The Dividend Cafe Finally Some Perfect Clarity about Inflation
Aug 15, 2025
Dive into the world of inflation as the host uncovers its complexities beyond the headlines. Learn how tariffs shape economic dynamics and observe price changes over the last 25 years across sectors like housing and healthcare. Discover the significant role of government subsidies in altering costs and the necessity of balancing money supply growth with production. Get insightful economic analyses that differentiate between price rises and monetary inflation, emphasizing the importance of understanding foundational economics over political narratives.
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25 Years Of Uneven Price Changes
- Over 25 years the blended inflation rate averaged ~2.5% annually, but price changes were highly uneven across sectors.
- Housing, health care, and higher education rose much more than many other goods which often fell in relative cost.
Wage Gains Mask Sector Pain
- Real wages grew more than prices over the 25‑year period, so average purchasing power increased.
- Yet steep rises in housing, healthcare, and college created real social and cultural access problems despite overall wage gains.
Subsidies Drive Sector Inflation
- Housing, healthcare, and higher education are uniquely impacted by federal subsidies, which correlate with their outsized price increases.
- Bahnsen argues this subsidy connection is the clearest causal explanation for those sectoral price escalations.