Wednesday, March 23, 2005
Monday, March 21, 2005
Advice to Rush and Others from the Rookie Radio Show Host
Yesterday I was a guest host on a local radio talk show. In preparation for my two hours of fame I had spent the better part of the week preparing topics, questions and what I was going to say about them. However, unlike my veteran talk radio counterparts, I absolutely refused to talk about Terrie Shiavo.
And I still refuse to talk about her.
However, the same cannot be said for the entire talk radio industry, for today I had to endure from 9AM to 6PM non-stop, incessant jabbering about Terrie Shiavo.
Was she being fed?
Was she still alive?
What did the husband do?
Did it go to the courts?
Did it go to congress?
Is she really a vegetable?
Here's the only question I have;
WHO GIVES A F*CK?????
My God, man! Get the hell off the case already!
An entire day of stay-at-home religious right female maniacs who only derive value for their pathetic lives by engaging in these stupid crusades calling into talk radio! Minute by minute updates on whether she was drooling or not. And pointless, mind-numbing speculation about the motives and incentives of all the people involved. It's so bad I've started listening to Air America just because they're covering something different!
ENOUGH!!!!
The sad thing is that I fundamentally acknowledge this is an important issue to resolve, but the overkill coverage of it has been so drowning that I'm so put off by it that I'm actually cheering for her to have a quick death, regardless of what moral ramifications that has for me, just so we can get back to having decent talk radio!
Perhaps it is on an economic perspective that it doesn't make sense. The amount of time, energy, effort, money, resources, media coverage, protests, etc., etc., that has been expended on this one person is more than what most people will accomplish in their lifetimes. In otherwords if you were to add up all the time people are spending on this, it amounts to the equivalent of a lifetime. If you were to add up all the money and resources spent on this one person, it adds up to more GDP and income that one person could every make. And if you add up all the resources spent on this, it would add up to more resources than she'd ever consume.
So my advice to all the talk show hosts out there,
GET THE HELL OFF THIS DUMBASS TOPIC AND MOVE ON TO BETTER THINGS!
Your entire listening audience consists of people other than those who read the Enquirer and watch day time soap operas.
And I still refuse to talk about her.
However, the same cannot be said for the entire talk radio industry, for today I had to endure from 9AM to 6PM non-stop, incessant jabbering about Terrie Shiavo.
Was she being fed?
Was she still alive?
What did the husband do?
Did it go to the courts?
Did it go to congress?
Is she really a vegetable?
Here's the only question I have;
WHO GIVES A F*CK?????
My God, man! Get the hell off the case already!
An entire day of stay-at-home religious right female maniacs who only derive value for their pathetic lives by engaging in these stupid crusades calling into talk radio! Minute by minute updates on whether she was drooling or not. And pointless, mind-numbing speculation about the motives and incentives of all the people involved. It's so bad I've started listening to Air America just because they're covering something different!
ENOUGH!!!!
The sad thing is that I fundamentally acknowledge this is an important issue to resolve, but the overkill coverage of it has been so drowning that I'm so put off by it that I'm actually cheering for her to have a quick death, regardless of what moral ramifications that has for me, just so we can get back to having decent talk radio!
Perhaps it is on an economic perspective that it doesn't make sense. The amount of time, energy, effort, money, resources, media coverage, protests, etc., etc., that has been expended on this one person is more than what most people will accomplish in their lifetimes. In otherwords if you were to add up all the time people are spending on this, it amounts to the equivalent of a lifetime. If you were to add up all the money and resources spent on this one person, it adds up to more GDP and income that one person could every make. And if you add up all the resources spent on this, it would add up to more resources than she'd ever consume.
So my advice to all the talk show hosts out there,
GET THE HELL OFF THIS DUMBASS TOPIC AND MOVE ON TO BETTER THINGS!
Your entire listening audience consists of people other than those who read the Enquirer and watch day time soap operas.
Friday, March 11, 2005
But is She a Capitalist?
She certainly is a babe...although a little fatter and fuzzier than I like them, but is she a capitalist?
Well I am reliably informed by her owners that "Louise" the fat dachshund from Wisconsin is indeed a capitalist canine...which makes her smarter than most human democrats.
Though not human, I will make this exception and allow Louise the Fat Dachshund from Wisconsin to enter the 2005 Babes of Capitalism Calendar Competition.
Well I am reliably informed by her owners that "Louise" the fat dachshund from Wisconsin is indeed a capitalist canine...which makes her smarter than most human democrats.
Though not human, I will make this exception and allow Louise the Fat Dachshund from Wisconsin to enter the 2005 Babes of Capitalism Calendar Competition.
Tuesday, March 08, 2005
Gerrymandering
Reminisce back to your middle school days and if you were paying attention in Civics or Government you would have remembered the cool term "Gerrymandering." And because it was such an odd term you probably exactly remember its definition, so I shall spare you an explanation. I knew stuff like gerrymandering happened, but in a recent article in The Economist, I happened upon this chart. And like many charts from The Economist, I just had to share it with you all.
Sunday, March 06, 2005
Of Black Helicopters and Big Oil
A quick story.
Whilst teaching economics at the local community college where they accepted nothing but the best the public schools had to offer, prices for a gallon of gas were persistently over $2 a gallon.
My students, the savvy geopoliticians they were, were all lit up about the high gas prices and were even more ecstatic about a boycott that was coming up that was "going to stick it to big oil."
"Huh," I said to myself, "that's interesting. I'd like to see how they boycott oil."
Upon further investigation I heard that there was this movement all across America for everybody to boycott oil on the same day and that would show those corporate executives at Exxon Mobil!
If you cannot see the weakness and stupidity in this boycott, you are at a loss, for I am too busy to berate you right now.
Anyway, I said, "Well, there are several reasons for the high prices of oil, but big oil is not one of them." I then went on to discuss how what was considered "big oil" were really more transporters and refiners and had to buy the crude oil on the market from primarily OPEC, and that they really didn't control the price of oil as much as forces of supply and demand.
Of course, this is not as romantic or exciting as being oppressed by big oil, so they did what any brainwashed students would do and believe what they wanted.
So, it was a pleasure when I saw the following chart.
In addition to OPEC tinkering with supply, on the other side of the equation is China's voracious demand for oil. I knew this, in combination with other things, was one of the contributing reasons for the increasing price of oil, but I didn't know just how much.
Unfortunately, if forecasts of Chinese economic growth prove correct, and the correlation holds, they aren't just joking or trying to make headlines with the $70 barrel of oil.
Whilst teaching economics at the local community college where they accepted nothing but the best the public schools had to offer, prices for a gallon of gas were persistently over $2 a gallon.
My students, the savvy geopoliticians they were, were all lit up about the high gas prices and were even more ecstatic about a boycott that was coming up that was "going to stick it to big oil."
"Huh," I said to myself, "that's interesting. I'd like to see how they boycott oil."
Upon further investigation I heard that there was this movement all across America for everybody to boycott oil on the same day and that would show those corporate executives at Exxon Mobil!
If you cannot see the weakness and stupidity in this boycott, you are at a loss, for I am too busy to berate you right now.
Anyway, I said, "Well, there are several reasons for the high prices of oil, but big oil is not one of them." I then went on to discuss how what was considered "big oil" were really more transporters and refiners and had to buy the crude oil on the market from primarily OPEC, and that they really didn't control the price of oil as much as forces of supply and demand.
Of course, this is not as romantic or exciting as being oppressed by big oil, so they did what any brainwashed students would do and believe what they wanted.
So, it was a pleasure when I saw the following chart.
In addition to OPEC tinkering with supply, on the other side of the equation is China's voracious demand for oil. I knew this, in combination with other things, was one of the contributing reasons for the increasing price of oil, but I didn't know just how much.
Unfortunately, if forecasts of Chinese economic growth prove correct, and the correlation holds, they aren't just joking or trying to make headlines with the $70 barrel of oil.
Saturday, March 05, 2005
A Truly Independent Girl
A girl with a rifle and if I'm not mistaken a pistol tucked into her pants. Something tells me she isn't a counselor at a public school.
Monday, February 28, 2005
Sunday, February 27, 2005
Want Grandchildren?
There’s not many times nowadays that I can safely bring a girl home to meet the parents. Back when I was younger it was actually an advantage. My mother is very motherly and would make my lady friend some cookies while my dad would interrogate her from the recliner as to what’s wrong with her for going out with me in the first place. If anything, it made me look good…or at least a victim deserving of pity.
But those days are long gone as the overriding theme today seems to be “When are you getting married and giving us grandchildren?”
It’s not “Hi, nice to meet you!”
Or “Oh, you’re Captain's friend, he’s told us so much about you.”
Or even “What’s your name?”
First thing out of their mouths are “So, are you guys going to give us grandchildren?”
And it does not seem that I am alone in this particular experience. The majority of my friends, also in their late 20’s and early 30’s, are expressing the same problems. It seems our parents, while patiently waiting for us to finish college and establish careers, have simultaneously run out of patience and have launched a coordinated multilateral attack on my generation to start proposing and start producing.
Unfortunately for them our answer seems a resounding “NO!” The average age of a couple getting married just recently passed 30 and is higher than it’s ever been. In America and many western European countries birth rates are so low that our populations would be shrinking if it weren’t for immigration. And more and more women are putting off having children to pursue careers as their labor participation rates soar to their highest levels ever.
Of course this confuses the Baby Boomer generation as evidenced by the multitudes of articles, research and papers trying to explain “why” my generation is not having children. Why are we waiting so long to get married. Why, if we do have children, we are not having a full litter of them. And, heaven forbid, why are more and more of us swearing off children completely.
Sacrilege!
The irony is that despite all the effort and resources poured into finding the answer as to our abysmally low birthing rates and our geriatric marriage ages, there still is no answer. Even more ironic is in all these articles and papers I have not seen one of them that polled, interviewed, or plain outright asked us why we aren’t producing little children. But what is the ultimate irony is that all this time, energy and resources spent on taxpayer funded research as well as worrying about whether they’d ever have grandchildren has all been in vain because the answers are so simple;
Divorce, social security and the women’s liberation movement.
One of the main reasons a lot of the Baby Boomers are not seeing grandchildren is divorce. Now while the Baby Boomers may have made divorce an Olympic event, most of the people in my generation remember the halcyon days of divorce during the late 70’s and early 80’s and don’t really care to relive those events. Thus, we are taking our time in choosing a life long mate and putting potential contenders through a bit more scrutiny than has been done in the past. And so with the average age of first time marriages surpassing 30, I’m sure the Baby Boomers can understand why they’ll just have to wait a little bit longer to hear the pitter patter or little feet.
