I swear I had Econ in college, but I don’t remember anyone saying this so succinctly. It’s from a weird place too, but this quote hits home. It’s like population decline, but for money.
It was a truly baffling thing for an American president to say. And University of Michigan economist Justin Wolfers explained on MSNBC that things could get very bad as Trump’s scheme becomes reality. Wolfers ntoed that the idea of how much you can afford to buy with your income is called “real income.” And if real income falls, that’s called a recession. Wolfers went on to explain that if things decline as badly as Trump’s example, where someone who bought 30 dolls could only afford to buy two dolls, that’s called a depression.
Video from MSNBC: https://www.youtube.com/watch?v=sAZxLm6M_V0
I was a kid in the Reagan years and I can certainly buy shitloads more now than as a young adult. As you say, housing and wages are shit, but I can afford things that were unthinkable back then. For comparison, I was making minimum wage as a 1990 college kid, basically am now at $15/hr.
I’m probably not making sense, but the goods available to me now are stunning compared to previous decades. And I’m not only talking about compute power, but while we’re there… Dad got me a VIC-20 in the 80s, $1,700 in today’s money. For that much I can outfit a family of four with decent phones and likely pay less monthly than our AT&T bill in the day. And what’s “long distance”?
My water bill was around $20 in the 90s, still is today. I had all the tools to cut my water, gas and power back on, I was that poor. Even at $15/hr. I can easily pay all that along with my wife’s $17hr. (Always had roommates or live-in girlfriends, same difference.)
Education and housing prices have exploded, but not so much other stuff. My first ever real shopping trip was $75 (1990), that’s $175 in 2025. $220 is our usual Aldi bill and I’m buying shrimp, chicken, beef, good stuff. Guess I’m saying that consumer goods and services are shitloads cheaper, or were. Give us a few months.
And as ever, I’m fucked once again on health care. Guess where I live.
Housing, education, and healthcare costs have grown much faster than inflation.
Food, energy, cars, appliances and home goods, furniture, apparel, and other durable goods have generally grown slower than inflation, at least between 1980 and 2020. Much of the last 5 years of inflation, though have eaten away at some of those gains of the previous 30-40 years in those categories.
Electronics, technology, entertainment, most services have generally gone down in price.
So the basket of what we buy is different, with different ratios. A time traveler from the 80’s would be shocked to learn just how many ready made rotisserie chickens or pizzas you could buy for the wage equivalent to one hour of warehouse work, or how many big screen TVs you’d need to pay the average monthly rent for a 1-bedroom apartment. Plane tickets between New York and LA are basically cheaper than one month’s rent in the cheapest possible home you can find in either of those cities. The ratios are all different than before.
But with housing costs high, it kind of puts all of the effort into that single basket. When it used to be that 1/3 your income could comfortably go into housing costs, now in many cities it’s closer to half, even for people up the income scale, because the rest of life beyond having a roof over your head is just cheaper in comparison to that very basic need for shelter.
So from 1960-1990 (30 years) prices went from about 60 cents to 1.66 per pound for beef. That’s that’s a 270% increase. The median salary went from 5,600 to 29,900. That’s a 533% increase.
From 1990-2020 (30 years, lucky we are skipping covids inflation) prices went from 1.66 to 3.18. that’s 191% increase. Wages went from 29,000 in 1990 to 68,000 in 2020. That’s 234% increase.
So what we see is a wage to consumer goods ratio decrease from 263% to 43%.
So our economic wealth as a country is managing to increase faster and faster, yet the consumer wealth fell off awhile ago. If you follow the stock market youd see the Dow Jones increased from 2,700 to 30,000 from 1990-2020. So comparably we should see a 1,100% increase, not a 43%.
Granted none of this matters at the end of the day. The fact is, we are producing a fuck ton of products, and fewer and fewer are reaping the rewards of such day after day.
If you evaluate accessibility of things after subtracting the baseline requirements to stay alive it gets real sketchy how close many Americans are getting by.
https://www.nationalchickencouncil.org/about-the-industry/statistics/wholesale-and-retail-prices-for-chicken-beef-and-pork/
https://www.multpl.com/us-median-income/table/by-year
https://www2.census.gov/prod2/popscan/p60-036.pdf
Beef is a bad example. It used to be cheaper than chicken and similar to pork, but the real cost of that land use policy that would allow such grazing in the west, and then the subsidies that make factory farm feedlots possible, wasn’t properly borne by the ranchers themselves. Today’s cost of beef is a better reflection of the true cost of raising that meat, that inefficiently.
If you do the same analysis with chicken or pork, you’ll find that we can and do afford to eat a lot more of those particular meats than we used to.
I fully expect beef to go like tuna, and slowly become a luxury item only for the rich within my lifetime. That is more of a trend with beef itself than broader trends in inflation generally.