Business and economic reporting is supported by the law firm of Larkin Hoffman Daly and Lindgren providing solutions for today's legal problems shandwick providing strategic public relations Council and Pentair a diversified company building shareholder value through focused industrial growth. Hey, good morning, six and a half minutes past 11. Welcome to mid-day on Minnesota Public Radio Gary item continues his vacation. I'm very familiar. Thanks for joining us today. Many of us have heard the stories from Grandpa and Grandma about the days when a gallon of gas cost $0.19 or a movie ticket would set you back a whole $0.15 most of us have our own stories of how much more things cost today than they used to but even considering the effect of inflation and an ever-changing Consumer Price Index. Does it really cost people more to buy products and services like gasoline in movie tickets our guest and midday has Cole published and intriguing study which concludes that the cost of living in America keeps getting cheaper not more expensive. In fact, Michael Cox vice president and economic advisor at the Federal Reserve Bank of Dallas comments in the study that our country has free markets have routinely brought the great mass of Americans products once Beyond even the reach of Kings. Mr. Cox is in Dallas this morning and he join From their good morning. Mr. Cox good morning are invited to call with questions and comments for mr. Cox. The telephone number in the Twin Cities is 2 to 76,000 to 276 thousand outside the metro area. The toll-free number is 1 800-242-2828. 1 800-242-2828. They sit over the Centre prices have got up. We know that the buying power of a dollar is down. How does that conclusion that the cost of living is going down square with those findings? We don't measure things through the price of things in my terms, but in real terms and that's how long you have to work in order to afford to buy something as of Adam Smith told us over 200 years ago the real price the cost of a thing is the amount of I'm sorry. I'm putting Walden now the cost of a thing as the amount of life, which is required to be exchanged for it. I mean Hitler in the long run. Adam Smith said it's a slightly different way. But it's the same principle is that the real price of everything is a toil and trouble of acquiring it. So, you know, what we did was we took the money price of everything and we filled with / how long was your money wages that you have a typical manufacturing worker which started say at the turn of the century a typical manufacturing worker was making 14.8 cents an hour. Today is typical manufacturing worker. This is a production in non-supervisory worker. Somebody works on the production line makes $13.18 an hour on average so money prices me and little apart from money wages. So bring them together and dividing prices by ways. You can calculate Beyond by-product how long you have to work in order to afford something will then is the inflation rate in the mission is Consumer Price Index and all these all these other economic figures that we hear about art. Are they essentially moot? No, I mean inflation is attacks. And we wanted Louis with fly straight as possible, which is to know what the fit and he's been working on getting inflation rate down and sit down out of one and a half or so percent in the 1.7% for the past 12 months using CPI. So it's not that it's just that has clouds the issue the real issue is how long did you have to work in order to Fort something? Because me. Born with money were born with time time is the currency of life and so few of us are born with big bank accounts and until you ask for an individual how wealthy are you when you're born in terms of money, but they are as wealthy as what they can trade their time for and send info we work in order to accumulate good. How long do we have to work? How much can our time by us today during our lives? So that's what we do. We look at the currency of time. We hear so much about people working more today than they used to if people are spending more time working then then how are they? Master products and services being reduced work-week is down to about 34 and 1/2 hours a week. Now. Most of us don't don't don't understand that what that data shows that that's because we think of a full Work Week being 40 or more hours a week where is there but they're really many people in society who do not work a 40 hour week. They work a part-time week we call part-time what are our grandmothers and grandfathers who work 60 hours weekly call 40-hour Work Week part-time and before that but you go back to 1830 go find the average hourly work week was 76 and 1/2 hours away in a week from Summit sunup to sundown Plus on Sunday when the tomatoes get ripe in the couch still need milk and you got to work. So you hear a lot about people being overworked but the date of don't suggest they are now, but but but to answer the question more directly what and what we Is it at is it a situation he will people becoming more productive at work. So even though they're working fewer hours, they wind up being able to with that time buy more Goods because their productivity is being enhanced by things like the computer and other Technologies with your economy today. Does does your research take into account the the kind of jobs that people do the average individual in societies about $26,500 which is right in line with the average wage of a manufacturing worker of production and non super we did we did everything relative to a particular standard standard standard of the middle of the production non-supervisory worker because that first of all that's a middle-income American and that goes that series goes all the way back a hundred years. For example, if you go back to 1897 you pull out a Sears catalog, you'll find a 1-pound box of baking soda will cost you $0.06. And so we know a couple of guys sitting around porch will talk about the good old days when you thought it was $0.06 or a bicycle is $25.06 back in 1897. You had to work 20 minutes. 