Secondly, this little thing called social security. Frankly, we’ve abandoned all hope of ever collecting, and have thus resolved ourselves to the fact that we’re just going to fork over 15.3% of our money to the Baby Boomers with no return. This means we have to take the appropriate financial counter-measures to ensure we can afford our OWN retirement. And since kids kind of run around $164,000, which after investing in the average performing mutual fund over 18 years would yield $650,000, a lot of us have opted for that extra 401k or mortgage payment instead of Pampers or Gerber baby food.
Thirdly, and perhaps the most devastating to the Baby Boomers’ chances of seeing grandchildren is the minor effects this fine study called “feminism” has had on both sexes. From the female standpoint, women are told, and it is quite literally true, that they do not need men. A nuclear family is not necessarily desirable nor optimal, and a taboo is placed on those women who wish to stay at home and raise kids. This sort of “pox upon your family” should a young woman opt for a traditional lifestyle, is indoctrinated in them during their freshmen year at college, reinforced for the remainder, and so it should come as no surprise to you that they are deterred from having children.
The guys standpoint, of which I’m intricately familiar with, is a bit more simple;
Girls are not nice anymore.
I know guys, myself included, who would gladly sacrifice two decades of their lives and risk getting shot in WWII to be able to go back to the 1940s and have that selection of women. Not so much because they were allegedly more “docile” or “subservient” but if for any other reason because they were NICE! They wore dresses. And they didn’t pierce their tongues. They were WOMEN!
Not to say we are able to compare today’s women to those back then. But I’m willing to bet that people like my grandmother, despite her obvious submission to the patriarchal dictatorship, despite belittling herself by cleaning the house, making food, and other such menial tasks unbecoming of today’s modern women, was a hell of a lot nicer, loving and fun than today’s average “independent” 20-something female. That and I’d take Jayne Mansfield over Janis Joplin and J-Lo any day.
Whatever the case, the women’s liberation movement has provided great disincentive to get married. It has convinced young women that traditional marriage is a disgrace and has seriously lowered the quality of women we men get to choose from.
The whole point, be it the women’s lib movement, social security, or divorce is that there’s just no incentive to breed. It’s too expensive to have the kid. It’s too risky to get married. The legal consequences of being married and having children is infinitely more complex AND disadvantageous than being single. And it’s just a more promising and care free life not to marry or have kids, especially with the quality of people to chose from.
So I sincerely hope the Baby Boomers enjoy those social security payments. I sure hope they enjoyed competing for the gold medal in divorce. And I sure hope women are “liberated” from that evil, fascist oppressive regime known as the nuclear family. Because for a lot of the Baby Boomers out there that wish that wish they had grandchildren, unfortunately the closet thing to a grandchild they’ll be seeing is a social security check.
But those days are long gone as the overriding theme today seems to be “When are you getting married and giving us grandchildren?”
It’s not “Hi, nice to meet you!”
Or “Oh, you’re Captain's friend, he’s told us so much about you.”
Or even “What’s your name?”
First thing out of their mouths are “So, are you guys going to give us grandchildren?”
And it does not seem that I am alone in this particular experience. The majority of my friends, also in their late 20’s and early 30’s, are expressing the same problems. It seems our parents, while patiently waiting for us to finish college and establish careers, have simultaneously run out of patience and have launched a coordinated multilateral attack on my generation to start proposing and start producing.
Unfortunately for them our answer seems a resounding “NO!” The average age of a couple getting married just recently passed 30 and is higher than it’s ever been. In America and many western European countries birth rates are so low that our populations would be shrinking if it weren’t for immigration. And more and more women are putting off having children to pursue careers as their labor participation rates soar to their highest levels ever.
Of course this confuses the Baby Boomer generation as evidenced by the multitudes of articles, research and papers trying to explain “why” my generation is not having children. Why are we waiting so long to get married. Why, if we do have children, we are not having a full litter of them. And, heaven forbid, why are more and more of us swearing off children completely.
Sacrilege!
The irony is that despite all the effort and resources poured into finding the answer as to our abysmally low birthing rates and our geriatric marriage ages, there still is no answer. Even more ironic is in all these articles and papers I have not seen one of them that polled, interviewed, or plain outright asked us why we aren’t producing little children. But what is the ultimate irony is that all this time, energy and resources spent on taxpayer funded research as well as worrying about whether they’d ever have grandchildren has all been in vain because the answers are so simple;
Divorce, social security and the women’s liberation movement.
One of the main reasons a lot of the Baby Boomers are not seeing grandchildren is divorce. Now while the Baby Boomers may have made divorce an Olympic event, most of the people in my generation remember the halcyon days of divorce during the late 70’s and early 80’s and don’t really care to relive those events. Thus, we are taking our time in choosing a life long mate and putting potential contenders through a bit more scrutiny than has been done in the past. And so with the average age of first time marriages surpassing 30, I’m sure the Baby Boomers can understand why they’ll just have to wait a little bit longer to hear the pitter patter or little feet.
Secondly, this little thing called social security. Frankly, we’ve abandoned all hope of ever collecting, and have thus resolved ourselves to the fact that we’re just going to fork over 15.3% of our money to the Baby Boomers with no return. This means we have to take the appropriate financial counter-measures to ensure we can afford our OWN retirement. And since kids kind of run around $164,000, which after investing in the average performing mutual fund over 18 years would yield $650,000, a lot of us have opted for that extra 401k or mortgage payment instead of Pampers or Gerber baby food.
Thirdly, and perhaps the most devastating to the Baby Boomers’ chances of seeing grandchildren is the minor effects this fine study called “feminism” has had on both sexes. From the female standpoint, women are told, and it is quite literally true, that they do not need men. A nuclear family is not necessarily desirable nor optimal, and a taboo is placed on those women who wish to stay at home and raise kids. This sort of “pox upon your family” should a young woman opt for a traditional lifestyle, is indoctrinated in them during their freshmen year at college, reinforced for the remainder, and so it should come as no surprise to you that they are deterred from having children.
The guys standpoint, of which I’m intricately familiar with, is a bit more simple;
Girls are not nice anymore.
I know guys, myself included, who would gladly sacrifice two decades of their lives and risk getting shot in WWII to be able to go back to the 1940s and have that selection of women. Not so much because they were allegedly more “docile” or “subservient” but if for any other reason because they were NICE! They wore dresses. And they didn’t pierce their tongues. They were WOMEN!
Not to say we are able to compare today’s women to those back then. But I’m willing to bet that people like my grandmother, despite her obvious submission to the patriarchal dictatorship, despite belittling herself by cleaning the house, making food, and other such menial tasks unbecoming of today’s modern women, was a hell of a lot nicer, loving and fun than today’s average “independent” 20-something female. That and I’d take Jayne Mansfield over Janis Joplin and J-Lo any day.
Whatever the case, the women’s liberation movement has provided great disincentive to get married. It has convinced young women that traditional marriage is a disgrace and has seriously lowered the quality of women we men get to choose from.
The whole point, be it the women’s lib movement, social security, or divorce is that there’s just no incentive to breed. It’s too expensive to have the kid. It’s too risky to get married. The legal consequences of being married and having children is infinitely more complex AND disadvantageous than being single. And it’s just a more promising and care free life not to marry or have kids, especially with the quality of people to chose from.
So I sincerely hope the Baby Boomers enjoy those social security payments. I sure hope they enjoyed competing for the gold medal in divorce. And I sure hope women are “liberated” from that evil, fascist oppressive regime known as the nuclear family. Because for a lot of the Baby Boomers out there that wish that wish they had grandchildren, unfortunately the closet thing to a grandchild they’ll be seeing is a social security check.
Wednesday, January 12, 2005
Ode to the Baby Boomers - Part 2
In my previous ode to the Baby Boomer generation I basically ripped them to shreds, accusing them of everything from the deterioration of American culture to the break down of the American economy. But one ranting economist blogger making outlandish claims doesn't make it so. What would make it so would be a little empirical proof and that's what this week's post is about.
Now, admittedly, some of the "societal ills" I accused the Baby Boomers of wreaking on America is simply opinion. It is only my opinion that Frank Sinatra's music was infinitely better than Jim Morrison. And it is only my opinion that dancing is a better way to meet women than to go to the bars and get them drunk. It is only my opinion that traditional religions are better than satanic ones. And it is only my opinion that the fashion and etiquette of Doris Day is forever superior to the likes of Janis Joplin.
But what is not my opinion is what happened to the bevy of various social and economic indicators by which we gauge and measure the quality, strength and performance of society under the reign of the Baby Boomers. Things like economic growth, divorce, debt, teen pregnancies, etc.; it is these things that provide us with the pulse of society and for which the Baby Boomer generation has much to answer for.
My favorite metric is crime. What better way to gauge a generation's stewardship of society than to look at how much crime that generation committed against society? Upon the Baby Boomers' entrance into adulthood offensive crime nearly quadrupled in the 20 years following 1960, peaking during the Volcker Recession. Property crime followed a similar pattern, and in both categories a resurgence in crime occurred as the Baby Boomer's offspring (with fine, stable upbringings) came of adolescence and crime-committing age. It wasn't until the economic boom of the 90's and the Baby Boomers entrance into middle age did crime start to fall.
(These crime measures are indices, incorporating all crimes (burglary, rape, assault, murder, etc.) into two overall crime measures)
Ironically, this skyrocketing crime coincides with another defining trait of the Baby Boomer generation; skyrocketing spending on government social programs, namely, "The Great Society." These programs were supposedly designed to lower or eliminate such social ills as crime, poverty, drugs, etc. However, it's almost as if the more money we spent on the social ills, the worse they became...something that liberals CERTAINLY to not want to hear!
Even more ironic than that, and what I find particularly disgusting, is the revolting increase in rape that occurred as the Baby Boomers became participating members or society. And what is particularly ironic about this, is that this was under the reign and heyday of the "women's liberation movement" which was allegedly supposed to decrease such atrocities.
Of course, some will argue this is due to the fact that women were being raped all the time, but never came forward. It wasn't until women were "liberated" that they felt comfortable coming forward, thus the increase in rape can be considered a good thing. However, I'm more inclined to subscribe to another theory; that feminists were 100% successful in eliminating that sexist and oppressive patriarchical behavior known as "chilvarly," yet, chivlary (or at least an upstanding father figure in the household) was the key ingredient in not only preventing rape, but instilling respect for women in men. But alas, I'm sure this correlation is spurious and I'm just some dumb economist jumping out of trees, running into the bushes and climbing rocks. I'm sure the women's lib movement has really improved the lives of women all around and has made them much happier.
