The Dow of Cheez Whiz

The insurance giant AIG was one of the 30 companies that make up the Dow Jones Industrial Average. Now that AIG has crashed and burned as part of the financial meltdown, a company needed to be chosen to take its place.

Let’s raise a frosty glass of Kool-Aid to Kraft Foods, newest member of the Dow.

The Dow Jones Industrial average is the most widely reported gauge of stock market activity, the one that news broadcasts and newspaper headlines typically trumpet. Many people are surprised that it consists of only 30 companies, given that the stock market as a whole consists of thousands.

Still, those 30 companies are widely accepted as accurately reflecting the market because they are dominant across a broad spectrum of the US economy.

Food companies are not new to the Dow. In fact, Coca-Cola and McDonalds are also part of the current mix. (Proctor and Gamble is as well, though the food part of their business is small; Folgers coffee, for example.) The original Dow Jones Average, created in 1896 with 12 companies, included food corporations. There was the American Sugar Company (now Amstar Holdings) and the American Cotton Oil Company (which eventually emulsified into mayonnaise company Best Foods, which ultimately congealed into Unilever.)

Here’s a surprise: Kraft Foods actually already was part of the Dow for a while up until last year. It’s just that they were hiding within the Altria Group (you know…Altria Group…the fancy new name for what had been the Phillip Morris Tobacco Company.) Kraft Foods had been bought up by the Phillip Morris back in 1988, which then baked it together with other food companies it had acquired, like General Foods and Nabisco.

Altria got rid of Kraft back in 2007, making it an independent company again (I guess they figured pushing both cigarettes AND Velveeta on their customers made the mortality levels too high for the bottom line), and Altria itself was taken out of the Dow mix earlier this year.

Are you following all this? Maybe you should go have a few Oreos to get your sugar up and increase your concentration. I’ll wait…

OK, so anyway, Kraft Foods is now part of the bellwether US stock market index. Since Kraft has only been an independent company again for less than two years, it’s a little hard to get a bead on what issues they are spending their million dollars per quarter lobbying money on. Their lobbyists work on import safety, cloned food labeling and on renewable fuels (i.e., the cost of grain), but it isn’t clear from what I’ve seen so far what positions they take on the issues. Incidentally, one of their chief Senate lobbyists is Abigail Blunt, wife of House Republican Whip Roy Blunt of Missouri.

Whatever their lobbying aims, the basic truth is that most of Kraft’s products are poor substitutes for real food, and that their advertising extols us to eat bad things.

But hey, they are part of the Dow now, so let’s all suck it up if we want to see the headlines able to report that the Dow is going up. A healthy Kraft contributes to a healthy Dow, so make sure you eat plenty of Oreos, Chips Ahoy and Chicken in a Biskit. Have an Oscar Mayer bologna sandwich slathered with Miracle Whip and Velveeta. Wash it down with Tang, Kool-Aid and Crystal Light. This Thanksgiving, stuff your turkey with Stove-Top and slather Cool Whip on your pumpkin pie.

Your nation is depending on you.

Previously posted on La Vida Locavore