Inflation propagates unevenly
Here is a good chart illustrating the heterogeneity of goods/services inflation[0] over the last 20 years. I would love to see it extended into 2022.Technological progress is often deflationary in ways we can’t easily quantify, even after hedonic adjustments[1]. A $500 smartphone today would have cost tens of thousands of dollars only a few years ago, if it were even possible to manufacture then. Some people estimate that a smartphone’s total computing power would have been worth several million dollars in the 1990s[2]. Yet someone with a $500 smartphone today doesn’t consider themselves a millionaire relative to someone from the 90s; we simply cannot quantify the monetary effect of having millions of dollars of 1990s computing power in our pockets[*].Similarly, a new $40,000 Honda Accord is superior in every way (power, amenities, ride quality, etc.) to a $200,000 Rolls Royce from the 90s. Conversely, if a car identical to a 90s Rolls were manufactured in modern factories, it would probably cost far less to manufacture than the Accord, owing to its relative technological simplicity. Yet we don’t typically consider middle class Accord owners in 2022 as driving around in cars only attainable to millionaires 30 years ago, even though this is objectively the case.[0] https://www.aei.org/wp-content/uploads/2021/07/cpi2021.png[1] https://www.bls.gov/cpi/quality-adjustment/questions-and-ans...[2] https://www.aei.org/technology-and-innovation/innovation/the...[*] I guess the “realistic” 1990s equivalent to a smartphone would be a team of personal assistants who could immediately look up any fact from reference materials, simultaneously call multiple businesses for information about their stock or hours, give real-time driving directions via carphone while reading a map, etc. Definitely more realistic than magically stuffing mainframes worth of compute in your pocket, but still only something that the extremely wealthy could afford.