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Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: telecomguy who wrote (62327)	11/7/2002 1:10:23 PM
From: RetiredNow	Respond to of 77400

I get your point. You know, the basket of goods and services in the CPI should be focused on the things that are more static in nature, like food, housing, medical care, transportation costs, etc. Ultimately, there are must haves and there are nice to haves. The must haves are the things that everyone has to spend money on regardless of their station in life. That is what the CPI should be tracking, if it doesn't already, because those are the fixed costs that people can't moderate when things go haywire in the economy.

To: telecomguy who wrote (62327)	11/7/2002 9:49:52 PM
From: Victor Lazlo	Read Replies (1) \| Respond to of 77400

<<If a computer cost $2,000 in 1995 and the price went down to $1500 in 1996 BUT the capability (ram memory, hard disk space, CPU processor speed, better graphics card, more software loaded in for free, smaller, lighter, longer lasting, bigger monitors so you can see lot better, etc.etc.), then the price of that computer has not gone down by 25%. It has probably gone down by 70%! >> Most people dont buy computers. Many people have never ever bought one computer. People who buy a lot of computers all the time are odd. They don't count. They need help. Normal people try to get raises every year at work. Inflationary. They also buy carpentry services and auto repair services, eyeglasses, and groceries. Check your bill on this stuff. Cheaper each year? <<And it's not only tech products....almost ALL products have become BETTER because of general progress in manufacturing, design, and R&D that is applied constantly to any products/services that is being consumed today. Think about your car today versus the car that was manufactured in 1950. There is NO comparison. They are not even comparable in terms of features, comfort, safety, durability, gas cosumption, etc.etc. The cars of today are so much superior to the cars of yesteryear so how can we simply take the price of a car and compare it from one decade to another without examining what KIND of car we are comparing. For example when the economist compares the price of a car this year versus last year, do you think they use the price of fully loaded 2002 Mercedes Benz versus the price of 2001 basic Hyundai car? >> Yes of course! And thus it takes much more engineering design, trial and error to arrive at the better products. All along the way we witness pay increases, including the heaviest pay increases for the engineers and other white collar input, and the increased cost of the superior materials, more R&D and testing, and the marketing research to make sure it will sell, etc. Each incremental improvement carries with it a higher rate of cost increases than the old existing standard. The market tolerates this inflationary input because that's what consumers want. But it's inflation nonetheless. If you are saying that there is no inflation input to all these better products, then you are quite mistaken. The inflation quotient is accelerated, not muted, becuase the white collar input is so much greater. NASA's ever-more bloated budget is the best evidence of that. In 1977 you could buy a house for less than you'd have to spend for a car today. And people complain about the cost of gas, not about the outrageous cost of the car or its insurance. Gas is extremely cheap in real terms! It's a sad joke.