Monday, June 4, 2012

A Lesson from Tom Cruise on Price Inflation

Mark Oles emails (My bold):
Quick example of inflation from watching a movie over the weekend:

In Tom Cruise's hit, Risky Business, the high school students are sitting around talking about the future. They all have a strong desire to go to an 'elite' school so that they can make big money. What hit me was their definition of 'big money'. The one male says 'I heard of so and so getting out a Harvard MBA making $40,000!'. A female jumps in, 'That's nothing, my cousin is a dermatologist and makes $60,000!"

What hit me was the $ amount. There are Ivy League MBAs and Dermatologists graduating every year, but offer them this amount of money, and they would laugh at you! Who knew in 29 years how much the Fed's actions would make a 'timeless' classic seem so out of place! Only Bernanke and the Fed could make a movie about a high school student running a brothel confusing;)

thanks for all you do,


  1. The populace, especially the young, have long become accustomed to thinking that some amount of price inflation is "normal" and is to be expected. It's just old fogies like you and me who think anything of it!

  2. Risky Business came out in 1983. I used the Inflation Calculator on the website; $40K in that year is approximately $92,400 for 2012; $60k in 1983, would be about $138,600 for 2012. Thanks Federal Reserve!

  3. If you ever catch the sci-fi film "Contact" starring Jodie Foster, a news reporter states (paraphrasing from memory here) that "the Machine" at the center of the narrative cost over 300 Billion dollars during its construction- "more than the GDP of the United States".
    This from 1997... I rewatched it last year and got a sick feeling of dark humor when I heard the breathless delivery of the seemingly staggering amount....

  4. My favorite example of this comes from MASH.
    There was an episode where Hawkeye is supposed to keep an eye on the money for everyone's wages, until payday.
    The cash gets eaten by a goat, the military police is called, and they say Hawkeye will have to pay it back after the war is over, to which he says he'll be paying off that debt for the rest of his life.

    So, what was the amount of money that could put a super-star surgeon in debt for a lifetime? Something around 10 000$ :)