Is Peter Schiff correct?

[TheCaliforniaLife]

I can't recall exactly where Peter Schiff said this. It was either when he talked to the Occupy Wallstreet people or when he debated Cornell West. It was in reference to regulatory burdens placed on businesses that drive business overseas. He said that in the 1950s we had the highest wages and we had the cheapest goods. The reason this was, was because we didn't have such a high regulatory burden. Do you guys have any resources to back it up? I would love to read a article on it. It does logically make sense given that I know how regulatory burdens do drive up cost of doing business.

[Becker]

good question.

if that's what he said, I've love to know the data to support it, and then you can ask "so why did we give up such an advantage?"

But I suspect the 1950s is a bad example, because we just won a war, where everybody else lost. Remember, almost every country that fought in the 2nd world war had their cities destroyed, except for us.

[Original_Intent]

Interestingly, Showtime is running a show called "An Unreasonable Man" which was all about Ralph Nader. And I do get the impression that Nader was well intentioned, and, give credit where it is due, he did actually accomplish something. But while the show case his activism in a positive light, there is no question that much of the regulation the he got implemented has been a huge burden on industry.

[Steven Douglas]

I'll cite specific examples later, while initially addressing one facet of the principle only:

First, it needs to be recognized that many of the regulatory burdens that have been placed on all businesses in a given industry are specifically designed and lobbied for by the largest businesses in that industry to begin with. For example, Companies A, B and C all invest $X millions of dollars in specific equipment for a specific process (example: fume hoods for painting). The equipment already provides a competitive advantage due to its efficiency/automated capability/etc., but to gain an even further competitive advantage, or perhaps even to try to hold off competition while the capital costs are recovered, Companies A, B and C, in an alliance with the equipment manufacturers who want to sell more of their product, will point only to the incidental fact that their process is a much "safer", or "more environmentally friendly" way to conduct this particular process. They will then team up to "lobby on behalf of the workers" (through EPA, OSHA, etc.,), and only in the most caring, altruistic, humanitarian, environmental terms, to convince them to adopt a specific set of regulations that force ALL companies to comply with THEIR very expensive standards - via an unfunded mandate.

Advantage: all those who already "complied" (with their own standards). Disadvantage: anyone who wants to compete, and could, were it not for prohibitive regulatory requirements, most of which are passed under color of something else entirely.

[enoch150]

You can try finding out the number of pages in the Federal Register back then. I think it had 81,405 pages in 2010.

[The Gold Standard]

Schiff is partially correct. The lack of regulation back then certainly allowed us to be more productive, but also the Federal Reserve had only been in existence driving up our prices and wages for 36 years, so we were still competitive globally. Over the following 50 years the regulatory burden increased making us less productive, malinvestment from the Fed and the government accumulated, and our price levels inflated higher and higher. Somewhere in there we passed the point where the combination of those meant it was more efficient to produce elsewhere, and rather than correcting that, we have just driven faster past that fork in the road.

[MJU1983]

I can't recall exactly where Peter Schiff said this. It was either when he talked to the Occupy Wallstreet people or when he debated Cornell West. It was in reference to regulatory burdens placed on businesses that drive business overseas. He said that in the 1950s we had the highest wages and we had the cheapest goods. The reason this was, was because we didn't have such a high regulatory burden. Do you guys have any resources to back it up? I would love to read a article on it. It does logically make sense given that I know how regulatory burdens do drive up cost of doing business.

I think it was during his testimony before Congress and the person he was talking about was Henry Ford.

Schiff pointed out that Ford paid his workers the highest wage in the world (equivalent to $2,500/week today) and still produced the best quality, least expensive product.


http://www.youtube.com/watch?v=ST_ZJ4s7PZc

[Cutlerzzz]

But I suspect the 1950s is a bad example, because we just won a war, where everybody else lost.Australia won.

[Cutlerzzz]

I think it was during his testimony before Congress and the person he was talking about was Henry Ford.

Schiff pointed out that Ford paid his workers the highest wage in the world (equivalent to $2,500/week today) and still produced the best quality, least expensive product.


http://www.youtube.com/watch?v=ST_ZJ4s7PZcI have to say, Schiff is dead wrong about this whole "Ford's workers made more in the 1920s than today" thing he has been going on about for the last month. Wages are not denominated in Gold.

