Re-Examining the Bread Standard for 2008

Comparison of Bread  1957-2008 
.

Sunbeam Bread    '57 Fresh (3)    '57 Day Old         2003 (4)      2008 (4)
Price per loaf             0.16                0.08            1.59 (5)        2.09 (5)
Sales tax (1)               .01                  .00              .10              .07
Mileage (2)                 .00                  .00              .73            1.17
Totals                      0.17                 0.08            2.42            3.33
 
Footnotes to table:
1.  1957 rate equals 3¢ per $1.00, beginning at 14¢.  2003 rate equals 6¢ per $1.00.  2008 rate equals 3¢ per $1.00
2.  IRS Mileage allowance of $0.365 per mile (2003);  $0.585 per mile (2008)
3.  Sunbeam bread baked in Clarksburg
4.  Sunbeam bread baked by Flowers Baking Co., North Carolina
5.  Kroger, Clarksburg.  Sept. 2, 2003; Aug. 14, 2008 _________________________________________

Five years ago in this column, I compared the cost of a loaf of bread in 1957 with its adjusted cost in 2003; I called it the “Bread Standard.”  The comparison, updated for 2008, appears in the accompanying chart.

In 1957, Sunbeam bread was baked daily in Clarksburg and delivered to the neighborhood grocery stores.  There were two grocery stores within a short walk of my house.  Grocers discounted day-old bread by half, because most homemakers would only buy fresh bread. 

In making a like comparison, we must use the discounted price of day-old bread because Sunbeam bread is now day-old bread when it arrives at the grocery store.

If we needed bread, I was allowed to walk or ride my bike to the neighborhood grocery but not to the nearest supermarket, which was one mile distant on a heavily-traveled thoroughfare.  Thus, the comparison chart includes the cost of a two-mile automobile trip for 2003 and 2008.

In determining the purchasing power of one dollar, most economists opt to compare commodity prices such as oil or gold.  Throughout history, however, the daily ration of bread has been the most consistent measure of nutrition for all people, whether they lived in the ancient Nile valley or now live in Kansas.

While not every civilization ate wheat bread, most of the world’s farmers could grow a cereal grain of some kind.  Our daily bread, whether made from wheat or corn, has its nutritional equivalent in rice, other grains, or non-grains such as potatoes (E.g.: the Incas).

Human civilization managed for a long time without need of oil or gold but never a day without bread.

In 1957-58, only the wealthy drove Cadillacs; the behemoths retailed for about $7,000.00.  Or put another way, if you could afford a new Cadillac, you could also afford 87,500 loaves of day-old bread.

Today, a Cadillac retails for about $50,000.00 and is considered nice middle-class car.  And why shouldn’t it be?  Its worth is only 15,000 loaves of day-old bread.

To match the social status of a 1958 Cadillac owner, you would have to spend $290,000.00 for your automobile and a whole lot more for the house, swimming pool, gardens, driveway and garage to go along with it.  And don’t forget to add in the associated property taxes and insurance policies.

Along the way, we have seen depreciation in more than just the dollar.  The old neighborhood groceries provided free delivery service, and credit-worthy customers could run a tab and pay every two to four weeks.  A housewife could also call her grocery order in if she didn’t have time to shop.

Fifty years ago, grocery shoppers demanded quality.  This was due to the fact that even city folks were not far removed from growing their own food, and they knew what fresh food looked and tasted like.  June Cleaver would absolutely scream if she had to fry a “fresh” egg from today’s supermarket. 

Fifty years ago, people knew what fresh-baked bread tasted like because they were probably raised on home-baked bread.  Homemakers in the 1950s would try to do without something else on the grocery list before they would stoop to buy day-old bread. 

In terms of food, the dollar has become worth a lot less for two main reasons.  The first is that government deficit spending for food stamps and agricultural subsidies have skewed the marketplace with inflationary pressures.  Import tariffs have done likewise.  And the ethanol-for-fuel mandate (ethanol is alcohol made from grain) is piling even more inflation on top of that.

Secondly, Americans have lowered their food quality standards.  Shoppers will pay a grocer for a dozen eggs that are a month or more old but will balk at buying truly fresh eggs from the local farmer because those eggs aren’t USDA-inspected.  This is but one example of how food-ignorant Americans are. 