20 minutes of work today will learn you $5.34. So it's as if that box of baking soda in today's terms really is $5.34 that night at 1897 box of baking soda is equivalent to $5.34 in today's wages. Of course, we can buy for being a lesson about today the middle-income American and I think that in your what do you conclude in the new study is that the it's what the what the average American the average American can afford matters and figuring cause swole. Why do you think it's the best way to look at this number to have no date on what everybody can afford and look at the distribution, but that's a that's a study alone with required almost three years of work here and there just taking products and and trying to calculate the data. So in lieu of having everything you want to have something with the middle-income American I can afford rather than just seeing what they really don't want to be able to tell just what That's not representative of society nor do you want to be able to show it was just you know how for how well off the poor people are because most of us aren't for the day the shows it only 13. The Gate of the government says that about 13.1% of Americans now or in poverty, which I would argue with his research from Daniel slesnick at the University of Texas shows at the party rate. Probably the true poverty rate not including people who are college students who're not making much in common are showing up in the poverty statistics and not including some other people the true poverty rate. Is it really only about to 3% There are people some people poverty but not to the level we suggest that you wouldn't want to know judge the success of the American economy by the by the poorest people or bites riches by what by what the middle-income American can afford because what you see wonderful things about the American economy is that jump within the space of only two or three generations in our economy middle-income Americans and even some of the poorest Americans can afford things which were Even the robber barons of them of yesterday, for example, if you look at what the poor people in America have today this date us when the Census Bureau and its from 1994. So there's even more games for the last four years but among poor households in America those who were regarded it as in poverty by the government statistics in 1974, 72% of them had washing machines 60% of them had VCRs 92 and a half percent have color televisions half have cars 60% have microwaves. So that's a standard better than the entire population was able to afford in 1971. I guess today is Michael Cox vice president and economic advisor at the Federal Reserve Bank of Dallas. If you like to join the conversation with a question or comment, feel free to give us a call. The number in the Twin Cities is 2 to 76,000 toll-free number is one 800-242-2828, Jeff and Rosalie the first color for years that we're better off now than we've ever been and things are continue to get better and unfortunate get a lot of arguments about that. I wonder how somebody would go about getting a full copy of your report so that the doors of us who are optimists good back up our contention. I experienced the same thing. Where is probably there is a bias in the calls you get because the people who agree with you don't normally call. This is kind of a rare call and so welcome to the club here, but my wife The two ways you can get in touch with me and I'll send you things you can do all the Federal Reserve Bank of Dallas is number and here it is 214. This is my number 214-922-5150 and that'll anybody out there who want to copy this report it is it was really fun reading and get it. Just calling in that number where you can email me at WM. Cox Cox at Del Dia delas. Tal. Frb for Federal Reserve Bank. Org and we'll get you one that way if the cost of the basics and I think you look at the basics is food shelter and clothing if they're getting cheaper. Why is it why is it apparently so hard for many Americans to get them? Well, you know what? I'm not. I can't answer that because if you honestly I don't know that it is that hard. I think what it was hard out there is to try to keep up with the Joneses and what I'm serving my own family is that my daughter will come home and say so and so it's got a swimming pool and somebody else and then she'll say and then it's other family over here. They've got a new car and then this other family has going on a vacation and and so she reports me all the all the good thing all the individual good things as Neo five or six different families have and make it seem like I need to get all those things in order to keep up with the Joneses right but I'm talking about I'm talking about the low income people who you know, just they just don't have access to the to these two these things apparently and if if they're so cheap, you would think that that would that would be the case. Well wouldn't be the case. If you look at the data and then