[MJU1983]

I have to say, Schiff is dead wrong about this whole "Ford's workers made more in the 1920s than today" thing he has been going on about for the last month. Wages are not denominated in Gold.

It was Congressman Darrell Issa who pointed out it was the highest wage in the world at the time. Schiff simply converted their wage in gold at the time (gold standard) to today's gold prices (fiat money).

No one in the video said they made more in the 1920's than today (it was actually 1914). In today's fiat money, they were paid the equivalent of $2,500/week. If you want to connect the dots and say that the workers of the past were paid more than today, you can do that, and it's true to an extent.

In 1914, and even into the 1920's and 30's, wages were denominated in gold or silver as you had Gold Certificates and Silver Certificates...and FRN's were redeemable in gold on demand. You also had gold and silver dollar coins.

The wording at the bottom is important:
http://www.pixshost.com/ebay/1914-five-dollar-frn-pcgs-xf45ppq-2.jpg

Other bills:
http://www.vaticanassassins.org/wp-content/uploads/2010/09/One-Dollar-Bill-National-Currency-1914.jpg
http://oldbucks.com/currencypic/LB200909%20Auction%203506/17041.jpg
http://www.anythinganywhere.com/currentlist/usa-p342-5.jpg

And of course coins:
http://3.bp.blogspot.com/-SI4hP2vgRV8/TXjUO5DBpwI/AAAAAAAAEOQ/zpt5A8mr5fg/s1600/USA_WALKINGLIB_HALF_1921D.jpg
http://usainteriors.com/cart/images/1921%20LAST%20YR%20MORGAN%20SILVER%20DOLLAR%20MINT %20MARK%20COLLECTION.jpg
http://www.apmex.com/Category/507/Pre_1933_US_Gold.aspx

Peter might have been making a point about inflation, the gold standard, and fiat money...who knows.

Today on a Mises fan page they posted this:

Let's imagine that America had been on a gold standard without a central bank for the past 40 years. This joke would not have been funny, because the value of the currency would not have diminished, as it did in the past 40 years. Rather, the value of the currency would have actually increased, as it did in the period from the Civil War to 1913.

Inflation/deflation data source: http://oregonstate.edu/cla/polisci/faculty-research/sahr/sumprice.pdf


http://www.youtube.com/watch?v=jTmXHvGZiSY

[Cutlerzzz]

Schiff says in this video, as he has in many others, that Ford's workers made more money in 1914 than they do today, which is clearly false.


http://www.youtube.com/watch?v=YpcteDgMZ1c

[LibertAtOnce]

completely false? care to explain further?

[vodalian]

http://en.wikipedia.org/wiki/Henry_Ford#Labor_philosophy
http://corporate.ford.com/news-center/press-releases-detail/677-5-dollar-a-day

[Cutlerzzz]

completely false? care to explain further?His explaination is that what Ford workers made in 1914 is the modern equivalent of $2,500 dollars a week, if denominated in Gold. He thus reached the conclusion that they were paid more back then than they are today. That does not matter, because people are not paid in Gold today, nor have they been in a long time.

[LibertAtOnce]

I think the point hes trying to get across is the taking the 1914 price of gold and comparing it to today. And thentaking the 5 doallars a day and comparing it today would be 2500/week since gold is the best way to measure the inflation over the 90+ years.

[Cutlerzzz]

I think the point hes trying to get across is the taking the 1914 price of gold and comparing it to today. And thentaking the 5 doallars a day and comparing it today would be 2500/week since gold is the best way to measure the inflation over the 90+ years.Schiff does not just state that he believes that it is a better way to measure inflation, but also that the workers were paid more back then. Even then, Gold Prices are not the best way to measure inflation. If we did that, it would mean that we have had 500% inflation in the last decade, and that during the early 80s we had 75% deflation.

[LibertAtOnce]

just some quick math that i did:

price of gold 1913=18.92, today=1715; 1715/18.92=90.65

assuming 5$/day for 5 days for 25$/week 90.65X25=2266.25$

i dont know what for autoworkers make per week but im pretty sure it isnt 2266.25$/week.


i could be out to lunch probably not the best person here to ask about this, also sorry its late and this probably looks sloppy

[enoch150]

Schiff does not just state that he believes that it is a better way to measure inflation, but also that the workers were paid more back then.

