Tuesday, February 14, 2012

1989 Radio Shack Cell Phone Commercial

In today's dollars, the $799 sale price would be about $1,450, and the full price of $1,139 would be more than $2,000.

HT: Peter Krieger


At 2/14/2012 10:06 PM, Blogger kmg said...

Another thing I noticed from the ad is that the American population of 1989 was better dressed and less obese that today.

At 2/14/2012 10:47 PM, Blogger KevinInfobia said...

I love the clip of the guy in the boat! I love how they made it seem like it would be able to work everywhere. Did cell phones run on analog back then?

Infobia---Crime, Safety, and Consumer Issues

At 2/14/2012 11:08 PM, Blogger Benjamin Cole said...

But inflation! Inflation! Inflation!

Yes, housing is cheaper than ever. Yes, autos are cheaper than ever.

Yes, you can buy cell phones for the price of thick hardcover novel.

Yes, you can take 1000 digital pictures for free---and then then send them within minutes to Taiwan.

You can even hold a little phone and have the world's knowledge available through an Internet connection. Juts one function--maps--is like carrying a few thousand maps around with you.

The only thing getting more expensive and of lower quality are health services (federal involvement) and military goods and services (federal involvement squared).

But inflation! Inflation! Inflation!!!!!

At 2/15/2012 12:03 AM, Blogger kmg said...

While Moore's Law has been the spearhead of human progress in the last half-century....

...This particular example just says something that could be said with any of a dozen other examples (large $1200 calculators, Atari 800 computers, etc.).

The post around Christmas that showed the 1964 TV set compared to multiple 2011 products combined for the same equivalent cost, was a more comprehensive example.

At 2/15/2012 12:03 AM, Blogger kmg said...


Inflation is the new Peak Oil.

Bets on high inflation have taken down some big names. Bill Gross of Pimco being one.

At 2/15/2012 9:35 AM, Blogger Bruce Hall said...

Given the changes that take place in technology, the more appropriate comparison might be this:


At 2/15/2012 9:51 AM, Blogger Jon Murphy said...

Man, technology has come a long way. Who says the Middle Class is stagnating?

At 2/15/2012 10:59 AM, Blogger morganovich said...


you really do live in a fantasy world.

consumer electronics are a special case.

food? up.

rent? up

energy? up.

housing affordability if you already own? way off. down payments much harder to come by. equity? destroyed.

healthcare? up huge.

education? soaring.

you fixate on the one product area that consistently drop and pretend that food and rent adhere to moores law.

i realize that your bizarre form of inflation denial tourettes is immune to data, but wow, you simply have no idea what you are talking about.

the average price of a car in 1989 was $14k. it's now $31k. oh, yeah, no inflation there.

seriously, do you ever even try to look at the facts?

At 2/15/2012 11:21 AM, Blogger Methinks said...

I had one of those!!

Don Boudreaux has an excellent presentation on this. A link to it exists somewhere in the Cafe Hayek archives.

At 2/15/2012 12:26 PM, Blogger morganovich said...

"Who says the Middle Class is stagnating?"

someone from the middle class trying to pay for a private education?

At 2/15/2012 1:23 PM, Blogger Eric H said...

Or a public one. I graduated from a state college in 1992. Full time tuition, dorm room and 20-meal per week cafeteria plan ran about $5200 for two semesters. This year the same school charges $14,000 for the same services.

20 years, 170% inflation. But the BLS will tell you it's only 2.1%.

At 2/15/2012 1:50 PM, Blogger kmg said...

No, rent has not gone up since the 1980s. Rent can only rise in proportion to the population and income growth. Many places have excess homes (rents are cheap in Vegas).

No, food has not risen. People eat in restaurants more now since they have no cooking skills, but the food eaten by people in 1970 would cost less as a percentage of income than today.

No, energy has not risen. Anyone who actually reads this blog knows about NatGas.

Morganivich has an irrational obsession with imagining inflation. Inflation nuts are the new peak oil nuts.

At 2/15/2012 2:05 PM, Blogger kmg said...

the average price of a car in 1989 was $14k. it's now $31k. oh, yeah, no inflation there.

Wasn't there a chart just two days ago on Carpe Diem, showing that car affordability has risen long term?

That is before even taking into account 1) higher quality of cars (no more oil spots in parking spaces, eh?), and 2) More technology in cars (CD player and iPod dock instead of cassettes, sensors to help you not back into another object, etc.)

You have no clue.

At 2/15/2012 2:43 PM, Blogger morganovich said...


um, no, it's you who seem to be sans clue.

rent has not gone up since the 80's?

BS. where in hell do you live?

been to a city lately?

urban us rent is up HUGE and is soaring year over year now due to a drop in the home ownership rate and the difficulty of getting a loan.

seriously, what color is the sky on your world?


and note that these are in constant dollars.

gross rent nationwide was 789 in 2007, up massively from 2000.


us rents were up over 5% last year.


perhaps you should try getting some data before you make a fool of yourself.