Closely related to crime and certainly contributing to it during the 70's and 80's was drugs, another ailment brought to prominence by the Baby Boomers. Before 1965 the recreational use of illicit drugs was practically non-existent. It wasn't until Jim Morrison and Janis Joplin started to eclipse Frank Sinatra in album sales that the first Baby Boomers entered (again) "adulthood" and made narcotics a booming industry. Marijuana alone experienced a 500% increase in new users in the eight years following 1965. Cocaine was a late bloomer, not reaching its peak of popularity until 1981; perhaps it was just a favorite among the younger Baby Boomers.
It should also come as no surprise that as drug use went up labor productivity might suffer. Averaging about a 3% annual growth rate during the 50's and 60's, labor productivity growth started to tank in 1965, once again coinciding with the entrance of Baby Boomers into the labor force. Labor productivity growth continued to tank for the next 15 years where it bottomed out at roughly 1/3 its 1965 high. Alas, it is a sad irony that droves of Baby Boomers entering the labor force seemingly "drove" (HAR HAR HAR!) labor productivity growth down.
(Note- I used rolling averages since labor productivity is very volatile and no trend would be able to be discerned visually. The rolling averages are not a trailing average, but a centered average, meaning the number you see in, say the 10 year rolling average takes the average of the past 5 and future five years to get its data point)
The negative effects of lower labor productivity may not be readily apparent to those who are able to attract members of the opposite sex - i.e. - those who aren't economists. However, the reason why labor productivity is so important is that all goods and services (i.e.-wealth) are derived from labor, which means ultimately our standards of living are based on how productive we are. This decrease in labor productivity growth, combined with oil embargoes and a politically placating monetary policy resulted in the pathetic economic growth rates of the 70's and the worst recession we've had since the Great Depression, the Volcker Recession (something older Gen X-er's may remember). When all was said and done a decade's worth of economic growth was wasted, standards of living had flatlined, inflation was running at 14% and unemployment was at European levels.
But to be fair, I must admit there was a silver lining to the economic malaise of the 1970's. A particular group of people were actually doing very well; divorce lawyers. Business for them almost tripled under the Baby Boomers, almost as if the Baby Boomers made divorce an Olympic event.
Of course, there is the argument often posed by feminists that divorce is a good thing and in some cases, it certainly is. However, the problem with divorce is not the hardship the husband and wife must go through, but what the children must endure. And here is where the children suffer on two fronts (and where I'm particularly livid with the Baby Boomers and especially my generation).
One is simply that the kid does not have a stable family household. Be it the parents arguing, abuse, using the kid as a chess piece in a tug of war match, or whatever, ultimately the kid is without one of his/her parents and the kid's dreams of going to Yellowstone park for a family vacation are somewhat dashed. Sadly the percentage of kids living under these households has gone from 11.9% of total households in 1970 to 27.9% in 1996.
The second front is that rarely do people contemplate the responsibility of having a child before they get married. Or more specifically, "If I were to marry person X, would we be able to provide a stable, nurturing environment to a child if we were to have one?" It's all about them, and no thought is given to the potential future would-be child. This is what I call "The SUV Kid Syndrome."
"The SUV Kid Syndrome" is where people have children not because they want to bring in another living human being that is in part a piece of themselves or because they want to share their lives with that child and bring it up the best they can. But because they "want a child" like they "want an SUV" or they "want an X-Box" as if children were an item, a piece of furniture to make the house complete. Forget whether they should have a child, or whether they can afford a child, or if they have the time for a child; such questions are inconsequential. It only matters if you want a child. Thus, the child takes on the characteristics of an object in that it can be "put away" or "turned off" in case it inconveniences you and your life.
Don't want to be inconvenienced bringing up your child? Outsource the responsibility to day care!
Can't afford day care? No problem, there's free government babysitting programs called Head Start and the public schools!
Don't want to teach them morals or ethics? Let Paris Hilton and Snoop Dogg do it for you!
Is your kid running around, all full of energy, bouncing off the walls like...well... a kid? Give him ritalin!
Really don't like the spouse you chose and wish you could trade him/her in for a better model, but you have a child? Heck, get divorced anyway!
Would you like to go out and get drunk, but you have to deal with that annoying kid? Lock him up in the trunk!
And is that kid interrupting your drug binge again??? That bastard! How dare he! Let the little twerp starve.
And when you're done pursuing your busy career and life, maybe you can stop in sometime and pick him up from the kennel for a walk...er...I mean "spend some quality "family" time together."
Alas, such a selfish and shallow approach to children did not exist in the 1940's, but give it two generations and a women's liberation movement and look how far we've come.
But hey, let's not go so hard on those people who have children and then get divorced. Some, don't even bother getting married at all. In 1960 only about 5% of all births in the United States were to unmarried women (the politically correct version of "illegitimate births"). Today that number is 33% and for blacks an inexcusable and pathetic 67%.
But again, I could be wrong. Feminists in all their wisdom contest that there's nothing wrong with single-parent households. Some even go so far as to admire those truly independent women that are single-mothers on purpose. And while there are instances where a poor parent certainly should be jettisoned from the household leaving a single mother or father to rear the children, it is the utmost of greed, self-centeredness and arrogance to purposely become a single-parent. It is these people whose desire to have a child supercedes the upbringing they can give to the child, and thus they impose fatherless or motherless childhoods on children. These are the people are the epitome of "SUV Kid Syndrome."
But let's be open-minded...reeeally open-minded. Let's just let the feminists and feminized men have that one. Let's just toss out all the research that says otherwise and accept that a child is going to be just as well served under a single-parent household as they would a nuclear family. Show me the argument then that shows children do just as well with unmarried teenage mothers as they do older more "traditional" parents.
Ahhh yes, another social indicator through the roof during the Baby Boomer-inspired American cultural renaissance called "The 70's." I'm not going to even bother arguing why teenage pregnancy is "bad" but no doubt feminists are working 'round the clock on a rationale as to why it "is a good thing."
But while the economy was tanking, our labor productivity slowing, responsibility being thrown out the window, and children being raised in broken homes, there was an element festering in America that posed a much greater and long term threat to America. An element so evil the devil could only envy it. A force so despicable, one could say it is the moral opposite of the US soldier who landed at Omaha beach; lawyers.
Ahhh, yes, lawyers.
I had always had this stereo-type or perhaps "sneaky feeling" that a lot of Baby Boomers had entered law. For example, whilst working security at college, I noticed that the majority of the law professors were not only of Baby Boomer age, but also had the most anti-American, leftist propaganda on their office doors. Another thing was the poster-children of the Baby Boomers (Bill and Hillary Clinton) were both lawyers, Hillary being the true embodiment of the backstabbing, Machiavellian lawyer. But what really clinched it was a 60 Minutes special I saw about the 1968 democrat convention riot in Chicago where they interviewed a now 50 year old pony tailed hippie protestor and an old retired cop. The cop was retired, the hippie was now a trial lawyer.
Alas I was compelled to investigate further and created the "Lawyer Index;" an index which measures the percent of the population that is lawyers and law students. And what do you know, I was right. In the mid sixties only about .025% of the population was in law school. Ten years later that number more than doubled to .052%, again coinciding with the Baby Boomer generation entering college age.
Five years later when these students graduated and entered the profession the number of lawyers as a percent of the population jumped from .2% of the population to .27%. (This jump occurred from 1979 to 1983 which coincidentally are the exact same years the US suffered its worst recession since the Great Depression.)
The question though is, did they really do any damage? Sure, opinions and anecdotal experiences with lawyers has earned them a very poor reputation with the public. And we crack jokes about them everyday, but do they deserve it?
And the answer is a resounding, "Hell yes."
And I say that not just because I've had to deal with now two personal injury lawyer parasitic scum in my own life, but because the costs to society imposed by lawyers truly are disgusting.
Frivolous law suits (tort) cost America roughly 2% of it's GDP each year, which is up from .5% back in the 1950's. The increase YET AGAIN coincides not only with the entrance of the Baby Boomers into the labor force, but with their disproportionate participation in law. Notice the particular jump in costs from 1984-1987, which immediately followed the bumper-crop generation of Baby Boomers that graduated from law school from 1979-1983. This suggests that this increase is a "supply led" increase, meaning fundamental demand for such services has not increased (people aren't really getting hurt more), as much as it has been lawyers going out and trying to find any reason to sue; thus fat people suing McDonald's and smokers cigarette companies, and other such outlandish law suits that are highlighted in the news today.
As an economist, though I think about two things. One, I speculate about the opportunity costs of losing a full 2% of our GDP each year to what are most likely frivolous lawsuits. That money could have been spent or otherwise reinvested back into the economy, producing easily enough wealth to solve our little social security problem. And a rough estimate in the head gives me a figure of at least a 10% increase in our income per capita. Money now currently going to pay for increased insurance premiums and Lexuses of lawyers. Two, I'm wondering if it was possible lawyers at one time had a reputable reputation before the Baby Boomers entered the field and drove up insurance premiums and tort costs. Perhaps we will never know.
Now I could go on and on about untold numbers of various social indicators and how their deterioration amazingly coincides with the advent of the Baby Boomer generation;
I could talk about SAT scores;
I could talk about alcoholism;
I could talk about infanticide and child abuse;
I could talk about welfare;
I could talk about STD's;
I could talk about "stagflation;"
I could talk about a tanking dollar;
I could talk about tanking work weeks;
I could even talk about the "Misery Index;"
I could talk about practically any social indicator and metric you could ever think of and in the vast majority of cases they will have worsened under the Baby Boomers.
But forget all of it. Forget everything I've ever said. Take all the various social ailments I addressed above and throw them out the window. Forget the atrocious increase in crime. Forget that "work ethic" was not part of the vocabulary during the late 60's and 70's. Forget that pot replaced milk as a staple of diet. Forget that the economy tanked and that the lawyer population exploded. And forget how children became more and more like furniture. Forget it all!
Matter of fact, just write me off as a raving lunatic "age-ist" with an agenda and that I'm just bigoted towards people between the ages of 40-62 simply because of a bad experience in the 3rd grade where I got questions 40-62 wrong on a test, and thus I'm forever psychologically scared for life. Whatever it is, just disregard everything I just said.
No matter how "bigoted" I am, no matter how hate-filled you may find me, and no matter how much you may disagree with me there is no denying that the Baby Boomers have fumbled the ball worse than Daunte Culpepper when it comes to;
Fiscal responsibility
Spending money as if they were married to a ketchup heiress, never has a generation ran such a deficit between the amount of resources they've consumed and the amount of wealth they've provided in return. Incapable of producing enough goods and services to satisfy their demands, yet still wishing to maintain the consumption of kings, the Baby Boomers needed a way to enjoy higher standards of living without having to do all that pesky additional work.
Enter in the master stroke of genius. The mantra by which the Baby Boomers have lived since the 1970's. The legacy the Baby Boomers will leave behind, pass onto their children and for which all of history will remember them for; this ingenious little concept called "debt."
