% increase means little without removing simple inflation.
“Two pounds of ground coffee was $1.79 in 1973, and today it’s around $6.70; that’s a 270% increase.”
Considering inflation alone turns $1.79 then into $10.27 now, we’re actually looking at a _decrease_ in coffee prices of about 35%.
So what if prices went up 10x if income did too? Numbers just adjusted for the fact that the value of a dollar decreased 90% - a story in its own right, but separate from the alleged point of this thread’s lead article.
Of course. I just illustrated inflation by giving the raw prices from 1973 compared to today.
I agree, price inflation of many everyday commodities is actually less than the overall rate of inflation over the last 44 years.
But "simple inflation" is not so simple; it is an aggregate of many, many individual prices.
Some have said that the real driver of the inflation we've experienced since the early 1970s was the result of Nixon's ending the gold-backed dollar back in 1971.
He is excoriated for that by Conservatives, perhaps rightly. But his hand was forced by the French, who demanded that we (America) redeem the dollar reserves for gold at $35/oz, which demand forced the end of the Bretton Woods system that was created during World War II.
There's no question that the inflation curve really took off around that time, but the Arab Oil Shocks of 1973 and 1979 also had a huge effect. Perhaps the Bretton Woods cancelation and the Arab Oil price increases are connected, I don't know.
Today, the value of the world economy is essentially driven by the price and availability of energy, which is the cornerstone of all other values.
That prices for things like soup and houses has stayed as low as it has is because of technology, IMHO, particularly information technology, which has resulted in huge improvements in efficiency across many sectors of the economy.