79-02-B6
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Miscellaneous 1[edit]
Transcript[edit]Down at Texas A&M University , there is a Center for Education and Research in Free Enterprise. It was organized primarily to help Texas high school teachers understand and teach good economics. Its endowment and operating funds are now up around the $2 million mark, and it has just published its first newsletter. In it is a fascinating collection of facts. For instance, the recent shortages in lead-free gasoline had government officials talking about rationing again. We had rationing for a lot of commodities back in World War II, the newsletter points out. In 1944 the federal government issued five billion ration coupons per month. The government had to hire 65,000 bureaucrats to run the program. They were aided by some 325,000 volunteers. If Washington tries it again, it's not likely that it will be able to count on the free labor of all those volunteers. Think of that the next time someone calls for government rationing. In 1976, the Center reports, the top five percent of American income earners earned 22 percent of all income -- and paid 40 percent of all federal income taxes. New York City is on the financial rocks. Do you know why? One reason is suggested by this fact: New York's government in 1975 -- the year the financial crisis began -- spent $1,900 per city resident. Los Angeles was second -- it spent $550 per resident. Chicago spent $350 per resident. Congress just increased the minimum wage schedule last year. Between 1976 and 1981 the minimum wage will rise nearly 10 percent a year . At this rate, the minimum wage in the year 2000 will be $20/hour, or $41,600 per year. If the inflation rate continues at 10 percent a year however, that $20 won't buy any more than the minimum wage today. The public seems to think that after-tax corporate profits in manufacturing are about 30-35¢ on each dollar of sales. The Center points out that the real after-tax profit on sales is about five cents on the dollar. In other words, many Americans think manufacturing companies make six times as much as they really do. In some states, the Center reports, it is against the law to advertise the price of eyeglasses. In those states the price of eyeglasses is about 25 percent higher than in states where advertising is legal. The next time someone tells you that advertising merely costs the consumer money, point that out. In 1976, compliance with federal regulations on consumer goods and services cost every American an average of $300 apiece. By 1979 it will cost each of us $500 apiece. Allowing for inflation, that would still be $429 apiece. Do we get more by paying this extra amount? Perhaps -- but we certainly get a lot less free choice. I say thanks to the folks down at Texas A&M for these thoughts, and hope that all of us hear a lot more from their Center for Education and Research in Free Enterprise. This is Ronald Reagan. Thanks for listening. |
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