Just this morning, out of the corner of my eye, I saw a television ad that captured the confusion of our age. A well- dressed man, maybe 28, wearing a three-piece suit and the purposeful look of a computer salesman, paused in the middle of a downtown city block and said into the camera, "I used to think when I made $25,000, I'd be on Easy Street." Then, with the overdrawn mannerisms of an actor in a 60-second commercial, he shook his head as if to say, "No way!"
The man in the commercial still believes in Easy Street, that boulevard where one can stroll through life without worrying about the Mastercard credit limit. But he shakes his head because he doesn't understand the rules anymore. How much does it take now to get through that tollbooth on Easy Street?
Now that an army of 12 million unemployed is helping us win a Pyrrhic victory against inflation, it is time to consider how 15 years of double-digit uncertainty have confused our values and eroded our money benchmarks. Prices have almost tripled since 1967, but many of us still nurture the quaint notion that $25,000--or even $50,000--is a lot of money. That kind of income can't buy respect in a gourmet grocery store, let alone prompt BMW dealers to grovel.
Not long ago, there were standards. If you had a three- bedroom split-level on a half- acre lot with a new Oldsmobile in the driveway and a color TV in the rec room, you were doing fine. But if the house was in a ticky-tacky development, the car was a four-year-old Chevy and the TV was still black-and-white, then you weren't keeping up with the Joneses.
This simple pecking order is now as dated as "Leave It to Beaver" reruns. These days where you live is as much an index of when you bought your house as how much you make. The owner of the big white house on the corner could be a partner at Covington & Burling with a $2,000-a-month mortgage, or a GS11 who has lived there since 1964 and makes payments of $400 a month at an old-fashioned interest rate. Banks used to say you could afford a mortgage that was 21/2 times your annual income; now no one is certain what the guideline ought to be. What you can afford may also depend more on whether your spouse works and if you have children than on how much you're paid.
In the early 1970s, popular magazines were peddling a simple formula for determining whether you were a winner. Success was making your age in thousands. Demand a starting salary of $22,000 and expect to be making $65,000 when they hand you a Rolex at retirement.
Unfortunately, the calculation wasn't indexed for inflation. Nowadays, it's hard to imagine a callow young MBA whispering sweet nothings like, "Darling, someday soon I'll be making 1.7 times my age, and you'll be right up there with me." Instead, we flounder in a world without stable reference points, where no matter how well we do, we sense it isn't enough.
Part of the problem is that we're as bewildered about prices as we are about wages. Short of lugging the Consumer Price Index around as we shop, who can remember what anything's worth anymore? The price of chicken has doubled since 1967, sausages have tripled and oranges have almost quintupled? What does that mean? Or why is a two-year-old Toyota still worth close to what you paid for it, but a new one costs 50 percent more?
Not so long ago, new-car prices were one of the fixed reference points in the universe. In the early 1960s, you could get a VW beetle for $1,595. Who can judge what comparable basic, dependable transportation is worth today? Once everyone knew that a Buick outranked a Chevy. Now some Buicks and Chevys are distinguished primarily by grillwork and may even use the same engines. Newspaper ads don't even talk much about car prices anymore, just monthly payments. A new Pontiac T1000 is now sold for $95 down and $129.44 per month.
Technological change multipies the chaos. When first introduced, a pocket calculator cost as much as a one-way plane ticket to Los Angeles. Now you get one free if you subscribe to Newsweek. The same thing is happening to video recorders: prices have dropped by as much as 50 percent since last spring. As for home computers, if you don't like what they're offering, wait 10 minutes for the new model and the new price.
It was Oscar Wilde who described a cynic as someone who knows "the price of everything, and the value of nothing." These days, Americans can't even keep the prices straight.