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Comment by nine_k | Hacker News Reader

Did an average American have higher buying power in 1930? In 1900?

It depends on how you look at it. I don't have data that goes back that far, but the graph in this article should be of interest to everyone:

https://www.forbes.com/sites/timworstall/2016/10/03/us-wages...

Essentially, up to the 1970s, wages followed closely with productivity. Quite suddenly, wages stopped growing while productivity has continued to grow with no sign of catching up.

Take a look at this chart from the BLS:

https://pbs.twimg.com/media/DJ9l_q6VYAERRDt.jpg

What we can take from that is while prices for certain things have declined(e.g. technology, new cars, software, toys, clothes), the price of arguably more important things (child care, medical care, college tuition, textbooks, housing, food) has gone up. Sure, we've been bearing those costs, but the maximization of profits from those expenditures will inevitably cause an adjustment when Americans can't pay for those things anymore.

Americans might technically have a higher buying power than 1900, and especially 1930, but not necessarily in every area or even the areas that are important. If we were to say that Americans have more access to food, clothing, computers, education, etc., it doesn't mean that Americans are actually paying for those things; a lot of the wealth we think we have is coming from record amounts of debt that were unseen in the early 20th century. The things that make it seem like we have more spending power than we did a century ago are being made possible by what could be a ticking time bomb.

Interestingly, this, and other similar curious pictures, are readily found here: https://en.wikipedia.org/wiki/Bretton_Woods_system

That is, once the dollar dropped the link to gold, and money could be printed, a lot if things went increasingly haywire, down to the circus of bailouts in 2008 and "quantitative easing" afterwards.

Oh come on. Not this argument again. Let me just say this: short of WW3 or a complete reset of the global economy, we will never, ever, ever go back to tying currency down to a commodity, ever again.

Why do you say that? Back in 2001 I couldn’t have imagined that the USA would still be in Afghanistan in 2018. But it happened. Is the US more or less likely to be in Afghanistan in 100 yrs? Idk.

What’s to say that currency won’t be tied back to commodities? What makes you so confident?

Because it is _even more_ stupid idea than any of the US wars in the last 20 years.

TV's, Software, and Toys are cheaper, and notably the only categories cheaper on that chart from BLS. Well, it looks like this is good at keeping rioting off the streets; everyone is too distracted consuming tech.

I would pay good money to test this hypothesis. I don't think its as simple as consuming tech though. I wonder how much effect cannabis legalization, opiod use etc. have on keeping a restive population dormant.

Huxley or Orwell.

I think our leaders just said “why not both?”.

It’s going to be an interesting few decades.

I think the consensus is that average American buying power peaked somewhere between 1970 and 1980, and it has been declining ever since.

That's plenty of time for an entire generation to be raised with an awareness that any entrepreneurial enterprise they may attempt can be crushed and consumed in short order by a competitor with the backing of the moneyed elites. If you try to manufacture a quality product in the US, and bootstrap your business, the instant you prove there is a market for it, someone will gather up some financing, knock off your product in China, and run you out of your own business. If you build a fun game app, Zynga or King or some other chop-shop with their model will instantly clone it and kill you with their marketing. If you open so much as a lemonade stand, the city will come round asking about inspections and permits.

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