By on April 7, 2009

The KitchenAid Espresso Pro Line—delivering 15 bars of pressure with a separate steam unit pump. Just holding it in my hands at the store convinced me. Solid weight, no rattle. Cast iron and proper machining, no plastic cheats anywhere. I was tempted to take the lid off and peek inside but didn’t. Given what would follow I should have pulled out an Umbraco-set and given it a go.

The steamer didn’t steam. Didn’t matter what setting I used. Water came out of the nozzle, but nothing you’d call steam. Dreams of frothy Cappuccinos were postponed, and I returned the unit. Got a phone call the same day telling me to come by and pick up a new one. Apparently, the problem was a well known one, and dismantling my Pro Line to fix it was too much bother.

I didn’t mind. Have never had the misfortune to get a true lemon from a car dealer, but as I understand it, you have to threaten them with abducting their closest relatives before they’ll even dream of letting you have a new replacement.

The Pro Line now delivered a fine jet of steam, and I was shooting Cappuccinos with the dexterity of a Milanese barista.

Until a few weeks in when the 15-bar pressure dropped to a trickle. I checked the metallic filter but it wasn’t clogged nor were the five feeder tubes. But the pressure wouldn’t have kept Costeau alive in the kids-only end of a pool.

I returned to the store. This time, the phone call came after a week. KitchenAid were pleased to offer me a replacement unit, “would I like the same color?” By now I had developed buyer’s remorse. When first wondering about which espresso-maker to buy, I had checked out a few. The exterior design of the KitchenAid, as well as the build, had lured me—but I had been thisclose to buying an Italian one. I knew that if I requested a switch they’d go along . . .
Couldn’t possibly be so unlucky that I’d get a third red lemon?

You bet I could. This one also developed a leak. A different symptom this time around. 15 atmospheres builds pressure, and if the hoses and tubing are not doing what they’re supposed to, liquid under pressure finds ways of escaping. The two dials fogged up from the excess moisture. I kept on making espressos that weekend. By Sunday evening the leak had developed into a spill, with water seeping out onto the kitchen bench. When I lifted the Pro Line the seep became a splash. Submerged electrics. Great.

I returned the unit. And got a new one. If you check Amazon and other sellers, you’ll find there are “remanufactured” Pro Line Espresso makers. These have been returned to Kitchenaid for a bionic redo. Bad initial design has its cost, and for Kitchenaid it must have been substantial. Someone had screwed up when spec’ing this espresso maker.

At this point I knew I’d never buy anything from KitchenAid again, another side effect of bad design. Disappoint a customer once too often, and you’ll find bagging them again just about impossible.

The fourth unit lasted six months before it blew a gasket, literally. This time it was the steamer unit, bringing me full cycle. Turned out that the seal of the top entry valve would burn off when the steam heater was left on. By now I was really longing for that Italian espresso maker—I knew it could be left on from now until 2012 without any trouble. A friend had one at work and always had it ready to go.

I didn’t return the clunker. Took it apart. What the heck. Even if they offered me another replacement it was just too much pain. I wanted an espresso maker that heated quickly (check), that had the proper pressure (check) and that was reliable (uncheck). The Pro Line was not it.

Disassembling was fun, though I can understand why they’re offering customers new ones. Fixing this unit is at least a day’s job, even with replacement parts handy. I’ve located the cause of the pressure loss, why leaks develop, and why the design makes the steamer moody. They haven’t been on a GM cost-cutting binge when putting it together. The parts are good, but the pressure and the heat build up is overwhelming the tubing and seals, which can’t keep up with repeated use.

I feel like the owner of a 2001 Land Rover Freelander, who finds out that LR effed up a whole engine design and that your only hope is a new engine under warranty.

Building a consumer product requires experience-based initial design, good prototyping, and some proper testing before you release it. KitchenAid, like quite a few car makers, are doing their testing in the field. Not recommended.

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107 Comments on “Editorial: Stein X. Leikanger’s Metaphorical Journey into KitchenAid Hell...”


  • avatar
    rehposolihp

    If you are willing to drop 3.5k, go with the Capresso Z6.

    It is a beautiful, simple, highly effective machine.

  • avatar
    gsp

    After the first hint of a crap product I give up. I don’t have the time to do what you did, but I have always wanted to go through this process. Thank you for writing this.

    With these machines I think that they count on people only using them once. Mean time to failure is often very low for consumer products. This is why your retailer probably tried to sell you an extended warranty, also on the assumption that you would never really use the machine.

  • avatar
    Matthew Danda

    Hmmm…this combined with the Segway announcement makes me wonder if everyone is rattled about the future of the automobile. I sure am.

    What is a good analogy? The obliteration of 35mm film in cameras? The impracticality of private aircraft except for hobbyists and highly specialized tasks? The utter devastation of local newspapers due to the Internet? Now the automobile and the automobile industry…hmm…deep thoughts when I need to be working.

  • avatar
    NickR

    So Kitchen Aid is screwing up its espresso machines? They can’t make a reliable coffee maker either. I splurged on a Kitchen Aid coffeemaker, spending about 4 times what I could have spent on something from Sears. What I got for me efforts was a machine that lasted about two years. Note, mine could not be taken apart due to the fastener used. So, into the garbage it goes, and off to Sears I go for something that might last. More crap surviving on its brand equity…for now.

  • avatar

    Shame, really, because KitchenAid is one of the few decent makers of affordable full-sized appliances. (Before you ask, I personally rock a Sub-Z fridge, mais bien sur.)

    Here’s the problem as I see it. The pace of change keeps accelerating, but manufacturing and design processes have some intrinsic bottlenecks in ‘em.

    I have a small computer repair business but I’ve just about given up on it. Three hours of labor, which is what it takes to fix major issues, costs my clients $235. A new computer is $299-399. Most of the time they’d rather switch than fight.

  • avatar

    Estro Vapores are not bad from my experience.

  • avatar
    AKM

    I love getting great deals, but stay away from “remanufactured” items for anything that has electric, mechanic, or electronic components (i.e. anything but books, models, or other objects for which the term simply means “returned because the customer didn’t like the color”).

  • avatar
    kreytec

    I have a Gaggia Classic, which has been trouble- free. Anyone contemplating a home machine should check out the reviews at Coffeegeek.com.

  • avatar
    no_slushbox

    Hobart (professional restaurant equipment) sold KitchenAid to Whirlpool in 1986. The mixers are still metal, but the new ones don’t look quite as well made.

    They sure have been whoring out the brand recently. I just saw a KitchenAid brand manual can opener at Target.

  • avatar

    Unfortunately, Kitchenaid is now a division of Whirlpool. This appliance conglomerate is working hard to become the GM of appliance makers. About five years ago we remodeled our kitchen, replacing in the process a 25 year old Sears wall oven and microwave, GE electric range, GE refrigerator and a Kitchenaid dishwasher, with new top-of-the line Kitchenaid appliances. The halogen range is outstanding. The refrigerator is inferior to the old GE. The oven is passable, but the microwave has far less power than the $129 Sanyo from Costco which is in my office. And the dishwasher is ok, but recently needed to have the mechanism which keeps the door from falling open replaced. The 25-year old Kitchenaid never required a single repair. We still have a 30-year old Kitchenaid mixer which soldiers on year after year.

    Whirlpool has taken a once-proud brand and turned it to crap. How soon before they’re asking for a federal bailout. Who could have seen it coming?

  • avatar
    psarhjinian

    Just holding it in my hands at the store convinced me. Solid weight, no rattle. Cast iron and proper machining, no plastic cheats anywhere.

    Interestingly, people buy Mercedes and Volkswagens for exactly the same reason, and often with the same results.

    Me, I’m a Lucky Goldstar/Samsung/Panasonic fan. Translate that how you will.

  • avatar
    tsofting

    Maybe this is a bit off-topic, but I have to share this: Our family has been on a steady diet of IKEA’s Billy bookshelf/-case for the past twenty years or so. They’re great for storing all kinds of stuff like my collection of Car and Driver from the seventies and up, and other “useful” stuff.

    Imagine my dismay when we picked up two copies of said furniture yesterday, and with my battery-powered B&D in hand, I prepared myself for final assembly, only to notice that Kamprad’s beancounters had counted their beans and found the metal “claw” fasteners to be prohibitively expensive! What, I pray, is then more natural than to replace them with copies made from brittle plastic? No surprises were encountered, the first “claw” broke with the sorry sound that only cheap plastic has! But, there’s more: the backing used to come in an acceptably stiff material that was folded once in a halfway cut, and it used to slide nicely into the grooves in the sides.

    No more! They took out another 25 cents worth by shipping some seriously flimsy cardboard, folded three ways. This crappy thing did nothing to strengthen the structure, and will only intermittently stay in the grooves!So, Billy, I guess we are at the end of the line as far as storage furniture is concerned. Another great example of how “de-contentment” is pissing consumers off!

  • avatar
    Caffiend

    The insides of that thing look awful. I’d think about getting an e-61 machine. I have an Isomac Rituale. Thing is built like a tank, and has commercial components that you can actually replace. It’s a bit bigger than the Kitchen Aid, but will make a far better espresso.

    Check out Chris’ Coffee in New York. They have a good like of semi-commercial home machines. But they’ll calibrate the machine, and have exceptional customer service.

  • avatar
    CarPerson

    I drive past a Seattle Coffee Gear every morning. Very inviting name, sign, storefront, and good parking.

    Last Thursday I stopped in. Machines from many different manufacturers, all lined up in rows arranged by cost from house payment to minor kitchen remodel. Great sales staff member explained the features and limitations of each.

    Passed over at the time but now, due to TTAC, on radar was the comment, repeated several times, that “If there is a problem, you bring it back here instead of shipping it somewhere and waiting to see if it will be repaired or not.”

    OUCH!

  • avatar
    MBella

    edgett, we too bought a KitchenAid fridge also replacing an old GE. Man is it a piece of crap. I wish we got the LG instead. The thing is, they just lost another customer. It is amazing how many people here have recently bought a KitchenAid product with bad results. In a couple of years nobody will buy anything from this brand.

  • avatar
    Airhen

    Great KitchenAid story and I have another one to share.

    A few years back I bought my wife a KitchenAid stand mixer for Christmas that she always wanted. Last summer I was using it to grate cheese. I admit I put too much pressure on it thinking it was tougher then it was, and a barring broke. I took it to a small repair shop (which was an hour round trip drive). They took it part and said that either they could make the mixer work but it’s days of grating cheese were over, or replace the entire top piece of the mixer (KitchenAid doesn’t sell just a replacement barring). I said let’s fix it for $150 (half of the cost of a new one) as I broke my wife’s mixer… And I didn’t want the blame for something not working.