again, I think you have to look at the data and then you have to drive through some poor neighborhoods and look at what the people have as well. Oru have to visit with the with the poor people and see what they have see the lifestyles date that they have what you will see today. I know that this is not a perfect system. There is no perfect system, but we're not in heaven and in there is still have this resource allocation poem that you talk about him in an economically What You observe is that the poor people in society today? We live much much much better than they then then the the general population did say when I was born in 1950. We have no air conditioner. We had certainly very few of the amenities. I had one or two pair of clothes jeans to wear around that's about it for me and I wasn't a poor family in a middle-class family have access to nearly to the medicines that the people in society have today. We had aspirin only as a painkiller and you know, if you got sick the doctor to come to your house with the little black bag with only had it with a stethoscope in a tongue depressor today, you know people routinely visit the doctor, even the people who poor go to hospitals and then her pin they provided that's provided for by either by the Or by you know hospital to just pay for it. Just pay for my somebody out there. And like I said the kitchen to 60% have VCRs. They have 72% have one or more cars. It's just that they don't want to consumption show that the poor people today do in fact live better than they eat. In fact many of most of Europe. Alright DePaul from St.Paul your question, please. Yes. Some things are cheaper but seems to be in the shelter case. It's pretty weak argument because real estate prices in Northland bone up with much more than inflation for many decades and a very important point, which is probably the one with the Cox is missing is that we're getting less from a typical neighborhood. My parents house is an example has gone way up more than inflation on the one hand but the neighborhood is much worse when I was a child are we can go around with no notifications. Basically, no problems. No crime in his neighborhood when we could go around, you know at night and so on now, it's completely opposite arm Camp there in the quality of life is much much worth the price is a way higher much higher than inflation over there over the time and the question is a very good question. If you look carefully at the good look at the first part and that's the part about housing prices going up faster than the generated inflation. That is true. And I thought what the what do you say about that? Well, if you look at the let's look at what has happened with our house today is not the same as the house that we had back seats 1956 compared to a house between 1956 and 1996 people long for the 1950s think it was so great the median house the medium size of a new house being built in 1956 was 1150 square feet. the median house price of a new house being built today 1997 2000 square feet to the house is bigger. He comes equipped with central heat and air 81% of them have central heat and air as compared to only 6% in 1956. They come with ranges in them already is the part of the price you pay is whereas 1956 only 1% Did they come with dishwasher that come with microwaves garage door openers for bathrooms of a bigger garage and only have two houses back then they even have garages today to the median house has two door to the garage for two cars. So they don't wanna per square foot faces. They are cheaper. In fact, it's going down by 10 15% per square foot in in terms of work hours how long you have to work in order to afford a square foot in a dwelling a better dwelling with rugs and all that? Now that's that's one of the questions about crime. That seems to me to be where we need to to to spend her greatest resources over the next few years is eliminating front. We have become wealthy as a nation. We've got when this country was started in 1776 the average American in today's dollars had an income level of $1,300 today. It's 2726 thousand. So we have 21 times as much real income as we did it we've got plenty of stuff don't speak more than enough to give thanks over to be grateful for but we need to where we need to spend. Our resources is getting getting crime out of our neighborhoods and I completely agree with The Cauldron that what I want to follow up one of the houses in shelters in their Specialties durable goods, you mentioned stoves and refrigerators. What's what's happened to the price of things like that. Will enter your under your remodel I think the most I can take you back to you know, when the when the things were first invented or I can take you back saying the 1970s. Let me just summarize that you go back to 1966 were invented. You'll find out you'll find it product by product. We're paying only a tiny fraction of what we were at least over a dishwasher refrigerator clothes washer were there in the first refrigerator freak sample sold in 1916 electric refrigerator. It was manufactured in an old organ Factory in Detroit and it was inflated with Steve ledin head only 9 cubic feet of storage. It was $800 of the day. And that was the equivalent of almost thirty to work hours today. You can buy one for 68 hours of work. 3200 and that's only about a week and a half workout next refrigerator. But the most interesting comparisons people think a lot of people seem to think that America peeked in about 1970. That was a Apex. Prosperity