When A Dollar Was Worth A Dollar

IMG_2219We stumbled across this fading barfront sign as we walked through New Orleans to the Bywater neighborhood.  Imagine!  Cold Dixie bottled beer for only 13 cents each — and highballs for only 35 cents a pop.  Of course, that was back when people actually drank a drink called a “highball.”

The beers that we drank in New Orleans this past weekend all cost more than $5 a bottle.

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Argentina Follows The Familiar Downward Spiral

George Santayana famously observed: “Those who cannot remember the past are condemned to repeat it.” We’re seeing that wisdom play out, again, in Argentina.

Argentina is an economic basket case. Under the government of its leader, Cristina Fernández de Kirchner, Argentina has spent lavishly on social programs and nationalized some industries. Argentina doesn’t have access to global credit markets since it defaulted on its debt obligations in 2001 and 2002. So the government is spending its dwindling reserves and seeking to devalue its currency — and in the meantime the Argentine peso is plummeting in value against the dollar and inflation is raging. The peso lost 19 percent of its value in January alone and inflation is somewhere above 25 percent.

Rather than learning the obvious lesson and ending the policies that are preventing free markets from operating, Argentina has gone in the opposite direction. The government blames supermarkets and oil companies for the inflation, and it placed caps on the prices of certain common goods sold at stores. Not surprisingly, those stores promptly began reporting shortages of the price-controlled items, because manufacturers and other suppliers obviously aren’t going to be pumping out goods that they can’t sell at a profit. Why would any business ship its goods to be sold in a price-controlled hyperinflation zone when it could just as easily send those goods to be sold in countries with rational economic policies? In Argentina, however, the government responded by fining the retailers and blaming their executives for raising prices.

We’ve seen this story again and again, in Latin America, in the Soviet Union, and in every other country that has adopted economic policies that interfere with the law of supply and demand and hinder the operation of free markets. Argentina will eventually experience a crash, as inflation spirals out of control and shortages become even more acute. But will it actually learn and take to heart the lesson it should have learned before?

Wherefore Art Thou, Cheap Date?

Saturday afternoon Kish and I went to see a movie.  The tickets cost us $10 a pop.  $10 to see a movie?  We’ve apparently crossed one of those product cost thresholds; theaters must feel there is no longer meaningful price resistance to two-figure ticket prices.

We shelled out the $20, but I found myself wondering about high school and college kids looking for the proverbial cheap date.  Unless you go to a second-run $1 cinema (with the change in price thresholds, maybe now it’s a $5 cinema) going to the movies certainly doesn’t qualify.  Between $20 for tickets and the standard inflated candy, popcorn, and soda prices, going to the movies has become an expensive proposition.  In this time of high unemployment among young people, how many kids have $35 to blow on a few hours entertainment?

Bowling is a perennial cheap date option — but many bowling alleys have gone upscale, with video screens, elaborate sound systems, disco balls overhead, and strobe lights down the lanes, and the prices for a game have increased as a result.  And you’ve got to drive there, which means you’re burning some of that $4 a gallon gas.  During the fall you can go to home football games on your student ID and make do with reasonably priced food from the band booster concession stand, but what do you do the other 47 weekends of the year?

I’m guessing that kids these days spend a lot of time in their parents’ houses, watching videos and playing video games.  Having somebody over to your parents’ house seems more like awkward hanging out than a date; I always thought the appearance as a couple in public, where your friends could see you together, was an integral part of the true dating experience.  Staying at your parents and sponging their food doesn’t exactly seem calculated to produce much self-respect on the part of the would-be couple — and it’s got to be exhausting for parents who have to come up with lame excuses to go down to the basement every five minutes or so to make sure nothing untoward is going on down there.

Maybe modern would-be Romeos and Juliets are just resigned to making do with less, or maybe they just “go Dutch.”  Either way, it’s too bad.  There was fun and inner value in the cheap date; I always felt good when I took my girlfriend out and paid for her movie and popcorn out of my own pocket, from my earnings at whatever job I had at the time.  I always thought my girlfriend appreciated being treated, too.  It’s sad to think those positive feelings aren’t being experienced by today’s jobless, house-bound youth.

The Fifty-Buck Fill-Up

Don’t look now, but gas prices in Ohio are spiking.  The cost for a gallon of unleaded regular has increased by more than 60 cents a gallon over the last three months.  This morning, with the gas gauge firmly on E, I stopped at the neighborhood Duke station for a fill-up.  To my chagrin, it cost $50.24 to top off the tank — and I had experienced the dreaded fifty-buck fill-up.

Gas prices are notoriously volatile.  Nevertheless, experts expect the prices to continue to rise, and rapidly.  The fact that prices are going through the roof during the dead of winter, traditionally a slow time for driving, is not a good sign.  The predictions are for $4 a gallon prices by spring, and even higher prices by the summer driving season.

The last thing our battered economy needs right now is a gasoline price spike.  People don’t budget for it, and if you are a commuter, as many Americans are, it is a cost you can’t avoid.  The money that consumers use to pay for most costly gasoline will not be spent on other goods and services and therefore won’t be used to create new jobs.  And the rising fuel costs will necessarily result in higher costs for goods delivered by truck — a category that includes everything from food to electronics — which means we may see an inflationary ripple effect in prices for a broad range of products.  This is not good news for an economy still trying to recover from a recession, or for a worker who took a faraway job because he needed to do so to feed his family.