Monday, July 7, 2014

Arithmetic: How Badly You Have Been Screwed ( )


Folks, I know people have this desire to moan about how bad this part of our country is or that, whether it be on guns, poverty, religion or whatever else pushes your buttons.

I challenge you to read and let this post sink in for a good hour today.  Do nothing else.  Find the hour, print this out or send it by email to your cellphone, read it and contemplate it.

Then choose, today and forward, whether you're going to sit for what has been done to you.

I present a simple arithmetic chart:

The data was pulled from here:

It is not my data.  It is official government data.  I did nothing other than pull it into Excel and chart it as a compound function.

Now let me explain what it shows you.

This chart shows the output per hour worked for Americans across the labor force.

It shows that today one hour of work at the end of 2013 produces 169.8% of the output that one hour of work produced in 1980.

Now stop and read that last sentence again -- very, very slowly.

Read it as many times as you have to until you understand it.

You should have 170% of the standard of living you obtained in 1980 from one hour of labor.

Let me ask: Do you?

If you did, what would you be complaining about?  The average middle-class person that could afford a house in 1980 could afford a house 70% better (not more expensive, better -- larger, with more appliances, that uses less energy, etc.)  You could buy 70% more food with an hour of labor today than you could in 1980.

Equally to the point -- note that there was no decrease in productivity at any time from 2007 to today.  In other words, what "great recession"?  You ought to be ~10% ahead of where you were in 2007.  What would there be to complain about, were this the case?

I could flip pizzas and pay for college in 1980.  I should be able to flip those same pizzas, pay for college in cash and have another 70% of the tuition, fees, books, room and board left over to buy other things. Can you?  NO, YOU CANNOT.

Look at the world in 1980 and a typical skilled and unskilled job.  Is the typical worker able to buy, with cash, 70% more than they were in 1980?  Did the typical lower-income worker need food stamps, EITC, Medicaid, etc?  Did that typical worker need a five, six, seven or ten year car loan, or was a car loan (if there was a loan at all!) for two, three or four years?

Or did they just write the check -- for a new or used car?

How come I could buy "no fault" insurance for a couple hundred dollars a year back then -- as a young driver?  Can you do that today or will the gecko bend your ass over the table for five or ten times as much?

How did that massive amount of improvement in your standard of living -- that was yours, not someone else's -- get stolen from you?

I've spent seven years explaining how it happened and why it continues. 

It does not matter how many dollars you have or are paid.  What matters is how much time you must spend working to earn a gallon of gasoline, rent, electricity or water for a month, food to feed your family and so on.  That is, what matters is how much what you have and earn buys in material goods and services.

Your purchasing power isn't stolen through "inflation" per-se.  If you are paid $20 tomorrow for an hour of work instead of $10 but the price of everything doubles you can say "inflation" was 100% (as expressed in prices) but it doesn't matter because you get paid twice as many dollars.  (Of course it matters a great deal if you saved those dollars from previous work, which is why inflation is bad and deflation is good -- but we're talking about the "Average Joe" that saves nothing.)

In short only purchasing power matters as measured by a monetary invariant -- such as an hour of work or a BTU of energy.

How much longer can this crap continue?  Are you a servant to the government today, dependent on those handouts?  Will you be tomorrow?  Do you think you can outrun this with your wits when a theft of nearly half of what should be yours in improved standard of living has already happened over the last 35 years?

Note that this improvement should happen for everyone.  A person who is dirt poor and has their standard of living improve by 70% is now probably lower middle class and self-sufficient!  Yes, the rich have even more.  So what -- so do you!

The schemes and scams concocted through monopoly games (such as in the health care and education fields) along with the continual deficit spending that destroys purchasing power is why you have not seen that 70% improvement.  It was stolen from you via the deliberate acts of our Government, including both political parties via deficit spending and permitting private banks to create ever more "dollars" via unbacked credit -- acts that are factual frauds.


The "wedge issues" that are often raised, whether they be "gay marriage", "pot smoking", "gun rights" or whatever else are a damned sideshow.  Do you really care about "gay marriage" if you are so damned poor you're living under a freeway overpass in a refrigerator box, gay or straight?  Do you really care about gun rights if you can't afford a gun no matter how little they cost because your income is insufficient to pay for food, water and a place to take a crap?

Go back and read that big, bold sentence up above again.

Read it however many times you need to until you get it.

Then decide.

Either you fix that and demand that the government enforce the law, returning to you what has been stolen, or sit down and shut up, because so long as you do not do that all of the other complaints you have are utterly immaterial to the outcome of your life and that of your children and grandchildren.


Anonymous said...

wow.... someone actually pointing out something I have been saying since 1975.the extreme inflation started after trudeau was elected and I watched as the dollar lost 100% of it's purchasing power from 1070 to 1980. it may have been more than 100%.

Anonymous said...

edit.. 1970 to 1980. for all the reasons you stated.