The famous question Ronald Reagan asked during the 1980 election season was “are you better off than you were four years ago?” It was a valid question then… and equally valid today. But let’s open the aperture a bit, and see where our political and economic leaders have led us over the past couple generations:
Only when we look at longer periods of time do we see the large impact inflation has on our ability to buy real goods and services. Since our middle class did not fully emerge until the end of World War II, it might be useful to compare the price of items back from 1950 to where things stand today. Has inflation had a big impact on our purchasing power? Let’s look at a few data points from 1950:
The average family income: $3,300
The average car cost: $1,510
The median home price: $7,354
These are three very important metrics when it comes to measuring purchasing power in the United States. The linked article goes on to calculate this meant in 1950 an average home cost 2.2 times one’s annual salary, and a car was 45% of it.
Expensive, yes, but not out of reach for those with the discipline to save for them.
Fast forward to 2014:
The average family income: $51,017
The average car cost: $31,252
The median home price: $188,900
Now a home costs 3.7 one’s annual salary — not quite double what it was sixty years earlier. A car costs 35% more, relative to one’s salary (61% from 45%).
Clearly, wages are not keeping pace with prices. Most of this is due to inflation, which has the effect of enriching those who get first access to “new money” (banks, corporations, etc) at the expense of everyone else. There are other factors, however, such as the impact of massive immigration (legal and illegal), which increases the size of the labor pool, thus depressing wages.
The common factor in all of this: public policy, which has promoted both inflation AND immigration as key tenets. It’s pretty clear that under the trajectory of the D.C. Empire, we are NOT ‘better off than we were’ several decades ago.
So what do we do about this? The only thing we can: demand an end to business as usual. NO INCUMBENTS, PLEASE!