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A lot of the problem in the US has to do with the petrodollar system. OPEC has only been allowed to accept US dollars for their oil since the 70s. That generat

A lot of the problem in the US has to do with the petrodollar system. OPEC has only been allowed to accept US dollars for their oil since the 70s. That generates massive demand for dollars outside the US. Foreign countries obtain the dollars they need to buy oil by converting their currency to USD or by exporting goods/services to the US. As a result, the value of the US dollar gets inflated and large parts of the US economy get "offshored" thanks to the favorable conversion ratio. On the bright side, this system means you can import foreign goods very cheaply - but on the downside, it means exports are often not viable. There are several industries in the US that don't reap large benefits from cheap imports. Education, healthcare, construction, and child care just to name a few. I hope this adds some color to the phenomenon you've observed

dantheman 6y ago
I'd say it's just inflation in industries that haven't had any made any progress in efficiency - it takes the same or more effort to do the same/corresponding activity. Productivity in manufacturing has increased a massive amount, so the inflation has less of an impact.
- Ericson2314 6y ago
  No, it's definitely dutch diesease with our dollar exports too. See https://phenomenalworld.org/reviews/trade-wars https://phenomenalworld.org/reviews/trade-wars
adventured 6y ago
> but on the downside, it means exports are often not viable. A large hole is shot in your premise by the fact that the US is a wildly successful exporter of both goods and services. There's very little evidence that the US Dollar has been too strong during the era you're referencing, save for a few brief periods of time. For example the USD was quite weak from 2004-2015, and yet education and healthcare soared in cost regardless. For most of the comparison history, the USD has not been far out of line with the value of the Euro in how they trade, and that's despite the US having a far more potent economy during that time than Western Europe. The so called petro dollar (commodities linked dollar) has existed for most of the post WW2 era. And yet education and healthcare were reasonably priced until the late 1990s forward. The ramp in education costs is easily explained by the infinite backing of student loans by the US Government, that's a never-ending inflationary cycle caused solely by the Feds. When or if they remove that inflationary prop, the cost of higher education in the US will begin to stagnate or deflate. It's real simple: pull the government inflation prop out from under education. Stop backing student loans so freely and to such a dramatic extent. What would happen? It'd instantly collapse, except for higher end private schools. What the universities could command in the way of prices would be obliterated overnight, they'd have to match what the students could actually afford in reality, instead of in govt-backed fantasy land. Education and healthcare costs keep going up because the operators can keep charging more due to how those systems are structured. There's either not a competitive market to push down on prices at all (healthcare) or there's an infinite inflation prop being supplied by the Feds (education). Prices are soaring as entirely proper representatives of real inflation over that time, which you can see if you stack the USD against gold, oil, silver, platinum, housing, or new car prices over decades. It's everything else that is doing worse than real inflation, because there is generally plentiful market competition to push downward on pricing power.

dantheman 6y ago

I'd say it's just inflation in industries that haven't had any made any progress in efficiency - it takes the same or more effort to do the same/corresponding activity. Productivity in manufacturing has increased a massive amount, so the inflation has less of an impact.

Ericson2314 6y ago
No, it's definitely dutch diesease with our dollar exports too. See https://phenomenalworld.org/reviews/trade-wars https://phenomenalworld.org/reviews/trade-wars

adventured 6y ago

> but on the downside, it means exports are often not viable. A large hole is shot in your premise by the fact that the US is a wildly successful exporter of both goods and services. There's very little evidence that the US Dollar has been too strong during the era you're referencing, save for a few brief periods of time. For example the USD was quite weak from 2004-2015, and yet education and healthcare soared in cost regardless. For most of the comparison history, the USD has not been far out of line with the value of the Euro in how they trade, and that's despite the US having a far more potent economy during that time than Western Europe. The so called petro dollar (commodities linked dollar) has existed for most of the post WW2 era. And yet education and healthcare were reasonably priced until the late 1990s forward. The ramp in education costs is easily explained by the infinite backing of student loans by the US Government, that's a never-ending inflationary cycle caused solely by the Feds. When or if they remove that inflationary prop, the cost of higher education in the US will begin to stagnate or deflate. It's real simple: pull the government inflation prop out from under education. Stop backing student loans so freely and to such a dramatic extent. What would happen? It'd instantly collapse, except for higher end private schools. What the universities could command in the way of prices would be obliterated overnight, they'd have to match what the students could actually afford in reality, instead of in govt-backed fantasy land. Education and healthcare costs keep going up because the operators can keep charging more due to how those systems are structured. There's either not a competitive market to push down on prices at all (healthcare) or there's an infinite inflation prop being supplied by the Feds (education). Prices are soaring as entirely proper representatives of real inflation over that time, which you can see if you stack the USD against gold, oil, silver, platinum, housing, or new car prices over decades. It's everything else that is doing worse than real inflation, because there is generally plentiful market competition to push downward on pricing power.