They were getting paid more in terms of gold, is what he meant. The 1914 workers earned 1.21 oz of gold per week while a UAW member today earning $29 per hour for 40 hours earns the equivalent of 0.68 oz. of gold.

But gold has far outpaced the CPI over that time, so it could be argued either way.

[S.Shorland]

Who knows how much paper gold is floating around? You'll never know the true price of gold that reflects peoples' true desire for it.Supply and demand has been short circuited.

[Bern]

... He said that in the 1950s we had the highest wages and we had the cheapest goods. The reason this was, was because we didn't have such a high regulatory burden. ...

Not sure about the statement's veracity, but in the aftermath of WWII, we definitely had the most functioning industrial and manufacturing base. Most of the rest of the world's infrastructure had been bombed to heck. I'm guessing that our large trade imbalance (exports > imports) started as a result of this situation, but I have never researched the matter.

[S.Shorland]

I read it stated that 'poverty rates fell by 50% between 1949 and 1961.' Where can I source this if it's true? The writer claimed a researcher friend of his working at the American Enterprise Institute told him.That's why Johnson had to bring in his anti-poverty laws or the government would have been shown to be superfluous.

[Acala]

Australia won.

Switzerland won.

[Seraphim]

Relative to real purchasing power of the time frames currency, workers in 1920 definately made more than workers today.

It's very difficult to demonstrate that because technological advancements have made it so that even poor folks have access to a lot of beneficial things...BUT...When it comes to being to accrue WEALTH...that ability is much lower than 100 or so years ago.

The amount of HOURS WORKED it now takes to finance a home, eat, transportation...is MUCH higher as a % of total household income then before...THAT'S WITH 2 WORKERS instead of ONE.

To me, that is the easiest way to make that argument.

Supply/demand fundementals are so skewed due to diat, that using nominal price points is damn near impossible to use as proof. I.e the data is MASSIVELY skewed, said data cannot be used to prove nor refute.

Occum' razor:

Look at time spent working and it's ability to generate relative wealth within the context of the time frame in question.

[Cutlerzzz]

Relative to real purchasing power of the time frames currency, workers in 1920 definately made more than workers today.


http://s3.amazonaws.com/files.posterous.com/temp-2011-09-13/FxbBehawjyBkCiEcesjzwGHDbFjgkmhwAmCzhwbueHoqkEJjuz hkqciyxmwo/RealComp.png.scaled500.png?AWSAccessKeyId=AKIAJFZA E65UYRT34AOQ&Expires=1320184954&Signature=A2GVO97tDyK6t8mwLwcp47NH5yA%3D

http://mises.org/Community/forums/t/15824.aspx





The amount of HOURS WORKED it now takes to finance a home, eat, transportation...is MUCH higher as a % of total household income then before...THAT'S WITH 2 WORKERS instead of ONE.

To me, that is the easiest way to make that argument.

It's very difficult to demonstrate that because technological advancements have made it so that even poor folks have access to a lot of beneficial things...BUT...When it comes to being to accrue WEALTH...that ability is much lower than 100 or so years ago.

It takes far less labor to produce anything now than it did before.

http://mises.org/Community/forums/t/15824.aspx

In 1901, Food, Clothing, and Housing Expenditures made up about 80% of expenditures. Today it is 55%. Not only that, but homes, food, and clothes are all of a higher quality today than they were back then. Houses back then were small, unsafe, made of crap, and had no electricity.

From Thomas Woods in 33 Questions About American History That You're Not Supposed to Ask


Americans need to work far few hours to earn the purchasing power necessary to buy a whole host of goods than they had to in the past. Thus in 1950 American had to work 6 minutes to earn the money that would buy them a load of bread; in 1999 it was just 3 and a half minutes. It took 21 minutes of labor in 1950 to be able to buy a dozen oranges; by 1999 it was only 9 minutes. For 100 kilowatts of electricity, someone in 1950 would have had to work for 2 hours. In 1999 the same person would have had to work only 14 minutes. For a 3 minute coast to coast telephone call, 104 minutes of labor were required in 1950. By 1999 that was down to 2 minutes.