    So two weeks later I go to pick it up. After looking it over, it had two large scratches running down the new top piece. I asked the guy about it, and I was told that the new case was shipped to them like that and that it was covered with a plastic film that they didn’t remove until after they put the thing back together. I was shocked! Some jerk at KitchenAid had this scratched top piece, covered it with the plastic film and shipped it out! “Screw the customer!”

    The repair shop spent a lot of time taking it apart and putting it back together and that was all they were willing to do. So it was take it or leave it.

    I was ticked! I threw the guy the cash and walked out with it. On the way home I was wondering how I would explain my wife’s mixer looking worse then before the repair? I actually thought about throwing it in the trash and just buying her a new one that she’d never know about? But lets see; I already just spent $150 and a new one would $300 more! So I just took it home and I’d explain the story and hope she understood.

    Well arriving home I plugged it in and checked it to make sure it was working fine; which I should have done at the store as I hear this “CLUNK CLUNK” as the speed lever will not stay in place as it wasn’t put together correctly. “Oh &^%$!” I yelled.

    So I took it back to the shop the next day and left it again to have them at least put it back together correctly!

    Now every time I look at that KitchenAid mixer, I see those big scratches running across the top and I hate them for it. I should have just bought her a new one as it would have been less of a headache.

  • avatar
    AGR

    A Kitchen Aid espresso/capuccino machine?

    Breville makes a good machine for espresso/capuccino and if you get it a Williams Sonoma they replace it on the spot no questions asked if something goes wrong.

    Appliances no longer have the traditional life expectancy, nor do TV sets, and so on. Its geared for consumers that get tired after a few years.

    There are only 2-3 appliance makers after several rounds of consolidation that make all the different brands of appliances.

    Is the automotive industry headed in the same direction?

  • avatar
    John Horner

    Kitchen Aid, like so many brands, isn’t the premium product line it once was. Marketers count of the memories of great former products to sell the mediocre new ones. Yet another case of the MBAs ruining everything IMO.

    Much of the stuff sold in Ikea, Target, Kohls and just about everywhere else is marginal stuff which isn’t expected to last. Just try to get more than ten washings out of most of the women’s clothing sold these days. Some time ago I happened to visit the local dump and then a WalMart later on the same day. It was weird walking through the store visualizing what all of that junk was going to look like in a year or two.

  • avatar
    Stein X Leikanger

    tsofting is touching upon the crux of the problem here. The fact that spreadsheet engineering is de-spec’ing what was once reliable products, from reliable brands. We don’t really know what to trust anymore – and have to remain skeptical for at least a year after purchase.

    Imagine the surprise of the Land Rover Freelander customers who got engines that actually pretty much blew themselves apart; or Audio Allroad owners from the same period who found out their crankshafts were made of buttermetal (if there is such a thing, soft it was).

    KitchenAid stands (stood) for absolute quality, but no more. The Pro Line had gotten good reviews, and I tried one in the store, which they had on to demo making coffee, when I made the initial purchase.

    But it really is a messy design, and can’t have brought KitchenAid anything but disappointed customers and a serious dent in the accounts.

    De-spec’ing “to make money” has become a mantra among the people in charge of manufacturing. Spreadsheet managers who don’t really care about the quality of what they are turning out, but are more preoccupied with meeting their budgets, in order to feed their options packages.

    And yes, as such, this story also illustrates what has gone seriously wrong with car manufacturing, where you have brands speculating in the repairs putting them over the top as far as profits are concerned, while offering the cars at a loss …

  • avatar
    nmcheese

    I prefer the simplicity of a Bialetti stove top pressure vessel for home espresso production.

    Add a handheld bodum frother (the type that looks like a french press) and you can make capuccinos without the need for electricity.

  • avatar
    VerbalKint

    I gotta wonder if we’re not better off buying old stuff from e-bay or garage sales. I’ve got a Hamilton-Beach mixer from the early ’50′s (it was mom’s) still working perfectly, never needed repairs. A Sunbeam electric frying pan from the mid-60′s (mom’s)) — works perfectly.
    Bought a Norelco shaver back in the ’80′s. Dad broke it. Took it in for repairs. Cost about $50. I thought maybe I should just buy a new one. Guy at the shop (who also sells new ones) said don’t– new ones are cheaper, motors aren’t as strong, and the batteries don’t hold a charge as long.
    And while I’m at it (hey, I got lotsa time on my hands… lost my auto related job…) my 30 year old GE refrigerator has a freezer the maintains -8 degrees below zero F!
    Wish I had my ’78 Scirocco back!

  • avatar
    no_slushbox

    psarhjinian:

    “Just holding it in my hands at the store convinced me. Solid weight, no rattle. Cast iron and proper machining, no plastic cheats anywhere.

    Interestingly, people buy Mercedes and Volkswagens for exactly the same reason, and often with the same results.”

    Hey, are you accusing KitchenAid of filling its products with foam sound deadener (like German cars) to make the metal sound more substantial than it really is?

  • avatar
    no_slushbox

    tsofting:

    “. . .I prepared myself for final assembly, only to notice that Kamprad’s beancounters had counted their beans and found the metal “claw” fasteners to be prohibitively expensive! What, I pray, is then more natural than to replace them with copies made from brittle plastic?”

    Are you talking about the cam locks? There is a special place in hell for the person that invented flat pack furniture cam locks. Even with pot metal cam locks I can’t put together flat pack kits without breaking a couple of cam locks. If I saw plastic cam locks whatever I bought would be going straight back.

  • avatar
    Stein X Leikanger

    VerbalKint :
    April 7th, 2009 at 10:27 am

    I gotta wonder if we’re not better off buying old stuff from e-bay or garage sales.

    My personal theory is that smart car buyers will buy older cars for about the next ten years, until Carmageddon is sorted out, and the car makers are in profit without de-spec’ing their products.

  • avatar
    Lokki

    Tying this nicely into cars, is my last experience with Acura back in 1997. I’d been out of the country for 4 years, and needed to buy a car upon my return. Since I’d had 3 Acura Integras prior to leaving the states (87,89,92) and had been very happy with them, I took a taxi from the airport straight to an Acura dealership. Cheaper than renting a car for a month while shopping around, and I can take care of myself in negotiations.

    Bought a 97 Integra without even test-driving it because if 3 of them have been good quality machines, how can #4 be bad?

    Well, it can be bad if the @#%$#@$!!!’s making the car de-content it to the point of turning it into crap. So many places to save money! One horn instead of two. Cheaper radio that won’t pick up a signal where the old car’s radio will…. cheaper upholstry that started to show wear at 10K miles. Cheaper digital clock that consistently lost a minute a week… dozens of places. I dumped the car and bought a BMW instead. Wrote them a letter, and told them if I’d wanted a cheap car I’d have bought a Hyundai, and goodbye and good luck.

    As with your KitchenAid, I was willing to pay more for quality…. and I guess I should have recognized that they’d cut quality to keep price down…. but they misread their customer. I’d have cheerfully paid a couple of $K more for a small car that I enjoyed. However, the company was more worried about making a price line than maintaining the reputation of the company.

    Acura has finally recovered and is making fine cars (if ugly cars this year) but I’ll never go back. I’d always be wondering if I got the model year where they decided to cut costs and ride their reputation again.

    Why don’t companies understand that there’s still a market for quality goods?

  • avatar
    pourspeller

    Oh, oh, my turn!

    I too used to think KitchenAid was some sort of quality brand.

    Then a few years ago, I bought a top of the line stainless KitchenAid convection gas range. It was pricey, but beautiful and felt hefty.

    It was utter crap.

    The oven door locked itself and wouldn’t open like some sort or frikken NORAD WMD defense shelter in Cheyenne. When I finally got a tech to come out and open the door (a week later), I half expected Dick Cheney to pop out.

    But that was just the start. The “infinite” gas controls were either too hot or too cool. The top was completely impossible to keep clean from one of the most bizarre design choices I’ve ever seen that was a total triumph of form over function.

    Then one day, the glass behind the burners exploded, sending piece of broken glass showering into the food I was cooking and all over the kitchen.

    I sent them a detailed complaint letter and a follow-up and received NOTHING back from them.

    Last weekend, I was staying at a really expensive house in the mountains for a ski vacation (owned by a friend of a friend). It had brand new KitchenAid appliances. And they were even worse. The heft was gone. Now, they aren’t just junk, but they feel like junk too. The main burner on the stove sputtered and was unusable, the dishwasher door creaked and groaned liked it was going to break off and it didn’t properly clean the dishes (in spite of the flashy stainless steel tub). In fact, my 12-year-old Whirlpool at home did a much better job cleaning.

    Whew, I feel better now, thanks.

  • avatar
    psarhjinian

    I gotta wonder if we’re not better off buying old stuff from e-bay or garage sales.

    Possibly. What we’re witnessing is a race to the bottom when it comes to longevity engineering. And we, as consumers, have to shoulder some of the blame.

    We stopped buying quality goods some time ago, and this puts cost pressure on manufacturers to meet a price point. There’s very few ways you can do this without compromising quality, and eventually you will because your competitors will otherwise beat you on volume.

    Now, consumers aren’t entirely at fault: median income has been plunging for decades, putting real cost pressure on the average household, and thusly on the producers of goods. It’s not nearly as easy to buy quality as it once was, even when you’re talking about basics like food**. The wage pressure we’ve been feeling that fueled some of the press for credit is finally coming home to roost, and a lot of companies are going to find out that, if you don’t pay people much, they won’t buy much, either.

    Case in point: I own a very rugged, premium laptop (an early IBM ThinkPad T30, the Volvo 240DL of laptops). I’ve had this computer for years and it’s never faulted, and it certainly cost a mint compared to it’s competition at the time, but it’s also outlived the generally wretched commodity competition by virtue of sheer stoutness. But the current ThinkPads, even the T-Series, aren’t nearly so robust, and the lower-trim models are deplorably bad because people aren’t willing or able to pay the price, and even if they were, Dell et al would eat their lunch.

    ** Don’t believe me? Price local, fresh (and especially organic) food versus canned, packaged, low-nutrient crap and then spend a little time wondering why poor people aren’t as thin as the rich.

  • avatar
    roadracer

    @psarhjinian :

    Interestingly, people buy Mercedes and Volkswagens for exactly the same reason, and often with the same results.

    I have a VW (made in Mexico) and a Mercedes (made in Alabama), both 11 years old, both with around 190K miles. The Merc is holding up much better I’d say.

    My remanufactured Kitchen Aid coffee grinder is holding up well, though the lid came without a gasket, but when the espresso machine fails I won’t be looking at KA.

  • avatar
    Colinpolyps

    And this has what to do with cars?
    Anyone care to hear my wife’s angst about her Singer Sewing Machine. And I have issues with my Accu-Chek blood meter. Also I have a complaint about the person who delivers my morning paper.

