The WSJ explanation is hugely lacking. Let’s discuss.
The snide answer is “Because everything is more expensive, stupid” which is true.
However, that’s a superficial answer that fails to address real world issues and contributing factors.
The Journal discusses a New York Times article that details a family of three in New Your City struggling to get by on $500,000 annual income.
That’s our starting point for discussion.
How a Family of 3 Lives on $500,000 on the Upper West Side
Please consider How a Family of 3 Lives on $500,000 on the Upper West Side. That’s a free link.
How can people possibly afford to live in one of the most expensive cities on the planet? It’s a question New Yorkers hear a lot, often delivered with a mix of awe, pity and confusion.
Rent is not the largest monthly expense for Anala Gossai and Brendon O’Leary, a couple who live on the Upper West Side of Manhattan. That would be child care.
They spend $4,200 each month on day care for their 1-year-old son, Zeno.
“We really liked the center,” Ms. Gossai, 37, said. “Neighbors in our building love it. It’s actually pretty middle of the road for cost. Some were even more expensive.”
The rent for their one-bedroom apartment is $3,900 per month. Space is tight, but the location is priceless.
“We’re right across from Central Park,” she said. “We can walk to the subway and the American Museum of Natural History.”
Their Priorities Are Their Problem
OK so what? They want to live in NYC. They want to walk to Central Park.
They are willing to blow most of their money on an 800 square foot apartment and daycare. They do save $10,000 a month hoping to buy a place.
None of this has anything to do with why the average person feels squeezed. The average person certainly is not saving $120,000 a year.
Why Everything Feels More Expensive
Next, please consider the Journal Opinion article Why Everything Feels More Expensive by Roland Fryer.
The New York Times recently profiled a family of three earning $500,000 a year and living in a one-bedroom apartment on Manhattan’s Upper West Side. The husband is a software engineer, the wife a data scientist. Their largest monthly expense—$4,200—is daycare for their 1-year-old. Rent is $3,900. They save $10,000 a month. “I think we’re middle class for this area,” the husband said. “We’re doing OK.”
The internet reacted predictably: Half a million dollars is middle class? These people are out of touch. The Times is out of touch for running it.
The reaction misses the economics. A recent CBS News/YouGov poll found that 83% of Americans say it’s harder to buy a home than it was for previous generations, and 77% say it’s harder to raise a family. They aren’t wrong. But the explanation is more complicated than either side’s populists admit.
Since 1975, median family income has risen by more than half, from about $68,000 to $106,000 in inflation-adjusted terms—a gain of roughly $38,000. But much of the difference comes from one of the most important social shifts of the past half-century: Labor-force participation among married mothers rose from about 45% in 1975 to 72% in 2025.
But for families with young children, much of that $38,000 gain is spoken for before it ever hits the bank account. A year’s worth of mortgage payments, adjusted for inflation, has risen from about $16,000 in 1975 to $25,000 in 2024, an increase of $9,000. Workers now contribute about $7,000 a year in premiums for family health insurance, roughly double the real cost in 1999. Full-day care for a single child typically runs $6,500 to $15,500, depending on age and location, a cost most families in the 1970s didn’t incur. Add it up and these three expenses absorb most of the $38,000 gain, leaving many families—especially those with young children or in high-cost cities—with roughly the same disposable income their parents had, despite earning more.
The culprit is structural, not political: Economists call it Baumol’s cost disease. Productivity gains tend to concentrate in goods—cars, clothing, televisions, food—as technology steadily drives prices down. But many services, like teaching a kindergarten class, change little over time. As incomes rise, wages must rise across the board; otherwise employees leave for higher-paying sectors. Labor-intensive services grow more expensive not because something went wrong, but because everything else became more productive.
Before indicting the economy, consider what 50 years of growth actually delivered. The car in your driveway is far less likely to kill you than its 1975 counterpart—traffic fatalities per mile driven have fallen by roughly 62%. The average American reaching 65 today can expect to live 3.6 more years than in 1975. The air is 79% cleaner by the Environmental Protection Agency’s measure. Researchers at the Massachusetts Institute of Technology estimate that Americans value access to search engines, email and digital maps at roughly $30,000 a year, none of which shows up in income statistics.
The 1975 middle-class family may have had more cash left at the end of the month. But they also faced higher risks of violent crime, breathed dirtier air, and waited for the evening news to learn what was happening in the world. The progress is real—it just doesn’t pay the daycare bill.
The composition of spending has shifted to amplify the feeling. It isn’t only how much families spend, but what they spend it on. A family’s budget once went to things they could see and enjoy. Today a large share of monthly spending disappears into medical premiums, deductibles and copayments that produce nothing visible unless catastrophe strikes. An $800 insurance premium you never use doesn’t feel like $800 of middle-class life. It feels like $800 gone—a tax on the possibility of illness rather than the consumption of anything tangible.
The $500,000 family in the New York Times piece is bougie but not entirely out of touch. They save $120,000 a year—not for vacations, but for an apartment they may never be able to afford. Their fixed costs are genuinely punishing. Some of what looks like indulgence is infrastructure; some of it is indulgence. But each additional dollar of income arrives bundled with costs required to earn it—an implicit infrastructure tax that makes the return on that last dollar far smaller than the headline number suggests. At the median family income of $106,000, the math is simpler and worse. There is no infrastructure tax. The basic costs of middle-class life simply don’t fit the income.
