Why do tech bros keep misreading this cost crisis chart?

Costs of key services like healthcare and education have been consistently rising for decades, whereas other costs, like of TVs and software have been consistently decreasing. Mark Perry's so called, "Chart of the Century" highlights this cost divergence between the "red" services getting more expensive and the "blue" sectors getting cheaper and many blame government involvement for this divergence. In particular some very prominent tech bros like David Sacks, David Friedberg, Jason Calacanis, Mark Andreessen and Ben Horowitz, all seem to share the sense that it is government regulation of supply followed by government subsidies of demand that is causing the costs of the red lines to go up and therefore that it'd be possible to fix this issue by removing government interventions and letting the free market use innovative technology to bring down the costs in these sectors. In this video I explore a version of these ideas called, Cost Disease Socialism, as well as bringing in Baumol's cost disease to show how this cost divergence problem is much more complex than the tech bros make out. Indeed, the idea of Baumol and Bowen suggest that these costs arise from the interplay between a "progressive" sector that can be more easily automated compared to a "stagnant" sector that is harder to automate. And this has implications for the future of our political economies given the rise of ever more AI automation. ▬▬ Chapters ▬▬ 00:00 - Most important chart! 00:50 - What is this chart? 03:20 - Tech bro steelman 08:06 - What are they missing? 13:13 - How much is Baumol causing? 14:13 - Bitcoin as hidden wealth 15:14 - Why does this matter? 19:42 - Cost disease in the Age of AI ▬▬ Referenced reports and media clips ▬▬ Cost Disease Socialism https://www.niskanencenter.org/wp-con... David Friedberg on Chris Williamson's podcast (Apr 2026)    • Everything is About to Collapse (But Not H...   David Sacks and Jason Calacanis on the All-In Podcast (Dec 2025)    • Massive Somali Fraud in Minnesota with Nic...   Marc Andreessen and Ben Horowitz on "The Ben & Marc Show" (May 2024)    • The Future of the American Dream   Life expectancy vs health spending, 2023, Our World In Data https://ourworldindata.org/grapher/li... China’s Dark Factories: So Automated, They Don't Need Lights | WSJ    • China’s Dark Factories: So Automated, They...   Harvesting wheat - 1898 https://www.loc.gov/pictures/item/201... John Deere harvesting - 2021    • +Gain 7 Days at Wheat Harvest | John Deere   ▬▬ Music ▬▬ Song: Valence - Infinite [NCS Release] Music provided by NoCopyrightSounds Free Download/Stream: http://ncs.io/infinite Watch:    • Valence - Infinite | Future Bass | NCS - C...   ▬▬ Use of AI ▬▬ Every word of the script for this video was written by me. However, I do use AI tools in an editorial capacity to critique drafts of my script, but never to re-write any of the script. I also used AI tools to help with some research tasks and to help collate data and prepare python scripts to generate the graphs, including the animated graph. These graphs were then presented and further annotated in PowerPoint. I also, of course, use AI features embedded in other tools that I use, such as the AI voice isolation in DaVinci Resolve when editing my videos and YouTube itself uses AI for auto-dubbing the voice track into other languages that I do not speak.