  • avatar

    @psarhjinian

    “…and we as consumers have to shoulder some of the blame.”

    I think we have to shoulder a great deal of the blame; if we measure success or failure only on money, perhaps we miss things like substance. Flying on commercial airlines has become a horrible ordeal, not because there is anything intrinsically wrong with flying, but because of price wars that we demanded, there is no longer enough profit in the business to make it anything like a pleasant experience. Crap appliances are here because we buy solely on price and not on real value. We are fortunate that cars have been nearly as touched by this as other consumer products, but both GM and Chrysler are failing because they were testing Lincoln’s (Abe) adage that “you can fool some of the people all the time…”

    I, too will think long and hard before ever buying another Kitchenaid product, and this is a sad event. Thousands of people spent their lives making Kitchenaid a truly well engineered product and in the span of a few years, MBA’s from Whirlpool have soiled a reputation built by all of these folks. But they did it in the name of the consumer, ‘cuz that’s what we asked for…

  • avatar
    Stein X Leikanger

    @Colinpolyps

    And this has what to do with cars?

    Fair question. When taking it apart, I felt as if I was working on the cooling system of my (a while ago) E-type or (now) Cherokee Jeep. There’s a heft and solidity to the apparent build that says “car parts.” And it is a closed-loop pressurised system, with pumps, conduits and heating elements.

    Heck, even the outer body gives associations to Studebaker heyday – though the body paintjob is sub-par, with lots of flaking.

    But the greatest relevance is that it is a perfect instance of the kind of endemic de-spec’ing, or de-contenting – if you will, that has become the scourge of product development and manufacturing, and that is going to destroy once venerable and reliable brands that once worked to earn our respect, and that now believe that marketing will solve the credibility gap.

    And as such I do think it is relevant to cars. I’ve run pressure tests, replaced hoses and up-spec’d parts. It’s like being in the garage, my friend!

  • avatar
    jpcavanaugh

    The land where marketing and branding has taken over. “Hey guys, we just picked up a great old brand with a fantastic reputation for quality. Quick, get engineering on the phone. We need a new line that is cheap as hell but looks expensive. Nobody will ever know and we’ll make a bundle.” Reminds me of my Maytag washing machine story. Paid a fortune, but everybody’s mom still had one that was 20 or 30 years old and working fine. Mine lasted 5 yrs and the transmission went out. Sounds like a Chrysler.
    This is why most of my cars are 10-15 years old when I buy them. By then, everybody knows what the problems are and you avoid the worst ones.
    Example – if it were 1996 again, I would never have bought that underpowered 4 cyl Honda Odyssey. The Grand Caravan or the Windstar seemed a much better choice. Now we all know about transmissions and head gaskets and everything else, and I am happily (albeit slowly) cruising around in my “new” 96 Odyssey.
    Are the new Odysseys 300k mile cars? Lets get back to that question in 2022.

  • avatar
    superbadd75

    Everything is built to a price point now, not for quality. Look at how WalMart keeps expanding, and not a damn one is ever empty. People want cheap goods, and unfortunately that’s the call that the manufacturers answer. For a company like KitchenAid to build things to their former quality, their goods would undoubtedly cost quite a bit more, putting them out of reach for a lot of people. Instead, they build them cheaper, price them lower, and make the money off of volume. The people buying them are just happy that they can finally afford to buy the KitchenAid appliance that they’ve always wanted, and since most of the stand mixers and cappucino machines don’t see daily use, it’s a while before they figure out that KA doesn’t stand for the quality it once did. The down side is that once they do come to that realization, the name is ruined and they’ve lost a customer. But hey, who cares? They made years of profits on that business model!

  • avatar

    This was fascinating and surprising, both the editorial and the comments. It is also useful to me since I need an espresso maker. Damn. And as a kid, I used to tell peole that drinking espresso was begun by some mechanics in an auto shop ont he left bank in Paris, during WWII because “espressoing” coffee beans concentrated the energy in them, just like coaking coal or cracking oil, and that there had been so little gasoline in France during the war that drinking coffee had been banned so that the beans could all be used to make espresso for the cars. The mechanics at this shop–in my story–became fed up with not having their coffee, so they tried the espresso, loved it, and it spread. I think I got the idea for this story because I used to tell my parents they were drinking diesel fuel.

  • avatar
    jerseydevil

    i use a stovetop espresso maker. No moving parts. Gasket replacement every year, costs 25 cents. Made of cast aluminum.

    I also use a stove top milk steamer. No moving parts, gasket replacement every year, 25 cents. Made of cast aluminum.

    I like the “no moving parts” stuff. Good coffee, too.

    I find that simple is best. Even with cars.

  • avatar
    paanta

    My La Pavoni lever machine is 20 years old (auto related content: I traded a brake job on an Element for it) and has had one seal replacement in that time.

    Fast and easy to use it is not, but espresso shouldn’t be easy. If you’re too busy to spend 20 minutes pulling a shot, you should probably change your lifestyle.

  • avatar
    Ferrygeist

    “or Audio Allroad owners from the same period who found out their crankshafts were made of buttermetal (if there is such a thing…)”

    Mercury?

    Aside from that, the mention of Panasonic above as a reliable brand reminded me that a sometimes helpful metric for buying actual quality products is whether or not the same company (not a subsidiary or distant parent) also makes professional versions of the same product, and if they do, to try to buy the very top of the consumer line, or even better, the bottom of the pro or prosumer lines; or, best of all, actual professional, if it’s still at all affordable.

    Unfortunately, the analogue to all this in the car world are cars that are simply too expensive for anyone but the wealthy to super rich.

    I think people forget that most cars these days are mass market consumer items. That is, products roughly analagous to the products you might find on discout at Target or WalMart or Ikea; the kind of stuff that fills what I imagine to be the average middle-income American home.

  • avatar
    Lumbergh21

    Well I’ll throw my 2 cents in. I have a Kitchen-aid mixer/blender from the 50′s that was a Christmas gift to my grandmother back when my mom was knee high to a grasshopper. Nice glass blender, good seals, and metal bottom. No problems with the motor, it’s still going strong. I also have a GE Upright Freezer from the same time period that was also originally bought by my grandfather. The thing has never needed a recharge of freon and works wonderfully, although I’m sure not all that efficiently. The fact that the cooling system is so tight that even 50+ years later it still is charged amazes me. I just stripped and painted it at the end of last summer, and now it looks great again as well.

    On the other end of the scale are the two NSFW lawn mowers I’ve bought in the last 10 years. Integrated design and plastic parts make failure assured and repair nearly impossible. The current mower is out due to a leak in the plastic gas tank which is not replaceable as a separate unit. I’m going to try an epoxy this weekend and see how it works. If it doesn’t, I’ll need to replace a lawn mower simply because of a leaking gas tank that probably costs about $1 to produce and $5 to buy. Ridiculous.

    By the way, it was awesome being able to use Hobart equipment when I was working in a restaurant. I always wished that I could get something smaller but just as solid for my own kitchen. It looks like that was what Kitchenaid used to be.

  • avatar
    shaker

    15 Atmospheres? That’s around 220PSI!

    I’d think if that were on my kitchen counter, it would need an endorsement from the US Navy :-)

    But you should keep it, as it matches your breadbox.

  • avatar
    dimitris

    A second thumbs up on the Gaggia Classic. Ours has given us consistent shots for almost two years now, even with our marginal – but cheap – grinder. If only I had taken my time to research things instead of just walking into a Williams-Sonoma, I would have avoided my first espresso machine attempt, the FrancisFrancis X1 which was both more expensive and didn’t reach the shot quality of the Gaggia. It did last for a few years though – in fact it’s only decommissioned, a “standby” if you will, after the dead heating element turned out to be just a broken thermostat.

    We don’t do frothed milk drinks, but I think any single-boiler machine would be a pain due to the need to wait for the boiler to switch between espresso and steam temperatures. Anyway, why devirginize good coffee with sugar/milk/whatever?

    For my ideal espresso setup, I’d stay away from the fully automatics. Instead, I dream of this little combo.

  • avatar
    Johnny Canada

    Leikanger, is that Kitchenaid unit manufactured in America?

    I recently up-fitted my kitchen with Kitchenaid appliances; they’re one of the very few companies that manufacture in America.

    So many appliances are now from China. You have to look for the manufacture label to be sure.

    Funny how Korean made Bosch refrigerators try to hide their manufacture label.

  • avatar
    Stein X Leikanger

    @Ferrygeist

    Who knows what they added to the alloy of the crankshafts in those Audis. They did turn out buttery soft, with cuts as deep as 2-3mm not being uncommon.

    @Shaker
    15 bars is what they claim, though the two pumps are each rated at >10bars, though they do add to the same flowpath. Yup, it’s a lot of pressure!

    9 is the minimum that an Italian barista will demand for good espressos.

  • avatar
    windswords

    John Horner:

    “Kitchen Aid, like so many brands, isn’t the premium product line it once was. Marketers count of the memories of great former products to sell the mediocre new ones.”

    Sounds like you’re talking about Toyota as much as Kitchenaid.

  • avatar
    wsn

    psarhjinian :
    April 7th, 2009 at 11:17 am

    We stopped buying quality goods some time ago, and this puts cost pressure on manufacturers to meet a price point. There’s very few ways you can do this without compromising quality, and eventually you will because your competitors will otherwise beat you on volume.

    ———————————————-

    Very good reasoning.

    During peace time, wealth tends to flow to those who have access to policy making (i.e. Paulson’s friends at G.S. and M.L.).

    For the average Joe, there is no way his salary can keep up with the inflation tax. So, Joe cannot afford quality products any more. If a manufacture keeps on increasing price (to hold up quality), it will have a hard time surviving.

    This trend of wealth flow will continue, until there is another violent resetting of social hierarchy.

  • avatar
    wsn

    I bought a KitchenAid slide-in range and a KitchenAid counter-depth fridge last year.

    No major problems so far. But there are a couple “inconvenience”:

    1) It’s extremely hard to take off and put on the warming drawer of the range. The user’s guide had a very simple illustration that’s totally useless. I would like to see how Whirlpool’s CEO and CFO can put it on in 10 minutes. My wife commented that we should never buy KitchenAid again.

    2) The new fridge is way more noisier than our old Kenmore. Even though the new one looks large (36″wide), the interior storage space is smaller than the old seemingly small Kenmore.

  • avatar
    Rev Junkie

    This is a good analogy for the American auto industry. Except one bad design became dozens, even beyond the mediocrity and tedium of the 70′s and 80′s. Most of the foiables come from GM: the Olds Diesel, the Vega, the V-8-6-4, etc., but the money lost from all of Detroit’s failed projects to win back buyers forced them to cut costs, which led to cheap AND mediocre products, losing more customers. Now that their products have FINALLY become acceptable, the companies are on the verge of collapse. Bummer.