The middle class is simultaneously better off and more financially strained than it has been in decades. The services that define 21st-century middle-class life—healthcare, child care, education—have risen two to three times as fast as overall consumer prices since 2000. This is the structural consequence of an economy that became extraordinarily productive at making goods but not at raising children or treating the sick. Meanwhile the gains—safer cars, cleaner air, longer lives—have quietly disappeared into what we consider normal. Psychologists call this hedonic adaptation: the tendency to absorb improvements into our baseline until they no longer feel like gains.
The antidote psychologists prescribe is mental subtraction: deliberately imagining life without what you take for granted. Try it with 1975. No air bags. A much higher risk of being robbed. Three television networks. We’ve adapted to these gains so completely they no longer feel like gains. The greatest threat to middle-class happiness may not be the cost of child care. It may be that they can’t afford to notice how much better life has become.
Mr. Fryer, a Journal contributor, is a professor of economics at Harvard, a founder of Equal Opportunity Ventures and a senior fellow at the Manhattan Institute.
Leave it to economists to over-simplify the problem while missing the big picture.
But I do agree with some of his points. Cars are better and homes much bigger. You don’t really want to drive a 1940s or 1920s car do you?
Some of the expense is all of the materials that go into cars and homes. But Fryer misses the big picture.
The Big Picture
- Everything government touches is dramatically more expensive.
- Tariffs and protectionism.
- Unions, especially public unions.
- Undercounting inflation
- The Fed’s 2 percent target is flawed with asymmetric policy on top of it.
Fryer put a spotlight on cars. OK point made, and I agree. But let’s discuss a few things that have not changed.
Food 1968 to Now
I worked in a grocery store for several years in high school and junior high. The timeframe is 1968-1972.
In 1968 the loss leader on bread on sale was 18 cents a loaf. The regular price was 22-24 cents a loaf. That works out to about 4 percent annualized.
Round steak was a loss leader ay $0.99 per pound. The current (April 2026 BLS) price is ~$9.83/lb. I got some on sale recently for $4.99 a pound.
From $0.99 to $9.83 is ~4.04% per year.
From $0.99 to $4.99 sale price is ~2.83% per year
From $0.99 to a $5–$6 typical sale/lower-grade price is ~2.8–3.2%.
The CPI Itself is approximately 3.97% annualized (CAGR) from 1968 to 2026.
That’s about as good as it gets on anything but electronics N/A at any price in 1970.
And the Fed’s target is 2.0 percent.
Education 1971 to now
I finished high school in 1971.
The cost of tuition at the University of Illinois for engineering was $250 per semester, $500 a year.
For the 2025-2026 academic year at UIUC’s Grainger College of Engineering (Urbana-Champaign):
- Illinois Resident tuition (annual): Approximately $18,372 (this is the guaranteed rate for the full academic year; engineering has a higher differential than base programs). cost.illinois.edu
- Per semester: Roughly $9,000–$9,200 (tuition is typically billed per term, but the annual figure is the standard quote).
- Non-resident: Around $41,444 per year.
- International: Around $44,688 per year.
From $500/year to $18,372/year is about 7.5% annualized (CAGR).
Q: What the hell are you getting for your money?
A: Nothing but a big pile of debt.
Everything that government touches, but especially housing, education, and health care have skyrocketed in price.
Unions
Don’t get me started. Illinois and many state pensions are insolvent.
The culprit is public unions inflating costs. The teachers, police, and fire departments are all in on the scheme.
Property taxes keep going up and up and up to pay the unions.
The Fed
The Fed has a two percent target and seldom meets it. The one time the Fed actually met its goal, the Fed chairs actually wanted to make up for lack of inflation.
Now they are concocting absurd measurement schemes like trimmed mean inflation to explain why it’s not as bad as it looks.
Academics like Fryer are on board.
Undercounting Inflation
The big grandaddy of them all is undercounting inflation.
The Fed and the academics do not include the price of a home in their measure of inflation. They do not count property taxes or homeowners insurance either.
To these ivory tower academics, a home is a capital expense not a consumer expense, as if consumer expenses are all that matters.
The BLS says Tenants’ and household insurance is 0.289 percent of the CPI.
Sound right?
If you own a home, how much is your homeowner’s insurance?
The BLS and academics call homeowners’ insurance other than contents a capital expense.
Five Housing Costs Not In the CPI
- The Price of the Home Itself
- Homeowner’s Insurance
- Property Taxes
- HOAs
- Special Assessments
Ridiculous Measures of Inflation
Every month we have CPI and PCE reports, and they are never realistic because of what’s excluded.
Is Homeowners Insurance Understated in the CPI?
On August 11, 2025 I asked Is Homeowners Insurance Understated in the CPI? Shop Around!
Our Insurance went up by $2,000. Then another $2,000. Here’s our story.
On April 17, 2026, I noted Median Monthly Condo Fee Was $420 in 2025, up 29% from 2019
Not a penny of that is in the CPI or PCE. Nor are property taxes, homeowner’s insurance, or special assessments.
And please note HOA Numbers Are Seriously Understated.
The median monthly fees shown (+26% for single-family HOAs and +29% for condos since 2019) do not include special assessments.