At 2/15/2012 2:50 PM, Blogger morganovich said...

let's look at the rest of your claims:

here's CPI:


food at home:


food away from home:


overall food:


so, not only are you wrong about no inflation, but you are also wrong about what's causing it.

seriously, do you even try to look at the data before you make such preposterously inaccurate claims?

clear not, because if you did, you would have seen the energy line and avoided looking like a fool there with your ridiculous nat gas claim. how wrong were you?

energy commodities up 10.6% yoy.

energy services as a whole: up 6.6%.

wow kmg, for you to have missed all this data and claim that others are nuts just beggars belief.

seriously, if you were trying to make the "no inflation" arguments look stupid, i don't think you could have done a better job.

At 2/15/2012 2:54 PM, Blogger morganovich said...


you clearly do not understand what inflation is.

"affordability" is not the same thing at all.

if a car doubles in price and so do your wages, affordability is flat, but there was still a great deal of inflation.

this matters because you may have savings. if you were sitting on cash, the car is much less affordable.

wages are only part of the picture. savings matters too.

i have no idea where you got the education that seems to be failing you, but you should ask for your money back.

At 2/15/2012 3:24 PM, Blogger Ron H. said...

This comment has been removed by the author.

At 2/15/2012 4:16 PM, Blogger Ron H. said...

"But inflation! Inflation! Inflation!"

You really don't understand inflation, do you.

Higher prices aren't inflation, but are the *result* of inflation. They indicate that the price of money has decreased.

Like any other commodity, the price of money is subject to the laws of supply and demand. When the supply of money increases more than the demand for money, the value of each dollar decreases.

Your hero Milton Friedman said:

"Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output."

If the price of dollars drops, I can buy more of them for a loaf of bread, a ton of steel, an hour of my labor, or when I sell my house.

None of those things necessarily changed in price relative to each other, but became more costly relative to a dollar.

Get it?

You should also be aware that inflation doesn't progress on a linear scale with respect to the money supply, but in several stages, including no or low inflation, then inflation, then hyperinflation as people lose confidence in the currency and seek to get rid of it as fast as possible to avoid losing purchasing power.

Do a little reading. Your prayers to Bernanke are calling for disaster.

At 2/15/2012 4:54 PM, Blogger Jon Murphy said...

By the way, if anyone wants to feel old, this video is from the year I was born!

At 2/15/2012 5:35 PM, Blogger kmg said...

morganovich has been outmatched with facts, and now is indignant.

Note how he points out inflation from the BLS, but does not include real GDP in his calculations.

Plus, he fails to account for qualitative improvements (apartments sizes have risen since 1980, so adjusting for size AND average income, prices have fallen).

I see you avoided the natgas point as well. Shame on you for being dishonest.

Morganovich, if you wanted to make inflation nuts look bad, you could hardly do a better job.

At 2/15/2012 5:36 PM, Blogger kmg said...

The same standard of living costs less than 1980.

Those who disagree are being selective about anecdotes, and are going out of their way to ignore quality improvements as well as the elimination of costs that existed before.

At 2/15/2012 5:39 PM, Blogger kmg said...

A simple question for Morganovich.

Has REAL GDP risen since 1989?

Has life expectancy risen since 1989?

This proves that living standards have risen. Salaries have risen above inflation, and to simulate the same living standard as 1989 costs a lower percentage of income.

Anyone who disagrees doesn't know how to read data.

At 2/15/2012 5:42 PM, Blogger kmg said...

So housing prices are vastly below their peak, and morganovich has the gall to ignore that and point to an increase in rent (an indicator of job creation).

My god, the inflation nuts are here. We just did away with the peak oil nuts, and the inflation nuts have arrived instantly.

Or are they just the same people, who found a new doomsday fetish?

At 2/15/2012 5:51 PM, Blogger juandos said...

Well kmg I don't know where you're living at but all your lists of things not happening are happening here in the St. Louis, Mo area...

Rents are up due mainly to the increased costs of regulations and liability insurance...

Locally milk cost nearly a dollar more per gallon than it did a year ago...

Gasoline has gone wildly up along with diesel in this area and this has affected the price of everything that moves by truck...

Food using corn or corn products have gone up (thank you ethanol program) but maybe are just barely beginning to recede in increase jumps a bit...

Thanks to the EPA the cost of electricity locally has gone up...

It might not be CPI but it is real world...

At 2/15/2012 7:25 PM, Blogger morganovich said...


seriously, are you trying to make fun of yourself?

"morganovich has been outmatched with facts, and now is indignant.

Note how he points out inflation from the BLS, but does not include real GDP in his calculations."

this is just babble.

what facts? i have not seen you cite a single fact. you are just babbling and showing that you do not know what the words you use mean.

your comment doesn't even make sense.

how does real gdp say anything about inflation?

you are just making yourself look less and less like you have any idea at all what you are talking about.