  • avatar
    Jeff Puthuff

    I second (or third, haven’t read all the comments) Seattle Coffee Gear. I bought my Solis Crema there and though it hasn’t given me any problems—knock on knock box—their customer service is prompt and helpful.

    My next machine will be the one baristas use at home: Rancilio Silvia. And CoffeeGeek.com is worth a look.

  • avatar
    Robert.Walter

    I have very much enjoyed “The Truth About Kitchen Appliances”…

    As a teen, I was a dishwasher in a restaurant which had ancient “Hobart Bros.” equipment which still worked like new … remember being really impressed and being fascinated by “Kitchen Aid by Hobart”… thinking this would be my brand someday…

    At the time of the Whirlpool take-over, and the man who kept my mom’s 25 y/o Norge dryer alive commented “well, before long K/A will be no better than Whirlpool”… it took them 20 years to wreck the brand…

    On the other hand, I find it funny, because at the time, Whirlpool was trumpeting the premium and commercial quality aspect of the K/A brand … and it seemed to me they made the acquisition to add a brand above Whirlpool … like so many times, the acquirer wrecks that which they aspired to own because they only understood the reputation, not how it came to be, or how to sustain it…

    Finally, bought a Bosch dishwasher for my sister, installed it at Christmas 3 years ago, worked so perfectly (on a well with softened water), it cleaned blueberry stains off a pie dish that had been in the finish for like 20 years, that my mom didn’t recognize it when it was returned … the Bosch got the moniker “Magic Dishwasher” … next Christmas, I installed a Magic DW for my mom (with the nifty little light that shines on the floor to let her know – she is hard of hearing – it is running…)

    Oh, and what does she have for an Oven/Range Unit? A stainless steel, 1955 “Frigidare – Division of General Motors” unit that is so retro, it looks cool, and aside from the analogue clock, works like new…)

    http://easterkiwi.files.wordpress.com/2006/08/frigidaire-flair.jpg (far as I know, my mom has never worn a crown while using it though…)

    In response to Dyn88, mom has a Maytag fridge, and it is ok but some of the plastic bits seem under engineered and the seal crapped out when it was 5 years old … (and she lives alone)…

    I live in Switzerland and have Electrolux appliances in my apartment, and I appreciate the fact that the builder may not have put premium units in the building, but these units are so Schiesse… (the dishwasher is also a magic dishwasher (but designed by an evil and sadistic troll.)

    I have no faith in GE either … Hot-Point is lousy, and the GE brand seems to have declined to match its cheaper stable-mate (anybody remember all those GE-made refrigerators that were recalled because of lousy compressors?)

    Oh, and I had a friend that after getting fed-up working at Ford about 10 years ago, went and interviewed at GE Appliance Park, OH, for an engineering job … they were giving him a plant tour, and were showing him the dishwashers on the end of the line getting QC checks … just as he walks by, some hose slipped off some fitting, and he got soaked … he decided to go work for Lexmark instead…

  • avatar
    Dynamic88

    I’ll just add this – Do not buy a Maytag refrigerator.

  • avatar
    wsn

    OK, enough about what not to buy. So, the question is: which ones are still good?

    In term of appearance, Thermador looks really nice. Is it any good? How about Electrolux?

  • avatar
    Dimwit

    I hate to tell you guys bit when it comes to consumer goods, brand means *nothing*. Whirlpool has bought up practically all brand names in N.A. and most other areas the same has happened. If you want quality you must investigate, find out where a model is made — notice I said model, one model can be brilliant and its more expensive brother a piece of crap just because that one is made in a different factory.

    Most brands have become labels. One of the only industries that this hasn’t happened to is the auto industry and even there there are cracks appearing in the system. Jeep Wranglers are not made by Chrysler but by a consortium of 4 companies which they are only one part. It’s quite conceivable that should Chryco close its doors that Wranglers will keep rolling off the line.

    Now I ask you, what is a brand worth? Would you be willing to buy a Kenmore Sedan? Nicely appointed, reasonable power, good mileage, a little bland on the styling so nobody is offended with a 5 yr, 60,000 mi bumper to bumper backed by the retail outlet. Price competitive with the rest of the field and maybe a little cheaper when a sale comes around? Seriously, would you buy one?

  • avatar
    carlos.negros

    I’ve rebuilt my La Pavoni lever machine. It is from the 1960′s and still works perfectly. Replacing parts was very easy.

    You can buy one of these on ebay for a reasonable price and buy a rebuild kit.

  • avatar
    wsn

    Dimwit :
    April 7th, 2009 at 5:46 pm

    Now I ask you, what is a brand worth? Would you be willing to buy a Kenmore Sedan? Nicely appointed, reasonable power, good mileage, a little bland on the styling so nobody is offended with a 5 yr, 60,000 mi bumper to bumper backed by the retail outlet. Price competitive with the rest of the field and maybe a little cheaper when a sale comes around? Seriously, would you buy one?

    ———————————————–

    Of course I would. In fact, Kenmory is the best selling car in the US.

  • avatar
    Joe ShpoilShport

    So. I was just up in the kitchen taking care of dinner dishes. I happen to look in the corner of the counter and there is the name “Kitchen-Aid”, big and bold, on the stand mixer I bought for my wife a few years ago. Wasn’t cheap. She hasn’t used it as much as I thought she would – maybe 10-20 times since new. Hmmmm.

  • avatar
    obbop

    This has been an informative thread.

  • avatar
    63CorvairSpyder

    I’m way late to this thread, it was a great read though….and I agree very informative. I too lament the de-spec’ing and de-contenting of so many consumer products we buy today vs those made 30-40-50 years ago when quality mattered and made in USA or made in Europe meant quality.

    My pet peeve lately(I do the grocery shopping) is the down-sizing of EVERYTHING in the supermarket.
    Coffee, ice cream, peanut butter, cereal, tuna, mayo, bleach. Everything is getting smaller but the price point stays the same. It is simply price increases…..Why don’t they just increase the price and leave the package size alone? Do they really think the majority of people are that stupid?

    I want to buy a dam gallon of bleach but I can’t. They force me to buy the 3-quart size(the old gallon size) for the same price the gallon used to be ….and oh, if I want to get the big size it’s 1.5-gallons.

    Can it be long till we start getting 3 quarts of gas for the price of todays gallon?

  • avatar
    Stein X Leikanger

    @Johnny Canada

    Didn’t see your question until now. Yes, it’s made in the USA.

  • avatar
    geggamoya

    I bought a Miele dishwasher about six months ago, cost quite a bit more more than a Italian Electrolux or Polish Bosch, and appears to be better built than similarly priced machines from other brands which have a plethora of useless “features” and a million buttons. This thing has two buttons and a dial to selet the programme, and a few leds to show the status. That’s it. Feels solid, works perfectly. Very quiet. From everything i’ve read, Mieles should last, but i guess i’ll find out sooner or later..

  • avatar
    Landcrusher

    At this risk of getting yelled at for making everything political, I have to point out that this whole problem is a direct result of high income taxes.
    If we taxed the energy and materials, rather then the parts, we would see a return to making things that actually can be repaired. Presently, the cost of repair is inflated due to the income tax, so it’s cheaper to toss stuff in the landfill, and buy another.
    Some stuff will always be cheaper to make new, but taxing material, rather than labor, will lead to better quality coming at a smaller premium.

  • avatar
    John Williams

    “What is a good analogy? The obliteration of 35mm film in cameras?”

    Not quite. Digital cameras are getting better and better every day. But they still have a very long ways to go when it comes to matching the quality of a 35mm print. It’s all in the scalability, a good thing to consider when enlarging prints.

    A better analogy could be how Zenith ended up going from a pretty good maker of TVs to a mere name on bottom-end Chinese-built goods. And the brand itself seemed to fade away just when the advent of affordable flatscreen tvs came about.

  • avatar
    confused1096

    Not all of the cheap stuff is automatically crap. I had a Mr. Coffee expresso maker, received as a wedding gift. Probably a $40 or $50 dollar machine. Used 4 or 5 times a week for 3 years. It was retired when a part disapeared (those with small children know how this works).
    I also have a Braun coffee grinder used daily for about 8 years now. I expect it to live another 6 months or so, it is starting to get a little bit of bearing noise. Not bad for $15.

  • avatar

    @Landcrusher: At this risk of getting yelled at for making everything political, I have to point out that this whole problem is a direct result of high income taxes.

    This is not a political statement, although I might imagine why you would sense this. In the 1950′s, the top tax rate was 91% (on income over $200,000) and we built the best appliances and cars in the world. The big three had figured out by 1970 that they had a captive audience and had long been giving in to any demand the UAW came up with, figuring they could just pass it on.

    The shift which occurred was not really political at all, but that many American companies decided that the most important thing they did was to make money, rather than money being an end result of producing superior products. As early as 1972, GM made no money on the cars they sold; they were making money on financing. Is it no wonder they lost sight of the product?

    The one thing that did change in the 1970′s was the advent of government mandated pollution and crash standards; if I recall, both were enacted during a Republican administration. What ultimately caught the U.S. automakers out was the original disparity between cars and trucks, allowing them to continue making the same 1970 truck design well into the 90′s and generating huge, but mostly false profits which turned into a false prophecy of their continued success.

    As to appliances, tax law seems to have little to do with their degeneration. When the bottom line is the only line, the product loses out in a totally non-political manner.

  • avatar
    Lokki

    The disposable products trend is not a function of inflation and decreasing purchasing power, as many here have postulated…..

    It’s a function of the speed at which technology has been advancing over the last 50 years. Almost all products with more than two moving parts become obsolete within 10 years of manufacture, and many within 5 years or less.

    Computers? Why use gold contacts when Moore’s law means that you won’t be able to use the thing in 5 years. Anybody who hasn’t replaced CD’s with thumb-drives? Some. Anybody who is still using floppy discs? Only the luddites.

    Cars? Sure you can keep an old Mercedes running forever, but it won’t have air bags, side impact crash protection, 6 speed transmission, etc, etc.

    Even with appliances, there are advantages to new, computer controlled motors, etc. Newer is better. But no matter what you buy, technological advances mean that a better one will be available in 3 years.

    Back in the 60′s my parents were sold a beautiful solid cherry Television console, with the promise that all of the company’s future products would fit…except that the TV they bought was a 25 inch model and the next one they wanted to buy was a 27 inch model…(with a -wired- remote control). So, they were foolish to have paid for the quality console.

    This meme is driving our engineering. There’s no point in making a good stone axe – who is going to buy it? All consumers have all already learned the same lesson my parents learned.

    Perhaps our discontent signals a turning point…maybe there is a market now for quality made components that will last a long time…. except will they be blu-ray compatible?

