavy hand. And we saw what happened with home prices as a result of them growing faster than inflation. Dare I guess the same is next for college?

  13. In 1958, they would have had Christmas displays and the kikes would not have gotten their way banning Christmas in public. But then, kikes deserved to be exterminated in 1958–just like today!

    1. Max Planck

      I would hope the board monitors will do the appropriate thing with this post. I may think the others fools, but this should not be tolerated on any forum.

      1. I may think the others fools, but this should not be tolerated on any forum“…

        Who are you maxie boy to want to have boundries set?

        If you’re so easily offended why hang around?

      2. I’m kind of hoping Prof. Perry leaves it up as a reminder that when we start feeling good about how enlightened we believe we are, there are still some incredibly ignorant and vicious people in the world.

        And trolls.

        1. I’m kind of hoping Prof. Perry leaves it up as a reminder that when we start feeling good about how enlightened we believe we are, there are still some incredibly ignorant and vicious people in the world“…

          Ha! Ha! Ha! Ha!

          Very good ron h!

  14. This is just more evidence that the government has been understating the true rate of inflation for decades now.

  15. “… you can thank the “miracle of the marketplace,” which brings us better and cheaper consumer goods all the time.”

    “miracle of the marketplace=low to slave wage third world workers.

    And “better off”=able to buy cheaper toasters.

    What a great Judeo-Christian nation we have become.

    1. miracle of the marketplace=low to slave wage third world workers“…

      Versus no wages?

      Well then slick here’s YOUR chance to put YOUR money where your public sentiments are…

      Open up a factory in the 3rd world and produce something that sells on the world market and pay your employees whatever makes you happy…

      Talk is cheap and its always easier spending someone else’s money…

    2. miracle of the marketplace=low to slave wage third world workers.

      And just think – with few exceptions, those workers *choose* to work at those jobs instead of whatever shitty alternatives they have.

      Like juandos, I suspect you aren’t really thinking of spending YOUR money when you decry those low wages.

  16. Cornfields

    Of course for toaster geeks (yes they exist) the 1950s was a golden age.

    A 300 dollar toaster from Williams-Sonoma, cannot toast bread nearly as well as an average sunbeam from the mid-1950s. Admittedly, it does a better job for muffins and bagels.

    My family uses a toaster from the early 1930s. It still works, and side by side with a contemporary toaster, it
    toasts about 50% more quickly, gives a crisp, yet still moist slice. Contemporary toasters tend to dessicate the bread.

    And it’s not just a question of quality, it’s a question of longevity. My parents owned one toaster from 1965 until 1987. Since that time, they have had to purchase 3 new toasters. Each new toaster failed after about 7 years.

    I have been using my 1930s toaster since 1999.

  17. The laptop or desktop or tower in front of you used to be the size of a refrigerator and you needed a roomful of them to get things done-more slowly

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