The real cost of living

I've been thinking about the price of things and the money it takes to buy them and I've made an obvious but as far as I can tell unrecognized connection.

It's said that the value of the U.S. dollar has been declining for years.  Go over to the Dollar Times inflation calculator (I have it bookmarked) and see for yourself.

As I've played around with it I've happened upon an interesting anomaly.  It appears that sometime around 1942 the value of the U.S. Dollar started declining steadily. This was almost a decade after FDR decided that gold was only useful for jewelry.  1942 was the first full year of the U.S. involvement in World War 2 so considering the economy was on a wartime footing it makes sense that the consumer economy was going to take a hit.  That's what happens when you actually try to pay for the wars you engage in.

What's strange is that it's a trend that's never stopped.  It leveled off for awhile during the "Great Recession of 2008" but continued its decline shortly after.  Most economists will tell you the only reason it didn't plunge further was due to government intervention and a lack of economic activity in general.

Look, economic babble aside, the  truth is that your buying power is continuously eroded over time and there's nothing you can do about it.

Regardless of your political affiliation or whether you care that the money in your pocket has been based on little more than good intentions (Fiat currency) for the past 4 decades the problem is self evident.   With apologies to Thomas Jefferson, the "rights " held self-evident have been little more than political marketing for the past century.

After all, even if it's worth less, it just feels good to have a million of something even if it only has the buying power of your kid's lunch money in a few years.

So if our money is worthless, why do we accept the excuse for higher prices being higher costs of production? 

Does that sound like a stupid question?  Then you're probably a stupid person. 

Sorry, but you were probably already chewing on the arm of your chair by now anyway...

What's really stupid is that we accept the fact that our money is worth less which naturally makes things cost more but don't give a second thought to how badly we're getting ripped off.

Let's go back to our Inflation calculator and stick in some numbers.  Say $40,000 which was a decent salary in 1985.  In fact it was a great salary and in 2013 dollars you could buy $87,217 worth of stuff. 

In little more than a generation our money has lost more than half its buying power.  Yet our wages are still based on those same 1985 numbers.  Somewhere, somebody in HR or accounting thinks that $40,000 will still let you buy a house, feed your family and save a few bucks for a rainy day.

It's perfectly acceptable to raise prices to compensate for a currency with declining value. It's only fair to charge more if it takes more money to produce the same item.

So how is it that demanding fair compensation for slowly killing your soul in some cloth covered cubicle suddenly makes you unreasonable? 

If everyone is getting what they need then everyone should be happy, right?

Thing is, very few of us are and the only relief we get are sound bites and token gestures from politicians crafted to quell the uproar till the next news cycle. 

It's the reason why politicians don't like to run on their records anymore and instead choose to act like bullies in a schoolyard.

It's not about rich versus poor or conservative versus liberal economics.  It's about expecting blood from a stone.  It's simple, if your money is worth less you have to have more of it just to maintain your standard of living.  A cost of living raise isn't a luxury it's a fact of life when you live in an unpredictable economy. 

I don't buy the big business wailing over minimum wage increases either.  If you can't afford to pay for the resources you need to conduct business then you don't know how to run your business.  It's exploitation, nothing less.

In fact, because business has gotten away with economic indentured servitude for half a century they've actually hurt themselves.  It's not the rich who keep the GM's, Chrysler's and Maytags in business.  It's the average Joe sitting in the morning commute 5 days a week.  If he can't buy your goods you're out of business. 

Talk about shooting yourself in the foot. 

Why do we accept this? If the value of our money is based on good faith and that faith has been violated then why do we continue to accept the whole premise to start with?

I've often said that the oil companies can charge whatever they want for a gallon of gas just so long as everyone's wages are adjusted to compensate.  Charge $20 a gallon for all I care, just make sure the average income is in the six figure range. 

If it costs you that much to deliver the product then I should be able to meet that demand from the rewards of my labor.  Anything else is economic opportunism on the backs of labor.

In the end , most of us have ended up living one check away from financial ruin while the Suze Orman's of the world chide us for spending our meager resources too frivolously.  I know your heart's in the right place Suze but your understanding of economic theory borders on fantasy. 

Until the slow slide from employment to indentured servitude stops in the developed world we need to stop blaming ourselves for all the economic ills and personal financial woes. 

We need to demand that wages reflect the world we live in now, not the one our grandparents knew.  It's not unreasonable unless you sit in the executive suites counting the millions you steal from your employees every day you don't pay a wage based on what used to be called "the cost of living"

Friends it's simple.  the rich are getting richer not because they're smarter or luckier than us.  They're getting richer because they're benefitting from the fact that you're not getting paid what you're worth.

If you think I'm wrong, well, I can guarantee you're not worried about feeding your kids next month.

