Real exchange rates

This story (via) reminds me of one of the first ever posts on D-Squared Digest, on the subject of the astonishing cheapness of British public officials and MPs, relative to the price of buying one in the USA.

As you can see, the going rate is $25,000 to have dinner at the publisher's house with 20 people, including "business leaders" (who might also have paid to be there), "opinion formers" (I think this means journos), "Congress members" (but presumably not important committee members or they'd have said, "advocacy leaders" (NGO types) and "other select minds" (presumably family members of the person hosting the thing).

Right, $25,000 is roughly fifteen grand sterling; can we do this? I've got a dining table with extension bits - twenty people would be a bit of a squeeze but doable. I bet I could get the catering done for under a thou, surely? So, what's the cost of eighteen great and goods (I'm assuming that clients will realise that when I say 20 guests, me and the missus are a gimme).

Hacks are surely still available for a free dinner and a crate of light ale - Ozdiller stores is doing slabs of Tyskie for £15, but I suspect that I would be pushing it too far if I got more than three or four of them to my "Salon". So say £100 for four journalists - three @ £15, plus £55 for a decent mixed half-case from Majestic to bring in someone at more of the senior editorial columnist level. I might push the boat out substantially more for a Max Hastings or Simon Jenkins figure, but if I did, it would substitute for some of the higher-ticket attendees further down the bill.

"Advocacy leaders" sound like they'd come a bit more expensive as you have to have someone who's more recognisably in charge of something in order to make it clear that your person from Oxfam isn't the manager of a charity shop. But on the other hand, they're quite poorly paid and I think I could gather a brace for no more than £150 a head, so £300 cash outlay.

Now it starts getting a bit more expensive. "Staffers" means Special Advisors in the British context - most of these people are either slumming academics or hacks with ideas above their station, but lots of them have developed expensive tastes I think that we're talking case of decent champers money. And you probably need at least four of them to make the event look like it's got the movers and shakers. I don't see myself filling out the SpAd ranks for less than three grand.

and then we need MPs and "business leaders", and the "business leaders" are going to have to look at least reasonably respectable. On the other hand, of course, the sponsors paying for the thing will consider themselves to be "business leaders" and there's an obvious opportunity to double-dip here. So I get maybe two business leaders at zero cost, and shell out perhaps a grand's worth of bribery to get a solid FTSE350 CEO along. Be conservative, say £1500 budget for three business leaders.

Now, elected representatives don't come super cheap, but they're not wildly expensive and I think I can get away with presenting a decidedly mixed bag in terms of quality. Say one PPS, one former minister has-been, one cheeky chappie backbencher with a media profile and one callow young no-mark. Average cost, what, £1500 a body? £4500 for four MPs strikes me as reasonable.

That leaves two spots to fill with "other select minds", who might be random friends and family available for zip, but just to be sure I'll assume this means after dinner speakers. Two from the cheaper end of this price list means a final £3k.

So that makes ... what ... £1000 catering, £100 hacks, £300 advocates, £3000 SpAds, £1500 businessmen, £4500 MPs, £3000 jokers - £13,400. So that's £1600 for my profit - to be honest, this seems rather crappy return, particularly as it has to cover the cost of getting my carpet cleaned once they've all effed off. I bet that the Washington Post is hoping to get at least a 20% gross margin on this one, clearing $50k for the series of ten.

On the basis of this calculation, I therefore conclude that British opinion-formers are too expensive relative to American ones, and that therefore the pound is overvalued.

Update: Ajay, in comments, suggests plausibly that the double-dipping is fundamental to this wheeze. Selling the first one covers the costs, but selling the same "Salon" (oh god, cringe) to a second "sponsor" is pure profit. That clearly changes the economics of the whole thing and makes the exchange rate call a little more complicated. So scratch that one.