While I'm no longer fretting about deflation, all this progress doesn't come without pain -- much of it concentrated in Silicon Valley.

Big price reductions, also happening in electronics sold to business, are forcing huge changes in the high-tech economy.

Hewlett-Packard and Compaq Computer merged last year in part because declining computer prices made it difficult for the two companies to compete separately against rival Dell. Tens of thousands of HP and Compaq workers lost their jobs as a result.

Sun Microsystems is struggling, and also tossing aside employees, because its core market for Internet servers is under attack from much cheaper boxes based on the same technology as low-cost PCs.

Mom-and-pop computer retailers, who often provided the best and most knowledgeable customer service, are long gone. The profit margins are now too thin to support anything other than gigantic retail chains hiring poorly paid workers who often aren't educated on the products they sell.

These setbacks, however, are probably unavoidable -- the price we pay for low prices.