1984 Forecast: Sky was the limit for prices 2011.01.05

Written by David Green.

By JEFF JOHNSTON

Special to the State Line Observer

Smoking is hazardous to your health. But guessing the price of a pack of smokes 16 years from now might be hazardous to your credibility.

At least that’s the way it looks when you dust off the predictions of the Money Advocate — a biweekly investment letter from Minneapolis — as found in a March 16, 1984, edition of The Blade. The article looked at the Advocate’s forecast of prices in the faraway, futuristic year of 2000.

Gene Beaverson of Fayette remembers wondering how those predictions would hold up.

“I thought, well I’m just going to cut that out,” he said, and he did. The clipping he stashed in his home safe gives an interesting glimpse of where money experts thought the economy was headed.

“Would you believe $14 a gallon for gas, $11 a pack for cigarettes, $40 for a stick of lipstick?” the article asked.

Well, no, we wouldn’t — not today, anyway.

A quick check finds gas prices hovering around the $3 mark, cigarettes costing (David: Please add current prices in Michigan and Ohio -- I couldn’t find reliable numbers online, but I’m guessing you know because of ads) and lipstick costing $5 to $8 a tube.

Go ahead and breathe a sigh of relief that prices haven’t hit those heights even 10 years after the year 2000.

But you might want to note that the Advocate predicted pay would rise right along with prices, with everyone earning about 10 times more in 2000 than in 1984.

If the average annual income in 1984 was about $16,000, that means we all would have been making $160,000 (on average) in 2000. By now, in 2010, maybe we’d all be millionaires — although by the Advocate’s figuring, we’d be shelling out $200 for a dress shirt.

Some more predictions?

• $100,000 for an average American-made car.

• $1,200 a week in groceries for a family of four.

• $450 for a doctor’s office visit.

• A cool million for an average new home.

“Thank goodness that didn’t happen,” Beaverson said of the scary-sounding price hikes.

How did the Advocate get it so wrong? It looks like the biggest mistake was assuming that inflation would only get worse over the years. It’s actually been rather flat for a while.

The Advocate predicted the dollar would lose 90 percent of its value from 1984 to 2000. In other words, something that cost a dollar in 1984 would cost $10 in 2000. But by some measures, it’s taken a lot longer to see that kind of loss of value.

“I graduated from high school in 1955, and gas was 29 cents,” Beaverson recalled. “A dollar and a quarter was pretty good wages.” Increase those numbers by a factor of 10, and you get $2.90 gasoline and a $12.50-an-hour wage.

For gasoline prices, especially, “That’s about where we’re at,” Beaverson said.

Gas at $14 a gallon might be years away (who knows?), but not everything in the Advocate’s forecast looks outlandish in 2010. Eleven-dollar-a-pack cigarettes?

“We were out in Las Vegas in February,” Beaverson said, “and they were about $9 a pack in a casino.”

Predictions from 1931 projected life in 2011

For the 80th anniversary of the New York Times, editors decided to ask some leading thinkers for their predictions of what the world might look like another 80 years into the future.

The predictions were made in 1931 and they looked ahead to the year 2011. The world was a far different place—culturally, socially and politically—but some of guesses were surprisingly accurate.

W.J. Mayo, co-founder of the Mayo Clinic, noted advancements in medicine that led to an increased average life span of 58 years and he predicted that would increase to 70 years by 2011. Not bad; the actual life expectancy is close to 78 today.

Anatomist and anthropologist Arthur Keith warned that medicine would become overspecialized. In his day there were physicians, surgeons and midwives. Now there are more than 50 specialized branches.

Physicist Robert Millikan looked for big changes in the field of biology and he expected the scientific method to solve the world’s social problems.

“The enormous possibilities inherent in the extension of that method, especially to governmental problems, has already apparently been grasped by Mr. Hoover as by no man who has heretofore presided over our national destinies, and I anticipate great advances for moving in the directions in which he is now leading,” Millikan wrote.

Science hasn’t solved our social problems and Herbert Hoover isn’t viewed favorable by many historians.

Physicist and chemist Michael Pupin believed that in the future workers would come to share the profits of the goods they produced. He expected that wealth would be distributed equally, and he was very wrong.

Physicist and Nobel laureate Arthur Compton stated that due to better communication, natural boundaries would lose their importance and nations would bind together with a centralized government.

History says that boundaries are still very important, and countries still go to war over them.

Industrialist Henry Ford—the most well known of the lot—didn’t hazard much of a guess at all.

“To make an eighty-year forecast may be an interesting exercise, first of the imagination and then of our sense of humility,” he wrote, “but its principal interest will probably be for the people eighty years on, who will measure our estimates against the accomplished fact.”

That’s what we’re doing, but Henry gave nothing to measure against.

Ford did say this: “After all, the only profit of life is life itself, and I believe that the coming eighty years will see us more successful in passing around the real profit of life.”

Sociologist William Ogburn expected the U.S. population to stand at about 160 million (a big miss there) and he saw increasing automation in manufacturing.

“The magic of remote control will be commonplace.”

There will be fewer farmers (true) with more wooded land for wildlife (false), and poverty and hunger will be eliminated. The crises of life will be met by insurance (for some), but inequality of income and problems of social justice will remain. He expected the role of government to increase, and that it has.

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