Debt is a magical thing. Impervious to time and adhering to no laws of physics, space or time, debt allows you to have your cake and eat it too.
The way debt works is the following;
1. You want something/s
2. You want something/s now.
3. You're too damn lazy to get off your fat ass to get a job and work up the money for it.
4. Thus, you take somebody else's money, promising to pay them back, but maybe you do or maybe you don't...but hey, that's their problem.
And boom! The magic of debt has worked. You've been able to acquire wealth on somebody else's dime.
Of course we operate under the assumption that people will always pay their debts back, and thus debt is not bad. But let me address that later. First let's take a look at just how much debt the Baby Boomers (and Generation X as well) has racked up over the course of their lives and then we'll worry about the issue of paying it back.
First, let's look at household debt. Household debt is the total amount of debt people have incurred, including mortgages.
(Adjusted for GDP so we know truly just how much debt has been incurred)
Now most would point out that "a house is a good investment" and that if there's something to take debt out for, a house is certainly not as frivolous as say a portable DVD player. And for the most part they're right. On principle I have no problem with people borrowing money to pay for a house.
The problem I have with people taking money out for houses now is that property is insanely overvalued.
Enter in the fact that the Baby Boomers will soon begin their journey towards nursing homes, retirement communities, and ultimately death, that means there will be a glut of property hitting the market for sale, thereby driving down prices. Barring a huge wave of immigration (and that's assuming these immigrants have the money to buy houses, which they don't) you can expect a drop or at least a long term decline or stagnation of property prices. But, don't listen to me, rack up that debt, take out that home equity line and buy yourself a fancy SUV, I'm just a dumb, bigoted economist.
But let's just assume for the moment that I truly am a dumb, bigoted economist and ignore the issue of overvalued property. Let's assume that property is a great reason to take out a loan and focus on the portion of household debt that is for non-mortgage (read "frivolous") items. We call this consumer debt.
Consumer debt has increased from 4% of GDP during the WWII Generation to now 18% of GDP (equivalent to the entire US Federal budget). And unlike the rest of this post, the Baby Boomers are not the only ones to blame for this increase. Generation X has some explaining to do as well.
Now on the face of it, consumer debt of only 18% GDP is really not all that bad. It would only require some astute fiscal discipline for a year or six to pay that back. Maybe you'd have to forego that plasma TV or little Jr.'s pocket bike, but it could be done. And thus, you're probably concluding, "hey, the amount of debt we've accumulated isn't that bad."
But, oh you foolish little boy. For that's just the beginning of the debt legacy the Boomers (and Gen X) have built up. We have much further to go. For households and individuals are not the only entities that can accumulate debt. Governments can accumulate debt too! Oh goodie!
If there is an example of having their cake and eating it too, government debt is the prime example. Wanting all these various social programs and the attainment of the "Great Society" the Baby Boomers voted politicians into office to increase spending on welfare, social security, education and the limitless number of other various social programs. And while on the face of it, it was to address the social ailments that arose during the 60's and 70's, methinks it was more to provide employment for people who were too lazy to major in engineering and computers, and thus wanted to become social workers, counselors, teachers and other varied sorts of lazy AFSCME members, but I digress.
Whichever the case, these programs needed money.
"What, you want MONEY to fund these programs?" the people would say.
Hearing their indignation, and worried about losing their cushy government jobs, politicians had to come up with a plan. The people wanted the government to pay for more things, and lavish them with money, but they didn't want to pay the taxes necessary to finance such operations(anybody remember The Bear Patrol from "The Simpsons?").
Enter in "the free lunch."
The free lunch was an ingenious concept developed by politicians in the 70's and 80's. How it worked was that the politicians realized if they could borrow money to pay for these various government social programs four things would result;
And the result of two decades worth of deficit spending? $5 trillion in debt.
Unfortunately, the problem is that unlike consumer or household debt, government debt can (actually, must) be passed one from one generation to the next. It doesn't go away. The question is who will bite the bullet? Who will have to work to pay off these debts? Will it be the people who incurred the debt in the first place and used it to pay for cushy government programs and subsidized tax cuts? Or will we just roll over the debt allowing future generations to pay it off instead? With the imminent retirement of the Baby Boomer generation upon us, you can expect Generation X to carry the torch and inherit the $5 trillion in accumulated government deficits because there is not enough time for the Baby Boomers to work up the money to pay back what they borrowed.
Alas it seems the Baby Boomers got to enjoy all the "benefits" of The Great Society and Generation X gets to pay for it.
Ain't debt a bitch?
But what's $5 trillion between friends? More so, what's $5 trillion between family? I'm constantly told by my Baby Boomer predecessors that blood is thicker than water. And besides, it's only money.
Truth is, even if I believed that, if all we'd have to inherit from our Baby Boomer predecessors was the $5 trillion, I would be the happiest man in the world. I would gladly accept that $5 trillion in debt from my parent's generation. But sadly, that $5 trillion is not all we will get to pay for. For that $5 trillion is all the debt that has been accumulated thus far. That $5 trillion is historic, it's all in the past. It says nothing about what we get to pay for or how much more debt we will accumulate in the future.
Enter in the two greatest scams...errr...I mean "achievements" of the democratic party and their patron saint, FDR;
Social Security and Medicare.
Every month I get a card in the mail from a comedy company and it is hilarious. I rarely laugh harder. My good friends at the Social Security Administration send me my "account balance" for social security. I open it up with my friends while we're drinking and boy do we have a good guffaw. Some guys laugh milk through their nose, others cry because it's so funny. Oh, those funny clowns at the SSA!
And the reason it's so funny is they actually act like they're concerned about us. Like we're really going to get this money we've socked away. Now, forking over 15.3% of my income every year, one would naturally ask "where is this going?" An investment account? An IRA? My own safety box at the SSA?
You're almost as funny as the SSA!
No, silly, it goes right out immediately as payment to current recipients on social security.
The next natural question to ask is "well, where did all their contributions go?"
Weren't you paying attention?
Their contributions are gone. The government has been running deficits ever since the Baby Boomers took over in 1971.
And where did they piss it all away...er... I mean "spend" this money?
I'll post it again;
But if you think that's funny, just wait till you hear this one! What I love is how politicians, the media, pundits, lawyers or even AARP make it sound like social security is this vast, insanely complex issue with complex problems and no simple solutions. That you morons, you Red State plebs, you Wal-Mart workers are too stupid to understand this and thus we need journalists, professors, Hillary Clinton and other intellectual elites to solve this problem for us. Why you just can't possibly understand this chart here below!
(Rimshot - Thank you, thank you! I'm here every Thursday! Don't forget to tip your waiters and waitresses!)
And we wonder why social security is in such a mess.
But like I said, we can't dwell on the past. What's done is done. We have that $5 trillion in debt to deal with and we'll just have to accept it. Besides, there are more pressing issues to worry about. Namely, how much more these programs are going to cost us in the future.
And will you look at that. If you thought $5 trillion was a lot, get ready for some fun times because the amount of money spent on just those two items; social security and Medicare, is set to double going from 7% of GDP to about 15% in 2040 once the Baby Boomers start retiring.
Add to that all the various social programs outside the realm of social security and Medicare that go to the elderly, and total spending on the elderly is predicted to consume a full fifth of our GDP; equivalent to spending the ENTIRE US FEDERAL BUDGET ONLY ON THE ELDERLY!
Yeah, kiss that cabin up north good-bye.
Could it possibly get any worse? Could we have put ourselves in more of a hole? Could other people have promised themselves so much without thinking of the true cost of their actions?
Oh, of course.
That just covers spending on the elderly. The Great Society promised everything for everyone! When all future promised obligations and entitlements are considered (things like welfare, income security, bailing out the underfunded pensions, Fannie Mae, Fannie Mac, etc.) and is compared to estimated tax revenues, the IMF estimates that our true debt level doesn't stand at roughly 40% GDP, but actually more like 250% GDP. That means you'd have to work 2.5 years, and be taxed at 100% to pay for all this. I think they have a similar arrangement in North Korea.
Now of course, these figures are all estimates and not set in stone. Some estimates are as low as $22 trillion, some as high at $44.2 trillion. Regardless of the figure, that's still a lot of dough. And the question then becomes how are we going to pay for this?
Thus far our Asian friends have been nice enough to loan us the money to at least finance our deficits (not pay for them). However, the point will come where they probably won't loan us anymore and ultimately we'll have to pay for it. The reason why? Quite bluntly, put yourself through the conversation;
Hu Jintao - "So, you'd like to borrow $30 trillion?"
You - "Yes."
Hu Jintao - "What will you spend it on?"
You - "The elderly, namely social security and Medicare."
Hu Jintao - "So let me get this right. You're going to borrow $30 trillion from us."
You - "Yes."
Hu Jintao -"Spend it on old people who are not working, thus providing you with no wealth in return. It's strictly an income transfer. It will do nothing to increase the US' ability to pay us back."
You - "Yes."
Hu Jintao -"And then you'll spend some of that money to help keep them alive for another 6 months only to have them die and not work in return, again, no return for the People's Republic of China."
You - "Yes."
As cold and callous as that may sound, that is exactly how any creditor is going to look at the arrangement. Thus, you can be rest assured that we're going to have to pay for this baby ourselves via hard work, more work, and higher taxation because (Baby Boomers, plug your ears)
THERE IS NO SUCH THING AS A FREE LUNCH!!!!
The result? You can expect your payroll taxes to increase by roughly another 10-15% points depending on how old you are today...unless of course you are a Baby Boomer, which means you'll not have to pay these taxes because you'll be retiring soon.
Now would be the point in our show where I give the standard "ol' funny economist prep talk" and make some commentary about how chicks dig me and what we need to do in order to fix this problem, and continue on into a bright, happy economist future. But I have one more joke for you. It's the biggest joke of all time.
You have this massive financial crisis that threatens to destroy America's economy, a threat that in my humble opinion dwarfs the threat of terrorism, and who do we call upon to save the country?
Generation X.
It's like asking for Superman and getting Cheech and Chong.
I don't know if you've noticed this, but my generation ain't exactly the quality and caliber of the WWII generation. This is the generation that has made reality TV and hip-hop culture popular. This is the generation that made Kirk Cobain go platinum and grunge a popular fashion. This is the generation that grew up on MTV and thinks being a good citizen means you "Rock the Vote" or get your news from The Daily Show with Jon Stewart. And this is the generation whose only response to tragedy seems to be candle-light vigils or grown men crying.
Now, of course to be fair, much of the above are social criticisms and has no bearing on the fiscal discipline, work ethic or wealth generating ability of Generation X. And truth be known, I'm a member of Generation X and I hold to the most rigorous fiscal austerity. I also know many members of Generation X who are contributing members of society and a borrower nor lender are. So just how good is Generation X with money management and debt, and how capable are they to face the oncoming financial crisis?