  • avatar
    Pch101

    If we taxed the energy and materials, rather then the parts, we would see a return to making things that actually can be repaired.

    There’s no reason to believe that, and the effect that you describe should be the opposite. If parts costs went up, makers would try to use cheaper ones, which would mean more breakage.

    The issue is economic. Consumers want prices to remain relatively stable, and they want deals. As the manufacturer’s costs increase over time and as they pursue above average returns, their impulse is to look for cheaper inputs, both labor and materials. That means offshored labor and lower cost parts, if they can possibly get away with it.

    This is inevitable, given the nature of competition in the marketplace. The company’s alternative is to consciously accept lower margins, which means being less competitive. That is not palatable for public companies, which are judged by their abilities to grow margins and revenues.

    Government contributed to this in two ways. First, Hitler decided to go on a tour of Europe and Africa, which set back their industrial capacity decades, leaving the US largely unopposed in the global market. Things started to look more dim for the US when the competition heated up.

    The second change is that many former colonies that had tossed out their colonial conquerors and had turned their backs on the west did a 180, going from a protectionist, anti-outsider view to opening the floodgates to western businesses. Thirty years ago, it would have been difficult to impossible, and not particularly profitable, to have offshored operations to India, China, etc. That situation has obviously changed, although we don’t necessarily get better kitchen appliances as a result.

  • avatar
    psarhjinian

    At this risk of getting yelled at for making everything political, I have to point out that this whole problem is a direct result of high income taxes.
    If we taxed the energy and materials, rather then the parts, we would see a return to making things that actually can be repaired.

    I don’t think you’re going to get yelled at, but I do think you’re stretching the point to primarily fault income tax

    The problem isn’t that we’re taxing the repairman so much as it’s that we’ve decontented the product to the point where repairs are more frequent and more expensive than worth it.

    Part of this is that modern good require a level of precision in their engineering that makes repair effectively impossible. Sixteen years ago I was soldering one- and two-layer PCBs and replacings ICs, resistors and caps in my bedroom for a small profit. I wouldn’t dare try IC replacement on a modern, multilayer PCB, and even replacing the caps on my iMac creeped me out because of the precision involved.

    The flipside here is that, done right, this level of precision ought to result in fewer repairs. And it did, before we started racing to the bottom again: the reason I had to replace the capacitors on my iMac (and why thousands of consumer electronics goods are meeting the same fate) is because makers decided to source caps from cheaper suppliers, and those suppliers used a bad (some claim stolen) electrolyte formula. If they’d continued to use the quality, known goods, this ought not to have happened.

    What it comes down to, truly, is that we’re not building products to the same quality and tolerances, especially at the consumer level. In the case of mechanical goods, its the use of thinner metal, or plastic, in load-bearing parts. In the case of electronics we’re using the cheapest circuitry, regardless of the lack of testing or durability. In the case of food, it’s the use of HFCF, starches and bulk fat (and in some memorable cases in China, melamine) in lieu of more expensive sugars, carbohydrates and proteins. And we’re doing this not because people are being taxed more—at least at the median income level—but because that same median income is falling relative to the cost of living.

    I’ll agree that it’s an income problem, but not in the direction that you’re claiming. It’s not that people don’t have enough post-tax income to buy quality goods, or that companies have the post-tax margins to produce them, it’s that the pre-tax income of consumers and many small businesses can no longer support both the drive for higher profits and the need for quality in what we buy.

  • avatar
    ra_pro

    I lived in a communist country for 20 years. Everybody there thought that all products made in our country were garbage and products made in the “West” especially America were the best. After the fall of communism the western companies bought most of the profitable local producers (Whirlpool bought everything it could) and started producing the “quality” western products.

    Now many people in the eastern European countries come to realize how wrong they were. True, communist products didn’t look flashy and there certainly wasn’t anything that could be called a selection, and yes there were shortages more often than not, but most products were well designed and well made and they lasted forever other than needing a small repair here and there.

    Now I hear the appliance repairmen in my country don’t recommend people buying the new appliances because of the poor quality and high price but recommend to stick with the old “communist” products which are (almost) bulletproof for as long as they last.

    Now obviously this doesn’t apply to cars; all the cars in the East were terrible, some more so than others. So this is certainly 1 area where the “capitalist” system did produce vast improvement in product over the “socialist” system.

  • avatar
    psarhjinian

    Why don’t they just increase the price and leave the package size alone? Do they really think the majority of people are that stupid?

    Yes, they do and yes, they are.

    Believe me, I’ve seen the results of our marketing department’s field tests and people will scream blue murder about price increases, but won’t necessarily feel or substantively complain about a quantity or quality decrease, especially if it accompanies a repackaging.

    This is why automakers (well, successful ones) do their large-scale decontenting during significant refreshes.

  • avatar
    psarhjinian

    but most products were well designed and well made and they lasted forever other than needing a small repair here and there.

    I drove a Lada Niva for a few months and I can tell you that, other than repair-ability, the car was utter crap. Same goes for cameras and certain electronic goods: that “small repair here and there” was really, really frequent, and the fact that you could do them yourself didn’t make up for the functionality gap.

  • avatar
    Landcrusher

    Here is the basic theory, I will try to not start an argument. (BTW Edgett, nice post, I disagree with much of it, but it was well done. The problem is that back in the 50′s there was still very small taxes on the overall labor cycle, and it takes decades for the market change what it wants, especially back then).

    1. The consumer wants best value for his time. He doesn’t know that, it takes him years, if not decades to change his behavior, but that’s the reality. Eventually, his behavior will move in this direction, so his belief that a cheap cappucino machine is better than an expensive one (or whether he wants one at all) will not respond immediately to changes in manufacturing or tax policy or anything else.

    2. It doesn’t matter what producers want, only what consumers want. Eventually, producers conform or are cast out. Whatever the system.

    3. Taxation is constant, and is part of the cycle from labor, purchase, labor… (Simplifying here).

    4. Tax is almost always perceived as an undesirable, and valueless component at each stage of the process. Taxation is avoided.

    5. If sales taxes and VAT are less than labor taxes, then it pays to reduce labor at the cost of other ingredients. Labor is all personnel cost, not just the folks who work with their hands. The designer is labor, as is the CEO.

    6. The entire life cycle of the product needs to be considered as well as the manufacturing and purchase.

    7. Psar makes a good point, but fixing it yourself wouldn’t be a problem if you weren’t paying 30% plus imbedded labor taxes (I made that figure up, but include all taxes and cost of compliance on labor, and it’s gotta be that high). You could HAVE it fixed, and employ your neighbor. (Compliance costs are HUGE here, and if you ever ran a business you would know that.)

    I think if you look at cradle to grave (per consumer), a well made cappucino machine, slightly over built, and easily repairable, would cost less to have and repair if you could switch the taxes on the parts and the labor (which could be self or paid). Furthermore, you would use less commodities (cradle to grave).

    Recycling becomes MUCH better of an idea as well.

    Unfortunately, it will take years for the market to respond because it will take years for people to learn that a $300 cappucino machine is more expensive than a $3,000 one. It may take decades. The good news is that they WILL learn.

  • avatar
    Pch101

    It doesn’t matter what producers want, only what consumers want.

    Both matter. If producers don’t see a profit opportunity, they stop producing or don’t start in the first place.

    Producers do have to make stuff that people want. But if the market price is too low to support production, producers avoid the space or fail.

    Your comment also assumes that people want durable appliances that they keep for years. In large part, they don’t; most people can’t or won’t pay for them. When the old one goes out of style, becomes obsolete, degrades in appearance (even if it is still otherwise functional) or otherwise gets lost or damaged (kid drops it, mover loses it, etc.), it will get replaced, anyway.

    It also wrongly assumes that people manage for long-term value, when they often manage for short-term cash flow. For example, if we lived in a two-option universe in which you would spend $100 on one machine with a ten-year life, or opt for a $60 machine that is identical but has a five-year life, the consumer who doesn’t have $100 will buy the $60 machine, while others will gamble that their cheaper five-year device beats the odds and lasts longer than it should.

    Costly items such as cars should attract a high proportion of value buyers, but for the cheaper stuff, long-term value becomes less important. That’s one place where coffeemakers and cars diverge — Mr. Coffee can probably afford to engage in some widespread consumer beta testing on his unwary customers, but Mr. Goodwrench definitely cannot. A broken $30,000 2-year old car creates a lot more animosity than does a broken $30 2-year old coffeemaker.

  • avatar
    Landcrusher

    PCH,
    “Sixteen years ago I was soldering one- and two-layer PCBs and replacings ICs, resistors and caps in my bedroom for a small profit.”

    I bet dollars to donuts you didn’t comply with all the government tax, labor, and environmental regulations involved even then! :)

    Electronics might remain disposable, but they might also become more repairable using more modular designs. The amount of labor AND resources in making the stuff you are talking about is already miniscule. Not so with a car, or cappucino machine. Still, why does it cost less to buy a whole PC than replace a couple parts?

    Let’s say you buy a Dell. It is made of parts from overseas, assembled in Texas, and packaged with software. If you switched the taxes around, you could remove much of the incentive for the parts to be made overseas, and remove much of the paradox of the parts costing more than the machine. Both good things.

    It is desirable that people replace an obsolete machine, but not for people to buy a new one when the present one is adequate yet needs a repairs.

    Efficient use of resources is desired by ALL sides of the political debates. No? It may be expressed differently by each group, but in the end they all really want to use less to get more.

    What I don’t get is why the UAW doesn’t see this and jump all over it? A union is nothing more than company that sells labor to other companies. Wouldn’t they want to stop having their ingredient taxed so as to incentivise it’s use?

  • avatar
    Landcrusher

    “Both matter. If producers don’t see a profit opportunity, they stop producing or don’t start in the first place.”

    Which is just another way of saying that producers have to fill a perceived need of the consumers or fail. The only wiggle room here is that you can often make a quick buck by filling a need based on a misperception of the consumer, but that’s not the way to longterm success in many sectors.

    I agree that people don’t presently want long term appliances. My argument is that the tax system has made that rational, and reinforced it, in places where it should not be. It’s an externality.

    There will be a market for both the durable and cheap, but changing the tax scheme will shift the balance towards durable. It’s not the only input into the equation, but it is ONE input. Remember, sales taxes reduce the ratio of the increased cost of the higher dollar item while also greatly increasing the penalty of buying the crappy item.

    Most people don’t manage for either longterm or cash flow, they aren’t that sophisticated. The learn slowly from others, and from results. We know that Pepsi wins taste tests over Coke, but that Coke still wins more sales. Your company research reminds me of Pepsi’s. Hey, Pepsi makes a lot of money, nothing wrong with Pepsi.

