Nostalgia ain't necessarily so.

       As I have often said, (quoting Mark Twain) there are three kinds of lies:  lies, damned lies, and statistics. A friend recently sent me a series of photos, the lot of which were labeled “nostalgic.”  Nostalgia is typically characterized as "A sentimentality for the past, typically for a period or place with happy personal associations." The picture below was the first in the series.

        One’s first impulse might well be to say, “Boy those were the good old days. Gas sure was a lot cheaper, then.” That would be totally incorrect. What?  How can that be?  As we tend to do when comparing prices, then and now, we tend to forget that the cost of living has also changed. The simplest tool for comparison is to simply look at the Consumer price index then and now.

       No worries, I did the math so you wouldn’t have to. The increase in the CPI from 1939 to 2019 was 17.1. That “16 cent” gallon, in today’s dollars would cost $2.72 per gallon. My local station will sell me all the gas I can use at (currently) $2.26. categorically stated, gasoline is cheaper now than it was in 1939.

       But wait, it gets worse. The average 1939 Buick got a scintillating 12 to 14 mpg. So, to get the same 28 mpg I get on my SUV, I’d need about 2 gallons. For an equivalent cost of about $5.70 per gallon for the same mileage. 

Similarly, the below pic was also shown:

            Again, things are not always as they seem. According to U.S. Census Bureau data from 2018, the latest release, the median household income was $63,179.  After taxes, this works out to about $56,000 anually. Using even this “net” figure, and assuming the 1938 number was “gross” that’s an increase over time of 32.32 times more.

         Just using a couple of these examples based on the numbers shown above, that new car in today’s dollars (using the 17.1 CPI increase in the gasoline example above) that new car adjusted only for CPI would cost about $14,500, so  it is more expensive today, but again, wait! As noted, the average family income increased by far more than the CPI, so, using the 32.3 factor, the new car costs a weighted $27,778. Which isn’t far off from reality. This of course doesn’t even address the light years of improvement and the increased mileage of the car.  

        Today, similarly, using the average income increase, that 25 cent movie ticket costs $8.06, not that far off.  Using just the 17.1 CPI increase, the 3 cent stamp costs 51 cents, but using the income increase figure, to be equivalent to the 1938 three cent figure a stamp ought to cost more than 96 cents. The 1938 gas price is simply incorrect. It’s half of the real 1938 national “price at the pump figure” of 20 cents per gallon.

        As with so many of these memes, the figure one uses is the “per capita” income. This of course ignores the fact that cars and such other commodities are usually bought by households, not individuals. For example, that “average household income”, divided among two parents and two children amounts to a per capita figure of $14,000, which is, at best, misleading.

        The “food” figures are, likewise fairly deceptive I’ll do the 1938 figure in today’s dollars, adjusted only for the CPI increase to 2019. In plain language the 2019 numbers are what the price would be simply due to inflation.

                1938   2019 (with CPI increase)  actual price  

Quart of Milk: 50 cents      $8.50                       $3.27

Sugar 10 lbs. 59 cents      $10.08                     $6.47

Coffee 1 lb     39 cents      $6.67                       $6-7 

Bacon 1 lb     32 cents      $5.47                       $5.50

Eggs 1 doz     18 cents      $3.07                      $1.29

        Obviously, while coffee and bacon are about where they would be expected to be, based on the CPI increase, Milk, Eggs and Sugar are all significantly cheaper. This is without considering the average household income after tax increase which has exceeded the CPI.  As I said, nostalgia ain’t what it used to be.