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I have thought something similar as well. If you have one Bill Gates and everyone else making $80k, then Bill Gates has a pretty low upper limit on consumption

I have thought something similar as well. If you have one Bill Gates and everyone else making $80k, then Bill Gates has a pretty low upper limit on consumption of scarce assets, and thus goods and services are not bid up. But when a larger and larger number of people make more than their peers, then you start to have a bidding war for scarce goods (ex: housing, education, etc). Hats what you have in the Bay Area. More people than ever making more money than ever before, while supply hasn't increased to keep up. This is something that my typical SF tech peer does not seem to grasp. Relative compensation vs your economic competitors (other knowledge workers in the Bay) matters much more than your absolute pay when considering your ability to afford the good life in a supply constrained environment.

WalterBright 9y ago
Industries that have government heavily involved in (health care, education, housing) have seen huge runups in prices. Ones government is not involved in (such as software) have seen precipitous price declines.
- saas_co_de 9y ago
  yeah, deflation is bad for the economy, unless it is high tech, in which case staggering rates of year-after-year deflation for decades on end are the engine of economic growth.
- hkmurakami 9y ago
  At least in the states, both healthcare and education are subsidized by the government so everyone can "afford" to pay more.
- maxxxxx 9y ago
  You can't blame everything on government involvement. You can't just not get involved in heath care, education or housing, You may get sick, to get a job you often need a degree and you need to live somewhere. But you can live without an iphone.
  - WalterBright 9y ago
    You need food, too, and food is dirt cheap, and there's far less government involved with that. (Yes, I know about the USDA and agricultural subsidies, but the latter doesn't apply to all the food shipped into the US.)
    - maxxxxx 9y ago
      As far as I know the food basics are highly subsidized. Isn't the yearly farm bill around 20 billion?
      - WalterBright 9y ago
        US population is 323.1m, annual food per is $6000, or roughly $180b. Even more roughly, then 10% of the food budget is subsidized. $20b doesn't explain cheap food prices.
- scientistem 9y ago
  I would not describe government as heavily involved in health care. The prices you see rising are from lack of meaningful competition and transparency allowing providers and insurance companies to dictate prices virtually arbitrarily and certainly irrationally to the consumer using the services. Meanwhile, government is the only meaningful access many have to healthcare and education.
  - nickpp 9y ago
    The very lack of meaningful competition and transparency is caused by and a symptom of heavy government involvement. Governments corrupt markets.
  - WalterBright 9y ago
    About half of health care spending in this country is done by the government. That's heavily involved by any metric. Secondly, the amount of regulation of it is very, very heavy. The price rises are due to this. See https://www.theatlantic.com/magazine/archive/2009/09/how-american-health-care-killed-my-father/307617/ https://www.theatlantic.com/magazine/archive/2009/09/how-ame... Note how prices for Lasik eye surgery, which has little government involvement, have trended down dramatically.
    - scientistem 9y ago
      While that may be true, the causal link between government spending and high prices is unclear. The vast majority of waste I see getting healthcare myself is the absolutely massive cost of dealing with insurance itself. This is an industry (billing!) that employs vast numbers of people. I think it’s much more likely the high costs are an effect of ludicrously poor price transparency and the unsustainable healthcare practices that this sustains. At worst, government regulation exacerbates this; I think you’d be hard pressed to demonstrate it’s the primary cause. Either way, we need price transparency before people start acting rationally, and government regulation of irrational spending is going to be wasteful. Price transparency would make the promise of single payer (government) healthcare actually sustainable for a populace; without it, you’re just making the healthcare industry richer without actually providing a proportionate amount of care to the public.
scientistem 9y ago
Well, average pay in SF is only high if you ignore the homeless person sleeping on your stoop. In that sense the job would be extremely rewarding compared to other parts of the country. If you only compare yourself to people in like jobs, that reward vanishes almost entirely for the average worker.

WalterBright 9y ago

Industries that have government heavily involved in (health care, education, housing) have seen huge runups in prices. Ones government is not involved in (such as software) have seen precipitous price declines.

saas_co_de 9y ago
yeah, deflation is bad for the economy, unless it is high tech, in which case staggering rates of year-after-year deflation for decades on end are the engine of economic growth.
hkmurakami 9y ago
At least in the states, both healthcare and education are subsidized by the government so everyone can "afford" to pay more.
maxxxxx 9y ago
You can't blame everything on government involvement. You can't just not get involved in heath care, education or housing, You may get sick, to get a job you often need a degree and you need to live somewhere. But you can live without an iphone.
- WalterBright 9y ago
  You need food, too, and food is dirt cheap, and there's far less government involved with that. (Yes, I know about the USDA and agricultural subsidies, but the latter doesn't apply to all the food shipped into the US.)
  - maxxxxx 9y ago
    As far as I know the food basics are highly subsidized. Isn't the yearly farm bill around 20 billion?
    - WalterBright 9y ago
      US population is 323.1m, annual food per is $6000, or roughly $180b. Even more roughly, then 10% of the food budget is subsidized. $20b doesn't explain cheap food prices.
scientistem 9y ago
I would not describe government as heavily involved in health care. The prices you see rising are from lack of meaningful competition and transparency allowing providers and insurance companies to dictate prices virtually arbitrarily and certainly irrationally to the consumer using the services. Meanwhile, government is the only meaningful access many have to healthcare and education.
- nickpp 9y ago
  The very lack of meaningful competition and transparency is caused by and a symptom of heavy government involvement. Governments corrupt markets.
- WalterBright 9y ago
  About half of health care spending in this country is done by the government. That's heavily involved by any metric. Secondly, the amount of regulation of it is very, very heavy. The price rises are due to this. See https://www.theatlantic.com/magazine/archive/2009/09/how-american-health-care-killed-my-father/307617/ https://www.theatlantic.com/magazine/archive/2009/09/how-ame... Note how prices for Lasik eye surgery, which has little government involvement, have trended down dramatically.
  - scientistem 9y ago
    While that may be true, the causal link between government spending and high prices is unclear. The vast majority of waste I see getting healthcare myself is the absolutely massive cost of dealing with insurance itself. This is an industry (billing!) that employs vast numbers of people. I think it’s much more likely the high costs are an effect of ludicrously poor price transparency and the unsustainable healthcare practices that this sustains. At worst, government regulation exacerbates this; I think you’d be hard pressed to demonstrate it’s the primary cause. Either way, we need price transparency before people start acting rationally, and government regulation of irrational spending is going to be wasteful. Price transparency would make the promise of single payer (government) healthcare actually sustainable for a populace; without it, you’re just making the healthcare industry richer without actually providing a proportionate amount of care to the public.

scientistem 9y ago

Well, average pay in SF is only high if you ignore the homeless person sleeping on your stoop. In that sense the job would be extremely rewarding compared to other parts of the country. If you only compare yourself to people in like jobs, that reward vanishes almost entirely for the average worker.