Mark Perry just lately up to date a wonderful chart:
Not all inflation is similar.
a. The higher (decrease) the diploma of presidency involvement within the provision of a very good or service the higher (decrease) the value will increase (decreases) over time, e.g., hospital and medical prices, school tuition, childcare with each giant levels of presidency funding/regulation and huge worth will increase vs. software program, electronics, toys, vehicles and clothes with each comparatively much less authorities funding/regulation and falling costs. As anyone on Twitter commented:
Blue strains = costs topic to free-market forces. Crimson strains = costs topic to regulatory seize by authorities. Meals and drinks are debatable both means. Conclusion: remind me why socialism is so nice once more.
b. Costs for manufactured items (vehicles, clothes, home equipment, furnishings, digital items, toys) have skilled giant worth declines over time relative to general inflation, wages, and costs for providers (schooling, medical care, and childcare).
c. The higher the diploma of worldwide competitors for tradeable items, the higher the decline in costs over time, e.g., toys, clothes, TVs, home equipment, furnishings, footwear, and many others.
d. From Twitter feedback this week (2022).
*Thank goodness the federal government doesn’t subsidize TVs or toys, or toy TVs.
*Nearly each line that went up, has had some kind of presidency involvement, whereas the strains happening have extra to do with capitalism.
*And as all the time, the extra regulated, the dearer issues grow to be.
There’s a large distributional impression right here. Much less nicely off folks purchase extra blue stuff, wealthy folks extra crimson stuff.
The implications for higher safety, much less immigration, industrial coverage, and subsidies are fairly clear.
I’ve been sloppy, about one in every of my very own pet peeves. This graph is about relative costs, not about inflation.