To the academics those don’t matter. Tip inflation does not matter either. And the BLS underweights food away from home too, even ignoring tip inflation.
Ivory Tower Occupants vs the Real Word
Neither Trump, nor the Fed, nor academics like Mr. Fryer, live in what most would consider the real world.
They all have absurd measures of inflation and make excuses why people should be happier than they are.
On top of that, Trump launches a highly inflationary and idiotic war to stop Iran from getting a weapon that Trump bragged many times he had already stopped.
The economists cannot figure out why people are angry, then write ridiculous explanations for the WSJ.
They are walking after midnight, in the dark, looking for inflation that is visible to anyone in the real world.
Related Posts
January 14, 2026: The Fed Has Missed Its Inflation Target on Ten Different Measures
The Atlanta Fed tracks various inflation targets. Let’s have a look.
March 30, 2026: Powell Warns the Markets and Trump that His Patience with Inflation Has Limits
Powell’s speech was to Harvard students but read between the lines.
April 9, 2026: Inflation Has Been Above the Fed’s Target for 5 Straight Years
The Fed’s preferred measure of inflation has been above 2 percent since March of 2021.
As usual, you give greedy private sector a break. You blame the government, the unions, but you do not mention private corporations that legally bribe the government thanks to Citizens United.
Healthcare is not more expensive because of the government, but because there are now private cartels that get away with despicable practices.
It’s not unions. It’s just currency debasement. Same as ancient rome. Suck all the purchasing power out of the dollar. Hide it by offshoring, outsourcing, and illegal immigrant labor.
All unions do is unveil the currency debasement by showing you what a living wage for a domestic worker actually is. The domestic worker is exposed to the inflated cost of things that can’t be offshored to cheap 3rd world labor. Housing, healthcare, etc.
But 3rd world labor doesn’t solve your problem. It just delays it. Debasement is still occuring.
We’ve just been putting off the inevitable wage-price spiral with every trick in the book. This is what the end looks like. When people can’t even afford to buy the offshored products.
AI is the hopium of hopium. It’s being marketed as a fix when it really just exacerbates the sitution.
Before fiat currency, a nation could actually go broke once the treasury vault was empty. Now, nations can suck every last bit of all their citizens’ purchasing power by debasing the fiat currency. So the nation’s government doesn’t go bankrupt. The nation itself and all its people collectively go bankrupt.
Except for the asset-holders. They’ll remain very rich as their wealth isn’t tied to the fiat currency. Except it is still indirectly tied to it because all the assets are only upheld by the stability of the system. If there’s a mass-liquidation event, then all their assets will be drastically repriced. They’d still be rich, especially relatively, as they’re holding the only things with real value. Unless, of course, they’re overleveraged. And let’s be real, they’re all overleveraged like everyone else. Kudos to any that aren’t because they won the game.
You’ll own nothing and you’ll be happy
When actual inflation is double (or even triple) what the CPI is, the difference is barely noticeable when the CPI is 1% which is where we were before COVID. As the CPI climbs, it becomes much harder to hide this discrepancy. Additionally, everything that could move to China and India to save costs has already moved, so there’s no where to “hide” inflation. Finally, the inflation of assets, especially real estate, is starting to spill into the real economy because the cost of taxes and upkeep on inflated houses must now be passed on to the renter.
We were not at 1% before COVID. To take one example, do you remember how much housing ramped up in the 2010s? I do. Housing is counted in services in the CPI. Yet little of that ramp showed up in the CPI. It is a garbage index.
“Everything government touches is dramatically more expensive.”
In the United States. This is rarely true for the rest of the world. And this is because the US has a strong bias towards a market economy, in that it assumes that prices on offer are the best the market can produce. So the federal government doesn’t use its purchasing power to bargain for lower prices. And knowing this, market participants simply keep increasing prices.
And this may be for the best. If the government used its power to control pricing and did it in a way that outcompeted other market participants, the population would likely demand the government expand into new markets. And then we’re Europe or Asia.
The US has a strong bias to wholesale socialism. Banks and other corporations are the target of welfare, tax breaks, bail outs. As for the plebes, they get unfettered capitalism.
Vast quantities of fiat money wrecks financial stability. Government inflation numbers are an Orwellian lie.
The Fed has been the single greatest enabler and rewarder of bad behavior. Had we allowed bad actors to FAIL and prosecuted the FRAUD, we might have actually had some real DEFLATION associated with a real business cycle. The entire world is now a centrally planned managed eCONomy.
The Fed is controlled by the largest banks. The shareholders of the largest banks are the major contributors to congressional campaigns. There is no way those Senators and Representatives are going to hold their masters accountable. And NO ONE is going to hold their elected officials responsible for anything. They just keep getting reelected.
Powell has been a dreadful Fed chair, and i didn’t think it could get worse than Bernanke or Yellen. But just about at every turn Powell has done the wrong thing. The one time he got it right was with rate hikes in 2023 but he then reversed it prematurely and has been useless ever since, even in the face of out of control inflation (accelerating since 2024).
Good article mish.
Things get clearer if “inflation” is defined as increasing the amount of money per capita. The non-rich are getting tricked by defining it as “how much stuff got more expensive”.
Imagine all the energy we get up with in the morning nets us 4% more goods and services YoY when the day is over, because of tech/efficiency improvements. We can all hope that everyone feels 4% extra or works 4% less!
