Abandonment of Middle Class – Page 3

What’s The GOP Plan For Negotiating On The Debt Limit?

The Daily Escape:

Dream Lake, Estes Park CO – January 2023 photo by Rick Berk Photography

(Wrongo and Ms. Right send healing thoughts to friend and blog reader Gloria R.)

We’re all aware that House Republicans are refusing to lift the debt ceiling unless Biden gives them well, something? And Republicans still haven’t decided what they want. The GOP also wants a balanced budget, but they can’t say what should go, or what should stay.

From the WaPo: (Brackets by Wrongo)

“They [GOP] say they want to reduce deficits — but meanwhile have ruled out virtually every path for doing so (cuts to defense, cuts to entitlements, wiping out nondefense discretionary spending, or raising taxes).”

The fact that Republicans are up in the air about what to do highlights the likely Democratic strategy is against their threats about the debt ceiling. Again, from the WaPo:

“Sensing Republicans are on the verge of a blunder in their schemes to use the debt ceiling to hold the economy hostage and try to extract draconian spending cuts, the White House has developed a two-part response strategy.

Part 1: Lay out the simple argument that Republicans are recklessly inviting an economic meltdown even by talking about a possible default.

Part 2: Force House Republicans to put forward a plan on the table and watch as they struggle with the fallout.”

The Democrats along with Senate Minority Leader McConnell (R-KY) are daring Republicans to put forward a plan. Senate Majority Leader Schumer (D-NY) said:

“If House Republicans are serious about taking the debt limit hostage in exchange for spending cuts, the new rules that they adopted require them to bring a proposal to the floor of the House and show the American people precisely what kind of cuts they want to make….”

Everyone who follows politics knows that Republicans never take much interest in fiscal sobriety when their Party is in control. They agreed to raise the debt limit three times while Trump was in power.

It seems that Republicans are doing the Democrats’ job for them. They are asking for an economic catastrophe and seeking draconian cuts that their base doesn’t want.

Consider the Republican desire to reduce our deficits. They have pledged to balance the budget (that is, to have a zero annual budget deficit) within 10 years. But they haven’t laid out any plausible mathematical path for getting there. And of the current debt ceiling, 90% of it was committed before Biden took his job.

Some Republican House members want to cut military spending, an idea that both Speaker Kevin McCarthy (R-CA) and Rep. Jim Jordan (R-OH) are on board with. But others, including House Appropriations Chair Kay Granger (R-TX), have said defense spending cuts aren’t on the table. Rep. Michael Waltz (R-FL) said:

“We’ve got to get spending under control, but we are not going to do it on the backs of our troops and our military,”

Waltz thinks Republicans should focus on “entitlements programs,” such as mandatory spending programs like Social Security, Medicare, and Medicaid. But the bi-partisan popularity of these programs makes them hard to cut.

And last Sunday, Rep. Nancy Mace (R-SC) was asked to name one thing she was willing to suggest as a spending cut. She instead stated things she wouldn’t put on the table:

“Well, obviously no cuts to Medicare or Medicaid or Social Security….That’s a nonstarter for either side.”

Wrongo has repeatedly suggested tax increases which would help lower deficits, but Republicans have ruled that out.

Instead they’ve changed the House rules so tax cuts will be much easier to pass, and tax increases harder to pass. The House’s rules package now says that any increase in taxes would require a three-fifths vote (60%) rather than a simple majority as previously.

They’ve also proposed doing away with income taxes, payroll taxes, estate taxes and even the IRS itself in favor of a supersized sales tax that would provide most revenue to the government. Republicans would substitute a 30% sales tax on all purchases and in exchange, do away with income, Social Security and Medicare taxes.

That means workers would keep the gross amount of their paychecks. But it also means that buying everything from groceries to automobiles would be hugely more expensive. It also provides a big tax cut for the wealthy and businesses.

The result is a smaller tax burden for the highest earners and a bigger one for people in the middle.

Once you reject trimming entitlements or defense spending and bake in the cost of the GOP’s proposed tax cuts, you’re left with an additional $20 trillion hole in the Federal budget over the next decade.

OTOH, the White House is expected to release its detailed budget in early March. It will build on budgets it has released previously. Republicans want Biden to negotiate on what to do about money we’ve already spent.

Try doing that with YOUR creditors.

Monday Wake Up Call, MLK Jr Day – January 16, 2023

The Daily Escape:

It’s MLK day, so let’s talk about a topic that was near to his heart: economic inequality. Since 1980, economic inequality has been increasing between the top 1% and the bottom 90% of Americans. It’s become so great that today, America now faces the same level of economic inequality that existed before the Great Depression.

Here’s a chart from Elise Gould and Jori Sandra of the Economic Policy Institute (EPI) showing the percentage change in annual wages by income group for the last 40 years:

From the EPI article: (emphasis by Wrongo)

“The level of earnings inequality that existed in 1979 could have simply continued…to today. Instead, we have seen a growing concentration of earnings at the…very top of the earnings distribution, while the bottom 90% has experienced meager gains. Wages for the top 1% grew more than seven times fast as wages for the bottom 90% between 1979 and 2021. The top 1% now amasses a record share of total earnings, while the bottom 90% share of earnings has hit a historic low.”