The statistics are even more dramatic if we use 1900 as one of our baseline years. To buy a pair of jeans, for example, someone in 1900 woul have had to work nine hours, as compared to four hours in 1950 and three hours in 1999. For a three pound chicken, a worker in 1900 would have had to labor for 160 minutes. The amounts of time necessary in 1950 and 1999 were 71 minutes and 24 minutes, respectively. It took the average American two years to earn the money to buy a car in 1908. "Today," writes Thom DiLorenzo in How Capitalism Saved America, "a Ford Taurus costs an American worker about eight months of labor, but the car is a technological miracle compared wtih the cars of yesteryear, with standard air conditioning, power seats, safety devices of all kinds, cruise control, a sunroof, tinted glass, a CD player, and so on."


Today we also have access to washing machines, dryers, dish washer, cell phones, computers, televisions, commercially used radios, lots of cars, commercial planes, modern medicine, and a countless other things that did not exist back then.



Repeat after me "Wages equal Marginal Revenue Productivity".

[Travlyr]

http://s3.amazonaws.com/files.posterous.com/temp-2011-09-13/FxbBehawjyBkCiEcesjzwGHDbFjgkmhwAmCzhwbueHoqkEJjuz hkqciyxmwo/RealComp.png.scaled500.png?AWSAccessKeyId=AKIAJFZA E65UYRT34AOQ&Expires=1320184954&Signature=A2GVO97tDyK6t8mwLwcp47NH5yA%3D

http://mises.org/Community/forums/t/15824.aspx




It takes far less labor to produce anything now than it did before.

http://mises.org/Community/forums/t/15824.aspx

In 1901, Food, Clothing, and Housing Expenditures made up about 80% of expenditures. Today it is 55%. Not only that, but homes, food, and clothes are all of a higher quality today than they were back then. Houses back then were small, unsafe, made of crap, and had no electricity.

From Thomas Woods in 33 Questions About American History That You're Not Supposed to Ask




Today we also have access to washing machines, dryers, dish washer, cell phones, computers, televisions, commercially used radios, lots of cars, commercial planes, modern medicine, and a countless other things that did not exist back then.



Repeat after me "Wages equal Marginal Revenue Productivity".

This does not make sense. My father was able to feed a family of 8 as the sole provider in the 50's & 60's. We paid our own hospital, doctor, dentist, and everything off of a small farm income. When I was in high school, I was able to secure a job at $1.60/hr which would buy 5 gallons of gasoline. And the jobs were quite plentiful. Do high school jobs today pay $18.00/hr? That is what 5 gallons of gasoline cost today. Are $18.00/hr jobs plentiful? Something is not right in your analysis.

I agree with Peter Schiff. In 1900, there was almost no personal debt. People did not have all the high tech material that we have today, but they were financially well off until the Feds crashed the economy in 1929.

[Cutlerzzz]

This does not make sense. My father was able to feed a family of 8 as the sole provider in the 50's & 60's. We paid our own hospital, doctor, dentist, and everything off of a small farm income. When I was in high school, I was able to secure a job at $1.60/hr which would buy 5 gallons of gasoline. And the jobs were quite plentiful. Do high school jobs today pay $18.00/hr? That is what 5 gallons of gasoline cost today. Are $18.00/hr jobs plentiful? Something is not right in your analysis.

I agree with Peter Schiff. In 1900, there was almost no personal debt. People did not have all the high tech material that we have today, but they were financially well off until the Feds crashed the economy in 1929.Anecdotes mean nothing before actual facts. Wages are not denominated in gasoline. If that were the case, than wages more than doubled in the last few months of Bush's presidency when gas fell from $5.00 to $2.00.

I agree with the actual data, Thomas Woods, and Thomas Dilorenzo (an actual economist).

[Travlyr]

Anecdotes mean nothing before actual facts. Wages are not denominated in gasoline. If that were the case, than wages more than doubled in the last few months of Bush's presidency when gas fell from $5.00 to $2.00.

I agree with the actual data, Thomas Woods, and Thomas Dilorenzo (an actual economist).