Now money supply (pick any Mx) increases 6% YoY, which means everybody needs 6% extra income to actually share the 4% blessing… But you’re not getting it because the rich tell the rest that “inflation is prices going up by 2% (6% – 4%) so you get 2% salary increase”.
Hey, but if the poor and middle class don’t gain anything, where is all that 4% extra pie going to… Year after year… I guess you can figure that out for yourself.
Mish I got to say, this is one of your best blog posts (imo) because you’ve stripped away the assumptions these guys been usings of decades (flawed data, flawed data collection, and flawed criterion for the data so they can dress it up) to justify saying there is no inflationary problem.
This all goes back to people refusing to look at reality and doubling down on their beliefs which are no longer applicable anymore. These people are poison spreeders because they give justification for those who don’t feel the inflation pain to justify looking down on those who are experiencing such pain, to blame the individual for their situation, and to gatekeep those who try but can’t keep up.
These people stand in the way of change, and these people ultimately help lead society into violent decay because their rational is used by those in power to strip the citizen of their sovereignty and the value of their labor.
We do need a reset, but as you can see the voice of the status quo is unwilling to face that reality.
Thank you Mish for valuing reality and exposing it to others. I recommend MPO45v2 give you at least two five star awards for this post.
Bah! sorry for the typos like spreeders, which shoud be spreaders. It’s late.
I agree. This is like the stuff we got to read here years
The rise of feminism in the 70s let the government pull off their greatest trick.
It let the government essentially tax housework / child care / meals. Those things that traditionally were done by the woman that paid nothing and were not taxed. But child care and house work (cleaning, laundry etc) and meals were worth a LOT of value to households even if it didn’t show up as salary.
Probably takes 30K a year salary (and likely a LOT more in big cities or if you have 2+ kids) just to break even on those things (ie child care + eating out more + hiring maid / laundry service) and that’s before factoring in need for a 2nd car (insurance + car cost etc). I’d guess you need to make 40K plus before you are adding even 1 extra dollar of spending money. And all that gets taxed by the government…
Perhaps the biggest impact was a change in federal banking regulation that took place, IIRC, in 1974.
Before then, a FDIC-insured bank (that is, about all of them) could take only one family income into account in deciding whether to extend a mortgage loan. A second income was considered “temporary”, as if the either spouse lost their job, the family’s ability to service the loan was called into question.
After the change, the bank could take two incomes into account. The upshot of this change was that both spouses had to work to afford a home in a semi-decent school district, because they were competing with two income families for the same real estate. (This is also one reason why the prices of residential housing soared in the 1970s, as there was suddenly more money available to chase real estate.)
For those of us who are not feral tomcats or hedge fund billionaires, anything else was like bringing a knife to a gunfight.
This rather obscure change in regulation went almost unnoticed at the time. But it probably had more real world impact on the average frustrated American family than all the Supreme Court decisions ever handed down. We can argue later whether the change was a good thing or not. At this point, good luck getting that genie back into the bottle.
I’d like to know more about that. Do you know the name of the regulation or have any new stories to reference from back then?
And don’t forget the extra sick care costs of dealing with kids/babies crammed together at a daycare.
Mish what have real wages done over that long time period? AFAIK they are below the early 70s peak. Even white collar types not at the very top don’t do as well today. The list of why things suck today (in many ways) is quite long.
The Journal article kind of worked around this some, but one reason everyone feels poor is expectations. Most Americans today – even those we might consider to be poor – live lives that princes would strive for in medieval times.
Up until the latest generation most people could at least read a little bit. Even royalty in the Middle Ages could not read. Heck most Kings could not read.
There was little in the way of heating and for sure no air conditioning. Even people in public housing have these luxuries that George Washington could not even think of in 1776.
Entertainment during the country’s 100th birthday was listening to one’s wife, or kid or cousin play the piano or violin (hopefully better than my wife or sister could).
You would have five brothers and sisters but only know maybe 4 of them because at least one died in their first year. Probably another one due to injuries working on a loom or in a coal mine.
We have much higher expectations and work a heck of a lot less than at almost anytime in the history of mankind.
Yes, it is true that inflation sucks, the government screws up everything it touches, and things could and should be better, but we FEEL a lot poorer that we actually are.
“live lives that princes would strive for in medieval times.”
I think you may be working around the issue as well.
The EXPECTATION people have is the expectation they SHOULD have for living under a capitalist economy. Things SHOULD get cheaper over time as technology enables us to improve quality and quality of goods and services with less and less inputs until there is no more improvement to be had.
But things get more and more expensive. Why? Because inflation erodes purchasing power of the next dollar earned and the dollars we have already saved. The rich are sophisticated enough to invest in the things that will go up in value with inflation, and they have enough margin in their budget such that the couple percentage point increases in food, education, housing, etc., every year is miniscule for them. For everyone else, you have to make lifestyle changes. Increase income or decrease spending. Or watch the water come over your head until you start drowning financially and sink out of the middle class.
It’s not fair. It’s not fair that people have their purchasing power, which they earned by the sweat of their brow, taken at the rate of a few percentage points per year by bankers who control the money supply. It’s not fair that people have to spend their dash trying to maintain their lifestyle in the face of the relentless onslaught of inflation. It’s not fair that they are left to buy lower quality food or crappier education at a higher price.