    I thought we were talking about cappucino machines, not Mr. Coffees. Certainly, people will buy a new $15 machine every year rather than a single lifetime one that costs $300. OTOH, I think we agree that they are more likely to consider the $3,000 one over the $150 one (if only marginally more likely). Now, if after 6 or 7 years the $3,000 buyers are still happy, and the $150 buyers are all tired of buying new machines, the market will change it’s behavior.

    If you watch behavior closely, you will find that people will learn things they can’t explain and change their behavior.

    It goes back to the SUV argument. Lefties are convinced that people want SUV’s because of foolish impulses, but the reality is that people are responding to the greater overall percieved value over time. Gas is cheap, buying and selling vehicles is expensive, renting is expensive, repairs are expensive in time and money. The SUV is a better value, and people responded to that right up until they started feeling pain at the pump. They overreacted, but given time, even if fuel had stayed at $4, they would have come back to the SUV, even if it were smaller ones.

    What will kill the SUV is the crossover. When these things start falling apart just like the average sedan, and thus start holding their value like the average sedan, it will push people back to sedans and wagons.

  • avatar
    Pch101

    Which is just another way of saying that producers have to fill a perceived need of the consumers or fail.

    No, there’s more to it than that. The point is that the consumer’s willingness to pay is part of the viability equation. If people want cheap stuff, then making expensive stuff doesn’t make sense for the producer, because he can’t sell it.

    Consumers don’t just buy a product, they buy a price point. For goods that have high price elasticity, a high price is a kiss of death when there are many lower price alternatives that seem to be “good enough”. This doesn’t quite happen with cars, because the Detroit definition of “good enough” often isn’t, but it does tend to be true with many consumer products where there are enough good brands that all of them are effectively commoditized (lack unique pricing power).

    My argument is that the tax system has made that rational, and reinforced it, in places where it should not be. It’s an externality.

    The easy solution to that is to use the sales tax to raise the initial price to the consumer. The higher the price, the more deliberate the purchase process and the more likely that consumers will self-ration.

    The problem with producer taxes is that the consumer doesn’t explicitly seem them, and may not modify his behavior accordingly. If demand is the driver, then you need to impact the driver directly. Tax the crap out of something, and consumers will think more about the purchase, because of the size of the hit.

  • avatar
    Landcrusher

    PCH,

    My statement about consumers is a truism, and I can only assume we are miscommunicating. What you just said is in complete agreement with my intent. The producers can’t produce something the consumers don’t value and expect to sell it, so the bottom line is that the consumer drives the train, and the producers try to stay on board.

    As for the tax part, we agree. I don’t care if you tax at point of sale, or basic commodities, or whatever. The point is to cease taxing labor. Labor is an environmentally friendly and renewable resource. Shift the value from the land and resources to the people. If you really start thinking about all the changes this can make it gets pretty exciting, and it’s not some utopian dream either.

  • avatar
    Pch101

    The point is to cease taxing labor.

    Wages and benefits are deductible, just as is just about every other operating expense, so I don’t really follow your point. Spend $100 on aluminum or $100 on wages, and you get the same writeoff. The only difference is in the retirement payments (Social Security, etc.), but that’s built into the overall price of the wage.

  • avatar
    Landcrusher

    Ah, but you don’t get to really write it all off, and you don’t get the same value.

    Because I pay high taxes, you have to pay me $200 to get $100 worth of my labor. Remember, I buy cans too. At 10 cents a can, you are paying me 2000 cans and I am giving 1000 of them to the government.

    (OTOH, if I am the aluminum salesman, then my customers are also paying that extra $100 plus all the other taxes on all the labor embedded in the price. It adds up.)

    So, you can sell a certain strength can for a certain price point. Right now, you are putting equal labor and aluminum in the cans. You could use less aluminum, but it would take more labor to make the cans to a more consistent thickness. Shift the taxes from the labor to the aluminum, or even to the point of sale, and you will hire more people and use less aluminum.

    More of the money goes into the pockets of the people providing labor, and less into the guy who owns the mineral rights. That’s progressive policy!

    It’s marginal, but it’s real. AND, you can get the IRS out of your personal life as a free benefit. I know the devil is in the details, but why we aren’t trying to figure out how to make the shift is just sad.

  • avatar
    Pch101

    OK, I missed that. I didn’t realize that we had turned this metaphor of kitchen appliances as a comparison to the car industry into a rant against income taxes and a pitch for a sales tax to replace it.

    The simple answer is that it won’t work because you can’t raise enough money from a sales tax. A simple example -

    During 2007, US retail sales were about $4.48 trillion.

    During the same year, federal individual and corporate income taxes raised $1.56 trillion.

    If you tried to raise $1.56 trillion in tax revenue on that level of sales, then you’d end up with a federal sales tax of 35%.

    Mind you, though, that a 35% sales tax would absolutely crush sales, which means that you’d need an even higher sales tax rate to make up for it, which would just spiral further. Lost consumption –> lower sales –> higher unemployment –> no wages to worry about.

    Also keep in mind that the tax figures above still left the US with a huge deficit, so you’d need to cut spending substantially — not just a little bit, but by an enormous (read: unacceptably high even for proud red-state right-wingers) amount that is not doable.

    Summary: Your plan won’t work, and Mr. Leikanger should get a French press to make his coffee. Cheap, simple, reliable. (Red staters may refer to theirs as a Freedom press if they prefer.)

  • avatar
    Landcrusher

    Wow. We didn’t make it a rant, you did. All I did was point out the advantages of not taxing income. You on the other hand, pointed out none of the advantages.

    Your math is all wrong, you are ignoring that when you stop taking out income tax, sales increase because people have more money to spend. Once again, liberal ideology is being adhered to because thinking multiple steps ahead is just wrong?

    The only real advantage to taxing income is state control of the population, but now I am ranting as well.

  • avatar
    Pch101

    All I did was point out the advantages of not taxing income.

    No, you didn’t. You posited a theory that clearly doesn’t work, not because of one’s political beliefs, but because of the politically neutral arithmetic.

    The math is exactly what it is. If you want to generate $1.56 trillion in receipts with a federal sales tax, then you need a 35% federal sales tax rate based upon 2007 retail sales, assuming no change. Unless Republicans are opposed to long division, this is just what it is.

    You aren’t going to find an economist of any persuasion on this planet who is going to argue that increased consumption taxes won’t lead to reduced consumption. For example, when we talk about whether to increase the gas tax, we all know that this is the motivation for doing it. Right, left, center, forward, backward, this is just how things are.

    So if we have a sales tax of 35%, you cannot expect sales to be unaffected. If businesses don’t sell as much stuff, they don’t need as many employees. Some businesses will fail outright. The rate is far too high to not have a nuclear impact; people will simply hoard their money, because with a 35% tax on everything, it won’t go very far.

    What is ideological is that you offered a theory without running the numbers. The theory was apparently more appealing than the math, which strips away ideology and makes it clear whether or not it’s feasible.

    If the government could function on a lot less money, then the numbers could work. If that was true, then at that point, we could talk about whether or not the idea is fair or unfair, just or unjust, nice or mean, polite or rude, too liberal or too conservative, etc., etc. But we don’t need to go there because (a) this thread is The Truth About Coffeemakers and (b) the math, she just don’t work.

  • avatar
    Landcrusher

    So, what your saying is that people will buy less if they are taxed on sales, but they don’t work less if they are taxed on labor?

    Really?

  • avatar
    Pch101

    So, what your saying is that people will buy less if they are taxed on sales, but they don’t work less if they are taxed on labor?

    They won’t work at all if their (thanks to you, former) employers don’t generate any sales that would require the employer to need their services.

    The problem with the sales tax is that it provides numerous opportunities for the would-be taxpayer to say no to the tax. Every purchase becomes elevated in importance, because the hit is huge, painful and clear. This is a downward spiral begging to happen.

    On the other hand, everyone needs some sort of income. An income tax set at an appropriate rate will not deter many people from working. Even if they don’t get to keep every dollar, they focus enough on the net amount that they show up.

    The historical rate of US unemployment makes it obvious that people are still willing to show up at work, assuming that they have a job, with the current tax rates. The detriment is obviously not that high, so you’re focusing on a problem that has not been demonstrated.

    Even the Laffer curve doesn’t set the optimal income tax rate at zero. There’s a point to which tax rates can be increased without compromising tax collections.

  • avatar
    Andy D

    I love fixing stuff. I’m happy if 1/2 the stuff I take apart ever works again. I drew the line on a Magic Chef gas cooktop. Marina bought us a new Kenmore. I think, ( hope) I saw a made in USA sticker on it.
    Last yr. I replaced the washer and dryer. I’ll never buy another Maytag. The dishwasher, the well tank and water heater.

  • avatar
    Durask

    Um, you guys probably aren’t coffee geeks here.

    KitchenAid espresso machine guts are from an Italian company, Gaggia, I believe. And Italian espresso machines have plenty of issues, just read the CoffeeGeek forums.

    Now, the other issue is that KitchenAid espresso machine is horribly overpriced, you can get a Gaggia with similar internals for about $200.

  • avatar
    Landcrusher

    I am not putting anyone out of work. You just can’t do the math.

    I make $100 per hour. I take home $50 per hour. According to you, after the taxes are moved to the point of sale, I will be unwilling to buy the same amount of goods I used to, and will now be putting the extra money in a mattress?

    At any rate, if you moved the tax away from the labor, demand for labor would increase and demand for energy and commodities would decrease because they would be substituted for with labor. That was appropriate to the conversation, sorry if it offends you.

    BTW, this discussion would never have happened if income tax policy was only about maximizing revenue at the lowest rate. That’s not even why they started the income tax, so let’s be honest, Laffer curve discussions are pointless here.

  • avatar
    Pch101

    According to you, after the taxes are moved to the point of sale, I will be unwilling to buy the same amount of goods I used to, and will now be putting the extra money in a mattress?

    You act as if I made this up. Every economist knows that higher consumption taxes reduce consumption. Nobody debates this.

    if you moved the tax away from the labor, demand for labor would increase

    You have it backwards. Companies aren’t in the business of hiring people. They hire people only if they need them to fulfill the demand for their products and services. With less demand, they start cutting bodies. Econ 101.

    So do the math: If you know that consumption taxes reduce consumption, then it stands to follow that sales will decline when those taxes go up. When businesses sell less stuff, they hire fewer people.

    This is very straightforward. You really need to have an agenda not to see it. Seriously, this is not right-left here, but stuff that all economists would agree upon, no matter which economic school they call home.

    The only reason to impose a 35% sales tax is if you want to use the tax code to deliberately discourage consumption. That’s why the Europeans tax the absolute stuffing out of gasoline, because they really don’t want people buying it in the first place, so they want to make it painful. It obviously hurts enough that European consumers consume cars far differently than other people who have lower taxes, and they use a lot less fuel.