living going downhill since then, but let's just let me just give you some statistics hear an electric stove only cost cost less than one-fifth of the work hours at did in 1976 about 22 hours of work a dishwasher less than half a refrigerator half the clothes washer only about thirty-five only about a third of what it did in 1970 in a clothes dryer about half a couple me one more product color television today to buy a color television with remote control closed caption in a nice picture clearer picture takes only 15% the work hours that it did when I bought my first one and let you know I got to go to school in Baldwin around 1970 Sony printer on an RCA. Colortrak or something those those were about six and a half times as expensive to have today's color televisions and not as good. Take another call a John in Monticello. Go ahead, please thank you. I may be going back a little bit further than you want to go back. But I grew up during the Depression. And in those days we didn't have any sales tax here in Minnesota and income taxes. Totally negligible. I understand now that the average taxpayer Works through probably met to pay his taxes, which totally which reduces to a great extent of his disposable income is that taken into account in your calculations. If you go back to the store to the century the total income tax Americans were paying with only about 9% of our of our income today on the cross state and local and federal and everything. It's more of these between 35 and 40% But I don't know turned out by the way that the top 10% don't want people to know this if they don't already the top 10% of American Income earners pay 48% of all income taxes. So are the tax burden Tim 10th, July not on the worker that we have in this study who was in the Pooh the middle-income manufacturing worker making $13.18 an hour a day. The type of work does phone that person turns out in our study? We we looked at that person. We found that in 1950. They were make about the tax burden for a middle-income work with about 5% of income rest today. It is going up to 21% now, why did we not subtract taxes from wages and have an induced things in after tax dollars. The reason is because we also did not include benefits and ended in addition to the wages people learn today benefits as a percentage of wages and 1953 were 19% Today, it's up to 44% on average in America for every dollar you earn your employer contributes another $0.44 somewhere to a pot for you and let you know medical benefits health benefits pension retirement insurance and other kinds of things employee Wellness plans and so we didn't subtract taxes, but we also didn't have benefits in the benefits more than make up for the taxes. Immature. You conclude that the most things are getting cheaper are cheaper now than they were before but there are two exceptions one Higher Education and the other Medical Care. Why is that? Well, I think first of all higher education. I mean, I'm a professor at SMU. Okay. I know I've been a professor for different universities. I'm also on my manager job. My main job here is with the FED is economic advisor, but I'm continue to teach no talk for about 20 years. Why is it called education becoming more expensive in real terms with two reasons? Probably one is because the education seems to be worth more on the market relative to a high school degree than it used to be a high school. Degree doesn't net you a very high salary relative to a college degree problem because of me, you know much as being learned once a month but much as being learned once you get out of the public education system in you get into University. It turns out today that a college graduate earns about $17,000 a year more than high school graduates on average and that's about $7,000 more than in real dollars that the that the Call Greg Hearn back in 1979 it since 1979. The price of a college education is about double the annual fees that you have about double but the value of the education is going up a lot to turns up enough to where you are on about $300,000 more in life time today. Then having a college degree. Then you would if you had a high school degree. So far is do the fat part of the increased cost of education's due to the fact that it's worth more. But the other part time I've used simply due to the fact that we have a tenure system and we have a system where this is going to be a funeral unpop to say this but this is my opinion that nothing's really not that of the feds. But but what you have is a system where the best teachers cannot be allowed to teach many many students and we have a bit of a non-market provision of of of a resource hear education in this area. Anytime you put up. Block between the consumer and a producer with the which is what we've done some degree in education. But also in medicine we we've gone from an environment where there was the doctor in the patient to an environment. What is the doctor-patient and somebody between the two which is a third-party payee and that takes the efficiency of the system and raising the price. Going to work, but we bring with we be regulated Trucking banking phone systems directly regulated now electricity. We we kind of regulated to some degree medicine In this River. Take another call I Kevin to Minneapolis. Go ahead please good morning. I have to question the first I was wondering if your study compared American to earning power with that with people in other countries. Realized in developing countries. And then also I