Issue 7, Spring 1994

William A. McEachern, Editor

The Evidence File

• The world's twenty highest-paid athletes in 1993, according to Forbes (20 Dec. 1993), included four boxers, four auto racers, four tennis players, three basketball players, two football players, two golfers, and one baseball player. Note that the representation tends to be highest among athletes who compete individually rather than as members of teams. Earnings for the top twenty average $13.8 million. Half the group earned more from product endorsements than from pay. Michael Jordan had the highest total income, with a salary of $4 million and endorsements of $32 million. His recent retirement will not likely affect his revenue from endorsements, at least not for a few years, and this may have influenced his decision to retire and ultimately forego a salary that represented only one-ninth of his total income.

• The United States accounts for seven of the world's top ten family fortunes, according to Forbes listing of the world's billionaires. The greatest fortune, an estimated $25.3 billion, is owned by the Walton family. Over one-third of the world's 311 billionaires live in the United States. I calculated that if the U.S. government expropriated and liquidated all the wealth of the nation's billionaires, the proceeds would just about cover the federal deficit for fiscal year 1993.

• U.S. inflation in 1993, at 2.7%, was a seven-year low. The GDP implicit price deflator has increased tenfold since 1929. Here are some prices taken from an A&P supermarket ad that appeared in the Brooklyn Daily Eagle on October 24, 1929: Campbell's Tomato Soup, 7 cents per can; Camel or Lucky Strike cigarettes, $1.19 per carton; Kellogg's Rice Krispies, 12 cents per box; Jell-O, 3 cents per box; Eight O'Clock Coffee, 39 cents per pound; butter, 53 cents per pound; and roasting chicken, 38 cents per pound. I recently checked prices for these same products at my local A&P. Generally, prices for processed products increased more than other products. For example, Rice Krispies and cigarettes each increased by a factor of 19 and Jello increased by a factor of 17. The price of coffee and soup increased by a factor of five, but butter only tripled in price and chicken merely doubled.

• The lecture circuit can be quite lucrative. Here is the asking price for some well know economists as reported by a special issue of Forbes called FYI: Alan Greenspan, $25,000; Martin Feldstein, $25,000; Milton Friedman, $20,000 (but he accepts no engagements outside of San Francisco); John Kenneth Galbraith, $17,500; and Arthur Laffer, $10,000. Expenses for travel and accommodations are extra.

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