(Please note that the scale of this chart is logarithmic and bankruptcies have skyrocketed under Generation X.)
You might as well be asking the French to defend Paris.
Now, admittedly, some of the "societal ills" I accused the Baby Boomers of wreaking on America is simply opinion. It is only my opinion that Frank Sinatra's music was infinitely better than Jim Morrison. And it is only my opinion that dancing is a better way to meet women than to go to the bars and get them drunk. It is only my opinion that traditional religions are better than satanic ones. And it is only my opinion that the fashion and etiquette of Doris Day is forever superior to the likes of Janis Joplin.
But what is not my opinion is what happened to the bevy of various social and economic indicators by which we gauge and measure the quality, strength and performance of society under the reign of the Baby Boomers. Things like economic growth, divorce, debt, teen pregnancies, etc.; it is these things that provide us with the pulse of society and for which the Baby Boomer generation has much to answer for.
My favorite metric is crime. What better way to gauge a generation's stewardship of society than to look at how much crime that generation committed against society? Upon the Baby Boomers' entrance into adulthood offensive crime nearly quadrupled in the 20 years following 1960, peaking during the Volcker Recession. Property crime followed a similar pattern, and in both categories a resurgence in crime occurred as the Baby Boomer's offspring (with fine, stable upbringings) came of adolescence and crime-committing age. It wasn't until the economic boom of the 90's and the Baby Boomers entrance into middle age did crime start to fall.
(These crime measures are indices, incorporating all crimes (burglary, rape, assault, murder, etc.) into two overall crime measures)
Ironically, this skyrocketing crime coincides with another defining trait of the Baby Boomer generation; skyrocketing spending on government social programs, namely, "The Great Society." These programs were supposedly designed to lower or eliminate such social ills as crime, poverty, drugs, etc. However, it's almost as if the more money we spent on the social ills, the worse they became...something that liberals CERTAINLY to not want to hear!
Even more ironic than that, and what I find particularly disgusting, is the revolting increase in rape that occurred as the Baby Boomers became participating members or society. And what is particularly ironic about this, is that this was under the reign and heyday of the "women's liberation movement" which was allegedly supposed to decrease such atrocities.
Of course, some will argue this is due to the fact that women were being raped all the time, but never came forward. It wasn't until women were "liberated" that they felt comfortable coming forward, thus the increase in rape can be considered a good thing. However, I'm more inclined to subscribe to another theory; that feminists were 100% successful in eliminating that sexist and oppressive patriarchical behavior known as "chilvarly," yet, chivlary (or at least an upstanding father figure in the household) was the key ingredient in not only preventing rape, but instilling respect for women in men. But alas, I'm sure this correlation is spurious and I'm just some dumb economist jumping out of trees, running into the bushes and climbing rocks. I'm sure the women's lib movement has really improved the lives of women all around and has made them much happier.
Closely related to crime and certainly contributing to it during the 70's and 80's was drugs, another ailment brought to prominence by the Baby Boomers. Before 1965 the recreational use of illicit drugs was practically non-existent. It wasn't until Jim Morrison and Janis Joplin started to eclipse Frank Sinatra in album sales that the first Baby Boomers entered (again) "adulthood" and made narcotics a booming industry. Marijuana alone experienced a 500% increase in new users in the eight years following 1965. Cocaine was a late bloomer, not reaching its peak of popularity until 1981; perhaps it was just a favorite among the younger Baby Boomers.
It should also come as no surprise that as drug use went up labor productivity might suffer. Averaging about a 3% annual growth rate during the 50's and 60's, labor productivity growth started to tank in 1965, once again coinciding with the entrance of Baby Boomers into the labor force. Labor productivity growth continued to tank for the next 15 years where it bottomed out at roughly 1/3 its 1965 high. Alas, it is a sad irony that droves of Baby Boomers entering the labor force seemingly "drove" (HAR HAR HAR!) labor productivity growth down.
(Note- I used rolling averages since labor productivity is very volatile and no trend would be able to be discerned visually. The rolling averages are not a trailing average, but a centered average, meaning the number you see in, say the 10 year rolling average takes the average of the past 5 and future five years to get its data point)
The negative effects of lower labor productivity may not be readily apparent to those who are able to attract members of the opposite sex - i.e. - those who aren't economists. However, the reason why labor productivity is so important is that all goods and services (i.e.-wealth) are derived from labor, which means ultimately our standards of living are based on how productive we are. This decrease in labor productivity growth, combined with oil embargoes and a politically placating monetary policy resulted in the pathetic economic growth rates of the 70's and the worst recession we've had since the Great Depression, the Volcker Recession (something older Gen X-er's may remember). When all was said and done a decade's worth of economic growth was wasted, standards of living had flatlined, inflation was running at 14% and unemployment was at European levels.
But to be fair, I must admit there was a silver lining to the economic malaise of the 1970's. A particular group of people were actually doing very well; divorce lawyers. Business for them almost tripled under the Baby Boomers, almost as if the Baby Boomers made divorce an Olympic event.
Of course, there is the argument often posed by feminists that divorce is a good thing and in some cases, it certainly is. However, the problem with divorce is not the hardship the husband and wife must go through, but what the children must endure. And here is where the children suffer on two fronts (and where I'm particularly livid with the Baby Boomers and especially my generation).
One is simply that the kid does not have a stable family household. Be it the parents arguing, abuse, using the kid as a chess piece in a tug of war match, or whatever, ultimately the kid is without one of his/her parents and the kid's dreams of going to Yellowstone park for a family vacation are somewhat dashed. Sadly the percentage of kids living under these households has gone from 11.9% of total households in 1970 to 27.9% in 1996.
The second front is that rarely do people contemplate the responsibility of having a child before they get married. Or more specifically, "If I were to marry person X, would we be able to provide a stable, nurturing environment to a child if we were to have one?" It's all about them, and no thought is given to the potential future would-be child. This is what I call "The SUV Kid Syndrome."
"The SUV Kid Syndrome" is where people have children not because they want to bring in another living human being that is in part a piece of themselves or because they want to share their lives with that child and bring it up the best they can. But because they "want a child" like they "want an SUV" or they "want an X-Box" as if children were an item, a piece of furniture to make the house complete. Forget whether they should have a child, or whether they can afford a child, or if they have the time for a child; such questions are inconsequential. It only matters if you want a child. Thus, the child takes on the characteristics of an object in that it can be "put away" or "turned off" in case it inconveniences you and your life.
Don't want to be inconvenienced bringing up your child? Outsource the responsibility to day care!
Can't afford day care? No problem, there's free government babysitting programs called Head Start and the public schools!
Don't want to teach them morals or ethics? Let Paris Hilton and Snoop Dogg do it for you!
Is your kid running around, all full of energy, bouncing off the walls like...well... a kid? Give him ritalin!
Really don't like the spouse you chose and wish you could trade him/her in for a better model, but you have a child? Heck, get divorced anyway!
Would you like to go out and get drunk, but you have to deal with that annoying kid? Lock him up in the trunk!
And is that kid interrupting your drug binge again??? That bastard! How dare he! Let the little twerp starve.
And when you're done pursuing your busy career and life, maybe you can stop in sometime and pick him up from the kennel for a walk...er...I mean "spend some quality "family" time together."
Alas, such a selfish and shallow approach to children did not exist in the 1940's, but give it two generations and a women's liberation movement and look how far we've come.
But hey, let's not go so hard on those people who have children and then get divorced. Some, don't even bother getting married at all. In 1960 only about 5% of all births in the United States were to unmarried women (the politically correct version of "illegitimate births"). Today that number is 33% and for blacks an inexcusable and pathetic 67%.
But again, I could be wrong. Feminists in all their wisdom contest that there's nothing wrong with single-parent households. Some even go so far as to admire those truly independent women that are single-mothers on purpose. And while there are instances where a poor parent certainly should be jettisoned from the household leaving a single mother or father to rear the children, it is the utmost of greed, self-centeredness and arrogance to purposely become a single-parent. It is these people whose desire to have a child supercedes the upbringing they can give to the child, and thus they impose fatherless or motherless childhoods on children. These are the people are the epitome of "SUV Kid Syndrome."
But let's be open-minded...reeeally open-minded. Let's just let the feminists and feminized men have that one. Let's just toss out all the research that says otherwise and accept that a child is going to be just as well served under a single-parent household as they would a nuclear family. Show me the argument then that shows children do just as well with unmarried teenage mothers as they do older more "traditional" parents.
Ahhh yes, another social indicator through the roof during the Baby Boomer-inspired American cultural renaissance called "The 70's." I'm not going to even bother arguing why teenage pregnancy is "bad" but no doubt feminists are working 'round the clock on a rationale as to why it "is a good thing."
But while the economy was tanking, our labor productivity slowing, responsibility being thrown out the window, and children being raised in broken homes, there was an element festering in America that posed a much greater and long term threat to America. An element so evil the devil could only envy it. A force so despicable, one could say it is the moral opposite of the US soldier who landed at Omaha beach; lawyers.
Ahhh, yes, lawyers.
I had always had this stereo-type or perhaps "sneaky feeling" that a lot of Baby Boomers had entered law. For example, whilst working security at college, I noticed that the majority of the law professors were not only of Baby Boomer age, but also had the most anti-American, leftist propaganda on their office doors. Another thing was the poster-children of the Baby Boomers (Bill and Hillary Clinton) were both lawyers, Hillary being the true embodiment of the backstabbing, Machiavellian lawyer. But what really clinched it was a 60 Minutes special I saw about the 1968 democrat convention riot in Chicago where they interviewed a now 50 year old pony tailed hippie protestor and an old retired cop. The cop was retired, the hippie was now a trial lawyer.
Alas I was compelled to investigate further and created the "Lawyer Index;" an index which measures the percent of the population that is lawyers and law students. And what do you know, I was right. In the mid sixties only about .025% of the population was in law school. Ten years later that number more than doubled to .052%, again coinciding with the Baby Boomer generation entering college age.
Five years later when these students graduated and entered the profession the number of lawyers as a percent of the population jumped from .2% of the population to .27%. (This jump occurred from 1979 to 1983 which coincidentally are the exact same years the US suffered its worst recession since the Great Depression.)
The question though is, did they really do any damage? Sure, opinions and anecdotal experiences with lawyers has earned them a very poor reputation with the public. And we crack jokes about them everyday, but do they deserve it?
And the answer is a resounding, "Hell yes."
And I say that not just because I've had to deal with now two personal injury lawyer parasitic scum in my own life, but because the costs to society imposed by lawyers truly are disgusting.
