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L. Neil Smith's
Number 527, July 12, 2009

"Robert McNamara— It is good that he died."

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Real Inflation
by A.X. Perez

Attribute to The Libertarian Enterprise

Mr. Jim Davidson lately stated that we paid for the Vietnam war with inflation. While there were other issues that contributed to the 1970's inflationary cycle the fact is we are relatively poorer now than then.

to illustrate my point I will use the enemies' own stat, the minimum wage. Minimum wage laws are ostensibly intended to prevent jerk bosses from cheating their employees out of fair wages. What they really are is feel good legislation allowing the liberals who vote for them to prove they are doing something for the poor and conservatives who vote for them to prove they're not so heartless after all.

In 1970-1973 an hour's pay minimum wage ($1.65) would buy you a new paperback, a pack of cigarettes and a cup of coffee. Alternatively, it would buy you between four and five gallons of regular gasoline. Nowadays the same hour's work (at the rate about to kick in of $7.25) will pay for the cigarettes maybe and buy some two and three quarters gallons of gasoline.

As far as I can figure to have kept up with inflation minimum wage would have to be between fourteen and twenty bucks an hour. I understand these are considered pretty good pay for established workers, not minimum wage newbies.

The real inflation is the increase in how many minutes and hours of work it costs you to buy anything. Minimum wage has been increased by between four and a half and five times since 1970 (and we got rid of Johnson's surtax to boot), wages for all except corporate CEO's and "rock star" level celebrities maybe six times. The problem is that the prices of most goods and services have risen between six and fifteen times. Some of this was that certain items ( crude oil and petroleum products, for example) were underpriced and their price rose, especially when the demand rose faster than the supply. Some have been subjected to incredible excise taxes. And the switch from regular jamoke to gourmet lattes didn't help.

The bottom line is that our labor, which is the main thing most of us have to sell to get by, is getting a relatively lower price, usually as a result of the common people, not the corporate bosses and government misleaders, having to pay the price for said bosses errors.

This is not a plea for starting the Red Revolution, rather a point of criticism of the failure of the current Statist system, including the faux free enterprise system we are under right now. Eliminating taxes and thus putting more of our money back in our pockets would help. Reducing (preferably to zero) the ability of aspiring tyrants to hide behind the power of the state in manners that create inflation would go a long way to this end.

BTW do not write and comment that I am a bad person for using the minimum wage as my base statistic. It was a handy useful stat to use to establish a baseline to compare the earnings of people in 1970 to what people earn in 2009. If you have other stats feel free to plug them in and compare the price of gasoline, ammo, coffee, smokes, housing, clothing and whatever else you wish to put in your shopping basket in hours labor, not money, it cost you to buy them.

The difference is the cost of submitting, voluntarily or not, knowingly or not, to tyranny.


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