2% real GDP growth could be 10% nominal growth and 8% inflation or 3% nominal growth and 1% inflation. clearly they are different situations. hell, 2% real growth could be -1% nominal and 3% deflation.

seriously, can you think at all?

what does real gdp growth have to do with anything?

you are not making any sense at all.

further, i addressed your natgas point directly, you are just to dumb to see it.

energy commodity inflation (per CPI) is 10.6%. that includes natgas. so, sure, natgas may be down, but everyhting else is up a lot more.

thus, your point is just nonsense.

i'm not being dishonest, you are being stupid.

that's like saying "band aids are cheaper" to refute a rise in healthcare costs.

then you delve into housing, which you clearly do not understand.

you claimed rents were down. faced with the clear and obvious proof that not only are rents up greatly, but up far more than inflation and wages, you try to hide behind "quantitative". most rental units in the US are the same ones now they were in 1980. maybe 10-20% are no. that has NOT moved the needle much. you are just obfuscating to cover up for how astonishingly wrong you were.

homes to buy are a complex issue that you seem unable to grasp.

sure, for a first time buyer, a home right now is quite affordable.

however, that's maybe 3-5% of the market. the other 95%+ already owns one and just lost their shirt.

25% are underwater. 50% have sub 5% equity.

to them, buying a house just got A LOT less affordable. they now need to cover negative equity or have insufficient equity to make a new downpayment.

why do you think home sales are still so low? because prices are low? no. because the cash price needed to buy has soared for most buyers.

it's funny how you inflation deniers never asked "why isn't cpi soaring from rising house prices" in 2003-7 and instead said "owner equivalent rent" but now want to use prices and ignore the metric you used on the way up.

you want dishonest? that's dishonest.

kmg, i'm sure there's a board somewhere where the readers are rock stupid and do not demand data and logic. perhaps you ought to go find it. you are getting mauled here.

At 2/15/2012 7:41 PM, Blogger morganovich said...

"This proves that living standards have risen. Salaries have risen above inflation, and to simulate the same living standard as 1989 costs a lower percentage of income."

no, it proves you are an idiot and do not know what inflation is.

inflation is the change in price. you are talking about living standards for wage earners.

to show you how they differ, imagine you are on a foxed income. you retired in 1989 and bought an annuity.

you are NOT better off now, you have maybe HALF the buying power you did.

all you are demonstrating, over and over, is that you don't know what inflation means.

and for the last 5-10 years salaries have NOT risen above inflation. you make claims about data and then never show any.

further, real GDP growth does not necessarily mean in improvement in living standards. it depends on population growth and a number of other factors.

if real gdp goes from 100 to 110 and population goes from 100 to 115, well, that's not an increase in living standards, is it?

you think living standards are up from 2007? really? what color is the sky on your world?

go look up the data he of big mouth and little brain:


download the spreadsheet "all races" right at the top.

you'll see that 2010 dollar per capita income in the US peaked in 2000 and has not gone anywhere since (2010 dollars column is the one adjusted for CPI)

2010 was 26487.

2000 was 28293.

whoops, a 6% drop!

hell, it's even down NOMINALLY from 2007-8 (current $ column)

once more, your grasp on the actual facts is shown to be completely absent.

so let's recap: per capita, an american has 6% less buying power than in 2000.

oh, and we haven't looked at wealth distribution yet either.

if income becomes more concentrated, standards of living drop for many.

if 100 people each earn $2, the economy is 200.

but, if 10 earn $11 and 90 earn $1, well, it's the same size, but 90 people will have had huge drops in standard of living.

i have no idea where you get your information kmg, but you need a new source.

you are just talking nonsense.

At 2/15/2012 7:46 PM, Blogger morganovich said...

oh, one more thought on housing "affordability".

the biggest challenge for many in buying a house is the down payment.

in 2005-6, zero down interest only loans were common. 10% down was a big downpayment.

now, there are NO 0 down loans, many downpayments are 20%, and I/O's are rare.

that makes housing MUCH less affordable for many.

the low rates only matter if you can make the downpayment in the first place.

it's like a great drink special in the VIP room. great if you're in, but useless to most and doubly useless if you have negative equity like 25% of homeowners.

At 2/15/2012 9:59 PM, Blogger Ron H. said...

Jon M: "By the way, if anyone wants to feel old, this video is from the year I was born!"

You whipper-snapper!

Just remember, old age and treachery will overcome youth and skill every time.

At 2/15/2012 10:31 PM, Blogger Paul said...

Morganovich and Ron H,

Your pimp hands are strong!

At 2/15/2012 11:34 PM, Blogger Ron H. said...

Paul: "Morganovich and Ron H,

Your pimp hands are strong!

Why thank you! ...I think.. :)

At 2/16/2012 9:44 AM, Blogger morganovich said...


i hate busting it out like that, but when someone as deluded and uneducated as kmg starts calling me clueless and a nut and making such outlandish, unsupported, and flat out inaccurate claims, well, that gets my fur up.

At 2/16/2012 10:47 AM, Blogger Methinks said...

Thank you, Jon Murphy, I didn't need help feeling old, but help you did :)


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