Loved bjensen’s observations and concur. By forcing more people to get formal educations and then pursue white-collar work, we have effectively reduced our standard of living (more educated people = lower wages for what labor is offering).
Also, I think the difference between the items that have increased in price vs. decreased is that the inflationary items (housing, healthcare, education, etc.) are less likely to be outsourced to cheap labor.
Additionally, the expansion of credit, especially since the early 80s, has pushed prices higher for things that are usually bought with credit (housing).
The 70s marked a time when more and more companies started looking at outsourcing to cheap countries (or insourcing with cheap, illegal-immigrant labor). It also saw the beginning of the demise of labor unions (worst thing that ever happened to us, IMHO).
While Americans were competing with poor peoples’ wages, they were still able to consume the same amounts (or more) due to credit expansion.
The spread between cheap labor and the prices Americans were willing to pay (with credit masking the deflationary effects of lower wages) is what made companies so profitable and enabled them to “grow” they way they did.
I think we are about to see the unwinding of these events.