The rich keep getting richer while the poor keep getting poorer under the CRAPitalism we have today. This is the stuff French Revolutions are made of.
Exactly. Even a small 2% annual real GDP growth will quadruple the standard of living in a lifetime.
Not if wage or earnings growth is below the rate of inflation it won’t.
I agree and have said the same to my wife. I’m 81, so I remember a lot from the good old days. They weren’t all that great, the ice man would bring big blocks of ice for the fridge, many didn’t have indoor plumbing, and most jobs were back breaking and filthy. Things are better today and expectations are through the roof, given our wind bag politicians and their constant tub thumping. Life as never been easy but those are the expectations of many.
This is so silly. Why I remember back in the day when I was trading grain futures in Chicago, between nice dinners and my nose it was costing me $15,000 to $25,000 a month. Mostly my nose. And that’s not including whiskey and hookers. And with no family. /s
Are you still alive?
IMO all insurance costs have been catching all sorts of costs that BLS misses. Both in scope and scale..
Stupids, everything feels more expensive because……..after years of research, I conclude…..it’s because prices have gone up!
I’ll take the gold statue for my Nobel Prize in Economics now. Thank You
Yours Truly,
Capt. Obvious
Can you explain more, Mish, your arguments for why unions are at fault?
Union worker membership:
1/3 workers in 1950s
1/4 workers in 1980s
1/10 workers in 2020s
https://www.congress.gov/crs-product/R47596
So decreasing union membership and power over time has increased the costs for the rest of us how?
good lord I have written about this dozens of times. Please look up illinois pensions Teachers pensions, police pensions, etc my blog or anywhere
No, Mish, you’ve made your opinion abundantly clear all these years. It’s your numbers that sometimes don’t add up correctly.
One of the top five reasons “why everything feels more expensive” is the union wages and pensions of 10% of the work force? Even if you think they are overpaid, most of those union workers are still middle income and actually not a part of the Social Security funding crisis the rest of us are causing. Your ‘crisis numbers’ are exaggerated here.
That is all union membership. Most of the private sector has been able to escape from unions (at least in red states). Almost all union members today are public sector union members, who pay their union dues that go to politicians (management) that gives members higher wages, that increase dues payments to unions, that give them to politicians……..
Has no one watched The League?
Stop taking Taco’s name in vain!
Dude was the man.
I’ve been telling people I’m saving up to buy hamburger. They chuckle, but it’s not a happy laugh.
I’m working the Cannibalism angle for the collapse.
But I’m torn I have this meaty neighbor that would bring in many canned goods, but she is a retired nurse and those skills may be more vauable
Retired, huh? She’d be like mutton.
A lot of nice plump Americans out there. Yum!
As a feral cat, I am looking forward to plenty of mice and rats to eat.
“don’t get me started on unions, teachers unions etc”
Well, I for one would have liked to see how inflation in teacher, police etc salaries compare to your timeframe. It’s not really fair to just expect the reader to agree without evidence. Maybe another post some day?
This is what Gemini summarizes:
And the reason that states get in trouble with pensions is because they underfund them, which is irresponsible of the state, not unions.
Also keep in mind public schools require teachers to get masters degrees, so teachers are especially exposed to price inflation in college tuition (about which I am in full agreement with you about; government involvement in lending here has caused extreme inflation in the cost of getting a degree.)
Dude all of this is far to complicated to pigeonhole.
Everyone wants a simplified answer because the threads are way more complex and dull to out right explain.
It pretty much sucks to see everything get dumbed down or have entire aspects neglect or denied or just ignored.
You can’t model universe because you will never have enough processing power and you can never have enough power to process a model of universe.
I just give up and ignore anything with a limited perspective.
Pointless when you know what is missing.
Sometimes a discussion is a good way to get through something with a lot of different angles.
Search my blog or literally anywhere for Teachers pensions. Try Illinois teachers’ pensions or Chicago Teachers union or CTU and report back/
You mean like this one from 20 years ago that has 14 pages? Hey look, 20 years later it all (mostly?) came true!
https://mishtalk.com/uncategorized/baby-boomer-time-bombs/
Probably your first. Not that hard to find either.
Exactly, public sector union members walk away with an annuity at retirement of a $ million thereabouts. I worked for a public sector agency for a year – i knew after 9 months that the agency was closing down so spent the last 3 months looking for a new job. I left after 1 year with $18K in pension funds to roll into my IRA. That was nearly half my salary during the period.
It was never possible to fund them completely because the goal posts are always moving so earlier funding could not have possibly been enough to cover where the goal posts went.
In other words pensions 40 years ago weren’t promising free Cadillac health care coverage for life for that person. Nor was it promising spousal survivor benefits at the same level as the original worker so if either person lived they got the money. Nor were they expected to retire at 55 and live another 30 or 40 years. Nor were pensions paying 90% (or whatever number) of final salary (spiked by massive OT so that it’s often more than final salary – LOL). Nor were you allowed to double dip and go back to work AND collect a pension. Nor was it indexed to inflation.
All those promises came long after the original pensions started up and of course all those enrolled got all those future promises but there was no way to back fund for any of those new promises. It was always doomed to fail but no one today cares about what happens tomorrow long after they are no longer elected officials.
