What Planet Money Fails to Consider . . . Again

[peristaltor]

The Planet Money blog mentioned the new iPhone 5 coming out soon, and quoted a note from someone at JPMorgan. The claim, according to Planet Money:

The JPMorgan note seems very mathy and precise. It starts with the full cost of the new phone, subtracts the value of the imports in each phone (imports are subtracted from economic growth numbers)

Comments

[fivemack]

It is not possible to buy larger-value items at an Apple Store with cash; a friend of mine turned up with $500 which he'd bought at £1=$2 to the Chicago Apple Store for an ipad, back when ipads were new and shiny, and was told they wouldn't take the money and required payment on credit card.

'the balance carried for just three months' seems an unreasonable assumption - don't your credit cards have a monthly billing cycle, and doesn't everyone in a position to buy toys as expensive as an iphone5 do so with a card that's paid off in full at the end of each month?

[peristaltor]

. . . don't your credit cards have a monthly billing cycle. . .

They do.

. . . doesn't everyone in a position to buy toys as expensive as an iphone5 do so with a card that's paid off in full at the end of each month?

Sadly, no. I personally pay off my card every month (except when unexpected costs arise, like auto repairs) and have done so for years; but talking with friends I realize I am a statistical outlier. I am staggered by the debt many I personally know carry for longer than three months. They know they are in an unsustainable position, a few have even been through bankruptcy before; but many of these folks outright dismiss the option of forgoing shiny gadgetry. And many of these are addicted to their iphones (or similar devices).

I based the three-month carrying of debt based on a WAG, a mix of those who responsibly budget and, as you note, pay off cards every month, and those others I know who never pay more than the minimum and have carried maxed balances for years.

[wildilocks]

I just went to a lecture by Richard Heinberg last night (he's touring Australia this month). It really is terrifying just how little so many so called "experts" understand about what the more and more deregulated fractional reserve system is doing to us and how debt works currently is really REALLY fucked up. The thing that pisses me off is that debt *isn't* inherently bad: it's only when it gets *completely* unrelated to physical assets, that it becomes unstable.

This obsession with growth is going to be the end of us :(

[peristaltor]

Yup. Pretty sad.

Heinberg, eh? Lucky. I made an audio montage about money creation about a year ago that included a bunch of Heinberg. I planned to use it for a podcast that never got off the ground (and never will). Then I thought I might put it up on YouTube, but over achiever that I am, I decided the graphics had to be engaging rather than silly and static, so I had to teach myself all these programs to pull it off. I'm about a third done compiling the graphics on Power Point, but nowhere near complete.

I've done this (back in the day) on 16mm film, VHS and larger video formats. It was easier somehow than clicky-clicky computer work. I should probably finish it or delete it.

*Sigh*