Tag Value

Buddy can you spare a billion

Michael 13 Comments

One of the annoyances of being addicted to 70 and 80 year old movies (and older even), is having to translate certain period references to their twenty-first century equivalents, most notably (at least for this discussion), is money. As in, the value of money.

An obvious fact of money is that money of this year is almost always going to be worth less than money next year. (Eventually it will likely become worthless but that is a discussion for a different day.) The point being, when someone in a movie made in 1933 tosses down a dollar coin in payment for a meatloaf dinner, pie, and coffee – and gets change(!) you instinctively know money went a lot farther then. (Further?) (Whatever). Those aren’t so bothersome. But when someone says something like, “I want to put $1,000 down on Nag #1 to win in the third race,” I get to wondering, just how much is that guy gambling.

I did some research, and I found out that $1,000 American dollars in 1933, when adjusted for inflation is the rough equivalent of $24,000-$27,000 today (depending on whose rate of inflation you want to apply. So our erstwhile horse race lover is splurging with let’s say $25,000 on his horse race.

Some of the more criminal endeavors in the so called gilded age were really up there. A garden variety kidnapping when the perpetrators then demand “$50,000 or youse’ll never see da brat again,” are looking for a payout of $1.25 million of today’s dollar bills. (In December 2024 a cryptocurrency executive was kidnapped and returned after a ransom of $1 million was paid so maybe that’s not so far off.) (I wonder if those guys got money or crypto for their ransom???) (Anyway…)

In the 1930s, the richest man in the world was John D. Rockefeller. Topping out at about $1.4 billion 1934 dollars, making him worth $35 billion dollars today. Some would pooh pooh that trifling amount. Today’s richest of the rich are worth over $200 billion dollars, except they aren’t. A billionaire in the 1930s had a billion dollars in dollars. True, some of that might be in the value of their business (in Rockefeller’s case, Standard Oil), but their businesses were worth their values in real dollars. Today’s wealth is more a standard of leverage than liquidity. If John D. wanted to buy the New York Times for $20 million dollars, he would have gone to the bank, taken out $20 million dollars (or maybe he’d get it out of his change jar at home), and paid Adolf Ochs $20 million dollars. (He didn’t do that and probably missed out on a great deal because newspapers were a dime a dozen during the depression years.) Today if someone wanted to buy say Twitter, they’d be lots of stocks transferred and “financial considerations” made but nobody ends up with real folding money to put in their wallets.

The other thing about the difference between 90 years of inflation is that not only has inflation devalued the dollar. So called market adjustments must also be taking into consideration to really determine the purchasing power of a dollar is. Remember those $25,000 dollars oof today’s money that would buy you 1,000 of 1933 dollars. You need about 2&1/2 times that much to buy what $1,000 would buy in 1933. The actual spend equivalent of $1,000 1933 dollars in about $62,000 today.

Put another way, in 1933 the average income was $1,300 per year. The average house cost $5,700 or 4.4 times the annual average income. In 2024, the average U.S. income was $62,000, the average house cost $520,000 or 8.4 times the average annual income. We are actually making more money but getting less spending power. By inflation only, that average $1,300 dollars is about $32,000 today but the average income is almost twice that. By calculating for inflation alone, that $5,700 house should cost $140,000 today. The house price rose 3.4 times higher than the rate of inflation.

Remember those numbers when you read in this morning’s paper that your Senators approved the Big Bastardly Bill taking even more of your money away. I’m sorry, any billionaires reading please, please ignore that last statement. You’re going to get to keep 38% more than you did last year. Everybody else go out for dinner this year. After next year’s tax bill you probably can’t afford meatloaf, pie, and coffee all in one meal.

Uncommon Sense

Michael 3 Comments

The past few weeks have sorely tested my patience I wish everybody would go out and invest in some self-help books that include how to recapture some common freaking sense. Let’s start.

It’s summertime in the good old U. S. of A. which means, even in the absence of global warming, it gets hot. Glass amplifies heat. An enclosed space holds heat. Things inside hot enclosed spaces cook. And that’s how Jordan Mott came up with the oven in 1490 (minus the glass – that’s a bonus). Because we know it doesn’t count unless it happened in America, we can fast forward to 1882 when Thomas Ahern worked out the details for an electric oven. Granted, he was Canadian but that’s as close as we’re going to get unless you want to count the first person who fried an egg on the hood of a car. That had to be a “real” American, and that gets us to cars, hot cars, hot car interiors on hot summer days. There have been such a spate of kids being cooked in the back seats of cars – again. The government is mandating that by 2025 all auto manufacturers to put in systems that display and sound warning messages to check the back seat for Junior and Fido when you shut off your car. If you aren’t lucky enough to have one of the cars that already have such a warning and/or until you do, they suggest you put “something of value” in the back seat so you don’t forget your kid. Duh! Is it just me or is there nothing anybody owns more valuable than their own child? That was an honest to gosh, news piece just within the last week on most major news outlets. Don’t forget your kid, put something of value in the back with them.”