Ignorant people make ignorant spending decisions—distilling corn for Cadillacs being just one.

American Voters Face Familiar Choice

For those of you who are younger than 50, you have a unique opportunity to learn American history. The election of 1976 is being restaged with Barack Obama as Jimmy Carter and John McCain as Gerald Ford. This is not a virtual election; this is for real, and your vote counts.

It's important to remember 1976 for another reason -- the economy. If you are younger than 50, then you haven't lived through a real economic recession. Today's economy is taking its licks from the sub-prime mortgage spree. But 30 years ago, U.S. Treasury notes carried interest rates as high as 14 percent. Try borrowing mortgage money at 15 percent or 20 percent and see what your house payments are. Then watch gasoline double in price as it did in 1979. It was heck.

You can fret all you want about today's high gasoline prices, but the economy is healthy when compared to 1976, and this is why you should be concerned about the upcoming revival of Ford vs. Carter. You are going to vote for the man who loses control of the economy.

Gerald Ford was a good man, but he couldn't inspire an angel to do a good deed. He neither had a command of economics nor did he have the best of economic advisers. Ford's solution to the economic woes of his day was to ask people to wear "WIN" buttons--WIN stood for Whip Inflation Now.

Compare this lame message to Margaret Thatcher's during that era. When she visited Lech Walesa during Poland's uprising, she gave him a copy of F.A. Hayek's book "The Road to Serfdom." That small gift inspired a trade unionist to lead his nation out from under the yoke of Soviet communism.

I can still hear Maggie Thatcher saying, "WIN buttons, indeed."

Gerald Ford also was viewed as a continuation of the Nixon White House, although nothing could be further from the truth. Ford tried to do the best thing for the nation by pardoning Richard M. Nixon, and however noble were his intentions, he lost the election primarily for this one act. People hated Nixon. George W. Bush is merely disliked by comparison.

John McCain is viewed as nothing more than a continuation of the Bush administration although nothing could be further from the truth. John McCain is Gerald Ford.

Enter Jimmy Carter, the candidate for change. Do you recall the motion picture "Being There" in which Peter Sellers plays Chance, the mentally disabled gardener, and through a series of misunderstandings, he becomes a national guru? This describes Jimmy Carter -- the boy who ran away from a traveling idiot circus and then demonstrated a knack for growing peanuts, and the rest, as they say, is history.

Jimmy Carter edged out better-known candidates for the 1976 Democratic nomination. The field was very crowded that year; his opponents only had regional appeal. Carter used his born-again, come-to-Jesus message to give him an advantage in every state. Though he was personally unable to explain the demands of the Good Book to his own family (Do you remember his brother, Billy?), Jimmy Carter was charismatic. Jimmy Carter was as charismatic by his humility as Barack Obama is charismatic by his arrogance.

Barack Obama is Jimmy Carter, right down to having a mean, vindictive wife.

Like Ford and Carter, McCain and Obama share a complete lack of aptitude for economics. And worse, we don't know who their primary economic advisers will be. Remember for the moment that Bill Clinton started his first term by appointing Sen. Lloyd Bentsen as Treasury secretary. When that proved a Texas-sized joke, Clinton made amends by appointing Robert Rubin. Bill Clinton's economic success was due solely to the confidence that the financial markets had in Secretary Rubin.

If there is an exception when comparing Ford vs. Carter to McCain vs. Obama, then it would be that the major parties have nominated two senators who serve in a Congress that has an overall approval rating of just 14 percent. How pathetic is that?

Offsetting this minor difference is the fact that the Republicans and Democrats once again are telling voters they have a clear choice when it comes to selecting the next president. If we do have a clear choice this time, then it will be defined by degrees of failure.

I don't know about you, but I will not let the major parties railroad me into choosing between Ford and Carter again. On Nov. 4, I am writing in "Ricky Bobby" for president, and I will do so, knowing in my heart, that if he ain't first, he'll be last.

Earmarked Funds Often Miss the Mark

Charles L. Miller stepped down as highway commissioner in 1984, and Fred VanKirk was appointed acting commissioner. At the changing-of-the-guard ceremony, Mr. VanKirk accepted the position by saying, "Everyone else in West Virginia acts like he's the highway commissioner, so I might as well act like it, too."

