According to most of them, $1 million in 1960 is $10 million today. But if you look at the actual prices, it makes no sense. $1 million in 1960 would buy two mansions, a fleet of cars, a nice boat, and you’d have enough left over to invest and have an income for several lifetimes.
It’s because the official inflation numbers have always been bullshit. We don’t care if TVs and beer are cheaper, we care if tuition and housing are cheaper.
Their idea of stimulating the economy is forcing the working class to invest in businesses if they want to retire at all. The burden of a tax always falls on whichever side of a trade is less able to pass on it. In our case, that means the cost of inflation is added to your credit card rates, to your mortgage, and to your student loans.
It’s more complicated than that. Electronics and appliances are the obvious examples of things that have inflated much slower than average (or even deflated). Apparel and tools have inflated much slower. Energy generally has inflated much slower than average, but has shown a ton of volatility. Food and cars have inflated slower than average, but individual items might have followed their own path. Healthcare, education, and housing have gone up much faster than average inflation.
And the ratios don’t stay consistent over time. When I was a kid, burger meat was cheaper than similarly sized chicken breasts. Now the ratio is flipped. A plane ticket between New York and London is much cheaper today than in the 70’s. Even a tank of gas for driving from one state to another is way cheaper today than in the 70’s, in large part because of better fuel efficiency.
And anything labor intensive is inherently at tension with itself. A seamstress or tailor can only make so many items of clothing per week. Those clothes will have to cost enough to justify their pay, and the raw ingredient textiles used to make the garments. So if their pay hasn’t kept up with inflation, then the labor-intensive items they make probably haven’t kept up with inflation, either. Ideally, increased productivity would allow raises to not be absorbed into the price of whatever is being produced, but that doesn’t always happen.
Looking at old menus and catalogs shows that some things have gone up a lot in price, while others didn’t experience the same effect.
Cars are an interesting example since even a cheap car today is significantly better in almost every way than the best car from the 60s.
However the very good cars have gotten much more expensive. So while we’ve been able to do more with less, we’re also doing A LOT more at the higher end.
For example, a Rolls Royce Phantom from the 60s was $6-8000. A new Nissan Versa for $20,000 is faster, more fuel efficient, safer. Maybe the leather in the Rolls-Royce is better.
My point is that it’s difficult to compare what you can buy over time since what is produced changes as well.
The inflation in luxury goods is staggering. High school kids used to be able to afford concert tickets, football games, and Broadway plays. That Phantom was a year’s salary for a school teacher; now the most expensive cars are twenty year’s salary. It’s not that the products are so much better; there’s a larger pool of very wealthy people. In 1960, if a man’s wife had a job they were considered ‘poor.’ Today, even professionals need two salaries to keep up with the Joneses
Outside of issues caused by Ticketmaster, there’s also just a lot more people who want to see only a few performers. It seems like there’s always a couple of names that are so overwhelmingly popular. Add to that the ease at which people can travel hundreds of miles, and your demand outpaces supply.
Property costs are probably the biggest factor that is affected by a larger population. We’ve got more people but everyone still wants to live in the same areas (and we’re bad at increasing the density of housing in these areas).
Yeah the pricing of cars has really expanded. It used to be $1000-10,000 covered basically all the new cars in 1960. Now it’s closer to $10,000-$10,000,000. Although I wonder if the distribution actually looks about the same.
The Phantom VI (the Phantom available in 1980) cost nearly nearly half a million pounds new. The Silver Spirit (or Spur depending on where you were) is probably the rolls you are thinking of, and it had a MSRP of a little over $100k new.
According to the CPI inflation calculator the Phantom would be about $1.4 million today, and the Silver Spirit would be about $334k.
This year’s phantom starts at around half a million but (IMO) it’s more of a “luxury car” compared to the ultra high end Phantom VI. But I think the Phantom is less of a car you buy and more of a modular platform you build your car on top of so I imagine there’s so multimillion dollar phantoms rolling (hehe) around
Yeah the phantom might not be a good choice since its price varies hugely based on customization and didn’t have a MSRP. I was looking at the Phantom V though which was produced in the 60s.
Compare Angelina Jolie and Elizabeth Taylor, for example. On paper, Angelina is far wealthier, but in terms of day-to-day lifestyles, they are pretty comparable. Only the 0.01% of multi-billionaires have reaped any rewards.
[off topic]
I’m not much of a fan of ‘inflation calculators.’