was wondering if your studies difference in Generations between the World War II and the baby boom generation. It seems like the Baby Boomers been an awful lot of time feeling sorry for themselves and complaining and feeling insecure that they'll never have enough money and I'm wondering if I know a lot of them are abandoning easier Lifestyles. It's a movement called simplify your life and if they aren't yearning for a richer spiritual at work and community life that and that's what they're really feeling the pinch on that. They don't realize it even though the hell out of well, there's something missing in Vegas that spiritual community. Life that was a Joy by their parents. Let me go back to the beginning does not compare us could to foreign countries there are but you can find that data on www.oecu.org where they show you the purchasing power parity adjusted values of Americans income compared to that people all over the world, but you'll find it there income level comprable dollars is much higher than everybody in the rest of the world with the exception of I believe luxembourgish has it makes the average income make a couple average person that makes a couple thousand dollars more income than do American, but we're doing better than Japan and German the all the other places with people normally say you're beating us. We're still way ahead of the rest of the world now, but the interesting part what is the most fascinating part of the question has to do with what makes people happy and even though I'm saying you're the United States and material X is much better off than we used to I'm not saying therefore you should be happy what makes people happy. I don't really know but I do know them my own life. It doesn't tend to be a lot of consumption. I mean, you know, there's an old saying that wealth is found not in having many possessions, but in having few wants it and what it means to be happy and what's what is found is generally they put the jelly find is the Grateful people are happy people and it is always you know, what I've been doing these studies on Americans living standards for 5 or 6 years and it really gotten almost sucked into this and drafted into this body by the by the interest on this subject out there and doing so up at thousands of people who You were searching for you know happiness in it and then and honestly speaking what it takes to make a person happy probably is not Material good with the spiritual kind of things that you're talkin about having friendships life love beauty and food. I guess today is Michael Cox. He is vice president and economic advisor at the Federal Reserve Bank of Dallas and we will continue our discussion in just a moment. I'm learning Benson on the next all things considered a local comedian who will perform in a major Canadian Festival this week shares the secret of her success, you know, I work I still work a 40 Hour Week waitressing. So if you're in my section be careful at 3 on Minnesota Public Radio 91.1 in the Twin Cities. Henna reminder coming up at noon today is part of our midday broadcast a City Club of Cleveland speech on juvenile crime can't Marcus is the top justice department official on juvenile crime and his counselor to the Attorney General of Youth violence his speech coming up shortly after noon right here on midday business and economic reporting is supported by the law firm of Larkin Hoffman Daley and Lindgren providing solutions for today's legal problems shandwick providing strategic public relations Council and Pentair a diversified company building shareholder value through focused industrial growth quick check on our weather forecast today. We have some Mo occasional showers and thunderstorms already in parts of southern Minnesota today. They will continue through the mid-afternoon hours. Otherwise, it should be probably mostly cloudy and less humid high temperatures today lower 70s to the middle 80s for the Twin Cities today partly sunny around 85 partly cloudy tonight. Hello near 60 tomorrow partly cloudy with a high near At last report Fargo-Moorhead sunny and 73 Saint Cloud partly sunny and 73 Rochester cloudy and 71 in the Twin Cities. The skies are Cloudy and the temperature is 74°. The time is 25 minutes before 12 noon. This is midday on Minnesota Public Radio. I'm very fenoli City in today for Gary. Eichten Our Guest is Michael Cox vice president and he cannot make advisor at the Federal Reserve Bank of Dallas. If you'd like to join the discussion, feel free to give us a call at 227-6000 and the Twin Cities to 276 thousand a toll-free number is one 800-242-2828 Mr. Cocker Cox. I want to ask you about what might be raising conclusions in your study. And that is a defensive the the the uneven income distribution the the fact that the wealthy play on the economy and you actually support that quite a bit. You mean by that how many times have you think your readers any of your calls? I mean listeners have have said to themselves or something or somebody I'm waiting to the price comes down before I buy one. I said it on mini plug that says it on the computer recently for my two college kids. I can't wait until the price comes down so I could afford one for them. And now I'm waiting for the price comes down even more so I can upgrade mine. I'm going to get down to $500. I'll probably upgrade my computer right now. The identity TVs are coming up around 7 to $12,000 and I'm saying again, I'm waiting for the price comes down before I buy one, it would say this but if