Have you noticed that things are more expensive today than they were before? Do the adults in your life talk about this? Who or what do they say caused all of this? After watching the video, do you feel like you understand Inflation better?

This is a tough one, why is everything so expensive? It’s easy to point a finger at things we don’t like and blame them. The only exception to the price of everything going up has been how technology innovations has forced the price of the previous tech gadget to go down to make room for the new thing. For example, when I bought my first home computer in the 1981 it was around $2,000, was a luggable computer about the size of a sewing machine, had a built-in 9-inched green text-only CRT-screen, slots for two 5 1/4-inch floppy disks that could save about 160 KB of data, featured 64 KB of RAM and an 8-bit Z-80 CPU. 

kaypro ii
kaypro ii

The last computer I purchased was an iMac with a 27-inch 5K LCD display, 64 GB of RAM, 2 TB of SSD storage and a 3.3 GHz Intel Core i5 CPU for a little over $2000, in 2020. So, while food, rent and gasoline are nowhere near the price they were forty years ago, technology prices continue to shrink, so that for the same price I can get amazing technology that didn’t exist in 1981. It’s crazy. 

As the presenter in the video noted, this trend has been going on for a long time and not pretend that somehow the government is doing this to us right now. In a world where we’re supposed to trust that competition will keep the prices of things in check, but the natural inclination of business is to control markets and eliminate competition, things are going to get out of control, especially when the world gets hit by a deadly pandemic. Expecting the market to just “right itself” might not be a very good experience. Just ask the folks in Texas about the cost of fuel and electricity the last few times they were hit with bad weather conditions. 

How about you, do you remember when you could get a full-size candy bar for twenty-five cents? Ugh. 

Source: KQED/PBS Above the Noise, https://www.youtube.com/@AboveTheNoise