General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsHow come prices always go up, year after year...rent, groceries,
etc., but with rare exceptions (Electronic equipment, housing prices--the crash, I mean,
gas prices fluctuate) they don't go down?
(And most peoples' wages don't go up--or if they do, not very much.)
Edited to add: Explain like I'm a kid.
grasswire
(50,130 posts)Grocery prices are out of control.
Housing? Partly affected by supply and demand.
hobbit709
(41,694 posts)In 1990 my property taxes were $400. Last year was $2700. The value of the house only tripled. The tax rate went up the roof.
All thanks to our wonderful R led lege which mandated all sorts of things for schools and then slashed state funding to them.
Recursion
(56,582 posts)Electronics, etc., have their prices go down because we get better at making them.
Houses per se are cheaper than they used to be, because we're better at making them, but the land they sit on gets more and more expensive (because we aren't any better at making it than we used to be).
Groceries' prices are pretty much set by ag policy, and lately we've been pushing farmers to put grains into our gas tanks rather than our food, so grocery prices have been going up (though some of that is just inflation).
brooklynboy49
(287 posts)My answer, in a word -- greed.
Example -- A widget costs a dollar right now. But because of higher gas prices, the cost of getting that widget to market has gone up a nickel. So, to keep pace, the widget manufacturer has to increase its price a nickel. But widgets Inc. figures, we're gonna raise prices anyway, might as well raise the price a dime. And so it continues down the food chain, with us, the end user/consumer, getting stuck holding the bag, there's no one for us to pass our increased costs to.
As I said, I know this is a gross over simplification. And I'm not an economist. But you don't have to be an economist to know that 18th century Adam Smith supply and demand economics don't work in today's economy.
Further evidence it's greed -- I remember, must be 30 years ago, there was a sudden, sharp spike in the cost of sugar. Things that use sugar, like soda, saw an immediate price increase to cover the higher cost of making soda (etc.). But, just as suddenly, sugar prices almost immediately dropped back to where they had been before the spike.
Did the price of soda come back down, too? Of course not! Consumers were paying the higher prices, so soda (etc.) producers pocketed the extra profits.
Like I said, greed. That's my take, anyway. And one reason I so strongly feel we need more regulations, not less.
dixiegrrrrl
(60,010 posts)1. the seller....who raises prices on the slightest of excuses.
2. Hedge funds have entered the picture also...they make zillions of derivative bets on all sorts of commodities,
pushing the prices up. then the sellers love the new prices, and keep them because there is regulation of prices.
That is a general reason.
Plus...we have inflation, which cheapens the value of a dollar, so sellers have to raise prices to make as much in spending power.
Btw......coffee prices are predicted to climb rapidly, something about Brazil and coffee production prices,
which of course does not explain why coffee prices from other countries will rise, but it will.
the way markets used to work?
They no longer do...it is now manipulated like crazy.
Loudly
(2,436 posts)eShirl
(18,490 posts)a kennedy
(29,644 posts)We are falling further, and further behind......middle class my arse, try lower income. I used to think I was middle class, now, not so much.
Proud Liberal Dem
(24,402 posts)And yet the idea of our wages going up causes mass hysteria among the Republicans and their concerns that wages going up is going to cause prices on stuff to go up- even if they ALREADY are (with less available money to pay them).
PowerToThePeople
(9,610 posts)We are doomed to self destruct.
Here is another form of exponential growth as an example
http://en.wikipedia.org/wiki/Nuclear_chain_reaction