We visited the Pabst Mansion in Milwaukee on our way to Oshkosh. It was completed in 1892 at a cost of $250,000 for 20,000 square feet. Although we are informed that we live in an inflation-free society today, thanks to the efforts of our wise political leaders in Washington, D.C., the $250,000 back then is roughly equivalent to $8.6 million now (the official BLS calculator goes back only to 1913). So that would be $430 per square foot for a house built in two years.
Rich people had a lot of friends back then…
It was a great tour, but I didn’t learn why Pabst went from the world’s largest brewer to being a niche supplier. They didn’t advertise their allegiance to the Rainbow Flag Religion (Bud Light never recovered). Wikipedia says “Pabst’s sales reached a peak of 15.6 million US barrels (1.86 billion litres) in 1978 before they entered into a steep decline”. Today, the company is headquartered in Texas and the brewing is done by contractors.
It’s not the inflation of mortgage backed property which pays off the national debt, but the immigrants who assume the inflated mortgage debt & work it off on our behalf.
On the plus side, flying from Milwaukee to Miami in 1892 was impossible, or in other words infinitely expensive. So, air travel costs have dropped significantly, whether you adjust for inflation or not.
Bruin: I think that the big changes were the railroad, which enabled national markets as well as fast comfortable personal transportation, and the telegraph (the “Victorian Internet” as a book title reminds us). Airplanes eventually became a significant improvement over the railroad, but the big leap was from stagecoach to railroad.
Railroad era was preceded by canal era, in North East and Mid West. Automobile eliminated stagecoach.
FYI, the reason Pabst went into nearly terminal decline beginning in the 1970s was…Anheuser-Busch. In the days when they were actually a profit-maximizing beer company rather than a trans-gender, non-binary, reverse cis-gender proselytizer non-profit.
Bud crushed all large brands existing in the 1970s with the exception of Miller and Coors.
Rockefeller recognized that it wasn’t the oil that was the driver of value but the rail transportation of that oil. Another brilliant insight that is obvious in hindsight.
The cost of building homes is a factor (thanks to over regulation and union for driving up cost) that locks out folks from owning a home. The other real killer is the ratio between income and home prices “Charted: U.S. Median House Prices vs. Income” [1]. And if that’s not enough, you have student loan depth (thanks to our leaders subsidizing higher education) folks have to deal with.
It used to possible for a family of 4 to buy a house and own a car based on 1 house hold income and to do so when they are still in their 30’s. Those days are long gone and are not coming back.
[1] https://www.visualcapitalist.com/median-house-prices-vs-income-us/