According to most of them, $1 million in 1960 is $10 million today. But if you look at the actual prices, it makes no sense. $1 million in 1960 would buy two mansions, a fleet of cars, a nice boat, and you’d have enough left over to invest and have an income for several lifetimes.
It’s because the official inflation numbers have always been bullshit. We don’t care if TVs and beer are cheaper, we care if tuition and housing are cheaper.
Their idea of stimulating the economy is forcing the working class to invest in businesses if they want to retire at all. The burden of a tax always falls on whichever side of a trade is less able to pass on it. In our case, that means the cost of inflation is added to your credit card rates, to your mortgage, and to your student loans.
We’re the ones paying the bill, not the rich.
It’s more complicated than that. Electronics and appliances are the obvious examples of things that have inflated much slower than average (or even deflated). Apparel and tools have inflated much slower. Energy generally has inflated much slower than average, but has shown a ton of volatility. Food and cars have inflated slower than average, but individual items might have followed their own path. Healthcare, education, and housing have gone up much faster than average inflation.
And the ratios don’t stay consistent over time. When I was a kid, burger meat was cheaper than similarly sized chicken breasts. Now the ratio is flipped. A plane ticket between New York and London is much cheaper today than in the 70’s. Even a tank of gas for driving from one state to another is way cheaper today than in the 70’s, in large part because of better fuel efficiency.
And anything labor intensive is inherently at tension with itself. A seamstress or tailor can only make so many items of clothing per week. Those clothes will have to cost enough to justify their pay, and the raw ingredient textiles used to make the garments. So if their pay hasn’t kept up with inflation, then the labor-intensive items they make probably haven’t kept up with inflation, either. Ideally, increased productivity would allow raises to not be absorbed into the price of whatever is being produced, but that doesn’t always happen.
Looking at old menus and catalogs shows that some things have gone up a lot in price, while others didn’t experience the same effect.
Cars are an interesting example since even a cheap car today is significantly better in almost every way than the best car from the 60s.
However the very good cars have gotten much more expensive. So while we’ve been able to do more with less, we’re also doing A LOT more at the higher end.
For example, a Rolls Royce Phantom from the 60s was $6-8000. A new Nissan Versa for $20,000 is faster, more fuel efficient, safer. Maybe the leather in the Rolls-Royce is better.
My point is that it’s difficult to compare what you can buy over time since what is produced changes as well.
I’d bet the resale value on the rolls Royce is better than the Nissan
The inflation in luxury goods is staggering. High school kids used to be able to afford concert tickets, football games, and Broadway plays. That Phantom was a year’s salary for a school teacher; now the most expensive cars are twenty year’s salary. It’s not that the products are so much better; there’s a larger pool of very wealthy people. In 1960, if a man’s wife had a job they were considered ‘poor.’ Today, even professionals need two salaries to keep up with the Joneses
Outside of issues caused by Ticketmaster, there’s also just a lot more people who want to see only a few performers. It seems like there’s always a couple of names that are so overwhelmingly popular. Add to that the ease at which people can travel hundreds of miles, and your demand outpaces supply.
Property costs are probably the biggest factor that is affected by a larger population. We’ve got more people but everyone still wants to live in the same areas (and we’re bad at increasing the density of housing in these areas).
Yeah the pricing of cars has really expanded. It used to be $1000-10,000 covered basically all the new cars in 1960. Now it’s closer to $10,000-$10,000,000. Although I wonder if the distribution actually looks about the same.
The Phantom VI (the Phantom available in 1980) cost nearly nearly half a million pounds new. The Silver Spirit (or Spur depending on where you were) is probably the rolls you are thinking of, and it had a MSRP of a little over $100k new.
According to the CPI inflation calculator the Phantom would be about $1.4 million today, and the Silver Spirit would be about $334k.
This year’s phantom starts at around half a million but (IMO) it’s more of a “luxury car” compared to the ultra high end Phantom VI. But I think the Phantom is less of a car you buy and more of a modular platform you build your car on top of so I imagine there’s so multimillion dollar phantoms rolling (hehe) around
Yeah the phantom might not be a good choice since its price varies hugely based on customization and didn’t have a MSRP. I was looking at the Phantom V though which was produced in the 60s.
more like $11M today, and it still checks out, right? How much is a nice mansion or two today?
Along the lines of the original post.
Compare Angelina Jolie and Elizabeth Taylor, for example. On paper, Angelina is far wealthier, but in terms of day-to-day lifestyles, they are pretty comparable. Only the 0.01% of multi-billionaires have reaped any rewards.