Frivolous law suits (tort) cost America roughly 2% of it's GDP each year, which is up from .5% back in the 1950's. The increase YET AGAIN coincides not only with the entrance of the Baby Boomers into the labor force, but with their disproportionate participation in law. Notice the particular jump in costs from 1984-1987, which immediately followed the bumper-crop generation of Baby Boomers that graduated from law school from 1979-1983. This suggests that this increase is a "supply led" increase, meaning fundamental demand for such services has not increased (people aren't really getting hurt more), as much as it has been lawyers going out and trying to find any reason to sue; thus fat people suing McDonald's and smokers cigarette companies, and other such outlandish law suits that are highlighted in the news today.
As an economist, though I think about two things. One, I speculate about the opportunity costs of losing a full 2% of our GDP each year to what are most likely frivolous lawsuits. That money could have been spent or otherwise reinvested back into the economy, producing easily enough wealth to solve our little social security problem. And a rough estimate in the head gives me a figure of at least a 10% increase in our income per capita. Money now currently going to pay for increased insurance premiums and Lexuses of lawyers. Two, I'm wondering if it was possible lawyers at one time had a reputable reputation before the Baby Boomers entered the field and drove up insurance premiums and tort costs. Perhaps we will never know.
Now I could go on and on about untold numbers of various social indicators and how their deterioration amazingly coincides with the advent of the Baby Boomer generation;
I could talk about SAT scores;
I could talk about alcoholism;
I could talk about infanticide and child abuse;
I could talk about welfare;
I could talk about STD's;
I could talk about "stagflation;"
I could talk about a tanking dollar;
I could talk about tanking work weeks;
I could even talk about the "Misery Index;"
I could talk about practically any social indicator and metric you could ever think of and in the vast majority of cases they will have worsened under the Baby Boomers.
But forget all of it. Forget everything I've ever said. Take all the various social ailments I addressed above and throw them out the window. Forget the atrocious increase in crime. Forget that "work ethic" was not part of the vocabulary during the late 60's and 70's. Forget that pot replaced milk as a staple of diet. Forget that the economy tanked and that the lawyer population exploded. And forget how children became more and more like furniture. Forget it all!
Matter of fact, just write me off as a raving lunatic "age-ist" with an agenda and that I'm just bigoted towards people between the ages of 40-62 simply because of a bad experience in the 3rd grade where I got questions 40-62 wrong on a test, and thus I'm forever psychologically scared for life. Whatever it is, just disregard everything I just said.
No matter how "bigoted" I am, no matter how hate-filled you may find me, and no matter how much you may disagree with me there is no denying that the Baby Boomers have fumbled the ball worse than Daunte Culpepper when it comes to;
Fiscal responsibility
Spending money as if they were married to a ketchup heiress, never has a generation ran such a deficit between the amount of resources they've consumed and the amount of wealth they've provided in return. Incapable of producing enough goods and services to satisfy their demands, yet still wishing to maintain the consumption of kings, the Baby Boomers needed a way to enjoy higher standards of living without having to do all that pesky additional work.
Enter in the master stroke of genius. The mantra by which the Baby Boomers have lived since the 1970's. The legacy the Baby Boomers will leave behind, pass onto their children and for which all of history will remember them for; this ingenious little concept called "debt."
Debt is a magical thing. Impervious to time and adhering to no laws of physics, space or time, debt allows you to have your cake and eat it too.
The way debt works is the following;
1. You want something/s
2. You want something/s now.
3. You're too damn lazy to get off your fat ass to get a job and work up the money for it.
4. Thus, you take somebody else's money, promising to pay them back, but maybe you do or maybe you don't...but hey, that's their problem.
And boom! The magic of debt has worked. You've been able to acquire wealth on somebody else's dime.
Of course we operate under the assumption that people will always pay their debts back, and thus debt is not bad. But let me address that later. First let's take a look at just how much debt the Baby Boomers (and Generation X as well) has racked up over the course of their lives and then we'll worry about the issue of paying it back.
First, let's look at household debt. Household debt is the total amount of debt people have incurred, including mortgages.
(Adjusted for GDP so we know truly just how much debt has been incurred)
Now most would point out that "a house is a good investment" and that if there's something to take debt out for, a house is certainly not as frivolous as say a portable DVD player. And for the most part they're right. On principle I have no problem with people borrowing money to pay for a house.
The problem I have with people taking money out for houses now is that property is insanely overvalued.
Enter in the fact that the Baby Boomers will soon begin their journey towards nursing homes, retirement communities, and ultimately death, that means there will be a glut of property hitting the market for sale, thereby driving down prices. Barring a huge wave of immigration (and that's assuming these immigrants have the money to buy houses, which they don't) you can expect a drop or at least a long term decline or stagnation of property prices. But, don't listen to me, rack up that debt, take out that home equity line and buy yourself a fancy SUV, I'm just a dumb, bigoted economist.
But let's just assume for the moment that I truly am a dumb, bigoted economist and ignore the issue of overvalued property. Let's assume that property is a great reason to take out a loan and focus on the portion of household debt that is for non-mortgage (read "frivolous") items. We call this consumer debt.
Consumer debt has increased from 4% of GDP during the WWII Generation to now 18% of GDP (equivalent to the entire US Federal budget). And unlike the rest of this post, the Baby Boomers are not the only ones to blame for this increase. Generation X has some explaining to do as well.
Now on the face of it, consumer debt of only 18% GDP is really not all that bad. It would only require some astute fiscal discipline for a year or six to pay that back. Maybe you'd have to forego that plasma TV or little Jr.'s pocket bike, but it could be done. And thus, you're probably concluding, "hey, the amount of debt we've accumulated isn't that bad."
But, oh you foolish little boy. For that's just the beginning of the debt legacy the Boomers (and Gen X) have built up. We have much further to go. For households and individuals are not the only entities that can accumulate debt. Governments can accumulate debt too! Oh goodie!
If there is an example of having their cake and eating it too, government debt is the prime example. Wanting all these various social programs and the attainment of the "Great Society" the Baby Boomers voted politicians into office to increase spending on welfare, social security, education and the limitless number of other various social programs. And while on the face of it, it was to address the social ailments that arose during the 60's and 70's, methinks it was more to provide employment for people who were too lazy to major in engineering and computers, and thus wanted to become social workers, counselors, teachers and other varied sorts of lazy AFSCME members, but I digress.
Whichever the case, these programs needed money.
"What, you want MONEY to fund these programs?" the people would say.
Hearing their indignation, and worried about losing their cushy government jobs, politicians had to come up with a plan. The people wanted the government to pay for more things, and lavish them with money, but they didn't want to pay the taxes necessary to finance such operations(anybody remember The Bear Patrol from "The Simpsons?").
Enter in "the free lunch."
The free lunch was an ingenious concept developed by politicians in the 70's and 80's. How it worked was that the politicians realized if they could borrow money to pay for these various government social programs four things would result;
- The programs would be funded and the people would be happy.
- Not only would the people NOT have to pay for the programs (now), but politicians could even promise them tax cuts.
- People with lower tax bills and increased government programs would be more prone to vote for these politicians, thus extending their political careers.
- The politicians would die before the people realized the piper had to be paid and there really is no such thing as a free lunch and escape their wrath.
And the result of two decades worth of deficit spending? $5 trillion in debt.
Unfortunately, the problem is that unlike consumer or household debt, government debt can (actually, must) be passed one from one generation to the next. It doesn't go away. The question is who will bite the bullet? Who will have to work to pay off these debts? Will it be the people who incurred the debt in the first place and used it to pay for cushy government programs and subsidized tax cuts? Or will we just roll over the debt allowing future generations to pay it off instead? With the imminent retirement of the Baby Boomer generation upon us, you can expect Generation X to carry the torch and inherit the $5 trillion in accumulated government deficits because there is not enough time for the Baby Boomers to work up the money to pay back what they borrowed.
Alas it seems the Baby Boomers got to enjoy all the "benefits" of The Great Society and Generation X gets to pay for it.
Ain't debt a bitch?
But what's $5 trillion between friends? More so, what's $5 trillion between family? I'm constantly told by my Baby Boomer predecessors that blood is thicker than water. And besides, it's only money.
Truth is, even if I believed that, if all we'd have to inherit from our Baby Boomer predecessors was the $5 trillion, I would be the happiest man in the world. I would gladly accept that $5 trillion in debt from my parent's generation. But sadly, that $5 trillion is not all we will get to pay for. For that $5 trillion is all the debt that has been accumulated thus far. That $5 trillion is historic, it's all in the past. It says nothing about what we get to pay for or how much more debt we will accumulate in the future.
Enter in the two greatest scams...errr...I mean "achievements" of the democratic party and their patron saint, FDR;
Social Security and Medicare.
Every month I get a card in the mail from a comedy company and it is hilarious. I rarely laugh harder. My good friends at the Social Security Administration send me my "account balance" for social security. I open it up with my friends while we're drinking and boy do we have a good guffaw. Some guys laugh milk through their nose, others cry because it's so funny. Oh, those funny clowns at the SSA!
And the reason it's so funny is they actually act like they're concerned about us. Like we're really going to get this money we've socked away. Now, forking over 15.3% of my income every year, one would naturally ask "where is this going?" An investment account? An IRA? My own safety box at the SSA?
You're almost as funny as the SSA!
No, silly, it goes right out immediately as payment to current recipients on social security.
The next natural question to ask is "well, where did all their contributions go?"
Weren't you paying attention?
Their contributions are gone. The government has been running deficits ever since the Baby Boomers took over in 1971.
And where did they piss it all away...er... I mean "spend" this money?
I'll post it again;
But if you think that's funny, just wait till you hear this one! What I love is how politicians, the media, pundits, lawyers or even AARP make it sound like social security is this vast, insanely complex issue with complex problems and no simple solutions. That you morons, you Red State plebs, you Wal-Mart workers are too stupid to understand this and thus we need journalists, professors, Hillary Clinton and other intellectual elites to solve this problem for us. Why you just can't possibly understand this chart here below!
(Rimshot - Thank you, thank you! I'm here every Thursday! Don't forget to tip your waiters and waitresses!)
And we wonder why social security is in such a mess.
But like I said, we can't dwell on the past. What's done is done. We have that $5 trillion in debt to deal with and we'll just have to accept it. Besides, there are more pressing issues to worry about. Namely, how much more these programs are going to cost us in the future.
And will you look at that. If you thought $5 trillion was a lot, get ready for some fun times because the amount of money spent on just those two items; social security and Medicare, is set to double going from 7% of GDP to about 15% in 2040 once the Baby Boomers start retiring.
Add to that all the various social programs outside the realm of social security and Medicare that go to the elderly, and total spending on the elderly is predicted to consume a full fifth of our GDP; equivalent to spending the ENTIRE US FEDERAL BUDGET ONLY ON THE ELDERLY!