    It’s not politics, just basic economic law applied to a question of public policy. You can debate whether you like the policy, but you can’t argue about the effects.

  • avatar
    Landcrusher

    I do not agree with your assumption. Certainly, consumption taxes reduce consumption. However, it is also certain, that increased income does the opposite.

    I believe the sales tax will be overcome by the combination of higher after tax income, and lowered costs due to the reduced embedded labor costs. You can stop throwing out basic economics which you know I know. Its the application of it which we disagree on.

    And, I am ahead of you because the lines have been drawn on the Fair Tax among economists. They do not all agree, disagree, or even seem to get it. There is no cult of consensus.

    The biggest argument is about how disruptive the change over would be, and how much the rate would have to be, not whether or not it would work.

    I don’t necessarily think the Fair Tax is the answer, but I know that its better than what we have. If we spent more effort on a rational discussion on how it could work, rather than uselessly trying to wish it away, we could get somewhere.

    We will get something like it in the end. There will be higher consumption taxes. It’s just a matter of time. It is the better way.

  • avatar
    Pch101

    However, it is also certain, that increased income does the opposite.

    Income isn’t going to increase if businesses sell less stuff. Incomes should go down, because as unemployment rises, companies do not need to bid up wages to attract workers.

    I believe the sales tax will be overcome by the combination of higher after tax income, and lowered costs due to the reduced embedded labor costs.

    You don’t follow the income tax argument being made by your fellow conservatives.

    The argument against the income tax is on the demand side of the equation. If the tax rate is too high, it’s the workers who don’t want to work, because the marginal cost of work is high. (If the tax rate is too high and the worker has a choice of working one hour or screwing off for an hour, the workers will vote to screw off, because the extra hour isn’t worth the bother.)

    The argument is that if workers have a lower income tax, they will be motivated to be more productive, and to save their money. (I believe that’s a poor argument, but I could defend it if I was playing debate team captain.)

    Companies are indifferent to the individual tax rate — they aren’t paying that tax, so they don’t care.

    If you want to argue that companies would hire more people, then you need to demonstrate that they would make more sales. You haven’t done that, and in fact have conceded the opposite.

    One thing that Laffer did that was positive was to highlight that tax rates matter. A 90% income tax can have a dramatically different impact from a 20% income tax, for example.

    If we accept that broader concept (and we should, even if we could spend weeks arguing about the slope and shape of the curve), then it is logical to extend it to other forms of tax.

    A sales tax set at the rate required to replace the income tax would obviously be daunting. If you could get away with a tax of 5% or 10%, for example, you might have a point. But at 40%, you’re not even close.

  • avatar
    Landcrusher

    If you want to continue to pretend that consumer will not change behavior due to his decreased taxes there is no point continuing.

  • avatar
    wsn

    Well the debate becomes long and I don’t want to repeat the points. Just to say I agree with Landcrusher that we should lift income tax and instead tax commodities (real estate is also commodity, IMO). This way:

    1) You discourage people to use energy and raw material, thus saving the environment

    2) You encourage people to work by taxing less. Since less energy is used, you would create more jobs to fill the hole. I.e. 10 worker at $10/hour vs. previous 7 workers at $15/hour($10 to self and $5 to IRS) + a lot of electricity.

    3) It’s bad to pay tax. And it’s worse that you pay tax, but other people evade tax. If we just tax energy and raw material production, there is about no way taxes would be evaded. So, it’s fair. Your cash-only plummer won’t have any advantage over you, in terms of paying tax.

  • avatar
    Pch101

    If you want to continue to pretend that consumer will not change behavior due to his decreased taxes decreased wages, higher unemployment and goods taxed at outrageous rates there is no point continuing.

    There, fixed that for ya.

  • avatar
    Landcrusher

    Right. Just throw out whatever basic econ you don’t like. More money, means more buying.

    It’s a clever trick that elitists pull off to pretend that on the one hand, people with larger incomes get all sorts of things that poor people can’t afford, and point out how unfair that is, while at the same time professing that those same higher income people don’t spend or invest their money, keep it all in a mattress, and don’t share the benefits of their “luck” with the rest of the “less fortunate” folks.

    I suppose that once you buy into that, it’s really hard to introduce an idea where increased income is used rationally.

    What’s interesting is that many right wing folks won’t buy into consumption taxes for the EXACT same reason with one change, they assume the sales tax will be added, but the income tax will stay. Now if that happened, what you describe would surely take place.

    At any rate, given your thesis, stimulus checks are just stupid. I mean, we are talking russian roulette for a dollar a pull stupid. People finding more money in their pockets don’t spend the stimulus, and jobs are lost all over while the national debt soars and the banks collapse due to lack of deposits. At the same time, we pay for it by taxing high income earners because they will keep working to get more income which they won’t spend. Oh sorry, they don’t work, they get their money by laying off poor people.

    Meanwhile, if anyone proposes getting rid of the income tax, pull out the Laffer curve. If anyone proposes reducing the income tax, dismiss the Laffer curve, and dial 1-800-RENTAMOB and have ACORN pass out the pitchforks and torches.

    Dude, how about you put down the play book for just a freaking second. I read it already, it’s boring.

  • avatar
    Pch101

    More money, means more buying.

    People who lose their jobs don’t buy more, they buy less. We are seeing this happen right now, as we speak.

    Companies that have their prices raised sharply due to sales taxes sell less, not more.

    Companies that sell less begin to fire people, because they don’t need more staff when sales are dropping.

    When companies fire people, unemployment goes up.

    The remaining workers who still have their jobs experience pay cuts, not raises, because there is more competition for their jobs, thanks to the jobs lost once the prices skyrocketed. The workers lose pricing power, and earn less.

    A tax rate as high as the one that you are suggesting is going to cause notable retractions because the number is huge. There is a difference between a 4% sales tax and a 40% tax; the difference in the rate is not trivial.

    You can’t possibly think otherwise. I know that you want to believe otherwise, but that makes it more about your political religion than any supposed basis in economics. In the time that you’ve spent defending this stuff, you could run the numbers, see how wrong you are, and perhaps come up with an alternative that is actually viable.

    A tax rate of the sort that you’re implicitly suggesting would obviously be a killer; if some lefty suggested a 40% sales tax, you’d undoubtedly go nuts.

  • avatar

    Landcrusher -

    There’s no doubt that you’re fervent in your beliefs and that there are a wide variety of remedies to our current tax system. It is also apparent, given the disappointingly poor showing for Ron Paul, that few in the real-world system we have are willing to address these remedies. Most disappointing to me was that voters did not get out of their “Republican” and “Democrat” postures sufficiently to support Paul’s questions, as he was posing some great ones.

    Debating sales vs income tax may be an interesting intellectual exercise, but you weaken your arguments when you decide that one group is automatically “against” tax reform while another group is automatically “for” it. I’d guess if you asked any American citizen for an opinion you would find that the uniformity of ideas totally transcends any party or other demographic.

    No one actually likes paying taxes. When one considers the privileges of living in our country, and compare it to places where tax rates are much lower, most people do not find our tax laws so inequitable that it is worth moving.

    There’s no doubt that lots of things about Federal, State and Local governments could and should be improved. Someone took over the Department of Motor Vehicles in California several years ago and virtually transformed it from a horrid place to one which provides service generally on a par with good retail stores. This kind of change is possible in almost every area of government and is worth encouraging; if you have lots of energy and commitment (and you seem to have this), I highly recommend you take a shot at any portion of government. Your fellow citizens will thank you and you’ll find that you made a lasting impact on American life.

    If, however, you’re like most of us, it’s just a lot easier to sit back and complain about it.

    Besides, Mr. Liekanger was really talking about espresso makers and the failings of modern manufacturers.

  • avatar
    Landcrusher

    Let me use numbers.

    Joe makes $25 per hour, and takes home $15. This cost his employer $30 per hour.

    We FIRST get rid of the taxes on labor, so now the employer cost goes down to $25 per hour. We know that overtime, this cost reduction will reduce the cost of the goods produced. (LOWER PRICE AT POS)

    Joe, meantime, now has $10 more per hour in his pocket, or $400 per week so he will spend more money (INCREASED SALES AT POS).

    Now, Joe goes to buy goods, and finds that because of the sales tax, things are more expensive. Yes, he will reexamine his purchasing habits, and may be deterred from buying some things he used to, or was planning to (DECREASED SALES AT POS); however, we know from above that he is flush with cash, so OTOH, he may buy more of some things (SEE ABOVE, DON’T CONTINUE TO IGNORE THIS PART)

    You keep ignoring the INCREASE parts of the equation. In the end, if the Government takes a trillion out under both schemes, the money spent should settle at the SAME LEVEL. (That’s MACROeconomics).

    It’s not helpful to argue about the rate because we argue about rates NOW. THAT will NEVER END. If you were proposing a tax that would hit the average person for 40% of his income during his or her prime earning years, no one would go for that either, but that’s what we have. That is no reason not to choose a better system though.

  • avatar
    Pch101

    Joe makes $25 per hour, and takes home $15. This cost his employer $30 per hour.

    We FIRST get rid of the taxes on labor, so now the employer cost goes down to $25 per hour. We know that overtime, this cost reduction will reduce the cost of the goods produced. (LOWER PRICE AT POS)

    This is wrong. The only “tax” on labor from the employer’s perspective is the social security funding, which is split with the employee. So you’re off to a bad start.

    But wait, it gets worse. With a corporate income tax, the labor expense is deductible. The government effectively subsidizes the costs by the amount of the tax rate. An employer with a $30 employee and a 35% tax rate has a net cost of $19.50.

    Under your system, the tax code provides no shield to support the wages, so in effect, assuming no change, the burden of the net wage increases for the employer, not down, because the company is stuck with 100% of the cost, instead of 65% of iit. That should discourage hiring, not encourage it.

    Joe, meantime, now has $10 more per hour in his pocket

    You’re assuming that Joe still has a job, and that market wages have not been impacted by the business failures created by your pet sales destruction project, which directly attacks the means by which companies create revenue. Bad assumptions all the way around; you can’t impose a 40% sales tax without seeing a reduction in sales.

    we know from above that he is flush with cash

    That’s the point — he isn’t flush with cash. Instead, he’s stuck in an economy in which money velocity has fallen like a rock, and he’s staring down the barrel of a self-inflicted depression caused by the disastrous policy that has caused consumers to hoard and led to business failures.

    You keep ignoring the INCREASE parts of the equation.

    I’ve pointed out that unemployment would increase sharply under your proposal, because consumption has been shred to bits under the weight of your supertax. There’s nothing going up here that anyone is going to like.

    It’s not helpful to argue about the rate because we argue about rates NOW.

    You want to ignore the rates because it takes about 30 seconds to see how the rates would torpedo your idea into kingdom come. The country would go into meltdown if we did what you are suggesting. It would be a disaster that makes the current bubble look like a picnic.

