What gives you the right?
“Your article from Feb. 8 is so wrong, it defies description. Basically, cost comparisons of goods across time are not directly related to the profits made from sales. The costs of production, etc., change. Next time, give us uneducated readers a little credit. Thank You.” —Reader
So sayeth a reader regarding Right Hook’s column titled “Profit numbers can be deceiving,” wherein I detailed that the rise of housing costs (and the minimum wage) in the last 80-odd years has far surpassed the price of oil, and yet it is “record profits” that consistently get liberals pantyhose in a bunch.
Now if you’ve been here before, you know that your host’s confidence in his Rightness is often mistaken for arrogance by the conservatively challenged in the peanut gallery. As former President Ronald Reagan once famously said, “Well, the trouble with our liberal friends is not that they are ignorant, but that they know so much that isn’t so.”
In any event, I gave the reader the benefit of the doubt and revisited said column. In retrospect, I must admit that the reader had a point—albeit probably not the one he’d intended to make. Clearly, there is a difference between the cost of an item and the profit margin earned on an item. That point is well taken by anyone with a basic understanding of accounting.
What I failed to include was the effect of inflation on the prices. In the spirit of full and complete disclosure, I went to http://inflationdata.com and did some homework—fully expecting to eat some crow for my journalistic lapse.
Here’s what I found using figures I’d researched for the aforementioned column:
In 1924, the average price of a movie ticket was 25 cents. In 2006 that figure—adjusted for inflation—should be $2.87.
In 1927, the Ford Model T Speedster cost about $300. In 2006 that figure—adjusted for inflation—should be $3,399.42.
In 1927, a daily newspaper cost two cents. In 2006 that figure—adjusted for inflation—should be 23 cents.
In 1930, the average cost of a new home was $3,845. In 2006 that figure—adjusted for inflation—should be $44,588.93.
In 1938, the federal minimum wage was first set at 25 cents per hour. In 2006 that figure—adjusted for inflation—should be $3.49
And as for gasoline? In 1927, a gallon of gasoline cost 26 cents. In 2006 that figure—adjusted for inflation—should be $2.95.
According to the Automobile Association of America, the current price of gasoline on the West Coast is $2.54 a gallon.
That perhaps brings us back to the reader’s original objection. You see, what he and his cadre really object to is the profit margin Big Oil banks on every gallon of gas relative to the aforementioned industries. And hence their self-deluded justification in vilifying Big Oil.
Liberals consistently get bent out of shape over the narcissistic concept of what is “fair.” (And you will note that the definition of “fair” is always—and I do mean always—within their complete and total province as bestowed on them, by, well, them.)
“This is a fair wage. This is a fair price. That price isn’t fair. That much profit isn’t fair.” And what have you.
Now, at the risk of again pointing out liberals’ general predilection for self-righteous hysteria masquerading as intelligent discourse, allow me to ask an obvious question:
What gives you the right to dictate how much profit is “fair?”