there wasn't such a wide Gap in income wouldn't the price for these these products not be so high in the first place. It wouldn't even exist because most people who most Pinot venture capitalist or people who start a business or thinking about supplying a new product don't say Hey, you know, I'm thinking about bringing cell phones into the America. Economy, and I'm going to go get my money back over 60 year. Or 30 year. They want their money back and they want your money back in three or four or five years until they what they do is they charge high prices at first knowing full. Well that some people out there can pay it and that the price will come down. But at least they'll recover their investment. They're fixed cost, you know, not to have too much hanging out there. So what happened? What happens is that flight to do start off hide you take for example a 3-minute Coast-to-Coast phone call but its first available from San Francisco to New York San Francisco in 1915. It was equivalent. It was because $20.70 wages of the day that was the equivalent of 90 hours of work two and a half weeks of work roughly two weeks to work in order to be able to talk on the phone long distance for 3 minutes of course of manufacturing worker couldn't afford that couldn't play 90 hours a week for that. But yet the phone call did I fell and AT&T? Cover their investment and it's sold of court to society's wealthiest people who may have wanted to show off but they have the money to do it. And so what happens is it the wealthiest people in society pays play the fixed cost of bringing Goods to market. The rest of us just say I'm waiting for the price comes down before I buy one and we get it we get the back of his like it's as if we get in the back of a long line people queue up for the product and at the front of the line of the people who who either haven't had the most money or one at the most and they might buy the product when it's new and when it's really not very good yet. And the rest of us eventually gets served was not like we don't get the stuff. We don't get the stuff but everybody talks on the phone now for ten cents a minute, you know, so we all get the stuff. We just get it and I'll get a better version of it the people in the back of the line someone later. All right. Mikey died at your question or comment, please. Trying to figure out how if a stove cost 1/5 of what it did 1970. You know, what does that mean that you know, our manufacturing efficiency has increased fivefold or you know, where does the savings come from there? I'm trying to figure that one out there two ways that we could Goods in the lower of hourly wage rate over time. Take me for example, are you so your name is Mike right? That's right to probe the time you on the job become more efficient at your job. It's makes you know, which makes you being able to have more income and then the product the other people out there become more efficient at their job and then sell the product to go there is to do they produce that you go to buy are also cheaper. So we are all innocent and it to see this is a really really fascinating things about the American, even if you didn't get more productive over time, You would still be able to buy more with your income because everybody else would get more productive over time becomes more productive over time. Everybody's out there and doing so trying to make themselves wealthy, but the way to do that is course that deliver a better product at a lower cost and this is the way to wealth and it's so even if you know you had this a fixed income of real income there would be a boon of American society name with everybody else is hardworking and productivity gains. So it's a double-edged sword. Take another call Roy and South Dakota. Go ahead please for 25 years and he depended upon him working with the farmer's Inn in Dakota and or the 25 years the commodity the farm Commodities that they've been selling in 25 years. In fact right now, they are lower now than they were 25 years ago. That's right. And although there's there's a lot of things with the genetics of mechanization. They can Farm or those those type of things that they both can see what get larger you can make it if you no more volume, but I think that thing has kind of finally cornered them. There's only so many hours in the day and lot of Agriculture has a very timing type thing there seems to be a real crisis in in this particular area know. How do we look at this whole picture? That's a good question Roy and what? Definitely find in societies with overtime the rate of exchange between Commodities and human labor has decreased the amount of human labor by it's going down down down overtime rate of exchange between Commodities and other Goods in society Society has been been falling including even such things as gasoline for I would not want to be a person who's filling gasoline and oil today take for example of gallon of gasoline back in that 1920a gallon of gasoline would trade for about a half hour's worth of somebody's work. So if you were selling gas, you can try to guess and by you know by labor for 4 and 1/2 hours somebody's labor with what you could build it do anything you want today. If you've stolen gasoline you only get only command about seven minutes of persons were other reason that is because the Commodities are becoming more and more abundant as we get better and better producing them and the labor is become. One more deer and it is becoming better educated and it is a