AI should take care of the teacher problem. Robots don’t need pensions!
Where are the Epstein boys list?
Just about the same time was the Franklin coverup.
All those big names were just into chicks?
Diddy used boys and he was kind of a successor to Jeff.
I think that female journalist laid out the connections but I can’t recall her name now.
Whitney Webb?
I think the snide answer is more important than you gave it credit for. The headline that asks why it “feels” more expensive has a connotation that maybe we just feel it but it isn’t real or maybe we just need to reframe our viewpoint.
No, it’s real. And it’s larger than reported and has been for a very long time.
Don’t give the headline writer a pass. It should have read “Why is nearly everything more expensive”…full stop.
Granted inflation has been the official policy for my lifetime where “they” actually target a value and even bitched when it wasn’t high enough. It’s not unique to this Administration only the additional reasons.
Inflation is the driver of uncertainty and unhappiness and it’s everywhere you look.
I watch the homeless and rug addicts digging through the pubic housing dumpster. When they find something they are really happy.
Just today this guy and girl found some clothes and bagged them.
You could feel the joy shimmering off their Anorexic bodies.
And that rapper who had the cops steal his cake and won his court case and money.
He was happy and he gets new cake.
What about car inflation?If americans can’t buy cars , isn’t that bad?
2027 all cars sold in the US require cameras that watch you as you drive. They also have auto shut off.
In the UK all REGISTERED vehicles will require the same cameras. But registered means they are added to old and classic cars.
I’ll never buy a car made after the kill switches are required. Younger people can’t make that resolution. Some of these e-bikes are like motorcycles, so maybe that’s an option. God help me if I’m riding a Onewheel in my 80’s. Hopefully a rickshaw somewhere. And hopefully I’ll be riding, not pulling.
Japanese old people carry robots.
I think they can be hacked unlike the cars.
The only way to stay ahead is to play the “Monopoly” game the way it exists which is buy income producing assets (water works, utilities, railroad and broadway) and when suckers land on your property, charge them to the max. Mine are stocks, bonds, foreign currencies, real estate, precious metals and a few other things.
Let me break it down to one word: profits.
Everything else will keep you running like a little hamster on a wheel for the rest of your life blaming politicians, the fed, immigrants, religious cults, vaccines, whatever. The only reason anyone’s life sucks is because they aren’t playing the game right.
The only alternative is a good exit strategy.
Kobyashi Maru!
Agreed. But the problem is that if everyone did this we’d have to eat traded paper for dinner and live in little huts made of it.
The fact that a decent life requires playing in this “paper mill” is 100% whats wrong in America today, and ultimately fuels populists like Trump
Most citizens have no clue how the game works, but they know something is unfair. I hope I’m gone before they figure it out. Thats why your reminders for an exit strategy are on the mark
Just move to another planet.
Largely how I feel with the constant “exit strategy” remarks.
I live here. I grew up here. I have family here. My wife has family here.
Were youngish, but poor. We work, and keep it going month to month.
I have no capital to play the game with. I have no exit strategy worth a damn. The only thing I can try to do is fight for more, labor for more, and work for more until my children can take care of themselves. It feels bleak. Getting others educated, to feel the despair I feel, gives me a measure of hope.
Your problem isn’t capital, your problem are the choices you make every day. Let me take a wild guess, you work a job you hate, can’t wait to get home to drink beer, watch tv (probably some type of football or sport) to numb the pain, then repeat the misery. Maybe spend time at some religious institution in a tiny glimmer of hope that something there might help you.
You want to know what I do? Well after working years and saving money, skipping the bars, sports, religious waste, I saved enough capital to have that money work for me. But having a pile of money doesn’t turn itself into more money, it requires teaching yourself how the monetary system works. Everything from economics, politics, trading, investing, and not just in the US but the rest of the world. It is a never ending process (Why do you think I’m here?), kinda like endless football seasons except football/sports give you nothing but false gratification that you “won” something.
This was mostly before the internet and now you have AI that can basically teach you anything about everything humans know on the planet for all of human history.
Believe it or not but I too was once a poor schmuck but that was millions of dollars ago.
I’m amazed at how people stay poor with all the free tools out there on the internet and AI. All it takes is the choice to do something different.
I’m working on it, notice all those UFO files are finally being declassified?
There were significant ruptures in the bond market today. The biggest was the 30 year bond that now has the highest yield since the COVID lows AND in the past ~20 years. In second place is the 10 year bond. Its yield is still less than the COVID highs of 2023, BUT it broke the upper channel formed by the 2023 and 2025 highs.
Kevin Warsh is in trouble already.
please explain briefly how this rupture in the bond markets does or could effect the overall economy ty
For starters, mortgage rates headed back over 7%. That affects a lot of downstream businesses – furnishings, furniture, moving companies, real estate and finance, etc. Also, the $40T national debt becomes more costly to service.
Rupture DUH!
Sounds damn close to RAPTURE which the government Evangelicals want.
bonds above 5% on $40 trillion = $2+ trillion in interest charges. That’s all you need to know. At 6% = $2.8 trillion (nearly $3t). The numbers are so ridiculous you’d think it were kids making up numbers, “when I grow up I’m going to have a gazillion dollars!”
