When we hear the cliché “You get what you pay for,” we generally assume it means that the more you pay for something, the better quality product you’ll get. But it can also have a different meaning: If you reward someone for doing something, other people will see that and assume they should do the same thing.
For example, Americans are often criticized because we value sports over academics. Athletes make millions and teachers don’t. But that’s why most children long to grow up to be sport stars and not educators. We’re getting what we pay for. The problem is we’re no longer paying for the things we need.
New York Fed President William Dudley recently bragged that our national economy is improving: “Today you can buy an iPad 2 that costs the same as an iPad 1 that is twice as powerful,” he told a crowd in Queens. But, as the Wall Street Journal reports, one bystander pointed out, “I can’t eat an iPad.” Someone else asked Dudley, “When was the last time, sir, that you went grocery shopping?”
Prices are indeed going up on things we need. As an April 5 story in The Washington Post explained, “it’s not computers and cars that are getting more expensive, it’s gasoline, which is up 19 percent in the past year, ground beef, up 10 percent, and butter, up 23 percent.”
Yet these commodities don’t appear in the Federal Reserve’s formula for calculating inflation. So experts can point to statistics that say things are getting better, while drivers and shoppers perceive things are getting more difficult.
Meanwhile, federal regulations make it steadily more expensive to actually build things here, often leading companies to move overseas. This is in stark contrast to how the fortunes of yesteryear were built.
Andrew Carnegie used innovation and efficiency to revolutionize the steel industry. By doing so he made his plants more reliable and drove down consumer prices. He got rich, but everyone benefited. J.D. Rockefeller had the vision and took the risks to build businesses that took petroleum from the well to the gas tank and made money on each step. By doing so he turned oil from a quack cure into an industry that enabled America to grow and thrive.
It’s not clear that our government wants to encourage manufacturing these days.