A fact can be objectively verified and proven through evidence. A fact is something that is indisputable, based on empirical research and quantifiable measures. A fact can be something that definitely occurred in the past. Truth, on the other hand, is entirely different; it may include fact, but it can also include belief. But facts are not decided by how many people believe in them.
When I hear somebody saying something that I’m pretty sure is devoid of factual basis, it drives me up a wall. Although this practice is widespread these days, I rarely assert my contention that the offending statement lacks accuracy. I learned a long time ago that it’s futile to engage in debate with an ignorant person. By ignorant, I don’t mean stupid. I mean a person who is unaware or uninformed of facts, or perhaps chooses to ignore the facts.
I often hear people pontificating about one thing or another, passionately producing evidence to prove their point’s veracity. In most cases, these assertions are based on the individual’s fervent belief in the truthfulness of their claim, but little, if any, empirical facts. It’s difficult to challenge these declarations because beliefs are typically anchored in faith, trust, and confidence – convictions that are hard to change even when confronted with inconvenient facts.
Is it just me, or has the rejection of facts become more prevalent in recent times? Fake news is the new, trendy battle cry often asserted by the irrational, the willfully ignorant, or the devious miscreant as they wantonly avoid the facts. I know there are many who are just not motivated to gather more information about the things they choose to believe. I think this is an egregious mistake.
Here is an example. At a social function the other day, I heard a small group of people commiserating over the cost of automobiles, which quickly led to a unanimous agreement that prices for everything are crazy high. One of the contributors confidently proclaimed that it was all because of President Joe Biden. I noticed the other members of the group, to their credit, responded with various nonverbal expressions of skepticism, ending the discussion.
I was tempted to contribute by offering several facts about economic policy and financial trends in an effort to persuade this small group that it was highly unlikely that the high price of cars, or anything else, could be blamed on the President of the United States, but I kept my mouth shut. As I said, I’ve been around long enough to know that people who’ve made up their minds about something are almost never interested in hearing contradictory evidence that exposes their ignorance and ultimately proves their accusations false.
Politics does play a part in the economic picture. The House of Representatives, for example, is responsible for initiating revenue bills, which may increase or reduce taxes. But, there are numerous influences derived from many diverse sources which ultimately determine our individual and collective financial situation at any given time. Several facts make it obvious that neither Joe Biden, nor any other president, single-handedly creates financial prosperity or adversity. If you want to find someone or something to blame for the high price of automobiles, you're going to be hard pressed to pinpoint an accurate single source.
If you’re 35 years old or younger, you may not realize how quickly things change during a lifetime. Many of the things we consider essential today, like laptop computers, smartphones, GPS, the Internet and World Wide Web, did not exist 50 years ago. And the prices for all the things that did exist 50 years ago were a lot less in those days than those same things cost today. The average income 50 years ago was also a lot less than it is today.
Now, if you’re under 35, 50 years ago may seem like ancient times, so who cares? But there are approximately 115 million of us here in the U.S. who are still around and remember how things like prices and income used to be in those days. We’ve lived through all the good times and bad times and the ups and downs of our economy. Sometimes, you’ve got to take a moment to consider the past in order to understand the present.
In early months of 1970, I was a 20-year-old staff sergeant in the Air Force, earning $249.90 per month. Because I was married and had a brand-new baby daughter, the military paid me an additional $90 per month for quarters allowance (off-base housing). Making ends meet on my military pay of $4,078.80 a year, before taxes, was challenging - but not as bad as you might think.
In 1970, a candy bar cost just 10 cents. A postage stamp was 6 cents. We paid 25 cents for a loaf of bread and 39 cents for a 5-pound bag of sugar. A gallon of gas was 36 cents in 1970. The average cost of a new house at that time was $23,500. I remember my parents bought a new house in the mid-60s for around $18,000.
The average “affordable” new car in 1970, such as a Ford, Chevy, Dodge, Plymouth, Buick, or Pontiac, would have cost you in the neighborhood of $3,500. My first car, a 1955 Chrysler 300, cost my father $200 in 1966. In the 50s, it was considered a luxury car. To an 18-year-old, it was not a cool car. But never look a gift horse in the mouth. This same car today, restored, will cost around $20,000. Hold that thought.
Of course, the average income in the United States during this time was a lot lower than today’s wages and salaries. The average income in 1970 was $9,500. The minimum wage in 1970 was $1.60. If you worked full time for minimum wage, your annual income would have been $3,328 – poverty level even then.
If you’ve been around a while, you know that income goes up over time – even minimum wage. But so do prices, and, historically, prices go up faster and higher than does income. Why is that, and who’s pulling the strings?
Well, it’s not the President – not any single president, nor all of them put together. Since 1970, we’ve had 10 different presidents: 6 Republicans and 4 Democrats. In the past 50 years, there have been many economic ups and downs, but the rate of inflation ensures that, over time, costs and income will both keep going up. The fact is, there are many influences that affect our economy. Identifying a single scapegoat or a silver-bullet cure is unlikely because, well, economics is pretty complicated stuff.
Getting back to the price of cars: the average price of a new car in 2024 is $47,244, which is actually down about 2.25 % from the average cost in 2022. In 2018, at the beginning of the pandemic, auto and truck prices began to soar by as much as 32%, then began to drop in early 2023. Looking at the big picture, the average price of a personal vehicle has increased 1,340% from 1970 to 2024, clearly outpacing the rise in average income.
I think we can make a pretty good case for price gouging by the auto industry as a significant cause of higher car prices. The effects of the Covid pandemic are also considered by economists to be the primary cause of increases in cost for just about everything, including automobiles.
To be fair, there are all kinds of economic pressures that drive individual companies, and whole industries for that matter, to increase prices over time, including supply and demand, cost of materials, cost of sales, need to expand and keep up with technology, satisfy investors and stockholders, and the relentless pressure to increase wages.
Looking back 50 years, average earnings per job have increased 843% from $7,600 in 1970, to $71,600 in 2022. Factor in the average annual income for the top 10% of workers to the mix, $173,176, and it becomes obvious that there are many diverse perspectives in the way people react to the state of the economy. At the bottom of the economic equation, those who work for minimum wage experience the most pressure to keep up with increasing prices. The annual income for a full-time minimum-wage worker today is $15,080, a 450% increase from 1970 – half that of other wage earners.
For those of you who are still reading these boring economic observations, I just want to add that the federal entity specifically responsible for managing our economy is the Federal Reserve, which is an independent agency accountable to the public and to Congress. They set target interest rates that banks use for borrowing and lending money. Their financial manipulations, plus national and world events, such as wars, financial crisis, stock market performance, major industry upheavals, ecological disasters, and so on, are the most significant influences on inflation and thereby economic fluctuations – not the President.
Okay, I got that out of my
system.
There are, of course, many other facts to consider in the effort to stimulate our minds; facts that don’t involve quasi-political undertones, facts that you will probably find more fun. For example, did you know that:
If after reading this blog you’ve determined that facts are boring and you don’t want to hear any more of them, then I have good news. I have eight novels of fiction for sale that do a pretty good job of concealing the factual information contained between the pages. If you need some relief from the facts listed above, I recommend you purchase one of my novels.
Thank you!