There’s an e-mail going around with some excerpts out of the 1934 Montgomery Wards Christmas catalog. It’s always fun to see what things used to cost less than a lifetime ago. A pair of shoes for two bucks, dress shirts for seventy-five cents, bras for a quarter apiece; heck, Wards would sell you all the materials needed to build a six room house for $558! Times change, we have Wal-marts instead of Montgomery Ward, a good pair of shoes can easily cost you over a hundred dollars, and your kid’s Christmas presents will probably cost more than that house did back then. It’s one of those facts of life we seldom question, prices go up. Temporary price hikes due to market factors are easy enough to understand, yeah, supply and demand… but why has basically everything in the economy just steadily risen approximately 10,000 percent in eighty years? Of course the main explanation is that we made money.
When I say that we made money, I don’t mean that we earned money. I’m saying we created it, printed it; like God, we called it into being from nothing. From 1937 to 1971 the US money supply doubled, from 1971 to 2005 it increased by 13 times, and since then it really started growing in earnest.
Okay, okay, I’m not going to go off on a Ron Paul style rant on the gold standard and the Federal Reserve. Understand though, that putting money into the economy naturally leads to inflation, and of course that hurts the poor the most. Everybody ends up with more money that is worth less. “Figures don’t lie, but liars figure”, and multiplying the money supply provides many opportunities for creative math. If you had two employees one earning $100,000 a year and the other $10,000, and you doubled both their pay; some would say that was fair and equal treatment, while others would point out that the higher paid employee received 90% of the pay increase.
Much is made of the increasing income disparity between the haves and the have-nots. Generally speaking, the insinuation usually seems to be that the rich are taking an ever larger share of the ever increasing pie, leaving an ever shrinking share for the rest of us. Since the beginning of the war on poverty, the disparity has only increased. Poverty is relative, and some of what is considered poverty in our country, would be considered living high on the hog in some third world nations. There is true poverty even in our country, but we do the truly impoverished no favors in exaggerating the plight of the poor. The “War on Poverty” has been nominally successful in that, thanks to food stamps, welfare and other benefits, the destitute can often live somewhat comfortably and have their children adequately fed and medically taken care of. In some regards though, this success has spawned a failure, and there are whole segments of the population that consider living on public assistance their lot in life. It’s not by any means a good life, but neither is it sufficiently bad to drive us to look for a better way. We have created a caste system whereby the poorest among us are permitted the scraps from the table, and maybe we argue over how many scraps they should be allowed, yet few seem concerned with how to move them toward owning their own table. “Give a man a fish, and you’ve fed him for a day; teach a man to fish…”. We sometimes seem content to just give the man a fish; but in not finding a way to “teach him to fish”, we rob a vital part of his humanity, and our charity becomes the shackles that keeps him in his place.
IMHO: As the Fed continues to create money, it should not surprise us that most of this new money ends up in the hands of those who already have more than enough, but also have the pull to corrupt politicians, pay lawyers and accountants, and buy influence. Is Capitalism to blame? We seem to increasingly imbue inanimate articles with spiritual values. Capitalism is not inherently evil, nor is Socialism by the way; but both can fail with the failings of men. When virtue is considered quaint, vices accepted and even admired, crudeness commonplace, cheating and lying expected… then no set of laws or economic system can give us justice. Forgiveness is one thing, but we can’t be the blind leading the blind. We have leaders that lie to us, enrich themselves through corruption, cheat on their wives… and we re-elect them! We seem to no longer have any standards at all. We fully expect our politicians to be very bad people, and we’re ok with that as long as our side wins. At our present trajectory our greed will preclude economic justice in our Capitalist system, and our sloth will ensure the predictable failure of any Socialist one. The greatness of America has always been dependent upon her goodness, today is no different. We must do better, expect better, be a better people, demand better leaders. Virtue and hard work will bring prosperity as it always has… you can’t tax or print enough money to buy that.
Although I have never given it a thought that Socialism could actually work, I would have to assume that it would take even more character and individual morals than Capitalism to be successful. If we have lost enough values to allow Capitalism to show it’s undesirable faults one could only imagine the pain and failure of the other, perhaps tenfold. Money can’t buy you love just like you can’t legislate morality. The removal of values and principles in our schools, should I dare say religion, has created a society or an environment that would destroy any “ism” man could think of! Back to the basics?
@tjtes: I agree. There are examples of voluntary communal groups that pool their resources and distribute them as any have need, most notably in the early church. It does seem to be a more difficult system to maintain without a heavy handed government because of the nature of man. This is something the early colonists learned as men were unmotivated to work if not permitted to keep the fruits of their labor, and if by not working they could still enjoy the fruits of someone else’s labor. But while Capitalism may allow more for the reality of the nature of Man, if that nature becomes a corrupt one, true, no “ism” is sufficient to overcome a fallen society.
“We seem to be ok with that as long as our side wins.” That sums up the increased corruption we see in our government. Our state is the pin-up poster for evil and corruption in high places. I will be willing to bet that you can’t find one non-corrupt official in the entire state.
@AJ: Absolutely right. Like so much about New York, our government has become an embarrassment. You’re more likely to lose your elected office by being arrested in NY than to be voted out. Where are our standards. We’re looking at Anthony Weiner again? And Spitzer thinks he has a shot! Republicans are just as bad in other states… looks like we’re up for a Mark Sanford redux. I’m not saying that a humbled and contrite transgressor might not occasionally merit a second chance, but these guys just seem to have realized that the voters will let almost anything fly. Is this really the best we can do?