Thanksgiving Day Dinner Celebration
As we approach Thanksgiving dinner and prepare to give thanks for our bounties, the U.S. Farm Bureau Federation contrives an annual wet blanket of “inflation” data-smog.
This year, the Farm Bureau Federation declares will be the second-most costly Thanksgiving on record. The average price of the classic feast for 10 people will come in at $61.17, or $6.20 per person. Included in the estimate are a 16-pound turkey, all the fixings, pumpkin pie desserts and other complements, such as peas and veggies, three pounds of sweet potatoes, rolls and butter, a gallon of milk, fresh cranberries and plenty of whipping cream.
After some 37 years of nominal cost increases totaling some 70%, this year is only the second-most expensive Thanksgiving meal in the farm federation’s survey history. This year’s estimate does signify a 4.5% decline from last year’s extreme of $64.05. But the cost is up by 25% from what it was in 2019 before the “inflation” caused by the pandemic.
The Farm Bureau is pleased with these results, since it says in “real inflation adjusted dollars,” the price of a Thanksgiving dinner has remained more or less flat for 38 years. As I wrote in “Life After Capitalism,” (Regnery 2023), “there are other ways to look at it.”
America’s consumer base has grown dramatically in size and purchasing power, and government farm subsidies average some $30 billion a year for a total over the 38 years of close to a trillion dollars. Yet food prices have been drifting up?
What is going on is an absurd mismeasurement of prices in Washington. The government wants you to believe that government spending is always worth what it costs, while it casts the baleful eye of the Consumer Price Index and GDP deflators to estimate the worth of private sector output such as food.
The result is a GDP that responds to government spending dollar for dollar, but massively devalues private sector output, such as Thanksgiving Dinners.
In 1994, Yale University Nobel Laureate William Nordhaus explained why in a paper entitled, “Do Real Income and Real Wage Measures Capture Reality? The History of Lighting Suggests Not.” He concluded that measured by the number of hours a typical worker had to spend to earn the money to buy lumens of light, government economic data underestimated growth since 1800 by a factor of six thousand.
Nordhaus’s estimates required detailed study of all the technologies of lighting from cavemen’s fires, to candles at Versailles, to incandescent bulbs, to fluorescent lights. Later estimates, including light emitting diodes (LEDs) interlinked wirelessly by Bluetooth, show that the declines in lighting costs continue through the 21st century.
Economists Marian Tupy, of the Cato Institute, and Gale Pooley, of Discovery Institute, took Nordhaus’s time-price concept and extended it far beyond lighting to all the goods and services of a modern economy, including Thanksgiving Dinners. In their book, “Superabundance” (Cato, 2023), they calculate that since 1986 the price of a Thanksgiving dinner has dropped 29.7% for an unskilled worker, 31.5% for a skilled worker, and some 70% for a typical worker who starts as unskilled and becomes skilled over time.
Applying time-prices to all the 50 commodities that sustain our economies, from wheat and oil to salmon and microchips, Tupy and Pooley show that around the world the time-price cost of these commodities has dropped close to 75%.
They also show that the greatest beneficiaries are people in poor countries. For example, the time price to acquire rice for a day’s meals in India has dropped from about seven hours in 1960 to less than an hour today. Meanwhile, the cost to buy a comparable supply of wheat in Indiana dropped from an hour to 7.5 minutes. The Indian peasant gained some six hours to do other things than scramble for food while the Indiana wheat purchasers gained just 52.5 minutes.
In an email yesterday, Gale Pooley summed up the latest data:
“Professor Jeremy Horpendahl has provided updated numbers on the percentage changes in four products essential to enjoying our Thanksgiving holiday,” Pooley wrote. “The products include a turkey dinner, gasoline, airfare, and wine. The Farm Bureau reports the prices on a typical Thanksgiving dinner. The Energy Information Administration reports gasoline prices and the Bureau of Labor Statistics reports the price of airfare, wine and wage rates.
“Remember, it’s not how expensive things are, it’s how affordable they are that counts. To measure affordability, we must compare prices to wages. This is what time prices do for us. A time price is simply the money price divided by hourly income. While the money prices of our four essential items have decreased from 0.8% to 13%, hourly income has increased by 4.4%. This means personal abundance has increased by 5.2-20%.
“Dividing the percentage change in the money prices by the percentage change in wages will reveal the percentage change in the time price. Personal abundance is how much more you now enjoy for the same amount of time relative to last year. We get 13% more Thanksgiving this year for the same amount of time it took last year.”
There is plenty of bad news out there. But let us be truly grateful for our bounties this Thanksgiving Day.