As the presses rolled and the dollar supply increased, those in charge of the Treasury, Federal Reserve, and in general those politicians who knew, but didn’t want to admit it, refused to confess that inflation is, as the dictionary says it is, “an increase in the money supply.” Inflation continued, and prices rose slowly but steadily. It was sort of like the frog in a kettle of water, with the flame being gradually turned up. The temperature rises so slowly, that the frog is cooked, and never knew what hit him. As prices go up, usually they go up in one sector at a time, and price increases can always be blamed on the weather, or some innocuous thing, which had nothing to do with the fact that the increase of dollars in circulation is the cause of prices going up.
Prices going up has several things happening at the same time. As prices go up, obviously it costs more to live, because life’s necessities cost more. This means that in order for one to stay even in one’s lifestyle, income must go up. If someone’s income goes up and they’re in business, they must raise prices. If one has a job, the employer’s prices must go up so as to increase wages. Either that, or one’s lifestyle must go down while having the same income. Or, merchandise, food, cars, etc. might just come from abroad, where wages are lower and lifestyles are lower also. This will allow a family with no increase in wages or income to stay even in lifestyle. Another thing which can happen, and did, is mass marketing through super markets, discount stores, and the like. Merchandise, foods, and clothing can be bought cheaper because there are no fancy displays, virtually no advertising, lush store appurtenances, and expensive, well trained employees. Examples are Sam’s Club, Costco, Home Depot, and the like. How many attendants does one see when one needs help at one of these places? Continuing with the decline of America; obviously mass, cheap merchandising has cost the jobs of sales people, window decorators and the like, of department stores, specialty shops, and mostly downtown shopping has declined. Quality goods consumption has also declined, as these things have become un-affordable.
In Washington D.C. where I grew up, the Woodward & Lothrup department store was wonderful. Located on F St, N.W. it was the place to shop and be entertained. “Woodies,” as was it was nick-named, had a big pipe organ, and concerts were featured every day. They had a wonderful lunchroom, gorgeous fixtures, carpeting, and lights. At Christmas, “Woodies” as well as Hechts, Lansburghs, Kanns, Garfinkles, and other department stores, all had wonderful animated Christmas windows, and Santa Claus took kids’ orders for presents. Stores were sumptuously decorated for Christmas. Downtown D.C. had movie palaces on every block on F St, plus grand shoe stores, restaurants, clothing stores, jewelers, and specialty shops. Reeves restaurant had the best strawberry pie I have ever tasted. The Capitol Theatre had a full stage, mighty Wurlitzer, 2500 seats, orchestra pit, and was beautiful. It’s all gone now. A casualty of degrading dollars, lower incomes, white flight, and inflation.
Was that bad for America? Of course, and that was only the beginning. My Mom used to take the Plymouth for a wash on Connecticut Ave N.W. and I’d watch the endless chain pull the car through while it was washed, and then hand dried. Those neat car washes with their employees were replaced by the “quarter car wash,” Nine quarters now? You put a quarter in and did it yourself, but it didn’t clean nearly as good. A casualty of inflation, pinched incomes, and America attempting to stay afloat or maintain a life style. Self service filling stations replaced full service ones where your windshield was washed, oil and water checked, and one never had to leave the car. Those stations had employees, and in order to stay in business, they had to cut costs because of inflation, and they did. More out of work people, but with unemployment insurance, one could live for many weeks and still get a stipend from government. This only made the situation worse, because the dollars kept on being printed. Just in this part nine, tens if not hundreds of thousands of people had lost their jobs on a gradual basis, downtowns had become empty and were decaying, and thousands of businesses were gone.
