Without watching the presentation I can say this. There’s such thing in the economy as supply and demand. We import clothes and appliances from China and we pay (roughly) as much for them as Chinese and Europeans. If Americans get wealthier and everyone else stays behind, we start paying smaller percentage of our wages for clothes and appliances, we have more money left, chasing a limited number of houses in desirable areas, limited amount of medical services (doctors’ time), limited number of spots in good colleges. Necessarily, house prices, health insurance, cost of education, etc. go up faster than inflation.
In the end, your income is the determining factor that says if you’re going to live in a big pretty house with excellent schools, and if your children are going to get good college education. If you’re middle class, you’re not going to save much money, because you’ll spend it all competing with other middle-class and upper-class folks for limited-supply goods and services. Upper class folks will buy all the same services and have enough money left over to save and to invest. They will get richer and you will stay poor. Marx called it “the law of centralization and concentration of capitals”.
In a fair world, our government would provide free healthcare and free/cheap merit-based college education. That would make houses appreciate even faster.
They way out of the rat race is to live below your means, save and invest today to reap benefits tomorrow. Pick an older house in a less-distinguished school district because your peers will bid up prices in CV and 4S to the point where you’d have to spend half of your after-tax income on interest and property taxes. Drive a cheaper car, don’t buy jewelry, don’t go on cruises. Give up Starbucks.