Fair enough. To each his own. Dilorenzo studies economics while Peter Schiff makes tons of money at it. Some people teach, others do.

[Brian4Liberty]

Just took a quick glance over the thread, but I like the idea of measuring value in "hours worked". Far less volatile than commodities like gold, oil and fiat currency.

[mcvac]

Peter Schiff sure has some beautiful ties

yep

[american.swan]

Fair enough. To each his own. Dilorenzo studies economics while Peter Schiff makes tons of money at it. Some people teach, others do.

As society produced more, prices were naturally going to fall. I think Thomas Woods and Dilorenzo make an important point in arguing for free market economics. As the free market produces, prices fall and have fallen. One could argue prices would even be lower if the government hadn't created so many bubble and bust cycles and inflation and regulations.

The fact the free market lowers prices as more products are produced doesn't mean the public is "better off". Do you believe the future is always better than the present? Of course it's not, because of government messing everything up. As socialism digs deeper roots the future will look more and more bleak. That's what we're arguing against as supporters of the free market.

SO, Peter Schiff is right. We'd even be more better off today if the status quo of 1914, or whenever, hadn't been corrupted by government over the last 100 years. We're arguing the future would be better if government got out of the way by voting for Ron Paul and yet people on this forum are trying to claim the government hasn't screwed up the last 100 years. What would 2012 look like if libertarians had run the US since 1900?

Let me put this more plainly. If you can't argue the last 100 years would have been better without so much government messing around then how can you claim the next 100 years will be better off without so much government messing around?

[Cutlerzzz]

yet people on this forum are trying to claim the government hasn't screwed up the last 100 years. Where is this?

[MJU1983]

Peter Schiff sure has some beautiful ties

yep

LOL :)

What's his net worth? $100m? $200m? I don't think he shops at JCP anymore.

[american.swan]

Where is this?

Aren't those saying Schiff is wrong implying it? Maybe I'm wrong on that analogy, but my point stands regardless. Schiff is right.

[dannno]

His explaination is that what Ford workers made in 1914 is the modern equivalent of $2,500 dollars a week, if denominated in Gold. He thus reached the conclusion that they were paid more back then than they are today. That does not matter, because people are not paid in Gold today, nor have they been in a long time.

lol, who cares what you get paid in??

He is talking about purchasing power, and gold is the best measurement of purchasing power over time that we have.

[Cutlerzzz]

Aren't those saying Schiff is wrong implying it? Maybe I'm wrong on that analogy, but my point stands regardless. Schiff is right.No to every thing you just said. Nobody is claiming that the government has been right the last hundred years, nor has anyone made that contention during this entire topic.

Schiff is absolutely wrong about wages and it has been shown in this thread.

[Cutlerzzz]

lol, who cares what you get paid in??

He is talking about purchasing power, and gold is the best measurement of purchasing power over time that we have.Gold is not the best measurement of purchasing power.

When having a discussion about historical wages, changing the commodity that wages are denominated in is kind of going to throw things off.

[Bossobass]

I have to say, Schiff is dead wrong about this whole "Ford's workers made more in the 1920s than today" thing he has been going on about for the last month. Wages are not denominated in Gold.


Schiff does not just state that he believes that it is a better way to measure inflation, but also that the workers were paid more back then. Even then, Gold Prices are not the best way to measure inflation. If we did that, it would mean that we have had 500% inflation in the last decade, and that during the early 80s we had 75% deflation.

You mean like the dollar index being 120 in 2000 and 75 today, or being 90 in 1978 and 150 in 1985, or exactly what do you mean?




It takes far less labor to produce anything now than it did before.

In 1901, Food, Clothing, and Housing Expenditures made up about 80% of expenditures. Today it is 55%. Not only that, but homes, food, and clothes are all of a higher quality today than they were back then. Houses back then were small, unsafe, made of crap, and had no electricity.

From Thomas Woods in 33 Questions About American History That You're Not Supposed to Ask

Today we also have access to washing machines, dryers, dish washer, cell phones, computers, televisions, commercially used radios, lots of cars, commercial planes, modern medicine, and a countless other things that did not exist back then.

Repeat after me "Wages equal Marginal Revenue Productivity".

