Cleaning out shoebox after shoebox of canceled checks
going back to 1970 brought two surprises to a suburban Virginia woman and her
spouse: how cheap – inexpensive compared with now – prices were; and how many
local businesses had disappeared in the meantime.
Seeing the dollar amounts inked in below the payees showed
how things have changed over more than forty years. Meeting day to day expenses
was not easy then, but in retrospect the value of the dollar – the
international standard then and still hanging on now – seems better in that
past than in the present.
Could that be?
Now and then a visit
to the Internet’s inflation calculator brings the feeling that the calculations
are not quite right. Take gasoline. Back in the 70s – the very early 1970s –
one dollar could buy about five gallons. The Bureau of Labor Statistics website
says 20 cents in 1971 would buy what $1.15 buys in 2013. A buck 15 will not buy
a half gallon in Fairfax County, Virginia. Maybe in the next county south.
Those old checks
showed that a family with five kids back in the early 70s would have a grocery
bill of about $15 on a typical visit to Grand Union (which no longer exists, at
least there.) Now it’s $75 to $100 or more several times a week to feed fewer
people.
Back in Wisconsin in the 50s and 60s prices were pretty
much the same. There was some inflation, but it seemed to matter less than in a
later period. A family that really can’t afford a new car, not even to mention
a house, now could swing both in those benighted times before iPhones and apps
for horoscopes or whatever.
Without a crash
course in economics, someone who ponders it a bit might think that the prices
of things and un-things (services) are out of whack in relation to other things
and other un-things. Back when smaller incomes could buy more of what was
needed and desired than can current equal incomes adjusted for inflation. At
least it feels that way.
Could that possibly
be? How can it be when kids spend $100 a month or more to stand around looking
down as they work their thumbs across the virtual keys on their smart phones?
Yet, there could be
some truth in those inchoate thoughts bouncing around in one’s memory bank.
Flipping
through umpteen channels on the flat screen TV (couldn’t do that back in the
Midwest of old) found a guy answering questions before a forum at the Cato
Institute. It was Lewis Lehrman, investment banker-Lincoln scholar-historian.
He was espousing a return to the gold standard, something many an economist and
academic laugh out loud at.
Even a
somewhat attentive consumer of longer tooth knows that prices began to get out
of whack about the time the U.S. of A. dropped the gold standard. Gold was $35
an ounce in 1971 when Nixon stopped the possibility of going to the bank and
converting your dollars into gold. Gold got up to something like $1,700 or
$1,800 an ounce before dropping down to whatever it is now ($201.70 the
inflation calculator would have it).
Back to Lehrman.
Without quoting him exactly, he made two points that really hit home and
brought back thoughts of those shredded canceled checks. First, he said that between
the 1770s until early in the 20th century, just before WWI, the
average Joes could buy and pay nearly the same amount for necessities. The
fluctuation was there, but the ups and downs were shallow. Also during that
period, money was pegged to gold and silver. Actually, we know, often it was
gold and silver coins.
Such a period of
affordable pricing for ordinary people could be worked out again, Lehrman
asserts. He notes the power was given Congress by Article 1, section 8 of the
Constitution. It is power to “coin Money, regulate the Value thereof, and of
foreign Coin, and fix the Standard of Weights and Measures.” Fixing the value
of the U.S. dollar is not the job of the Federal Reserve Board, he says.
So, anyway, it’s
something to think about. Might even preserve the middle class.