West Virginia enjoyed a long run of qualified highway commissioners beginning in 1969 with Bill Ritchie and continuing with Charlie Miller and Fred VanKirk. The number one priority of each man was completion of the Interstate system, and they should be remembered for finishing the job.

Today, motorists take the Interstate system for granted. And that is a shame. For example, before I-79 was built, the trip from Charleston to Morgantown took six hours, and every mile had its share of grueling curves and blind passing zones. The drive now takes a little over two hours and can hardly be called challenging.

In the 1960s, Interstate construction was spotty. The main reason for this was the sad fact that highway commissioner Burl Sawyers (1961-1968) and his deputy, Vincent Johnkoski, were extortionists, crimes for which they were later convicted.

West Virginia is a tough place to build high-speed highways. Our terrain is notoriously unforgiving; our weather limits the construction season. The cost of building a mile of Interstate in West Virginia was comparatively one of the highest in the United States because of the quantity of earth that had to be moved and the numerous stream and river crossings.

I always have felt that our Interstate highways are a remarkable engineering achievement that have been overlooked and underappreciated. That's especially so because the three aforementioned highway commissioners protected the highway budget and stayed with the plan to finish every mile of Interstate in timely fashion.

We are now living in a different era -- the earmark era. Every politician in the land tries to earmark funds for a pet project. The drawback to this hodgepodge of earmarks is that there is no plan for the public good -- there are just scattered pet projects, such as Alaska's proposed bridge to nowhere.

Were it just Alaskans earmarking Alaskan funds, we wouldn't care. But earmarks are now the preferred passion of every legislator and executive. Twenty-four years ago, Fred VanKirk could joke about everyone acting like a highway commissioner. Now it's not a laughing matter.

My congressional district has a very visible earmark project -- the Gateway Connector highway at Fairmont. The project connects I-79 to the High Level Bridge and will assuredly save downtown Fairmont from further deterioration after it opens in 2010 or 2011.

The highway is only 1.5 miles long, but it carries an estimated price tag of $155 million. The roadway also features two traffic circles. Many people refer to these circles as "roundabouts," but I prefer "circles" lest I infer the road is a roundabout way to get to downtown Fairmont.

I think the traffic circles were engineered to provide holding patterns for westbound traffic waiting for a green light to cross the bridge. And further, I guess that stoplight is the "gateway" in "Gateway Connector."

I am taking this potshot to make a point. The $155 million could have easily finished Morgantown's 705 to I-68 connector -- a road that has been desperately needed for two decades. The Gateway money could have provided seed capital for 100 machine shops. The money could have built more than 700,000 square feet of new office space in Software Valley.

But no matter how earmark money is spent, it generally is wasted because it neither furthers the completion of an overall plan nor does it contribute to a coordinated, meaningful infrastructure.

The native sons of Marion County, whose ranks include our governor and First District congressman, undoubtedly will feel that I am picking on them personally. But I am not. I am criticizing the whole notion of earmark spending as being irresponsible.

When the Interstate highway system was laid out, it was planned from coast to coast with a purpose for each and every mile. Had Congress designed the Interstate system using the earmark method, then every congressional district would have a few miles of four-lane highway, and none of it would be interconnected.

If you don't hear from me for a while, please don't worry as I will be writing my next column from the tropics. A Fairmont travel agency is planning my vacation stay at a Guantanamo Bay resort hotel, where I will be learning a new sport called waterboarding.

Boards Must Have Balance, Integrity

Because of the ongoing turmoil at West Virginia University, the subject of appointing directors to the university's governing board has been a much-discussed topic. Let's take a moment to consider the right people for the job.

When selecting a board member-- and this applies to every organization -- the candidate must have a common interest or commonality of purpose with regard to the institution. If not, why bother?

While this requirement seems simple enough, it never fails that two undesirable types of people pass the commonality test--the proverbial "yes" man and the parasite. Even the most diligent screening process cannot always weed out these people.

Sitting on a board can have an intoxicating influence on even the most well-intentioned people. Directors find that the title of board member does afford them status in their communities, and at some point they might become "yes" men or women so as not to jeopardize losing their directorships. No director that I am aware of was ever fired for toadying.

Other well-intentioned people have compromised their fiduciary duty by doing business with the very institution they are appointed to oversee. Most often, these business arrangements begin as symbiotic relationships with all parties benefiting. When greed sets in, the relationship turns parasitic.