Today it's 55%, but the rest goes to taxes which didn't exist in 1913, like, um, the income tax, for one.

Washing machines, cell phones, TV, etc., all cost money. Statistics prove the bulk of the cost is credit, which means they cost a LOT more than the advertised prices, which would change your statistical %. They are advertised to people like you as "modern conveniences" that increase productivity, but it's just an advertising slogan for the weak. The gains in free time are more than lost to paying for these conveniences, a battle which the majority of Americans are losing, as their net worth is lost to their rising debt burden, both personally and as a nation.

It takes the same amount of time today to mow a lawn as it did in 1920, only back then the homeowner had the tools and time to do it himself, whereas today he has to hire an illegal alien because he's too busy meeting his tax and debt demands (and being glued to one of those 'modern conveniences'... the TV).


Gold is not the best measurement of purchasing power.

When having a discussion about historical wages, changing the commodity that wages are denominated in is kind of going to throw things off.

So, what is the best historical determinant of purchasing power, the USD, which is only 40 years old? That would mean it's you who is changing the commodity wages have historically been denominated in, and only Ben Bernanke would deny the historical value of gold as a measuring stick with as straight a face as you do.

What you and others with similarly empty arguments always fail to mention is that in 1913 there was no income tax and from 1913 to 1930 the income tax was a flat 1%. There was next to zero debt burden, especially none at 15%, the average CC rate. There were also absent a myriad of other taxes, such as, since we're talking about auto workers, there was no gasoline tax in 1920. No one can compare real wages without including interest on debt and TAXES, regardless of what medium wages are paid in.

If you get paid $4,000.00 per month, but -$1,000.00 is income, SS, MC, MC tax, -$31.50 is gasoline tax, -$155.00 is sales tax, -$400.00 is state & local income tax, -$400.00 is health insurance, -$300.00 is rent on your automobile, -$150.00 is interest debt load payment, -$150.00 is phone/cable/ISP costs, etc., etc., etc. It means that in order to pay rent or mortgage you have to put in for a shit load of overtime and send your wife out to work or take in a room mate because you're upside down.

That cuts the comparison multiplier by at least 50% and must be factored into the productivity gains argument, or there is no argument at all.

Bosso

[Seraphim]

Very good post Bosso.

The implementation of the income tax to pay for the interest on the debt product (the USD) is a HUGE cost to society/families that was not there prior.

It's all part of the cost built into this ridiculous system.

[Brian4Liberty]

What you and others with similarly empty arguments always fail to mention is that in 1913 there was no income tax and from 1913 to 1930 the income tax was a flat 1%. There was next to zero debt burden, especially none at 15%, the average CC rate. There were also absent a myriad of other taxes, such as, since we're talking about auto workers, there was no gasoline tax in 1920. No one can compare real wages without including interest on debt and TAXES, regardless of what medium wages are paid in.
...
That cuts the comparison multiplier by at least 50% and must be factored into the productivity gains argument, or there is no argument at all.

Bosso

Great point. Wages must be calculated as a net minus taxes, not gross. Makes the comparisons even more difficult.

[Cutlerzzz]

You mean like the dollar index being 120 in 2000 and 75 today, or being 90 in 1978 and 150 in 1985, or exactly what do you mean?


The USD index measures the dollar against other currencies, not the dollars actual value. I assume that you know that.




Today it's 55%, but the rest goes to taxes which didn't exist in 1913, like, um, the income tax, for one.


Which changes take home pay, but is irrelevant to determining real wages.



Washing machines, cell phones, TV, etc., all cost money. Statistics prove the bulk of the cost is credit, which means they cost a LOT more than the advertised prices, which would change your statistical %. They are advertised to people like you as "modern conveniences" that increase productivity, but it's just an advertising slogan for the weak. The gains in free time are more than lost to paying for these conveniences, a battle which the majority of Americans are losing, as their net worth is lost to their rising debt burden, both personally and as a nation.

It takes the same amount of time today to mow a lawn as it did in 1920, only back then the homeowner had the tools and time to do it himself, whereas today he has to hire an illegal alien because he's too busy meeting his tax and debt demands (and being glued to one of those 'modern conveniences'... the TV).