Major cities had marvelous trolley systems which created no pollution. They carried residents to work and shopping, and back home with no parking problems. With urban sprawl and white flight, these systems went bankrupt, causing a loss of taxes and franchise fees paid by these systems. Now, light rail as it is now called, is making a come-back, but is run by cities at huge losses, made up by taxpayers. More dollars printed. Understand, it isn’t necessarily printed dollars, but checkbook dollars, federal grant dollars, food stamp dollars, welfare check dollars, subsidy dollars, and the like. All fulfill the dictionary definition of inflation. While we are on the subject of trolleys, they were manned by two men almost till the end. A conductor and a motorman. In the name of economy, the cars were converted into one man cars, with the motorman collecting the fares, running the car, and opening and closing the doors. More layoffs in the name of economy. Everyone tries to do the best they can with what they have, and that includes businesses, homeowners, and citizens as a whole.
In the name of economy, buildings with elevators converted them into self-service, to save money and maintain a profit status with inflation on all sides. Young people can’t remember elevators being run by operators, but I certainly can. Economy for the sake of efficiency is fine, but when it is done to just break even because of inflation, it is sad and symptomatic of a slowly failing system or nation. While these things were happening to try to stay afloat and maintain a life style, government was telling everyone that prices were going up because of ’greedy businessmen and corporations.’ When government causes problems, it’s never their fault. Who prints the dollars? Not me, nor you either. You decide who was at fault when downtown shopping centers went, neighborhoods decayed, and everything else mentioned so far occurred.
While America was trying to stay afloat by economizing on everything, and trying to keep employed with stores closing, downtowns decaying, and even automotive washing and fueling laying off employees, another thing began to happen. Japan had begun to really thrive off of America’s largess. In 1947, in America, Bell Labs invented the transistor. The transistor would eventually replace the vacuum tube. It used tiny amounts of current, created no heat, and lasted a long time. In 1954, the “Regency I” transistor radio was invented and put on the market at a price of $49.95. It was made in Indianapolis Indiana, obviously by Americans in an American factory. While the Japanese were recovering nicely, their wage scales were way below America’s, and it is easy to profit from another’s invention if one can make it cheaply and avoid paying patent royalties. In 1957, the first Japanese transistor radio went on the market in America for $30, made in Japan, with Japanese workers. Those who beheaded and tortured American troops nine short years earlier, were now sending their cheaply made copies to America, and Americans were buying them. The process had begun.
America had begun to import what it made, and eventually import what it “used to make,” because the wages of American employees had gotten so high because of inflation, that they couldn’t compete, at least in radios in 1957. Honda’s first car was made in 1970. In 1972, it imported its first into the US. It was a piece of junk with a 600 CC 2 cylinder engine, and really pitiful. Beginning in 1959, the Germans had begun importing the Volkswagen, which was a superior car with superb German engineering. Both came in because they were cheap to run, and America was trying to save money in any way possible. The 1973 OPEC gas shortages hadn’t hit yet, but Americans were still trying to save a few bucks. Before we go any further, let’s examine the gas ’shortages’ which drove America insane with long lines, ’no gas’ signs, and the like. There was no gas shortage. The reason there was no gas available, was because President Nixon had instituted price controls on oil and petroleum products. The Arabs had increased their prices above Nixon’s price controls, so there wasn’t any gas! There will never be a shortage of anything, unless government controls its price. Shortage of water in the desert? Not if you want to pay for it. Shortage of anything without price controls? Never.
Already, in the 1950’s, inflation had begun to do more harm than cause the birth of discount stores, self service gas stations, quarter car washes, desecrated neighborhoods, and blighted downtowns. Sure, self service elevators were always around in small buildings, but not in large office buildings and department stores. Single truck “Birney” trolley cars were always one man because of their size, and all retailers regularly had sales, giving discounts for old, out of season, or slow moving merchandise. That had nothing to do with inflation, but rather normal efficiency. Now, much lower priced labor in foreign lands were making merchandise and importing it into America, and American labor had risen so much because of inflation, that it was becoming too expensive to be competitive. Robotics? Automation? More Monday.
Leaving for two week vacation on Thursday. Will have cell phone and laptop to serve you, if service is available on the Columbia River. (Just got a horror story from a client. If you sell on E-Bay, do not take Pay Pal or postal money orders as payment!).