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Comment by wesammikhail | Hacker News Reader

Well I'm happy they consider it modest and stable because most people I know consider economists insane and unstable.

> $1 in 1924 is equivalent in purchasing power to about $18.37 today, an increase of $17.37 over 100 years. The dollar had an average inflation rate of 2.95% per year between 1924 and today, producing a cumulative price increase of 1,737.28%.

> This means that today's prices are 18.37 times as high as average prices since 1924, according to the Bureau of Labor Statistics consumer price index. A dollar today only buys 5.444% of what it could buy back then.

This is at a time where technology is making everything cheaper mind you...

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> This is at a time where technology is making everything cheaper mind you...

Automation is just one factor of supply and demand curve movements. Supply (and demand) of labor, money, energy, good weather, etc are others.

That's intentional, to incentive people investing their money instead of stuffing it in their mattress, where it doesn't help anyone. As long as wages raise as well, it's not a problem. You shouldn't compare prices to prices 100 years ago, but purchasing power 100 years ago to purchasing power now.

Wages don’t seem to have raised at the same rate at all.

https://www.epi.org/publication/charting-wage-stagnation/

Weirdly, most graphs start getting off in the 1970s when the US left the gold standard. This is to be expected due to the Cantillon Effect.

https://river.com/learn/terms/c/cantillon-effect/

>>As long as wages raise as well, it's not a problem. You shouldn't compare prices to prices 100 years ago, but purchasing power 100 years ago to purchasing power now.

>Wages don’t seem to have raised at the same rate at all.

>https://www.epi.org/publication/charting-wage-stagnation/

Figure 1 from that link is compares actual income with "projected assuming no growth in inequality"... whatever that means, not inflation.

Figure 2 compares hourly compensation with productivity, not inflation

and on and on...

Real wages (ie. inflation adjusted) has gone up, albeit slowly[1]. Even your link suggests this. "Stagnation" implies staying in the same place, not falling behind.

[1] https://fred.stlouisfed.org/series/LES1252881600Q

A good website on this:

https://wtfhappenedin1971.com/

yea yea we've all heard it. your spending is my income therefor I get to steal your wage from you if you don't spend it. "we'll encourage consumerism by taking the money from them if they don't spend it"

Sometimes I wonder how people have come to accept this line of thinking as anything but malicious.

As to your second point, yes. PP is more important, so let's use that. I'm sure the picture will look a whole lot better... /s

I think an (insane and unstable) economist would say that technology is indeed making everything cheaper, and as a result the average person's buying power is increased. Since buying power has increased, demand has gone up for all goods and services, and since demand has gone up prices have risen.

Why does the price of things today vs 1924 matter? Do you have a store of cash from 1924? Is there actually a downside of this steady long-term inflation?

If the immorality of theft is of no concern to you then perhaps any of the following reasons may jive a little bit better with your ethos:

1. Destruction of savings

2. Distortion of price signals in markets

3. Impoverish those on long term fixed/low income

4. Creates massive inequality especially inter-generationally

In my estimation however, if you really have to ask about the benefits or downsides of theft then you've already started at the wrong end of things.

Are you equating inflation with theft?

Low, stable inflation is a natural phenomenon in a growing economy, largely a function of market forces.

So we all came together, agreed on a shared store of value, then said no one can "poof it" into existence, and then gave said power to only a single entity that now makes more of it without doing anything and we're all supposed to think "that's normal".

It's not theft, but it's not that far off from it. But at this point, we've normalized things like "taxes" anyways, so peoples' definition of theft doesn't align with reality, so why would it be different when it comes to printing of money.

Everyone is just post-rationalizing about this because they can't cope with the logical inconsistency of the world they live in.

Well you don't get paid in 1924 dollars do you?

No, I get paid in 2024 dollars that are unadjusted for inflation (see mostly static wage growth since the 70s). But.. That's fine and all. As long as those that got paid in 1960s dollars got to have a society in where they can accomplish so much with those dollars at my generation's expense.

I'm happy we're looking at dollars as cars. "This is a 1924's dollar model and that is 1960s one". Makes you really wonder how crazy we are as a society to view our output denomination like that.

>No, I get paid in 2024 dollars that are unadjusted for inflation (see mostly static wage growth since the 70s)

This implies that if inflation wasn't a thing, you'd somehow be able to keep your pay raises (including any inflation adjustment), which seems doubtful.

> This is at a time where technology is making everything cheaper mind you...

If this were true, then there would be no inflation.

Are you seriously trying to argue that technology is adding to inflation? I'm not following...

It doesn't make everything cheaper.

The price of housing is one of the biggest drivers of cost of living in the US. The constraint on housing supply is primarily political (codes and zoning) not technological.

Also, financial. Interest rates play a huge part in both the supply and demand for housing.

No. I'm saying technology makes some things cheaper, but not all things.

For certain classes of goods that's arguably true. If you check the inflation categories you'd see that mass produced goods have actually gotten cheaper, but services involving people (eg. tuition or healthcare) has gotten more expensive.

https://www.aei.org/wp-content/uploads/2022/07/cpi2022junea-...

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