This really speaks volumes to what an ignorant man you are. The average man is too busy to meet his tax and debt demands today, so he hires an illegal immigrant to mow his lawn? People work fewer hours in the 21st century than they did in 1920. Adding an expeditenture such as mowing a lawn would make the average man's debt issues worse, not better.

Nobody is forced to buy a washing machine. They use it because it takes two minutes to do a week worth of laundry. If done by hand, that would take much longer and be less efficient. Cell phones do increase productivity by making communication easier and giving everyone a hand held computer. Nobody claims that having a TV increases ones productivity; it is just for leisure.

Whether or not these devices save money depends on the individual. In many cases, that is not the intent. You don't buy a TV to save money.


So, what is the best historical determinant of purchasing power, the USD, which is only 40 years old? That would mean it's you who is changing the commodity wages have historically been denominated in, and only Ben Bernanke would deny the historical value of gold as a measuring stick with as straight a face as you do.


Gold is a commodity that lost its link to the dollar 40 years ago. It has seen it's price plumet and sky rocket by 20% in less than a year several times. That does not mean that the dollar has ever lost of gained 20% of its value in a single given year. My IQ just dropped a few points from reading your comment.

The monetary supply and prices are the best determinant of the value of the dollar.



What you and others with similarly empty arguments always fail to mention is that in 1913 there was no income tax and from 1913 to 1930 the income tax was a flat 1%. There was next to zero debt burden, especially none at 15%, the average CC rate. There were also absent a myriad of other taxes, such as, since we're talking about auto workers, there was no gasoline tax in 1920. No one can compare real wages without including interest on debt and TAXES, regardless of what medium wages are paid in.

If you get paid $4,000.00 per month, but -$1,000.00 is income, SS, MC, MC tax, -$31.50 is gasoline tax, -$155.00 is sales tax, -$400.00 is state & local income tax, -$400.00 is health insurance, -$300.00 is rent on your automobile, -$150.00 is interest debt load payment, -$150.00 is phone/cable/ISP costs, etc., etc., etc. It means that in order to pay rent or mortgage you have to put in for a shit load of overtime and send your wife out to work or take in a room mate because you're upside down.

That cuts the comparison multiplier by at least 50% and must be factored into the productivity gains argument, or there is no argument at all.

Bosso

A random set of numbers you just made up? Brilliant.

Again, taxation does not change real wages. Debt has nothing to do with real wages, and can only be taken on voluntarily to begin with.


What a waste of a post. There is absolutely no way to argue that Schiff is right.

[Travlyr]

There is absolutely no way to argue that Schiff is right.

Peter Schiff's point was that the wages they were getting paid were more valuable to the individual than they are today. In the 50's, currency was fully redeemable which means that the economy was an asset based economy. Debt was used for large purchases like a home but not for appliances, education, personal credit, automobiles, etc. Credit cards were not used at all. Cash was king. Individuals owned their goods outright and since unemployment was low, most people owned their homes outright as well.

Today's economy is debt based. Almost everyone is working to pay the banker for their car, home, education, appliances, and even entertainment. A layoff likely means default and then the banker comes and takes everything of value, marks the debtor a "bad" person, sets their personal belongings on the street. And says, "go find a job to finish paying the debts you owe us."

In other words, individuals of yesteryear owned the Earth. Today Bankers own the Earth. Take-home wages had more value because they were asset based not debt based.

[HOLLYWOOD]

Here... the adjusted for inflation rates.

1914 Ford workers were paying a 1% Federal Income Tax, 0% payroll Taxes and most states had 0% State Income Taxes... in addition to low Sales Taxes.


We are being ripped off today by Government @ all levels.

http://www.taxfoundation.org/files/fed_individual_rate_history_nominal&adjusted-20110909.pdf

http://i15.photobucket.com/albums/a361/mzcmdr/IRS_1914.png

[Cutlerzzz]

Peter Schiff's point was that the wages they were getting paid were more valuable to the individual than they are today. In the 50's, currency was fully redeemable which means that the economy was an asset based economy. Debt was used for large purchases like a home but not for appliances, education, personal credit, automobiles, etc. Credit cards were not used at all. Cash was king. Individuals owned their goods outright and since unemployment was low, most people owned their homes outright as well.

