I’ve been reading about Harry S. Truman for the last long while.  Mostly because I’m reading the thousand page biography and trying to only ignore my family as much as absolutely necessary and it takes a while to weave your way through a big book like that.

One of the things President Truman and the Democratic Party stood for then was price controls. Price controls for commodities and for housing mostly as a war-time measure.

I’ve thought about that quite a bit, in part because I’m struggling to make things work on one income, and it ain’t easy.

The median household income in 1950 was $4,237 per year.  That number included 87% families with a husband and wife working and the wife was employed in about 20% of those families. In 2012 when domestic relations were not tracked as closely or using such terms as husband and wife the household income is calculated by all of the people in the house 15 and older whether related to the householder or not.  Just based on my personal observations, it sure seems like a lot of people have two or more household incomes, or at least a lot more than in 1950. The household income in 2012 was $51,371. The average household income from 1950 with inflation adjusted dollars is $39,868. It appears we have made some gains, but it seems that more people are working to get to that average income today too.

Inflation adjusted gasoline at 1950 prices would be $1.71 per gallon. Inflation adjusted average price of a 1950 new car $14,385. (in 2012 it was $30,748) Inflation adjusted price of a new house in 1950 $80,500. (in 2012, it was about $239,000) 1950 minimum wage was $0.75 per hour, or about $7.15 per hour today. So that’s about the same.

In short, according to averages, we are earning about 25% more per year with more hours worked while the cost of gas and cars have doubled and housing costs have tripled. Inflation has gone awry.

Price controls would help to fix that. If real estate was a place to live instead of a vehicle to squeeze dollars out of people, we would all be better off. If we allowed for more free enterprise (people entering the market place for business) and less of a free market (the money changers controlling everything) it probably would not take too long for things to even out.

Maybe I’m sounding a bit like a wild-eyed radical compared to my more conservative postings. Well, here’s 3 things to consider.

1- Regulating the value of money (what a dollar will buy) is explicitly a power granted to congress in Article I, Sec. 8, paragraph 5.  Congress is supposed to protect the property rights of the people including the value of their money by helping to control inflation. A floating dollar and a floating market is not working out for the people too well. Controlling inflation will go far to help the people.

2- The Nephites in the Book of Mormon also set prices for food. Alma Chapter 11, verses 7 and 15 indicate that grains were tied to the value of their money.  You could simply be industrious and grow your own money, so to speak. Your main worries were crop failures but you didn’t have to worry about the price of grains fluctuating from year to year.

3- I know the global economy is a highly complex thing today and simple answers or pell-mell instituting prices for things would be a nightmare, but I suspect the remarkable complexity of the global economy is in part made so confusing so that people will not see what is going on as easily(ever try to make sense of credit default swaps?).  Sort of like how lawyers write laws so complex only lawyers can make sense out of them.

I know there is some wisdom in price controls. Maybe some day we’ll figure it out.

Comments Welcome