scarce resource now and look at the unemployment rate of 4.3 4.5% of that range. People are the scarce resource and despite the fact that Commodities near theoretically exist in limited quantities. We have not met them out Susie and dismal scenario of of having the Commodities in the world not being able to keep up with more than kept up. So I'm I mean the long-term lesson of nature is that labor will become more value and commodities will become less. I wouldn't really want to be in the market selling commodities cuz like you said Roy you're going to have to get better and better at doing it in or just just to keep up with the effect of a global trading prices. Well, do you think has been to keep them down? I mean especially put in global trade of all types has been I mean global trade not in just in Commodities, but in labor services, for example, right now, we we have a phenomenal going on because of the way the world is evolve towards being more information or unit, and it's easier to pass information along back and forth between companies and download stuff from internet and email right now. A lot of work can be or somewhere can can be and is being packaged up and transported across the sea to India free sample of suppose you working for? Insurance company in Hartford, Connecticut, and you just got more papers the process and cleans the process than you can possibly do when you can't find a people to do it. What were you can do with bundle it up and send it to an English-speaking countries. They've been pulled over put it in the email and attach a file to it and put it over email it to Bhopal India and have them sort it all out and cleaned it up and send it back to you so that the effect of that kind of trade printing services in particular now is because holding prices down and allowing us to have these good thing for pretty pretty low prices 1.3 billion people in China who now want to want to play the Capitals game and that's going to help hold prices down for quite a while go to bike in Roseville like to say that I too am an optimist. It is fairly rare to find that and I do get in arguments regarding that but with that Utilitarian perspective. Yes, there are more Goods available in certain way VCRs were not available 30 years ago, but they are here today. However, there are so many more additional goods and services that seem required to meet the the basic or fundamental standard of living these days has that outpaced it real dollars, is that increased or decreased over recent decades the ability to in real dollars to meet that median standard and I think Mike like this before which I think it is focusing at focusing to think of what you're saying is that What seems to be the list of our needs and wants on that list there seems to be a lot more needs to pay than there used to be and within so many more needs that we have more stuff, but we need more stuff and with an amount of stuff that we need seems to be going up faster than our economy is dinner only incomes ability to afford these needs. Is that what you're asking your question? A good friend of mine who I graduated from from Tulane University with before I got my doctorate was in town the other day and said to me something really I think we would just Bears repeating to others and that's it. Whatever you let your wants. Become your needs. some Freedom Is Lost And most of us do that we let what used to be something. We would that we wanted it. So forgot it. We were happy because we wanted it and we were satisfying a want not a need wasn't expected more than we bargained for whatever we want to look at. The neat would have to have to have it. Then no longer does having it make you feel better off if it's expected. So I would I would really hurt people too soon to say I want these are my knees. My knees are food clothing shelter some furniture, but don't draw your lawn too much further down over time. If you're listed in the list of needs and wants. Draw the line too far down is that the needs line too far down? British band sings don't buy it and see what happens. If you'll be my find more peace and happiness. That way this bus saving money. I find peace and happiness by having some money in the bank, which will I know I don't have to spend like a I think I said earlier. Kevin when he called early was talking about the baby boom generation feel sorry for itself, perhaps they would do if they would just say no to some of these things is in and they do they have identified themselves. It seems to me instead of the me generation being the war with me generation. Deal for Rochester. Go ahead, please I'm not familiar with your guests work and I haven't heard the program from the beginning nonetheless. I'll stick my neck out and ask a question. I heard him say that that that the disparity of wealth is a good thing because the the wealthier people in the society by the new products and then the and repay this is the entrepreneur for for developing it and then the price comes down so that the rest of us can afford it. I guess my question then is is with your guess promote or be in favor of social policy like or the other side. Decreasing or eliminating things like capital gains for the upper, you know, 10 or 20% income bracket or or reducing taxes or things like that just to drive based on what he said to drive. Technology and and development further and better. Mr.cox does lifts all boats and and if we can do things to make the general level of production and economic activity go up