Today's economy is debt based. Almost everyone is working to pay the banker for their car, home, education, appliances, and even entertainment. A layoff likely means default and then the banker comes and takes everything of value, marks the debtor a "bad" person, sets their personal belongings on the street. And says, "go find a job to finish paying the debts you owe us."

In other words, individuals of yesteryear owned the Earth. Today Bankers own the Earth. Take-home wages had more value because they were asset based not debt based.Whether wages are denominated in gold or paper does not inherently make wages any more or less. Value is subjective.

By the 1950s, the dollar was not fully redeemable in gold. It was illegal to own gold in the 1950s. These "good times" never existed.

[Zippyjuan]

Germany would be an example of a high wage, high regulation economy which is very successful economically. Despite their much smaller size (their population is 81 million vs 300 million for us), they export more than the US (#3 biggest exporter in the world) and below China (#1). Rankings: http://en.wikipedia.org/wiki/List_of_countries_by_exports

[Travlyr]

Whether wages are denominated in gold or paper does not inherently make wages any more or less. Value is subjective.

By the 1950s, the dollar was not fully redeemable in gold. It was illegal to own gold in the 1950s. These "good times" never existed.
Value may be subjective, but my point is that people were not working for the bankers in the 50's. People took their income home and advanced their individual wealth. Your claim is wrong. The good times did indeed exist for people. I lived it and so did our neighbors indeed the entire country. Opportunity is much more difficult to find in 2011's static economy than it was with the 1950's vibrant economy. Sure the disparity of wealth is much wider today, some people are very rich while others must live on the streets. That is a direct result of the wealth transferring scheme installed by the bankers. But the 50's did produce jobs, opportunity, and vibrant industries.

Currency was redeemable until 1968. It was an asset based currency, the economy was thriving, and virtually everyone who wanted to work was working. Most households only needed one provider. America's real economic decline accelerated in 1971.

The Death of the Silver Certificate (http://1957silvercertificate.com/us-silver-certificate/)
With the Series 1934 the $1 silver certificate was the main denomination circulating throughout the US. As these wore out they would be replaced with the Series 1953 or for the $1 denominations the Series 1935 silver certificate. From the 1940s and on the Silver Certificate began fading with the final series being the 1957 silver certificate.
As more and more people exchanged there certificates for the actual silver they would be destroyed and not replaced as the face value of all the certificates had to match the silver value in the reserve. This exchange of “paper” for the real silver only increased as the price silver increased and by 1960 a $1 silver coin was worth $1.29 melted down. On June 24, 1968 all silver redemption was stopped.
Please, explain how you can ignore the people who are unemployed, and not counted in the official numbers, in wage calculations.

[Cutlerzzz]

Value may be subjective, but my point is that people were not working for the bankers in the 50's. People took their income home and advanced their individual wealth. Your claim is wrong. The good times did indeed exist for people. I lived it and so did our neighbors indeed the entire country. Opportunity is much more difficult to find in 2011's static economy than it was with the 1950's vibrant economy. Sure the disparity of wealth is much wider today, some people are very rich while others must live on the streets. That is a direct result of the wealth transferring scheme installed by the bankers. But the 50's did produce jobs, opportunity, and vibrant industries.

Ok, but that has nothing to do with real wages.


Currency was redeemable until 1968. It was an asset based currency, the economy was thriving, and virtually everyone who wanted to work was working. Most households only needed one provider. America's real economic decline accelerated in 1971.

You're correct about this part and I'm wrong. You could still get redeem your money for silver, even if owning Gold was a crime.


Please, explain how you can ignore the people who are unemployed, and not counted in the official numbers, in wage calculations.

There is no reason to include people in the real wage statistics that are unemployed.

[Travlyr]

There is no reason to include people in the real wage statistics that are unemployed.
Sure there is if you want accurate data. People who want to work but cannot find work = zero wages. When 20% of the people have $0.00 then averaging their zero wage with the employed wages will significantly reduce your higher wage claim.

[Cutlerzzz]

Sure there is if you want accurate data. People who want to work but cannot find work = zero wages. When 20% of the people have $0.00 then averaging their zero wage with the employed wages will significantly reduce your higher wage claim.Then wages were significantly higher in 2008 then they are now.