Yeah, kiss that cabin up north good-bye.
Could it possibly get any worse? Could we have put ourselves in more of a hole? Could other people have promised themselves so much without thinking of the true cost of their actions?
Oh, of course.
That just covers spending on the elderly. The Great Society promised everything for everyone! When all future promised obligations and entitlements are considered (things like welfare, income security, bailing out the underfunded pensions, Fannie Mae, Fannie Mac, etc.) and is compared to estimated tax revenues, the IMF estimates that our true debt level doesn't stand at roughly 40% GDP, but actually more like 250% GDP. That means you'd have to work 2.5 years, and be taxed at 100% to pay for all this. I think they have a similar arrangement in North Korea.
Now of course, these figures are all estimates and not set in stone. Some estimates are as low as $22 trillion, some as high at $44.2 trillion. Regardless of the figure, that's still a lot of dough. And the question then becomes how are we going to pay for this?
Thus far our Asian friends have been nice enough to loan us the money to at least finance our deficits (not pay for them). However, the point will come where they probably won't loan us anymore and ultimately we'll have to pay for it. The reason why? Quite bluntly, put yourself through the conversation;
Hu Jintao - "So, you'd like to borrow $30 trillion?"
You - "Yes."
Hu Jintao - "What will you spend it on?"
You - "The elderly, namely social security and Medicare."
Hu Jintao - "So let me get this right. You're going to borrow $30 trillion from us."
You - "Yes."
Hu Jintao -"Spend it on old people who are not working, thus providing you with no wealth in return. It's strictly an income transfer. It will do nothing to increase the US' ability to pay us back."
You - "Yes."
Hu Jintao -"And then you'll spend some of that money to help keep them alive for another 6 months only to have them die and not work in return, again, no return for the People's Republic of China."
You - "Yes."
As cold and callous as that may sound, that is exactly how any creditor is going to look at the arrangement. Thus, you can be rest assured that we're going to have to pay for this baby ourselves via hard work, more work, and higher taxation because (Baby Boomers, plug your ears)
THERE IS NO SUCH THING AS A FREE LUNCH!!!!
The result? You can expect your payroll taxes to increase by roughly another 10-15% points depending on how old you are today...unless of course you are a Baby Boomer, which means you'll not have to pay these taxes because you'll be retiring soon.
Now would be the point in our show where I give the standard "ol' funny economist prep talk" and make some commentary about how chicks dig me and what we need to do in order to fix this problem, and continue on into a bright, happy economist future. But I have one more joke for you. It's the biggest joke of all time.
You have this massive financial crisis that threatens to destroy America's economy, a threat that in my humble opinion dwarfs the threat of terrorism, and who do we call upon to save the country?
Generation X.
It's like asking for Superman and getting Cheech and Chong.
I don't know if you've noticed this, but my generation ain't exactly the quality and caliber of the WWII generation. This is the generation that has made reality TV and hip-hop culture popular. This is the generation that made Kirk Cobain go platinum and grunge a popular fashion. This is the generation that grew up on MTV and thinks being a good citizen means you "Rock the Vote" or get your news from The Daily Show with Jon Stewart. And this is the generation whose only response to tragedy seems to be candle-light vigils or grown men crying.
Now, of course to be fair, much of the above are social criticisms and has no bearing on the fiscal discipline, work ethic or wealth generating ability of Generation X. And truth be known, I'm a member of Generation X and I hold to the most rigorous fiscal austerity. I also know many members of Generation X who are contributing members of society and a borrower nor lender are. So just how good is Generation X with money management and debt, and how capable are they to face the oncoming financial crisis?
(Please note that the scale of this chart is logarithmic and bankruptcies have skyrocketed under Generation X.)
You might as well be asking the French to defend Paris.
Monday, September 20, 2004
Election Year Economics 101
Morons. I'm surrounded by morons.
Everyday I wake up and be it the radio, the TV, or (if I'm especially blessed) in person, I am inundated with morons. It was almost as if God decided to give 90% of the population just enough brain cells to form incredibly uninformed and stupid opinions. And if that wasn't enough he went a brain cell or two beyond that to create "Uber-Morons;" morons with the confidence that their opinions are somehow worthy of broadcasting.
But during an election year it seems the moron population doubles, especially the Uber-Morons. And more and more I hear things like:
"This is the worst economy in 50 years."
and
"Unemployment is reaching Great Depression levels."
and
"This is the largest deficit in history."
Which is irksome, because as an economist, I actually know something about unemployment rates, the Federal Budget, and GDP growth figures, unlike these morons.
But what is even more irksome than listening to the electoral year morons regurgitate their lines received from socialist headquarters, is when I'm listening to talk radio and I find out that these guys, who are allegedly the front line of defense against the forces of socialism, are morons too!
And there I sit, hopelessly in traffic, without a cell phone, listening to two morons duke it out, sadly forming the opinions of thousands of other morons.
"This is the worst economy in 50 years."
"No it's not!"
"Yes it is."
"Nuh-uh!"
"Yeah-huh!"
"Oh yeah? Well my dad can beat up your dad!"
Morons!
Thus, it seems to be my calling to inform the masses about some simple, basic economics because it doesn't seem like anybody else is going to do it. That and it might just play a larger role than you'd think in helping you determine who to vote for, which ideology to subscribe to and a whole host of other things.
But first off, let's educate ourselves on the difference between "thinking" and "knowing."
Thinking is what children, liberals, socialists, college students and other people who don't work do. They are faced with a problem and with that limited "moron +2 brain cells" brain of theirs they single handedly solve the world's problems and form opinions.
"If we just printed off more money then all of our problems would go away."
Or one of my favorites,
"I just feel that if we taxed the rich a little bit more we could afford adequate health care and education for everybody." (Note "feeling" is very much like "thinking," except requiring no brain at all.)
"Knowing" is all together a different universe. Knowing takes what is called "intellectual honesty." Which means you do not sit on your ass at some coffee shop with a bunch of other suburbanite sociology majors pondering the world's problems whilst you sup a cup of $4 latte on your daddy's dime. It means you get off your ass, you go to the library or computer and find out the facts for yourself.
Sadly too many people do too much "thinking" and not enough "knowing."
So let's go through an exercise in "knowing."
Take unemployment or the statement commonly heralded from the left that "unemployment is approaching Great Depression levels." Can they cite what the unemployment rate is? Can they tell you what it was? Do they even know where to go to get the unemployment rate?
Of course not. They're too busy thinking in their cushy little office at the local NGO, regurgitating what they heard on NPR.
But we are more intellectually rigorous than that. We know that there must be some government database out there with a historical record of unemployment. And sure enough there is; the FRED database at the Federal Reserve.
http://research.stlouisfed.org/fred2/series/UNRATE/12/Max
And shucks howdy will you look at that. The question you should be asking yourself is if you've ever seen that graph before in your life. And if you haven't; have you ever dared argue anything regarding the unemployment rate without this seemingly vital piece of information?
Thankfully you've been spared becoming one of those morons who insist on spouting off an uninformed opinion. Furthermore, you're probably one of 2% or so of people in the United States that has even bothered to look at that chart and therefore can competently argue about it. But most importantly you now have KNOWLEDGE. You KNOW that;
1. The unemployment rate is only at 5.4% and that is not only historically low, but considered full employment by most economists.
2. The peak rate it achieved in this last recession (6.3%) is absolutely nothing compared to the peak it reached during the Volcker Recession.
3. The peak rate is absolutely nowhere near the 25% unemployment rate during the Great Depression.
And chances are your brain, after looking at the chart is saying...
4. "Gee, that last recession doesn't look too severe."
And this is a good sign. For this is what we call "called for thinking;" thinking that has been triggered by KNOWLEDGE not hopeful wishing, or feeling or thinking or pondering. Thinking that pioneers new questions, questions that can be satiated with further knowledge. Coincidentally leading us into our next exercise in "knowing;" the economy.
Exactly how is the economy performing? Ask any socialist or aging CBS anchor and our economy is horrible. Ask any union leader or Lou Dobbs and we are hemorrhaging jobs to China. Ask your friendly neighborhood Democrat and they'll say, "This is the worst economy in 50 years."
Really?
Aren't you glad all these people are here to do all the thinking for you? Why, you just sit back and relax and don't worry that little head of yours with such pointless and bothersome questions.
Well, surely there must be a government database somewhere with GDP figures? And as luck would have it there is! The Bureau of Economic Analysis actually calculates GDP figures on a quarterly basis and is even so kind enough to calculate year over year growth for us.
http://www.bea.gov/bea/newsrelarchive/2004/gdp204p_fax.pdf
Of course this only goes back a couple years. Remember, John Kerry and Friends say this is the worst economy in 50 years. The data is there, you would just have to copy, paste it, and then chart it yourself in Excel. Fortunately Captain Capitalism has come to the rescue and already done this for you. And surprise surprise. This "Horrible Recession," this "Worst Economy in 50 Years" this "pox GW has cast upon America" turns out to be
THE MILDEST RECESSION IN RECORDED HISTORY!
This, the mildest recession in recorded history, coming off of a Dotcom Mania crash that tanked stock markets by 50%, a terrorist attack and accounting scandals than ran rampant during the 90's. If anything it is a tribute to the rapid and effective fiscal and monetary policies implemented by Mr. Bush and Mr. Greenspan.
But not only that (and here's the real kicker to flabbergast all the morons at parties)...
IT WASN'T EVEN AN OFFICIAL RECESSION!!!!
In order to qualify as a recession, GDP must contract for two quarters in a row. This last "recession" was a Kerry Recession where it "flip-flopped" (ha ha ha) for three quarters between growth and contraction. And although certainly not a booming economy, it technically can't even be called a recession.
But yet, even more stupidity from the mouths of morons. For while the recession ended approaching a full three years ago, the left so desperate to hold onto the past, insists this economy is still in the dumps, or at best suffering a very slow and weak recovery. Two and a half years of solid economic growth averaging 4% a quarter makes one think what exactly would qualify as a "rapid and strong" recovery in the eyes of the left?
Our third and final excursion into the Realm of Knowing is the deficit.
"The largest deficits in history." "Deficits, bankrupting the future of our children." "Mortgaging the future at the expense of social security." And so forth and so on.
But unlike the above, the morons are actually correct to a certain extent. By no fault of their own mind you. Inevitably if you think enough thoughts, one or two will accidentally be right. It is true, deficits are the largest they have ever been. And it is true, chronic government deficits do "crowd out" other investments, eventually driving up interest rates. And it is true, deficits are nothing more than a mere post-poning of taxes into the future. It is about the only legitimate criticism of the Bush administration heralded by the left that I happen to agree with. But let us put things into context.