    You can’t have an intelligent discussion about tax policy without talking about the rate. The rate is a primary component in weighing the available options.

    If you could raise the receipts needed with a 1% sales tax, it would put the discussion into an entirely different realm. But since that isn’t even close to being true, your idea is totally unworkable.

  • avatar
    Landcrusher

    edgett,
    There is of course a group of people for and a group against tax reform. That is a truism.

    The subsets share certain ideological beliefs, but the whole sets are not uniform. I just stated the opposite case of what you said I did.

    My original point was quite on topic explaining one of the reasons for the trend that Stein was writing about. PCH and I went off on a tangent. This is considered bad form in forums with persistent threads, but this is not that kind of forum. This is not an archival forumm where there would be a value for people looking for info on fixing cappucino machines, or which one to buy.

    You can’t really hijack a thread that people all intend to move on from anyway. If our conversation irritates you, I apologize, but you can of course ignore us.

  • avatar
    Landcrusher

    PCH,

    Yes, there are costs to the employer besides SS in every state I have done business in. What states have you run businesses in? I could use that info. Also, there are also compliance costs that, for small businesses, are a big cost.

    Your common mistake on the write off of the income tax is kinda funny. Somehow, you think that the write off is a subsidy? How about we write off THE WHOLE TAX. Which will leave the corporation with more money?

    We are not talking about a 1% tax, silly rabbit, we are talking about a 25 to 35% tax. So, no, arguing within the reasonable range is not helpful.

    Your argument is circular, but you cannot see it because you are applying the sales tax BEFORE eliminating the income tax. They do not happen in that order, or even at the same time by some proposals.

    Think about it this way. Joe makes cans. He used to get a quart of milk for the effort to make 100 cans, and took home a pint. After shifting the tax, he will still get a pint of milk for the same effort even under the worst case scenario for the consumption tax. 100 cans equals one pint of milk. The man at the dairy doesn’t have to lose his job, so he still buys stuff in cans, so our man Joe still keeps his as well. There is no huge demand drop.

    Some reasonable opposition arguments about demand, unlike yours, note a MARGINAL change towards savings. Well, I say that would have saved us this current recession, or at least reduced it’s damage because much of the pain was caused by too many over leveraged people and businesses. At any rate, that money would have been in a bank, and available for credit. Instead, the money just isn’t there because it went into a landfill, or overseas to buy more resources, or overseas where labor is cheaper in part because of our ridiculous income tax.

    Buy taxing consumption, we give domestic producers a huge advantage. We get rid of a corporate tax, and now tax the fruits of chinese labor the same as we tax domestic labor. Previously, a 1,000 cans made in the US were taxed at a pint of milk, while a 1,000 cans made in china were not taxed in the US. Now, those 1,000 cans made in china net the US government a pint of milk as well. So, the can company can still outsource Joe’s job to pay less labor, but the tax revenue doesn’t leave the country with it.

    So when Joe goes on welfare, the chinese laborer is supporting his pint of milk, not another US worker.

  • avatar
    dgduris

    BREVILLE!

    Period.

    Unless you have a LOT of $$$ to burn.

  • avatar

    Landcrusher, PCH -

    I did not intend to flame either of you but to suggest only that there are real things which CAN be done to government by real people such as yourselves. Both of you are quite fervent in your ideas and I’m sure I’m not the only one to have found the discussion to be most illuminating. It occurs to me that all of us who feel that government can be improved have an obligation not just to talk about it, but to actually act on those beliefs.

    Imagine millions of Americans each trying to effect some change in the efficiency and cost effectiveness of government! How much more patriotic than slapping on a lapel pin or “Support our Troops” bow or political sticker on one’s car. Of course, with everyone doing this, and nearly everyone having slightly different ideas about what really needs to be done, not a great deal of change happens. But I do thank the person or persons responsible each time I walk into the DMV office, and there was indeed someone or many someones who initiated this change.

    Thanks again to Mr. Liekanger’s espresso-machine review for a wonderful discussion!

  • avatar
    Pch101

    Yes, there are costs to the employer besides SS in every state I have done business in.

    They have costs. But they don’t pay income taxes (those things that bother you so much) to have employees. They would continue to have workers comp, benefits costs, etc. even without an income tax. Calling those things a “tax” just because you don’t like them is factually inaccurate.

    Your common mistake on the write off of the income tax is kinda funny

    It’s reality. The tax code is written to motivate us to spend our money on some things, rather than others. Depreciation schedules are a common example of this; we alter them when we want spending habits to change.

    Wages are fully deductible from ordinary income, which is the best deduction that a business can get.

    We are not talking about a 1% tax

    And that’s unfortunate for you, because that’s the very thing that makes your plan unworkable. You are proposing a tax rate on consumption that would put a mushroom cloud on American industry. Not good.

    you cannot see it because you are applying the sales tax BEFORE eliminating the income tax.

    I don’t see it because your math is wrong and it doesn’t work. Your tax rate is a killer, and would create ripple effects that would depress spending, leading to substantial business losses.

    He used to get a quart of milk for the effort to make 100 cans, and took home a pint. After shifting the tax, he will still get a pint of milk for the same effort even under the worst case scenario for the consumption tax.

    Again, this is wrong. The macroeconomic result is falling wages, so he gets less, not more. Your presumption that wages are unaffected by widespread business failures is false.

    Buy taxing consumption, we give domestic producers a huge advantage.

    I doubt that you’d find a business in this country that would embrace a 40% sales tax, especially when they sell stuff for a living. The rate is too high.

  • avatar
    Landcrusher

    I don’t know any other way to say it since you obviously would rather play games.

    Nevermind

  • avatar
    Stein X Leikanger

    The core of the economy – in most of the G20 nations at least – is actually in a quite fine state of equilibrium, with distinctions being drawn on minor points.
    A few “flat tax” and “no income tax” theorists have availed themselves of the opportunity to create non-equilibrium economies in former Soviet Republics. An action that seemed sensible as long as these had access to easy credit – but which has now blown up in their faces (and ours, since we lent them the money for this fine experiment.)

    Consider California, where people have the ability to consider propositions, in the form of referenda, that hamper the equilibrium state an economy should ideally aim for. By doing this, Californians get the short-term pleasure of thinking they’ve saved money and given their politicians a lesson, and the long-term displeasure of shooting themselves in the foot.

    It’s really, really dangerous to bring political agendae to the table when effing about with the economy. The former communist enclave of Europe tried long and hard, and painted themselves into a corner doing so.

    Fiddling with the economy, for instance proposing an elimination of the income tax, is a little bit like cutting slices from an inflated balloon, and expecting the remainder of the structure to hold, while you replace the missing slice with “something else” which is entirely ideologically posited.

    The crux here is whether you want a polity or not, and whether that should fulfil the tasks ordinarily expected of one.
    If you don’t, then feel free to slice and dice that balloon – but there are usually dire consequences when messing with the equilibrium state, which has been arrived at after centuries of trial and failure.

    The present financial crisis is one where the balloon was hyperinflated through the creating of a completely unaccountable and unregulated derivatives market. And we haven’t even seen the consequences of the hyperdeflation that is going to lead to. (Detroit is definitely seeing those consequences.)

    No political agenda here – I’m equally skeptical of both sides in the political spectrum. Just consider Lawrence Summers, presently ruling the roost as the president’s financial adviser par excellence – he was highly dismissive of any warnings of a “financial meltdown” just a few years ago – and he’s now in charge of getting us out of it.

    Batten the hatches! And be very, very afraid when anyone suggests radically changing the equilibrium state of the economy, or pretends it doesn’t matter (the fiscal irresponsibility of the previous president being a case in point; we’ll still have to give Obama at least a year before we turn the thumb on his administration.)

  • avatar
    Landcrusher

    Stein,
    A well thought out position, and I would agree with most of it actually. I would nitpick the idea that the derivatives market was completely unregulated, as it was/is not. It is poorly, and incompletely regulated for sure.

    I wouldn’t recommend a radical change if I didn’t think it was worth it. However, you can’t reasonably examine the worthiness of the idea without completely unthought out responses coming out of the woodwork. I am happy to engage in a discussion on how to make communism work best, knowing that I will likely reject whatever comes out of the discussion as unworkable, but I will at least give it a try because being irrational about it helps nothing.

    The other point I would like to make is that several radical changes have been made over the last century without being well thought out at all. And, even when faced with their continued failure, both sides continue to try to support their failures with more money and resources. It’s really ridiculous.

    Yes, getting away from an income tax will upset the cart, and it will not be painless. I don’t think it would be as painful as the recent recession, and it would definitely be worth it.

  • avatar
    Kendahl

    With regard to the debate between Landcrusher and Pch101, once I decide to buy something, it doesn’t matter whether the taxes I pay are labeled “income” or “sales”. What income versus sales taxes do is affect the balance between saving and consumption. Low income and high sales taxes favor saving. High income and low sales taxes encourage consumption.

    Taxes can be looked at as the mechanism by which a group of people (the government) overrides private individuals’ spending priorities with its own.

    For the most part, modern automobiles are better made, more reliable and last longer than their predecessors a generation ago. However, much of the improvement is offset by the greater complexity of modern cars. We tend to forget how much performance has improved. Compared to their predecessors, modern cars are faster, handle and brake better, are more comfortable, safer and more environmentally friendly.

    Sometimes, an unrepairable device is a better bargain than a repairable one. The best example is consumer electronics. Production costs for highly integrated, unrepairable devices are so low that life cycle costs would be higher for modular, easily repairable designs.

  • avatar
    davey49

    “I have very much enjoyed “The Truth About Kitchen Appliances”
    So have I
    An espresso machine? I would just go out every time I wanted espresso (or other coffees that use these machines)
    Helps the local businesses. Keeps people employed
    Landcrusher sounds like a supporter of the Fair Tax
    A $15 Mr Coffee coffeemaker can last a lifetime (15 years or more). You’d be surprised, you don’t need to spend $150 on a coffee maker.
    That being said, if I was in the market for a new coffeemaker, I’d get a Bunn. Because its the only one made in the US.

  • avatar
    ihatetrees

    Landcrusher vrs Pch101 was an interesting ride.

    While I’m more sympathetic to Landcrusher’s argument, there’s no way the income tax is going away. There are too many political and tax constituencies involved.

    A simplified flat(ish) tax is more likely. Allow consumer’s a choice – use the old tax form system or a new flat(ish) one. Remove incentives for the political class to whore themselves for technical tax code changes.

    Of course, that doesn’t end the debate. There are legions of law papers written about what constitutes “income”.

  • avatar
    Accords

    I cant help but wonder how Planned Obsolescence has an effect on our lives, and our pocketbooks..

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


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