And that’s not something the “government” owes, that something YOU the taxpayer owes. It’s like charging all the stuff you buy to daddy’s credit card and you find out that daddy is paying the card with YOUR college fund, inheritance, and trust fund. Oh and daddy is taking money from your not-yet-born children too.
Rupture? Sound’s painful.
The Point of No Return was written on that tiny sign the USA just sped past, following the Japanese car ahead. Too bad nobody spotted it.
Japan is melting down, causing a double- crisis, as Japanese debt is Too Big To Fail, and they have to unwind their multi-Trillion$ carry trade and go back to the Yen to attempt to bail out the sinking Titanic that is their economy. Jap Yen borrowed at 0.1% do not look appealing when the Yen is plunging, the currency value loss makes whatever they thought they were earning in US$ investments pointless. The Great Unwind is here.
And Japan imports all energy, meaning say Sayonara to the economy, Japan is now priced out of markets due to high cost. China will eat their Sushi lunch.
Japan is just the first to fall, many more behind.
It’s a race to see who collapses first, place your bets. Japan has opened up a sizeable lead, who can catch them on the final turn?
Why would he be in trouble?They are building huge inflation so they can keep on expanding the debt.
With high inflation,they can raise rates comfortably.
They can keep the markets up.
Ok its hard for bondholders,real economy,cost of life,but is it really important?🤑
I’m still amazed the pitchforks haven’t come out yet. Then again, people just lived relatively peacefully in Hoovervilles during the great depression, so maybe people just roll with the punches by nature. At some point though, it will progress to something akin to the Bronze Age Collapse. Looking at world history throughout the millennia, it always comes to that at some point.
And how many people can make Bronze these days?
More like Quest for fire.
Anthony Burgess did the dialogue for the movie for any fans.
A software engineer and a data scientist… Two jobs that can easily be done by AI. Let’s check back in with them in 2 years and see how they’re doing.
I would imagine the hot ones are the last to go out the door.
Executives are blaming layoffs on AI, but research shows AI is ‘not the main driver’ of US labor slowdown.
https://finance.yahoo.com/economy/article/executives-are-blaming-layoffs-on-ai-but-research-shows-ai-is-not-the-main-driver-of-us-labor-slowdown-114708955.html
Mainly I think it is stupid kids who get fired first, the ones who have a parent come to the job interview or have a lazy Monday extra day off.
They will still have jobs. if they are in the 250K a year range they aren’t entry level people but ones with specialized knowledge. Those will be the last to go.
It’s the basic IT guys and simple website development etc that will go over the next couple of years.
The same thing happening in the legal field. Legal secretary jobs rapidly being replaced by AI. After that will be the entry level lawyers and so on.
The people most likely to develop the next generation of software through AI automation are people who are currently software engineers. The idea that tech companies will entrust this process to unskilled people is bizarre. I expect software engineer salaries to be higher even accounting for inflation in about 10 years – partly because of a lack of juniors being hired today thanks to AI cutting down the need for labor (but not getting rid of it completely as some say).
Your description of tuition increase at University of Illinois piqued my curiosity. I attended Rice University, graduating in 1972. Tuition for a full time student there in 1972 was $1500/year. I visited the Rice University website today to learn the Tuition has grown to $71,140/year.
Rice has a good science/engineering program. It was a good value then. It’s more akin to larceny today.
Rice would answer that “most students don’t pay that much” – as if disparate pricing is a good thing! There are some people who have to pay full price to go there – or else the sticker price would be lower. Little financial aid is merit-based. Most is “needs-based”. A family that has saved money for tuition (aka suckers) don’t have any “need”. The FAFSA system (virtually universally used by colleges) won’t give any aid if the family has the cash to pay for student. It also only takes into account how many kids are in college RIGHT NOW, so if you have four more under 16, that doesn’t compute into the system. The whole system is like walking into a fast food joint and asking the price of a hamburger only to hear, “well that depends. How much you got?”
Colleges jacked prices too high. They are afraid of lawsuits from alums if they cut tuition (mark down the value of what they paid) and instead of cutting tuition they are upping aid and essentially bidding for kids to add to their rosters. This happened to my kid. Going to a $90,000 a yr school we can afford outright, getting $45,000 in free money. Don’t look at the gross these days, start looking at net tuition. Top line has become fake.
Much like “make home ownership affordable” programs jacked up housing prices (because now there was more money to chase residential real estate), “make college more affordable” programs in fact make college more expensive.
The problem with economics is the Keynesian macro-economic persuasion that maintains a commercial bank is a financial intermediary.
Lending by the banks is inflationary. Lending by the nonbanks is noninflationary (other things equal).
Economist John O’Donnell said of the U.S. Golden Era in Economics: “increased money velocity financed about two-thirds of a growing GNP, while the increase in the actual quantity of money has finance only one-third.”
M1’s average growth was 1.5% each year (from 142.2 to 176.9). CPI inflation averaged 2.5% (because of the Korean War) during the same period (from 23.7 to 33.1). If you exclude the Korean War, 1955-1964, the rate of inflation, based on the Consumer Price Index, increased at an annual rate of 1.4 percent.
Then we got conned by Bernanke’s “wealth effect”: Fed Paying Interest on Reserves: an Old Idea With a New Urgency
“https://www.wsj.com/articles/BL-REB-1411
This lowered the real rate of interest stoking asset prices.
