As an American householder I almost daily read or hear about a rise in the retail price of one or more of the items and services I use commonly: food, clothing, utilities, printed matter, cleansers, transport fares, taxes, repair services.
Such news usually is announced about like this:
"Hurricane Allen's impact on the Southwest will result in rises in prices of certain farm products. It may take only a month before the effect is felt in the nation's supermarkets."
Or there was this actual headline, placed over a United Press International news story from Olympia, Wash.: "Bumper Crops in Ash Path." And across the same front page from it was another; "Food Leads Price Surge."
When it isn't the result of some natural disaster like a flood, hurricane, heat wave, tornado, volcanic eruption, or earthquake it is the latest strike or a price hike in imported items.
As an ordinary middle class consumer I have no detailed knowledge of the workings of this part of the business world. But the readiness of that world to pass on to the householder increases in costs, it seems to me, calls for reform.
On the face of it, it looks as if what is happening is this: manufacturers, processors, distributors, retailers, and others in the business system alike are insisting on maintaining a fixed profit level that goes back to the peak years in a firm's or service's net earnings. That level has become sacred. There is a refusal, apparently, to absorb any portion of any increases in costs of operations resulting from economic conditions, but rather insistence upon passing them along as soon as possible.
But the citizen who must pay more and more constantly has no system that will produce a profit or a surplus that equals that of past years. He slips behind steadily and must strain to increase earnings and to practice new economies.
If the business world will not absorb reasonable percentages of the climbing costs and insists on passing them along to subdivisions within that world and they, in turn, move them on to the helpless customer, there not only is an unfairness but also a danger of a social explosion some day.
We supposedly are in a recession or depression. It therefore is with wonderment that I look at the announcements of the sailings of cruise ships from New York, miami, San Juan, and San francisco. I wonder where the passengers get the money, for such trips cost from $200 to $300 a day a person for voyages that run from 7 to 90 days.
Who buys all those luxury items advertised in the posh magazines like The New Yorker, Harper's Bazaar, and Vogue? Who lives in expensive condos on the US coasts and in major cities? How can people buy the costly rare stamps, paintings, and antiques sold at auctions or in private deals? And who puts up the cash for precious-stone rings and other valuable jewelry in the shops and for the high-priced dresses and suits displayed in fashion shows? What men pay offered in various mail order catalogs?
Why does the recession appear not to be reaching all these persons?
There may be a connection. A large number of executives and other officials of US firms continue to be paid extraordinary salaries (and other rewards less taxable), as any annual report indicates. The profits of US companies remain in the upper areas, a Chrysler being an exception rather than the rule.
Perhaps a rational explanation for these apparent inequities can be found in the offices of some Washington government department with computers that spew out the justifying statistics. But the million of persons going to the grocery stores or paying the plumbers' bills get little help in understanding the cause and effect of the situation. And even if we did understand the working of our economics system we still would not know what to do about the rising costs and the lagging incomes that cannot meet them.
In any case, could there not be a sharing of those costs with the consumer instead of an automatic pass-along policy?