Recently, I was approached by members of the Coalition of Concerned Legal Professionals, who in addition to their verbal pitch, gave me one of their flyers.
An objective stated in their flyer was to provide legal help to those who could not afford lawyers. They could have added the professions of doctors and dentists as not being affordable as well.
Instead of focusing on why people can’t afford the services of professionals, the emphasis was on providing free or low-cost services to those in need.
We are a nation that increasingly focuses on effects rather than on causes. Consequently, we change very little.
Low-income people cannot afford the services of professionals because of inflation. Inflation is a form of theft that affects all of humankind. It goes unpunished because the public has little concept of its cause or consequences.
An extreme case of inflation occurred in Germany as a result of the Treaty of Versailles, in which the German government was asked to pay an amount of reparations for World War I, which could not possibly be attained. The German government decided to print billions of marks to pay its debts, and the mark became worthless.
The effect on German society became catastrophic.
A German woman who had experienced that crisis told me that as the inflation began, she saw a pair of shoes in the store for 20 marks, which was more than she could afford. But she saved her money from the following week’s paycheck and went to buy the shoes. But then they cost 40 marks.
She got a raise the following week, but when she came back to buy the shoes, they cost 100 marks. Her income never caught up with the price of the shoes. Individual savings became worthless. Society descended into chaos. And the government collapsed.
An extended period of zero inflation occurred during the Great Depression in America. People earned very little money, but there wasn’t any inflation. And when people saved for something, the price of that commodity didn’t go up. If a person saved a dollar a week, at the end of five years, they had enough money to make a down payment on a house, which might have cost less than $1,500.
My parents did that, and bought a house at the beginning of World War II.
During the Depression, insurance companies sold endowment policies, which provided a form of enforced savings. When the time arrived for me to purchase insurance, endowment policies were rapidly falling out of favor as the post-war inflation ate into the value of those policies.
About the time I started my business during the 1960s, the minimum wage was $1.40 an hour. By the time I ended my business in the 1990s, it had reached about $4.50 an hour. When the minimum wage goes up, all wages eventually go up. This causes the value of savings to go down.
People who were saving to buy a house when the minimum wage was $1.40 an hour found the cost of the house they had planned to buy had more than tripled in price when they were ready to buy it. Like the German woman whose income never caught up with the price of shoes, the savings of people today cannot catch up with the price of a home.
Increases in the minimum wage are major inflationary influences, but there are others.
Another inflationary pressure results from automation and mass production, which cause the goods and services that cannot be automated to become inflated. Personal care such as that provided by doctors, lawyers, barbers, hairstylists, manicurists, taxi drivers, truckers, coaches, therapists, and any activity that cannot be mass produced or automated is becoming increasingly costly.
We have become a society that cannot afford itself, and conditions are getting worse because influential powers benefit from this inflation.
For those who believe in large government, increases in inflation result in more people in need of government services. As the bestower of minimum wage increases, the government garners votes while increasing dependency.
For those who own many assets, inflation increases their value.
Who effectively works to lower inflation? No entity that this writer is aware of. If no one works to curb inflation, but vested interests work to increase inflation, what will the end result be?
See above for the answer. It always happens.
Just one quick footnote, upon reflecting on this Point of View, I realized that my rent once amounted to a half of my Social Security check. Now it amounts to two-thirds of my Social Security check. If it were not for subsidies from the Senior Citizen Rent Increase Exemption, I would no longer be able to afford the rent.
I am now dependent on governmental largesse for inflationary reasons. More and more retired people can no longer afford their rent without some sort of government assistance.
Inflation — which the government caused — is now making us wards of the state.
Think about that.