A Dollar Was Never a Dollar

But a Dollar Is Always a Dollar, Nonetheless

Perhaps your Thanksgiving conversation turned to money, the state of the economy, and all that. If the conversation included your older relatives and friends, you probably heard “When a dollar was dollar” (or some variation) invoked to express dissatisfaction with how much, or little, the current dollar buys relative to some more ideal historical time.

However, when you stop to think about it, has the dollar ever truly been a dollar? Did it ever have absolute worth? For that matter, how do you value a dollar? By the goods it buys? Or the labor? Or the CPI? There are many measures to choose from.

Truth is, anybody in any year, can exclaim with certainty, that the dollar way back was a dollar. Another anybody in that way back period could just as correctly claim the then current dollar couldn’t hold a candle to an older dollar. So, it all boils down to a handy expression for telling everybody around us that we’re unhappy with what the dollar buys today. (Though see us in 2020 and we’ll tell you the dollar was really a dollar in 2015.)

Here’s the value of a dollar in terms of the CPI index for the decades beginning with 1920 measured against its value in 2014.

1920: $11.80

1930: $14.20

1940: $16.90

1950: $9.83

1960: $7.99

1970: $6.10

1980: $2.87

1990: $1.81

2000: $1.37

2010: $1.09

It would appear the dollar was worth more than a dollar in 1940. Of course, then, you were looking back at the Great Depression and forward to entry into World War II. The dollar might not have looked so great to you in the midst of those two major historical events. And, just as a reminder, back then, you would be spending 1940 dollars, not current dollars traded at some historical exchange agency.

Maybe the best thing you can say is, “A dollar is always worth exactly a dollar” the moment you spend it. Of course, it doesn’t have the same ring to it, and certainly does nothing to tell people who discontented we are right now. w/c


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