The error is twofold. Banks don’t lend deposits so all bank-held savings are lost to both investment and consumption. Dr. Philip George sees the causation but misses the accounting in “The Riddle of Money Finally Solved”.
The error is people are just plain dumb.
Everyone and everything is a statistic and someone always has a bigger hammer no matter what percentage of wealth you have.
We accept the lie we can all become rich, beautiful and happy if we only work a little harder at it.
In a country well governed, poverty is something to be ashamed of. In a country badly governed, wealth is something to be ashamed of.
Confucius
Bank credit proxy isn’t the same as the intermediaries’ deposits equal loans and investments. In the commercial banking system all the outside factors, e.g., bank capital, increase in currency outstanding, reserve bank credit, the inputs and outputs of the system, are offsetting.
Well when I opened my savings account way back in the 80’s the bank gave me 7& interest.
Now I have 0& in the same account.
The river flows one way and it ain’t toward me.
The Fugs – Wide Wide River
https://www.youtube.com/watch?v=svPDzNO6GQk
Another problem with how the Fed measures inflation is that they only look back 12 months, as though we all forgot how much less things cost before Covid. To better match how the average person experiences inflation, they should have three goals:
Combined with better measure of inflation, those 3 criteria would keep them more on the same page as the rest of us.
Debt at $39T and now the highest bond interest rates in 20 years. The true cost of Trump’s (and the American People’s) stupidity will never be known. Well the first 240 years were pretty good.
hey, we put a man on the moon.
America will always have that. We peaked 58 years ago. what a run.
I thought that was on a stage with Kubrick..
Steven Toast stumbled onto the set
Looking forward to China putting people on the moon and looking around for the stuff we supposedly left there.
We’ve been on this road for quite some time. The de-industrialization of the US, financial activities taking over the economy, excessive military expenditures, sticking our noses into other countries’ business. Trump’s tenure is just accelerating the inevitable. Debt load is unsustainable. My all time favorite quotation…”You can’t bullsh*t math”
thank you taco for your continuing ill-fated policies and total disregard for the welfare of the middle and lower economic classes.
Do you know who TACO is?
Taco MacArthur is a main character on The League, who won the Shiva Trophy before the show started in 2006. He is the brother of Kevin MacArthur , brother-in-law of Jenny MacArthur and uncle of Ellie MacArthur and Chalupa Batman (Christopher Benjamin) MacArthur.
Taco founded TacoCorp in the show to facilitate his some-what crazy ideas about business. This lead him to become very rich twice in the show (mostly by fluke) and the creation of inventions, ‘The Pee Bib’ and ‘The Brown Note’.
OK, so I get Baumol’s cost disease and understand the rationale. But I don’t think it is the entire reason for cost inflation in services. Let’s take college education. I remember when MOOCs first arrived on the scene 15 years ago, and all the hype about how it was going to radically change education. I have taken several MOOCs over the years, from various institutions including MIT, Duke, etc., and found them to be excellent. I learned just as much from them as sitting in a classroom with hundreds of other students. The costs per student to provide the education were small, and they can be rerun for years at tiny marginal costs. But in general MOOCs seemed to have failed to make any substantial change. Why? Because they didn’t make universities enough money. Rent seeking behavior will always win out over increases in efficiency.
Because MOOCs aren’t the same thing as a college education?
Carnegie public libraries have provided free books to Americans for 150 years. Reading a book (or watching a MOOC) may benefit you individually, but society and individuals don’t value them the same as a complete primary, secondary or college education. Those require professionals using their skills to convey knowledge – at least for what most employers wants. And those professionals suffer from the Baumol cost disease that the WSJ was referencing.
Don’t like it? Don’t buy it or participate.
Middle class may not be 500k, but it’s not far from 200k.
Most people that thought they were middle class aren’t anymore.
I am constantly amazed at the people who don’t grasp this, and are placidly and often smugly watching their families and society sink.
Nobody does math it seems. Basic math
its not just a feeling, lol.
Your college education cost probably doesn’t include a dorm room or equivalent housing which can run from $7-10k per year. Plus food/meal plan.
Cant cover those costs peddling weed anymore, either.
Wasn’t there some rich college girl hooker ring run from the dorm and headed by the father of one who moved into her dorm room?
Found it bur I’m damned sure the “families” invented the charges cause you know rich kids don’t ho or OF.
https://www.oxygen.com/crime-news/lawrence-ray-accused-of-sex-trafficking-extorting-sarah-lawrence-college-students
he father of a former Sarah Lawrence College student is accused of sex trafficking and extorting students at the school in a years-long scheme that began in his daughter’s on-campus housing.
Lawrence Ray, 60, is now facing a series of charges against him that include conspiracy to commit extortion, extortion, sex trafficking, obtaining forced labor and money laundering after authorities say Ray used sexual and psychological manipulation to control his alleged victims—forcing one into prostitution and others into forced labor at a rural property to work off perceived debts, according to a federal indictment.
Ray is accused of using tactics such as sleep deprivation, sexual humiliation, verbal abuse, physical violence and threats of criminal action as he isolated the victims from their families and exploited their mental health, according to a press release announcing the charges.
Authorities say he successfully extorted at least five victims of more than $1 million total.
Especially in Canada where its now legal so there is no need to find someone to sell you weed.