Sunday, December 26, 2010

""The Good ol' Days""-- Part 2...

(See Part 1 HERE)...Mark Perry at Carpe Diem gives further evidence that the "good ol' days" are TODAY, and as someone born in 1960 I tend to agree.  What gives money its value to the great un-washed is what we can exchange it for in the quantity and quality of goods/services.  You can extend this analysis to consumer goods across the board IF those goods are (1) bought in competitive markets domestically that are subjected to limited government interference through significant market distorting subsidies (private and public goods, i.e. education, medical care) and (2) subjected to international trade and competition.  Please visit this ENTRY many active links in this blog entry I did not include...

""Here's another comparison of consumer purchasing power in the 1960s versus today, based on the time cost of common household appliances like a kitchen oven. The Sears Kenmore oven pictured below retailed for $330 in 1966, which would represent 121.3 hours of work (about three weeks) at the average hourly wage in that year (ignoring taxes).

At the current average hourly wage of $19.10, today's average consumer would earn a little more than $2,300 working 121.3 hours, and would be able to furnish their entire kitchen with the new appliances pictured below (click to enlarge) from Best Buy including a high-efficiency front-loading washing machine, super capacity gas dryer, 30-inch gas stove, 8.8 cubic feet chest freezer, 16.5 cubic foot refrigerator, dishwasher, mid-size microwave and blender:

Measured by what is ultimately most important, the value of our time, household appliances keep getting cheaper and cheaper, thanks to innovation, technology improvements, supply chain efficiencies, increases in productivity and other market-driven efficiencies that drive prices lower and lower year by year. As much as we hear about declines in median income, economic stagnation, the disappearance of the middle class, falling real wages, increasing income inequality, the data tell a much different story: The rich are getting richer and the poor are getting richer.''
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