The simplest reason deficits are the largest they've been in recorded history is because our society and thus economy has grown. Adjust for inflation and who knows whether deficits are truly "the largest in history."
But fortunately there are people who do know. Savvy individuals with that rare combination of looks and intelligence. Individuals with charisma that make women blush and men speechless. Individuals that rank right up there with "fireman, police officer, the Pope and the President" when first graders are asked what they want to be when they grow up;
Economists.
Yes, it is hard to believe that in addition to calculating GDP growth rates at the BEA, tracking the unemployment rate all the way back to 1947, and gently turning down scores of romantic advances from members of the opposite sex, these people still have time to take deficits and put them in terms of the total economy. More specifically; "Federal Deficit as a Percent of GDP."
The great thing about this information is that it really puts things in context. WWII experienced a government deficit of 1/3 our entire economy. Of course that was a world war. A more reasonable comparison would be the real worst economy in 50 years, the Volcker Recession, when then President Reagan ran deficits on the order of 5%GDP. GW comes in a full point below that at 4%. Certainly not good, but not necessarily the crisis those morons think it is.
Next Lesson; "Common Criticism of Economics by the Left; How They Feel About These Figures and Think They Should Be."
Everyday I wake up and be it the radio, the TV, or (if I'm especially blessed) in person, I am inundated with morons. It was almost as if God decided to give 90% of the population just enough brain cells to form incredibly uninformed and stupid opinions. And if that wasn't enough he went a brain cell or two beyond that to create "Uber-Morons;" morons with the confidence that their opinions are somehow worthy of broadcasting.
But during an election year it seems the moron population doubles, especially the Uber-Morons. And more and more I hear things like:
"This is the worst economy in 50 years."
and
"Unemployment is reaching Great Depression levels."
and
"This is the largest deficit in history."
Which is irksome, because as an economist, I actually know something about unemployment rates, the Federal Budget, and GDP growth figures, unlike these morons.
But what is even more irksome than listening to the electoral year morons regurgitate their lines received from socialist headquarters, is when I'm listening to talk radio and I find out that these guys, who are allegedly the front line of defense against the forces of socialism, are morons too!
And there I sit, hopelessly in traffic, without a cell phone, listening to two morons duke it out, sadly forming the opinions of thousands of other morons.
"This is the worst economy in 50 years."
"No it's not!"
"Yes it is."
"Nuh-uh!"
"Yeah-huh!"
"Oh yeah? Well my dad can beat up your dad!"
Morons!
Thus, it seems to be my calling to inform the masses about some simple, basic economics because it doesn't seem like anybody else is going to do it. That and it might just play a larger role than you'd think in helping you determine who to vote for, which ideology to subscribe to and a whole host of other things.
But first off, let's educate ourselves on the difference between "thinking" and "knowing."
Thinking is what children, liberals, socialists, college students and other people who don't work do. They are faced with a problem and with that limited "moron +2 brain cells" brain of theirs they single handedly solve the world's problems and form opinions.
"If we just printed off more money then all of our problems would go away."
Or one of my favorites,
"I just feel that if we taxed the rich a little bit more we could afford adequate health care and education for everybody." (Note "feeling" is very much like "thinking," except requiring no brain at all.)
"Knowing" is all together a different universe. Knowing takes what is called "intellectual honesty." Which means you do not sit on your ass at some coffee shop with a bunch of other suburbanite sociology majors pondering the world's problems whilst you sup a cup of $4 latte on your daddy's dime. It means you get off your ass, you go to the library or computer and find out the facts for yourself.
Sadly too many people do too much "thinking" and not enough "knowing."
So let's go through an exercise in "knowing."
Take unemployment or the statement commonly heralded from the left that "unemployment is approaching Great Depression levels." Can they cite what the unemployment rate is? Can they tell you what it was? Do they even know where to go to get the unemployment rate?
Of course not. They're too busy thinking in their cushy little office at the local NGO, regurgitating what they heard on NPR.
But we are more intellectually rigorous than that. We know that there must be some government database out there with a historical record of unemployment. And sure enough there is; the FRED database at the Federal Reserve.
http://research.stlouisfed.org/fred2/series/UNRATE/12/Max
And shucks howdy will you look at that. The question you should be asking yourself is if you've ever seen that graph before in your life. And if you haven't; have you ever dared argue anything regarding the unemployment rate without this seemingly vital piece of information?
Thankfully you've been spared becoming one of those morons who insist on spouting off an uninformed opinion. Furthermore, you're probably one of 2% or so of people in the United States that has even bothered to look at that chart and therefore can competently argue about it. But most importantly you now have KNOWLEDGE. You KNOW that;
1. The unemployment rate is only at 5.4% and that is not only historically low, but considered full employment by most economists.
2. The peak rate it achieved in this last recession (6.3%) is absolutely nothing compared to the peak it reached during the Volcker Recession.
3. The peak rate is absolutely nowhere near the 25% unemployment rate during the Great Depression.
And chances are your brain, after looking at the chart is saying...
4. "Gee, that last recession doesn't look too severe."
And this is a good sign. For this is what we call "called for thinking;" thinking that has been triggered by KNOWLEDGE not hopeful wishing, or feeling or thinking or pondering. Thinking that pioneers new questions, questions that can be satiated with further knowledge. Coincidentally leading us into our next exercise in "knowing;" the economy.
Exactly how is the economy performing? Ask any socialist or aging CBS anchor and our economy is horrible. Ask any union leader or Lou Dobbs and we are hemorrhaging jobs to China. Ask your friendly neighborhood Democrat and they'll say, "This is the worst economy in 50 years."
Really?
Aren't you glad all these people are here to do all the thinking for you? Why, you just sit back and relax and don't worry that little head of yours with such pointless and bothersome questions.
Well, surely there must be a government database somewhere with GDP figures? And as luck would have it there is! The Bureau of Economic Analysis actually calculates GDP figures on a quarterly basis and is even so kind enough to calculate year over year growth for us.
http://www.bea.gov/bea/newsrelarchive/2004/gdp204p_fax.pdf
Of course this only goes back a couple years. Remember, John Kerry and Friends say this is the worst economy in 50 years. The data is there, you would just have to copy, paste it, and then chart it yourself in Excel. Fortunately Captain Capitalism has come to the rescue and already done this for you. And surprise surprise. This "Horrible Recession," this "Worst Economy in 50 Years" this "pox GW has cast upon America" turns out to be
THE MILDEST RECESSION IN RECORDED HISTORY!
This, the mildest recession in recorded history, coming off of a Dotcom Mania crash that tanked stock markets by 50%, a terrorist attack and accounting scandals than ran rampant during the 90's. If anything it is a tribute to the rapid and effective fiscal and monetary policies implemented by Mr. Bush and Mr. Greenspan.
But not only that (and here's the real kicker to flabbergast all the morons at parties)...
IT WASN'T EVEN AN OFFICIAL RECESSION!!!!
In order to qualify as a recession, GDP must contract for two quarters in a row. This last "recession" was a Kerry Recession where it "flip-flopped" (ha ha ha) for three quarters between growth and contraction. And although certainly not a booming economy, it technically can't even be called a recession.
But yet, even more stupidity from the mouths of morons. For while the recession ended approaching a full three years ago, the left so desperate to hold onto the past, insists this economy is still in the dumps, or at best suffering a very slow and weak recovery. Two and a half years of solid economic growth averaging 4% a quarter makes one think what exactly would qualify as a "rapid and strong" recovery in the eyes of the left?
Our third and final excursion into the Realm of Knowing is the deficit.
"The largest deficits in history." "Deficits, bankrupting the future of our children." "Mortgaging the future at the expense of social security." And so forth and so on.
But unlike the above, the morons are actually correct to a certain extent. By no fault of their own mind you. Inevitably if you think enough thoughts, one or two will accidentally be right. It is true, deficits are the largest they have ever been. And it is true, chronic government deficits do "crowd out" other investments, eventually driving up interest rates. And it is true, deficits are nothing more than a mere post-poning of taxes into the future. It is about the only legitimate criticism of the Bush administration heralded by the left that I happen to agree with. But let us put things into context.
The simplest reason deficits are the largest they've been in recorded history is because our society and thus economy has grown. Adjust for inflation and who knows whether deficits are truly "the largest in history."
But fortunately there are people who do know. Savvy individuals with that rare combination of looks and intelligence. Individuals with charisma that make women blush and men speechless. Individuals that rank right up there with "fireman, police officer, the Pope and the President" when first graders are asked what they want to be when they grow up;
Economists.
Yes, it is hard to believe that in addition to calculating GDP growth rates at the BEA, tracking the unemployment rate all the way back to 1947, and gently turning down scores of romantic advances from members of the opposite sex, these people still have time to take deficits and put them in terms of the total economy. More specifically; "Federal Deficit as a Percent of GDP."
The great thing about this information is that it really puts things in context. WWII experienced a government deficit of 1/3 our entire economy. Of course that was a world war. A more reasonable comparison would be the real worst economy in 50 years, the Volcker Recession, when then President Reagan ran deficits on the order of 5%GDP. GW comes in a full point below that at 4%. Certainly not good, but not necessarily the crisis those morons think it is.
Next Lesson; "Common Criticism of Economics by the Left; How They Feel About These Figures and Think They Should Be."
Sunday, September 19, 2004
The Chapin Nation
Chapin Nation
OK, girls, here's the disclaimer. This web site is for guys. Not the sensitive 90's pansies you were brainwashed to like in college, we're talking old school, real men. Men that got in fights in school. Men that picked up a gun and went to war to protect the homeland. Men that didn't major in philosophy, sociology or feelings. Men that if you're with on a date, you feel safe. Men that don't cry.
Part of being real men, means you like women. And none of these "modern day women" that look like men, dress like men, and try to be men. We're talking real women. Women that a proud of their femininity and like showing it off in dresses...or perhaps a little less. So don't be going and complaining to me when you see the occasional photo of a dolled up moll on this site. Just accept it and read what they have to say. It'll help out more than the 10 years of counselling you've been getting.
OK, girls, here's the disclaimer. This web site is for guys. Not the sensitive 90's pansies you were brainwashed to like in college, we're talking old school, real men. Men that got in fights in school. Men that picked up a gun and went to war to protect the homeland. Men that didn't major in philosophy, sociology or feelings. Men that if you're with on a date, you feel safe. Men that don't cry.
Part of being real men, means you like women. And none of these "modern day women" that look like men, dress like men, and try to be men. We're talking real women. Women that a proud of their femininity and like showing it off in dresses...or perhaps a little less. So don't be going and complaining to me when you see the occasional photo of a dolled up moll on this site. Just accept it and read what they have to say. It'll help out more than the 10 years of counselling you've been getting.
Tuesday, August 17, 2004
Tuesday, March 02, 2004
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