The faculty has expressed that the governing board should have more faculty representatives. This sounds wonderful in theory. But the reality of the campus is that professors rarely know what goes on outside of the buildings they teach in.

Professors also specialize in their field of learning. So who do you pick? The botanist who studies aphid damage? The physicist who looks for dark matter? The historian who debates the cause of the Civil War? Or do we consider the education professor who knows everything about running a classroom but precious little about running a school? Would a professor of proctology even stand a chance?

For the faculty's sake, they should speak collectively through their elected senate rather than through one or more board members. And the faculty senate should have stronger powers, especially so with regard to the presidential selection process. If a presidential candidate can't win the hearts of the faculty senate during his or her interview, then the candidate has no business applying for the job.

There are probably 100 million people on this planet who know who Pat White and Kevin Pittsnogle are. Ten times that many know who Jerry West is. In terms of dollars and cents, WVU's athletic program is not a huge budget item. But in terms of publicity, athletics brings WVU its most attention.

Candidates for the Board of Governors need to be serious about athletics -- and just as serious about demanding a scandal-free athletic program. The football stadium may be named in honor of Milan Puskar, but it will always be remembered as the house that Don Nehlen built. Coach Nehlen was a winner, but let us not forget that he was respected for his integrity from coast to coast.

The Health Science Center is an important part of WVU, and the board needs a few members who are up to speed on modern medicine. While drug company representatives don't get much respect, I will tell you for a fact that they know everything that goes on in the medical community.

I am not recommending a drug pusher for the board. So don't choke.

I point this out, however, because WVU needs to consider people in the medical field who get around and also are knowledgeable of the financial side of the medical business. This is definitely the area where WVU has to think outside the box for recruiting board members.

When Netscape developed JavaScript in 1995, I remarked that java scripts had been around for years. When questioned about my observation, I quipped that boards of directors were in the habit of using the chairman's report as coffee cup coasters to protect their mahogany conference tables.

Bad jokes aside, a board member must be involved and not consider the board meeting a coffee klatch.

A board member's responsibility can be compared somewhat to that of a juror's. When the door is closed, people trust them to make the right decision. Sometimes, those decisions are incredibly unpopular, while at other times they are routine. But all individual decisions made on behalf of a community test a person's resolve, conscience and ethics.

From personal experience, I have seen the damage that self-serving directors can do. I have also seen the good work that responsible directors can do. The final test for selecting a board member is this simple: Picking from the former guarantees a train wreck, while picking from the latter guarantees success.

It Was A Dark And Stormy EMBA Degree

I read the Report of the Special Investigative Panel For Review Of Executive MBA Program Records (at West Virginia University) issued on April 21, 2008. At the outset, I did not believe that five college professors could write with such clarity and brevity. And yet, these five academics did an admirable job in explaining their findings in crystal-clear fashion using as few words as possible.

Therefore, I have been at a loss to understand how there could be any debate about what transpired in awarding Ms. Heather Bresch an Executive MBA degree. The panel concluded that the academic and financial records of West Virginia University were reasonably accurate, that Ms. Bresch received special treatment not afforded any other degree candidate and that her degree was manufactured in the shabbiest way possible -- by overt fraud committed at the highest levels of the university.

The panel could not have made these charges clearer. However, in West Virginia, not all people are fluent in translating the English language into our local dialect.

"The Elements of Style" by Strunk and White is (and has been for decades) the most popular writing primer. The authors are famous for their advocacy of using the active voice when writing. They further recommend that writers avoid using the passive voice.

Unlike Mssrs. Strunk and White, West Virginians tend to speak and write in the passive voice, which derives from their fondness for passivity. The term "miner's mentality" describes the passive attitude of most West Virginians. For my purposes, let's skip the reference to miners and call this behavior the passivity-passive voice complex.

Innumerable people have either said or written, "Mistakes were made" when describing the manner in which university officials manufactured Ms. Bresch's degree. I wondered how they could have read the panel's report and then resort to the passive voice to describe people pulling grades out of thin air.

So I went back to the report and re-read it. On page 12, the panel states, "But again, the grade (--) that was entered in that course (--) was simply pulled from thin air." Well, there you have it -- the passive voice.

