WE NEED A BIGGER TRUCK

4/15/O4

There’s an old joke about two guys who bought watermelons for two dollars each, hauled them to market in an old pickup, then sold them for a dollar apiece. When they realized they had lost money on the venture, one turned to the other and said, “What we really need is a bigger truck.” I don’t claim to know a bunch about business, but I’m starting to feel like those watermelon salesmen are now working as government economists.

I learned two things about economics. I learned the old joke that if you laid all the World’s economists end to end they still wouldn’t reach a conclusion. I also learned that economics professors chose their own books, and those of close friends, as required reading. Only medical books are more expensive than economics books.

I notice I listed three of the two things I learned about economics; perhaps, blame my fourth grade math teacher for my difficulty understanding government reports. Some things are just downright confusing to a poor old country boy like me.

For example, the economy is either booming, about to boom or is the pits, depending upon which “think tank” pundit you listen to, but in any case government statistics will support their conclusions.

Unemployment statistics are particularly confusing. The economy improved a few weeks ago; only 324,000 people were laid off. Why doesn’t the report the number hired? In fairness, we ought to have a report that tells how many are looking for work, have given up, are grossly under-employed, or working only part time. And, how many of the unemployed are now “working” as ”self-employed” consultants? Honest statistics would give a real picture of the employment situation.

We’re told average incomes are up and inflation is being held down, which may or may not be true. We know those on the upper end of the income scale are much better off now than a few years ago. Now, if you make a hundred thousand a year and I make nothing; together we have an average income of fifty thousand. If your income doubles and mine remains at zero, our average is now one hundred thousand. Does that make me better off?

Inflation figures apparently don’t include the things I buy. The costs of gasoline and utilities are up. Costs of medical care and pharmaceuticals are increasing at an astronomical rate. Insurance of every kind has increased, some as much as 300%. Childcare and educational costs are higher. Services are more expensive (Don’t believe me – call a plumber or electrician). Lumber and plywood prices are up. Steel prices have increased 70% in the last year. Even funeral costs are increasing. State and local taxes are rising rapidly to offset the loss of Federal funds. My bank has even doubled the fees it charges to hold “my” money.

Let’s be honest. Real wages for most Americans have actually gone down, particularly when you consider corporate reductions in healthcare and retirement. Living costs for lower and middle class workers have gone up tremendously and will go even higher when the bill comes in for the massive Federal deficit of the current administration. The only people really doing great are the wealthy, and they are not a bit shy about scratching more out of Congress and the Administration.

Some argue we are better off if the rich get richer, because they use their wealth to invest in new businesses for the benefit of all. Is that true when the new businesses are in China, Bangladesh, or India? Incidentally, I notice that an Indian businessman from Calcutta (one of the poorest cities in the World) just bought a house in London for an all-time high price of $128 million. I’m sure he would argue that his great wealth somehow helped the people of Calcutta. I suspect America’s wealthy would argue the same..

Another area of confusion is with the value of the dollar. It is worth about twenty percent less less now than in 2000; at some point foreign suppliers must raise prices to restore their profit margins and we are going to pay the bill. Political pundits, economists and businessmen argue that a cheap dollar is great for exports and therefore is good for the economy. We need to remember that we buy a half trillion dollars more products every year than we are sell. And all of those purchases are going to cost more.

I don’t claim to have any answers to the economic problems, but I don’t think the people in power have the answers either. At least they haven’t articulated them in a way I can understand. Maybe, just maybe, it’s time for a change.