He quotes the equally-wicked Bill Downey, who offered the following comparison, of "How Much things cost on Aug 15th, 1971" to what they cost today:
- Dow Jones Industrial Average 890 or 25 oz. gold in 1971, versus 9,000 or 10 oz. gold today. 40%
- Average Cost of new house $25,250 or 721 oz. gold in 1971, versus 250,000 or 277 oz. gold today. 40%
- Average Income per year $10,600 or 302 oz. gold in 1971, versus $70,000 or 77 oz. gold today. 25%
- Average Monthly Rent $150 or 4.3 oz. of gold in 1971, versus $824 or 1 oz. of gold today. 23%
- Datsun 1200 Sports Coupe $1,866 or 53 oz. gold in 1971, versus $28,400 or 31 oz. gold today. 60%
There's a bunch of reasons why these things can change. Stuff such as houses can be made relatively cheaper per-unit, either by technological improvements in construction (allowing them to be performed by drunk illegals rather than union carpenters,) and also decreasing the quality of the stuff used. Ditto rental units.
The reason that Detroit took the Final Suck, IMHO, is that wages decreased faster than the cost-per-auto. The 'bama's would agree with this, but shooting one's self in the foot is not the solution.
The major reason that the Washington Whorehouse hasn't gone off the rails before - say, during Cap Weinberger's FuckAmerica policy when we deceided that Military Keynesianism was the way to go - was the silent boom in certain areas, including computers and information technology. Were Washington not leeching away the value as fast as technology could improve it, we'd be sitting on a pretty high place, indeed. The Dow might actually be 9,000 but with real money!
Back around 1980, Americans realized that the jig was up on pooled capital investment, and bailed out of bank savings accounts. They were persuaded that Equity Rocks! which it does, when you want to put money at higher risk. Even with thirty years of Government policy of driving capital out of the long-term investment market - like dull old corporate bonds - IT managed to accrue enough capital - by playing with IPO's and such things - to blast into the stratosphere. (If you don't believe me, whip out your old Atari from 1990 and play with your grand-son.)
But we got deluded into thinking that the IPO shenanigans CREATED wealth, not just shuffled it into productivity. The "dot-com-bust" showed that capital could be mal-invested even when the streets were paved with gold. Note that the "dot-com-bust" didn't stop computer technology, did it?
The ONLY thing that vaguely resembled the accumulation of wealth through innovation in manufacture - the computer industry - hasn't shown up its true effect, which was a forty-year boom equivalent to the post-Civil War Industrial Revolution. That's because we've pissed away the productivity into Governmental crap, including military bases on any place that shows up on a satellite map. We burn off 50% of today's crude oil imports in the Department of Defense. What's that do to the price?
Anyhow. When the IT boom matures, we're in for the rolloff-bust of a lifetime. It may nbe a short lifetime. This explains why many societies become comfortable - and then abruptly collapse. They come across some innovations which are cash-cows for financing an increasingly nonproductive society. When the cash cow suddenly expires (or matures), there isn't any money tree any more. Kabam.
You don't believe me? Here's DEPRESSING. The world lost the recipe for making Concrete, for God's sake, between the end of the Roman Empire, and about 1600. Feeble, eh?
PS: The Guru's such a mean grump, I've decided to send him a picture that will turn him into a foolish optimist. Just wait....ah, here it is.
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