In matters relating to science and scholarship, it is customary to use the passive voice in certain situations. For example, it is better to write, "Experiments were conducted" than to write a lengthy preface explaining who conducted the experiments. If it is necessary to name each scientist conducting the experiment, then that information is consigned to a footnote.

The investigative panel's charge did not require the panel to return an indictment against the person or persons who altered Ms. Bresch's transcript. Thus, when the panel wrote, "But again, the grade ... that was entered ... was simply pulled from thin air" they purposely used the passive voice to avoid naming names and going beyond their charge.

Though the circumstance demanded that the panel speak to the alteration of grades in the passive voice, that does not mean that certain people weren't actively doing the pulling. If we allow ourselves to slough this dreadful affair off with words like "Mistakes were made" then we should just assume that the university's computer system is a deus ex machina over which there is no control. And that assumption would be consistent with the passivity-passive voice complex.

West Virginians need to realize that the rest of the world speaks with the active voice and, further, that the rest of the world does not translate the passive voice as necessitating passivity. The rest of the world is dumbstruck that a university would manufacture a degree. But West Virginians have allowed their special interpretation of a few words to cloud their own judgment.

The investigative panel members should be commended for their report. Had the provost appointed five typical West Virginians to the panel, then be assured that their report would consist of three tried-and-true words that you'll hear spoken only in the Mountain State: "You'll have that."

The university's faculty has every right to be incensed about the manufacture of a degree. That said, every single faculty member should have demanded a forum to cast his or her vote in the matters addressed on May 14. As it turned out, less than half bothered to vote.

No amount of protest can ever restore the faculty's virginity. But in this case, Shakespeare might say, "Methinks the Lady doth not protest enough!"

WVU would quickly expel a student caught cheating. The same punishment must apply to everyone involved in this pathetic scandal.

Were Our 'Good Old Days' Really That Good?

George Kovach died last week. He was 90. For most of my boyhood, "Mister" Kovach ran the Cities Service filling station a block away from my house.

As I read his obituary, I began having those unavoidable flashbacks of life as it was lived nearly 50 years ago. Whenever we remember the days of our youth, we invariably think of that stage of our lives as the good old days. Maybe you call them the salad days. For most of us, that time of life seemed just about right because we were far too young and untraveled to have had any perspective.

The old filling stations were lessons in merchandising. Everything the station sold was a branded product. The Cities Service logo--the outline of a green clover leaf on white background--appeared on everything.

The men who worked at the station wore neat uniforms with a Cities Service emblem. The oil cans, antifreeze jugs and just about every other container carried the store brand. And as for the gasoline, Cities Service promoted their brand as the best for your car because it had Power Prover.

In Clarksburg, Cities Service had to compete with Esso, Pure, Gulf, Amoco, Mobil, Texaco, Sunoco, Sinclair, Spur, Red Head, Ashland, Quaker State and Pennzoil. Each brand claimed that its own secret ingredient made your car engine run better. However, these claims were just so much gimmickry. (Perhaps you'll recall: "Put a tiger in your tank!")

Filling stations were big on handing out promotional items. You could take your pick from a nice selection of road maps. Ice scrapers were common giveaways in the wintertime. Sometimes, the giveaways were merchandise, such as drinking glasses. All in all, these stations competed for your business and your trust by developing brand loyalty.

Filling stations usually had two service bays. One side had a lift for lube jobs and oil changes. The other side was used for car washes and tire changes.

Fifty years ago, a car needed a lot more maintenance. On average, cars had about seven grease fittings that needed a shot of grease at every oil change. Drum brake pads, unlike today's disc brakes, wore out pretty quickly. Batteries were anything but maintenance-free. And radiators all too often overheated.

In some respects, filling stations were like the blacksmith shops in the horse-and-wagon era. Cars of the 1950s were about as temperamental as horses and, like the wagons of old, needed frequent maintenance.

Tires prove this out. Fifty years ago, a set of four tires cost about $100. Radial tires were still a new concept in Europe. We bought tube-type, bias-ply tires that did well if they lasted 10,000 miles. With their uncanny ability to pick up nails off the roadway, you could expect a tire to go flat once before it wore out.

To fix a flat tire required removing the tube and patching it with a hot patch. Then you had to remount the tire and, most likely, rebalance it. Fixing a flat tire was a real chore.