Think about it.

Where the rich white men go

It's spring in Palm Beach again and just as has happened for the previous decade Barrett Jackson's parade of rolling dreams is underway. 

The differences between the Scottsdale and Florida events are minimal but noticeable.  For one thing, you're not going to see any 4.2 million dollar original Batmobiles roll under the palm trees.  This is an auction more in line with the well heeled collector looking for a sharp daily driver than a 1 of 1 rarity.

Oh, the feature cars are there but they're mixed in with somebody's 10 year old cast off Mercedes 500 SL.  You don't see as many of the heavy hitter bidders at this auction either mostly because the pickings aren't as choice.  That 70 Challenger RT is more likely to be a one-off custom than a build sheet matching original. 

You do see more examples of Lamborghini's, Ferrari's and the like mostly due to their popularity in the region and of course the concentration of wealth on the Right coast.  The mix of offerings reflects a different attitude toward collectible automobiles in the region. 

Where a 60's muscle car may bring six figures at Scottsdale the same car could bring much less at the spring event.  A smaller consignment pool and more variety has a lot to do with it.  At Scottsdale a featured original Hemi 'Cuda will likely have at least a dozen other customs that will benefit from a strong sale. 

If it's stuck between a couple of Lamborghini's and Charity customs it will likely suffer unless it's got a very strong provenance.  In other words the buyers have to know about it before it ever goes on sale. 

Jet powered Semi Trucks  aside, the offerings tend to be more practical than whimsical.  Emotion plays a much smaller role and the prices reflect that.  In short, the event is probably your best bet for getting a reasonable price on a collector vehicle at a Barrett-Jackson auction.

Still, if you can stomach Speed channel's coverage of the event you'll notice many of the lots being  sold to the same buyers.  Most of which happen to be well heeled old white men that have made Craig Jackson a millionaire in the past 15+ years of his control of the auction.

If Scottsdale is the example of wretched excess and you want to find an example of what the 1% consider a discount store, the Palm Beach event is a good place to start.

    

Pain and Suffering

I'm convinced there's a bit of masochist in all of us...

It's not that I have a low opinion of humanity I think it's just human nature if not biology to need a bit a suffering to validate our accomplishments.  Think about it.  Without pain we can't know pleasure.  Without a challenge, victory isn't so sweet now is it. 

That's not to say that wanton suffering is a good thing.  Suffering for no good reason is the definition of masochism.  If there's a goal to reach, however, it's perfectly reasonable to endure a bit of pain.

That's one of the reasons I hate cheaters in multiplayer games.  They add needless suffering for their own selfish ends.  It may be fun to dominate everyone else for a few hours but after awhile it just gets boring.  Unless that's your idea of fun.  In which case you'd be exhibiting some sociopathic tendencies. 

In which case, I'm keeping an eye on the kiddies when you're around...

There was a line I remember from the movie "The Matrix" and I think of it often.  Agent Smith was interrogating Morpheus and made the following commentary on humanity.

"Did you know that the first Matrix was designed to be a perfect human world? Where none suffered, where everyone would be happy. It was a disaster. No one would accept the program. Entire crops were lost. Some believed we lacked the programming language to describe your perfect world. But I believe that, as a species, human beings define their reality through suffering and misery"

Agent Smith's premise was good but he paints with a bit of a wide brush.  If we weren't meant to endure some pain we wouldn't have any nerve endings.  We'd just aimlessly walk around stumbling into traffic and occasionally ending up in wood chippers without a care in the world.  We wouldn't have as clear a grasp on consequences either and I'm fairly certain the human race would have been nothing more than a fossil record by now.  In Star Trek 5, Kirk said it best...

"Damn it, Bones, you're a doctor. You know that pain and guilt can't be taken away with a wave of a magic wand. They're the things we carry with us, the things that make us who we are. If we lose them, we lose ourselves. I don't want my pain taken away! I need my pain!"

We're programmed to value our victories more when they aren't so easy to obtain.  We've all wished at some point that we were rich or got paid to do nothing.  The reality is that most of us wouldn't be idle for long.  It's more likely you'd find something to challenge you even if you didn't have to worry about paying the bills anymore.

In the case of Bernie Madoff, his challenge was to not get caught, hence my earlier sociopath example...

Hopefully your motives would be more pure but it ultimately comes down to the same thing.  We're just  not happy unless we're striving for something.  It could be your career, a favorite project, a game or even just surviving to a ripe old age.  All of it involves a challenge and like it or not challenge and pain are synonymous terms.

Nothing has value to us unless we "pay the price."  So long as it's a fair price there's no problem just be sure it's worthwhile.  Otherwise we end up being martyrs and masochists which is just unnecessary pain.