While we’re on the subject of kids, in June in a small Pennsylvania airport, the TSA confiscated a loaded handgun – in a baby stroller! According to a report on TSA.gov, “The man said that when he and his girlfriend take their dogs and child for a walk that he keeps his loaded gun in the rear stroller pocket and forgot to remove it when they came to catch their flight.” I call bull-doodoo! If you’re taking a baby on a plane with a stroller you are using every cubic inch of that to add carryon volume. And where in H-E-Double Toothpicks is this guy walking that he needs to carry a loaded gun with him when he’s out with his pseudo-family? Let’s stay with guns in airports for a while, even though I ranted about this before. Also, from TSA.gov, “Transportation Security Administration (TSA) officers detected twice as many firearms per million passengers screened at airport security checkpoints nationwide in 2020 compared to 2019, and at a significantly higher rate than any other year since the agency’s inception.” A total of 3,257 guns were confiscated from passengers carry them on their persons or in their carry-on bags, and about 83 percent of them were loaded. Those figures didn’t include the number of guns confiscated because they were improperly packed in checked baggage, or toy and BB guns. All while people on planes are beating each other up for taking too much of the shared armrest or [shudder] being compelled to wear a mask.

And now that the delta variant has bloomed in the US to where masking might become more routine again, I figure something in August I get to write this post all over again with a new set of “can you believe this” tales.

Patience. Please give me patience.

not-vaccinated-section-3

With Three You Get Collections

Michael 1 Comment

Where does a collection end and an obsession begin?  For that matter, where does a collection begin?  We believe that with two you have a spare.  With three you have a collection.   Webster prefers not to be so specific, calling a collection a mass or a pile, as in “that’s a pile of money you have there” if someone was to describe your twenty dollar bill collection.  But why do we even care?

In the news this weekend was the report that someone paid $1.38 million (a pile of money, for sure) for a penny.  It bears mentioning that it was a penny minted in 1793 and it was all copper.  Ok, it bears most mentioning that it was minted in 1793 but the news people all seemed a bit obsessed with it being copper, too.  That penny came up in our discussion over brunch and that’s why we care.

Those shows on television that claim to be reality shows (unlike this very blog you are reading that we know is the real reality show), might like to lead viewers to believe that finding a million dollar penny is no harder than breaking into your piggy bank, blowing the dust of the pennies that appear to be all copper, make up a good story to go with one, and drop it off at the local pawn shop.  If that doesn’t work, go bid on a storage shed that has been ignored by its renter for long enough to get on the “sell for rent” list and you will certainly find at least one million dollar penny, probably 3 or 4, taped to the inside of a clarinet case underneath the felt covering.  They’ll also tell you that if you don’t find that million dollar penny and you keep buying up clarinet cases looking for it, and you keep all the empty clarinet cases in the kitchen piled so high that you can’t get to your trash compactor, all it takes is a weekend with some assertive relatives and a professional organizer (household, not union), and you too can avoid eviction, commitment, or both.

But we digress…

She of We asked why somebody would pay so much for something that, at face value, is only worth one cent.  He of We cautioned her that she has art hanging on her wall for which somebody paid much more than face value if face value is calculated by the cost of canvas and paint.  It’s in the beauty of it.  It gives her joy to look at.  And there is the reason.  Beauty and joy trump face value every time.

The collecting game is probably not terribly rational.  There are many this weekend who are questioning the sanity of that unidentified buyer of the 1793 penny and his $1.38 million bid.  Both of We have several collections and in their entirety they don’t cost $1.38 million.  In their entirety they may not cost more than the computer you are using to read these words.  Yet there are still some people who may question the sanity of spending even just a few dollars for one more Mr. Potato Head, one more holiday inspired animated hat, or one more miniature version of a 1960’s era full size toy.  Some may question putting our risk of insanity in the same category of one who spends well over $1 million on a single coin as somewhat ambitious.  Then again, some people may consider putting a pile of hats that sing and move up and down in the same category as a coin collection is in itself pretty ambitious.

What is a collection?  Encarta gets a little more verbose than Webster and is willing to state that a collection is a set of objects held for its interest, value, or beauty.  So what is the value of that 1793 penny?  One cent?  $1.38 million?  It’s been said the value of any object is how much somebody is willing to pay for it, yet its worth is how much somebody wants for it.  Rarely are worth and value equal.  If our collections actually cost what we feel they are worth, they would far exceed our ability to pay for them, thus lowering their value to us.  But it is because we place such worth on these objects that give us so much joy that they are so valuable to us.

Yes, a collection is interesting and beautiful and valuable.  And not at all rational.  And just a little obsessive.  But perfectly sane.  If we didn’t covet those things of beauty that give us such joy, why would we want anything?  Is it crazy to spend $1.38 million for a coin?  Is it crazy to spend $20 for a hat that plays “The Stars and Stripes Forever?”  The answer to both is yes.  But neither is the question.  The question is, what is it worth to look upon what you have and say you wanted it, you looked for it, you found it, you got it, and you like having it for the joy that it brings you?  It’s worth more than all the money in the world.  It truly is priceless.

Now, that’s what we think.  Really.  How ‘bout you?