A set of radial tires today will cost four times what Mister Kovach charged. But your new radials are likely warranted for 50,000 miles or more. As for flat tires, you may never have one. All-season radial tires handle much better, are much safer and are far less likely to hydroplane than the rubber ducks of the good old days.

Last week, gasoline hit $3.89.9 per gallon in Clarksburg, the highest price yet. Today's price seems so distant from the 25 cents that a gallon cost in my youth.

If I looked only at the price of gasoline, then I'd say the good old days were indeed good. But when I look at the total cost of operating a vehicle, I must conclude that modern times are the better era of the two.

Gasoline has become a generic commodity sold mostly at convenience stores. These stores offer no service because there really isn't much of a need to check under the hood anymore. As for building customer loyalty, why hand out free road maps when cars are increasingly equipped with GPS locators? Is it any wonder then why the neighborhood filling station is all but extinct?

In 10 or so years, we won't complain about the price of gasoline because we'll plug our vehicles into an electric outlet every night. And when that time comes, we'll remember the good old days. You know -- the days when every neighborhood had a convenience store.

As Investments, Airlines Have Bumpy Rides

Until recently, I had four distinct memories of Charleston's airport.

The most vivid, of course, was my first landing. I kept wondering if the pilot was ever going to descend low enough to land when, all of a sudden, the runway was right under the plane. That first landing on a hilltop was an unforgettable thrill. And then wondering whether the pilot would ever get the plane stopped in time more or less topped the thrill of landing.

That landing brought back memories of a plane crash at the airport many years prior. I remembered the dope-filled DC-7 that came in too low and went kersplat. The plane crash, however, wasn't as newsworthy as was the response by a sheriff's deputy. At first, he was praised for getting to the crash scene so quickly. Then it was learned that he was actually there to meet the plane.

After Tom Wolfe's bestseller "The Right Stuff" was made into a movie, the Charleston airport was named in honor of Brig. Gen. Charles "Chuck" Yeager. You just knew that Chuck Yeager had the right stuff when he quipped that having the airport named for him must be an honor because it's so hard to land a plane there.

And my other memory of the airport was reading a newspaper article from the mid-1940s in which the author pointed out the benefits of building Charleston's (proposed new) airport at Teays Valley to serve both Huntington and Charleston. That did not happen. Charlestonians wanted their own airport regardless of its location.

Allow me to pause here and mention Warren Buffett. As you know, Mr. Buffett became one of the world's richest men because he is a brilliant investor. Even so, the Sage of Omaha once made a poor stock pick -- US Airways. He later conceded his error and said, "If capitalists had been present at Kitty Hawk when the Wright brothers' plane first took off, they should have shot it down." No one, not even Warren Buffett, has made money on airline investments.

Until now, that is. Because this time, it's different.

The descendents of the tribe that flattened seven of Charleston's hills by moving enough earth and rock to rival the construction of the Panama Canal are now going to get into the airline business. Yeager Airport is going to be home to a startup, discount airline -- code name: Jet America.

My sources tell me that investors and public officials from Kanawha County sealed the deal after being flown to Nebraska, where they feasted on Omaha steaks at Warren's Buffet, a trendy eatery in Scotts Bluff.

Charleston, Kanawha County and the state have announced they will pony up $2.2 million in seed money for the Jet America start-up. All of this money comes from taxes or public grants.

Jet America is modeled after Skybus, the discount carrier that operated out of Columbus, Ohio. In less than a year of operation, Skybus lost so much money that it unceremoniously pulled the plug April 4. Travelers were stranded. Employees were left in the lurch. And everyone who held a ticket for a future flight is probably out their money.

It goes without saying that Port Columbus airport, the state of Ohio and investors have lost money -- about $160 million. Yet just last spring, Skybus was going to revitalize Port Columbus and central Ohio. Because that time, it was different.

In this current round of airline bankruptcies, the airlines are blaming high fuel prices. Before this, they blamed pilots' salaries. Before that, they blamed machinists' salaries. Before that, it was airport fees or not enough landing slots.

The reason why airlines go in and out of bankruptcy so often is actually quite simple -- there is too much capacity in the industry. Too many seats lead to poaching customers to gain market share.

There seems to be no shortage of people who think airlines are a good investment. The business does have a certain allure, not unlike that of horse racing. Perhaps, it is that allure that makes investors convince themselves that this time, it's different.

But really. What do I know? I don't own airline stock.