The value gap

Bears and bulls on a Ferris wheel: That's the stock market today. Investors - euphoric, terrified, euphoric - want to know what will happen next. But in an age in which Federal Reserve Chairman Alan Greenspan's various blinks and nods are considered an economic forecasting system, good data are hard to come by.

Those of us with no money to invest are also interested in the country's economic well-being, but we rely on more subtle signs than a plummeting or skyrocketing Dow. One economic indicator I recently identified, "The Gap Gap," has me worried.

The Gap Gap forecasts increases in inflation based on a disassociation between value and consumer spending. Or, put another way, when retailers and consumers agree there's no difference between paying almost $40 for a group of items and paying $30 for the same items, there's no longer any point in saving your money for a rainy day because a deluge is imminent.

I don't normally patronize The Gap, the chain of clothing stores that caters to a young crowd.

But on a recent Sunday I was searching for thick cotton socks, and I believed The Gap might have them.

When I visited the nearest location, I discovered just what I was looking for, in attractive earth-tone colors, and best of all, on sale. A sign hung above the socks proclaimed "Assorted socks. 3 pairs for $15. 1 pair $7.50."

I happily gathered up six pairs of socks and headed to the cash register, where a young woman rang up my purchase and brightly announced, "That will be $39."

"No, that's wrong," I said. "It should be $30 - three pairs for $15, like the sign says."

"It must not have been entered into the computer yet," she said, frowning. "I'll call my manager."

The manager, another young woman of college age, came to the register.

"Here's the problem," she said. "The socks you picked out aren't on sale because they're $6.50 a pair."

"But they're on the rack with the sign above them," I protested. "That's misleading."

"No, it's not," she insisted. "See, $7.50 for one pair. Those are the regular socks, the kind you wear everyday. Those are on sale.

"These," she said, gesturing to the thick ones I had selected, "are more like novelty socks. They aren't on sale."

Though I didn't see what was so "novel" about thick socks, I understood her point. I was buying the thick socks to go with the heavy boots I usually wear in the winter. As the weather gets warmer, the market for thick socks diminishes. To me, that seemed all the more reason to put those socks on sale.

"Let me get this straight," I said. "You're willing to sell me six pairs of $7.50 socks for $30, but you insist on charging me $39 for six pairs of $6.50 socks?" Both young women smiled at me, pleased that I finally had figured it out.

So they were stunned when I took back my charge card and left the store. They stared after me with their mouths open. Clearly no customer had ever complained before about being charged $39 for $30 worth of socks.

I learned my sense of value working summers at my grandfather's dime store. Grandpa would have known just how to deal with such a situation: he would have taken the $30, bagged the socks, wished the customer a nice day - and fired the fool who had made the sign.

But clearly another sense of value is at work among the young people who work at - and buy from - upscale stores.

This is The Gap Gap - a sense that money is meaningless, so if you want these particular socks, then you pay whatever the arbitrary price is for them. That can mean only two things: Consumers have too much money and prices will rise in response. Or, rising prices mean inflation, which will hamper the economic expansion.

The current presidential candidates talk a lot about "values" when maybe they should talk about "value" instead. A return to an old-fashioned sense of value is badly needed.

Thomas R. Marshall, US vice president from 1913 to 1921, captured the spirit of that age when he proclaimed, "What this country needs is a really good five-cent cigar."

As a slogan for Campaign 2000, why not: "What this country needs is a really good pair of $5 socks."

*John Lenger is publications director of the Harvard University News Office and a journalism instructor at the Harvard University Extension School.

(c) Copyright 2000. The Christian Science Publishing Society