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I saw saw a chart that showed the change in prices of stocks, bonds, real estate, consumer goods, and wages over ten years. What economists call inflation, wag

I saw saw a chart that showed the change in prices of stocks, bonds, real estate, consumer goods, and wages over ten years. What economists call inflation, wage and price inflation, was something like 13-17% total over 10 years. Where everything else more than doubled. We get gaslighted to only think about the wage and price inflation year over year rate. But not the the total relative change in prices over time. The latter is the important part.

heterodoxxed 5y ago
One aspect I'm fascinated with is the way that consumer goods are continually dropping in price offsets the increase in necessities. We get a supercomputer in our pocket for $40 a month, but rent has ballooned. We can have hundreds of video games for free but we'll never own a home. And so on. We all get wikipedia for free, but a college degree is painfully expensive in a world that doesn't let you apply for jobs on the strengths of self-education. As someone on here said years ago, "I love my iphone but I worry about health insurance." What good is cheap frivolities if the necessary building blocks of life are skyrocketing.
- Gibbon1 5y ago
  My dad's crusty friends refer to that as deflation for things you want, inflation for things you need. Also official reasoning about housing costs ignores that there are huge variations in that prices people have to pay to house themselves. The focus on average market rates hides the reality on the ground.
jfengel 5y ago
I wouldn't call it "gaslighting". People need to eat, wear clothes, have a place to stay, etc., which is the kind of thing measured by price inflation. If that stuff is relatively stable then it doesn't matter nearly as much if stocks and bonds go up. That's a concern primarily to wealthier people who already have assets, and for them, the increases are double-edged swords. Them that has, gets. Them that doesn't -- i.e. young but upwardly mobile people -- are forced to play that high-risk game. The genuinely poor weren't playing that game to begin with, and could never retire, so they were always out of luck. The only thing they have going for them is social security, i.e. wealth transfer. It's not much, but the alternative would be absolute poverty, which is what it looked like in the early 20th century. I'm more concerned about them then about whether the wealthy stay wealthy, or even whether the young and upwardly-mobile can get assets.

heterodoxxed 5y ago

One aspect I'm fascinated with is the way that consumer goods are continually dropping in price offsets the increase in necessities. We get a supercomputer in our pocket for $40 a month, but rent has ballooned. We can have hundreds of video games for free but we'll never own a home. And so on. We all get wikipedia for free, but a college degree is painfully expensive in a world that doesn't let you apply for jobs on the strengths of self-education. As someone on here said years ago, "I love my iphone but I worry about health insurance." What good is cheap frivolities if the necessary building blocks of life are skyrocketing.

Gibbon1 5y ago
My dad's crusty friends refer to that as deflation for things you want, inflation for things you need. Also official reasoning about housing costs ignores that there are huge variations in that prices people have to pay to house themselves. The focus on average market rates hides the reality on the ground.

jfengel 5y ago

I wouldn't call it "gaslighting". People need to eat, wear clothes, have a place to stay, etc., which is the kind of thing measured by price inflation. If that stuff is relatively stable then it doesn't matter nearly as much if stocks and bonds go up. That's a concern primarily to wealthier people who already have assets, and for them, the increases are double-edged swords. Them that has, gets. Them that doesn't -- i.e. young but upwardly mobile people -- are forced to play that high-risk game. The genuinely poor weren't playing that game to begin with, and could never retire, so they were always out of luck. The only thing they have going for them is social security, i.e. wealth transfer. It's not much, but the alternative would be absolute poverty, which is what it looked like in the early 20th century. I'm more concerned about them then about whether the wealthy stay wealthy, or even whether the young and upwardly-mobile can get assets.