in the economy. Generally speaking. What you'll observe is it it does it does get get to all level II. I'm not a fan of double and triple and quadruple taxation personally. He seems to me they want you earn income. If you know if we do have to public doesn't need to be provided in the way that you can't just have forehead taxes because you exist with generally speaking you pretty much have to go long and tax folks according to income that seems that he has decided that that seems fair but after you but after that tax thing of the interest earnings on savings and then we're taking the capital gain or taxi in the money that did you try again with inheritance. That's a triple taxation taxation levels can get to be double and quadrupling. If you type whatever you talk to tend to destroy When the Thought he's always needed to find ways of taxing things back a couple hundred three or four years ago in England. They would talk to people who have Windows because if you're welcome up to have Windows you would done. You will have to pay taxes will people with black in their window. They blow their text me text up people's having two doors in your house. So people. Having closets and that's what we got. All these armoires and wardrobes from for the people have to have a door to the closet one of these whatever you text him to go away and since we do tax income we leave work Bruce's the production of income which we get to Spread spread among Society. So I think we have to be very careful about the degree to which we we packed cuz it's it's worth putting people at taxes, but people at war with one another just like a tariff a tax a tax is a double-barrel tariff on trade between individual and I know it to get tax rate gets too high. I'll just do it the most I just do stuff myself. I'll paint my own house do my own plumbing and you find a lot of that in Sweden where the tide for Edisto high. This has been the average number of hours that a man spins in and activities around the houses over there is double than what it is in America. Treehouse we have just a few minutes left. So I want to ask you one final question and that would be if whether you think that the prices will continue to a to decrease and we with all the technology we've talked about in the fast-changing. We're in do you think that will continue or do you think that might go the other way at some point for most everything what you will find generally speaking is the product that have been around the longest will not experience the biggest price decline because they worked out most of their their their games early on but the newest product will be the one to where you see the biggest price the client, but that's the way it always is something comes into being it starts off very high Falls the third fastest it first and then continues to fall but at a slower rate so for the new products like you knows it's like I said earlier, I didn't the television some of the medicines that are coming out viagra pills or whatever they're starting off more expensive, but then they will get paid and and the companies will do the companies will lose their This is Luther between 7 or so your patent in the competition will enter the market and it would become a tough race and I will release get down to some low-level to prices for 4. I think so too high now he was squeezing one more call apollon Owatonna. Go ahead. Please made it a 550 to 600 billion dollars a year. What is your thoughts or comments on that explosion legalized gambling and how that relates to our economy of a wealthy Nation along with all the other things that are so what you're pretty far down are a list of needs and one at the top, of course at the food clothing and shelter, but then you got to keep on going we've gone so far down that list that we got pet psychiatrist. Now we have pet orthodontist to fix the people with teeth dog's teeth of Gopher game show dog. We got you can turn on the TV at night and get a psychic not have no fakes like it but a real one, you know, you can give me the entertainment industry is booming people spend a double as a fraction of their budgets been twice the amount of money on entertainment today that they do in the 1970s. We've plate on a 1982 since 1983. We've got a hundred and one different sports. We play in America. Now, I just baseball and football and hockey and tennis and soccer and golf until 1 anymore and we got so it's not a wealthy Nation we have to get there but too. Thanks so much for joining us today, Michael Cox his vice president and he cannot make advisor at the Federal Reserve Bank of Dallas said his new report is called time. Well spent the declining Real Cost of Living in America that report is available on the web. You can reach it at www.dallascad.org and we should also mention that will be rebroadcast last conversation with Michael Cox tonight at 9. So thanks to all of you who called in during this hour and stay tuned shortly after news headlines in The Writer's Almanac. We will hear a speech from Kent Marcus a top justice department official on juvenile crime. I'm Ray Suarez former Puerto Rican Governor Louisville has been an outspoken proponent of statehood for decades. We have become a new culture and today we speak Spanish, but we think I marry in part 1 of a three-part series will look at Puerto Rico's political status a century after us occupation on the next Talk of the Nation from NPR news and you can hear Talk of the Nation this afternoon at 1 here on Minnesota Public Radio.