posted
It isn't inflation that's like a fraction, it is money. It doesn't matter if the numbers are bigger or smaller, just what their ratios are. If the ratio between income and the cost of things people buy a lot of with that income goes down, people have less to spend. If the ratio goes up, people have more to spend. If we multiply both parts of the ratio by a huge number, people still have exactly the same amount to spend.
The average cost of a car (especially just the purchase price, ignoring the actual cost of owning a car) is almost irrelevant. What matters is the prices people do pay, and the prices people can pay. For instance, I bet you people can buy a used car now that works objectively better in pretty much every way than almost any car in existence in 1970 for far less than $3,542, much less $20k. Have prices really gone up if you can buy something better for less in nominal dollars yet your income in nominal dollars is nearly six times greater?
The question doesn't have a single easy answer, especially when you consider it across the universe of goods. And that's with just forty years of change.
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posted
[to stonewolf] You know that in a zero-inflation world average wages can decline as well? In particular, the takeaway from these stats should be: why has inflation outpaced wage growth? Other good questions in this area are: why have medical expenses outpaced inflation? Why has the cost of higher education outpaced inflation?
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posted
Medical and education prices have outpaced inflation because, I think anyway, condensation of wealth has placed greater disposable wealth in the hands of enough people to consume most of the available goods at a very high premium. This has been aided by the expansion of debt availability to the top earners as well- so even those who can't pay the costs can borrow enormous amounts in order to pay. Availability of education and medical care thus decline overall, as more of the industry chases a smaller source of business at a higher premium.
Essentially the equation works out to: the rich or well off either pay the highest price they can, or borrow in order to meet that price. The rest of society in the next generation will be forced to pay those systemic costs in the form of higher prices on homes, cars, and insurance and education, at a rate much higher than it would have been as a function of percentage f income if the previous generation had not borrowed so heavily and inflated prices.
Republicans, by the way, are doing everything they possibly can to maintain this trend, by removing all roadblocks in place of people driving up these prices. Keeping capital gains low, fighting marginal tax increases, and fighting regulation of the health industry and banking systems to ensure that the means to own housing and obtain medical care is in the hands of only the rich and powerful.
Posts: 9912 | Registered: Nov 2005
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The average cost of a car (especially just the purchase price, ignoring the actual cost of owning a car) is almost irrelevant. What matters is the prices people do pay, and the prices people can pay. For instance, I bet you people can buy a used car now that works objectively better in pretty much every way than almost any car in existence in 1970 for far less than $3,542, much less $20k. Have prices really gone up if you can buy something better for less in nominal dollars yet your income in nominal dollars is nearly six times greater?
The question doesn't have a single easy answer, especially when you consider it across the universe of goods. And that's with just forty years of change.
I think you're ignoring the effect of wealth condensation and income disparity on political enfranchisement. You can buy a car fir less today, but does owning that car make you as enfranchised as it did in 1970? the car, by the way, being only symbol of wealth. Real wealth has a far greater effect on political potency. If I control a larger portion of the means of production and money, then I have more political say- even if your actual personal standards of living increased in 40 years, your status has declined.
Posts: 9912 | Registered: Nov 2005
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quote:I think you're ignoring the effect of wealth condensation and income disparity on political enfranchisement. You can buy a car fir less today, but does owning that car make you as enfranchised as it did in 1970? the car, by the way, being only symbol of wealth. Real wealth has a far greater effect on political potency. If I control a larger portion of the means of production and money, then I have more political say- even if your actual personal standards of living increased in 40 years, your status has declined.
That's pretty much entirely outside the question of inflation. Not that it isn't an important thing to discuss (though it is an entirely new universe of fuzzy), but that it isn't what is being discussed.
And while enfranchisement is an important consideration, it is important not to downplay other things. Even with the extremely high enfranchisement of, say, a 5th century jarl, I think you'd find extremely few alive today who would switch lives with one.
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quote:Medical and education prices have outpaced inflation because, I think anyway, condensation of wealth has placed greater disposable wealth in the hands of enough people to consume most of the available goods at a very high premium. This has been aided by the expansion of debt availability to the top earners as well- so even those who can't pay the costs can borrow enormous amounts in order to pay. Availability of education and medical care thus decline overall, as more of the industry chases a smaller source of business at a higher premium.
Debt is hardly just available to the top earners. Extensive debt has been made available to just about everyone (you know all those technical college advertisements? That's why). Further, availability of education in the US has done nothing but increase, as has average availability of medical care (though one might wish it had increased more, and the story for medical care is more complicated). There's a lot to talk about on those topics, but you should make certain your story lines up with the facts.
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posted
On availability of education- what I should have said was "the means for the average person to afford an education," and for that matter, decent healthcare. Particularly in the arts, the costs are quickly outstripping the benefits of an education if you're talking purely economic potential for a graduate. And with inflation outstripping the rise in low level wages, paying back the debt that people take out (and yes, it's more available across the board), gets to be harder and harder.
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