Slow growth in real (inflation-adjusted) hourly wages for the vast majority of workers has been a defining feature of the US labor market for most of the last 40 years. Only for about 10 years after 1979 did workers see consistent positive wage growth: in the tight labor market of the late 1990s and in the five years prior to the pre-pandemic labor market peak in 2019.

While some low-wage workers have experienced high wage gains after America reopened from Covid, the truth is that most haven’t even kept pace with where they were in 1979.

Today is Martin Luther King Day in America. We mostly celebrate Dr. King’s birth rather than acknowledging what he was arguing for when he was killed. His focus at the end was on both economic justice, and voting rights. Perhaps more than any other leader in American history, King could see the different strands of political and social injustice. He was able to tie them together to form a coherent narrative, one that was capable of leveraging dissent for concrete policy change.

Those were the enduring lessons of Dr. King’s life.

There’s less than three months between the observance of King’s birthday and his death. The way each is recognized by politicians reveals the contradictions in his legacy. Most politicians extol the virtues of racial equality, while most ignore King’s criticisms of economic injustice.

From his April 30th speech in Atlanta: (emphasis by the Wrongologist)

“A true revolution of values will…look uneasily on the glaring contrast of poverty and wealth with righteous indignation. It will look across the seas and see individual capitalists of the West investing huge sums of money in Asia, Africa, and South America, only to take the profits out with no concern for the social betterment of the countries, and say, ‘This is not just’…this business of…injecting poisonous drugs of hate into the veins of peoples normally humane….cannot be reconciled with wisdom, justice, and love. A nation that continues year after year to spend more money on military defense
than on programs of social uplift is approaching spiritual death.”

As the EPI report above shows, over the last four decades, policies promoted by the GOP have reduced the opportunities for most workers to achieve wage growth at rate similar to the top 10%.

Time to wake up America! Develop your narrative, one that fights against economic injustice and for voting rights. Add any other issues that are pertinent to you. Take your narrative to your neighbors. Then work to get out the vote.

To help you wake up, watch “People Get Ready”, a Curtis Mayfield tune that foretold the turning tide in the battle for racial equality. It topped the R&B charts after its 1965 release by The Impressions. It’s been covered by scores of artists, including Bob Dylan, Bruce Springsteen and by Rod Stewart and the late Jeff Beck, who died last week. Early in their careers, in 1969, Beck and Stewart performed together in the Jeff Beck Group. Here’s Beck’s official music video for “People Get Ready” featuring Rod Stewart:

Jeff Beck was one of one as a guitarist. There was no one better. He had the mindset of a jazz musician playing blues rock. His guitar sound wasn’t anything like traditional jazz guitar. He didn’t cut his teeth playing the old jazz standards, but he could improvise something fresh every time. OTOH, Wrongo didn’t love Beck the recording artist.

Rod Stewart has a secret hobby; he builds model trains. He would take his trains on tour with him, requesting an extra room so he could work on them while staying in hotels. Stewart recently unveiled his 1,500 square-foot replica of post-war Chicago and New York railway systems that took him 23 years to build.

Workin’ On The Railroad

The Daily Escape:

Pikes Peak with Garden of the Gods in foreground, Colorado Springs, CO. View is from the reflection pool at Garden of the Gods Club and Resort – November 2022 photo by John Susan Hoffman

On Monday, Biden called on Congress to prevent a rail workers’ strike. Railroad workers are threatening a nationwide strike on December 9, which could deliver a crippling blow to the American economy. According to the Association of American Railroads, a nationwide rail shutdown could cost more than $2 billion per day. Passenger rail transportation would also stop, disrupting hundreds of thousands of commuters.

The unions have rejected a tentative agreement that had secured a pay increase of 24% over 5 years for rail workers, but wages don’t appear to be the primary sticking point. The outstanding issue is paid sick leave. The railroad companies have adamantly refused to include any more short-term paid leave. That means rail workers must report to work, even when they are sick, or forfeit their pay.

The essence of the unions’ position is that rail workers must use accrued paid time off (PTO) for their sick time. Actually, they use PTO for ANY days off. They get about 21 days of PTO annually. The rest of their time, including their weekends, is tightly controlled.

The context is that rail workers do not get weekends or holidays off unless they use their PTO. They’re on call 24/7, and if they refuse a shift after a designated (12 hour) rest period, they are docked points. Since the rail carriers have laid off more than a third of their workforce in the past decade, every shift is understaffed, and on most shifts, everyone who is eligible is likely to be called in.

Rail workers have jobs that often require them to be on the road for weeks at a time. From Heather Cox Richardson: (brackets by Wrongo)

“…[the unions]…oppose a new staffing system implemented after 2018, which created record profits for the country’s main rail carriers but cost the industry 40,000 jobs, mainly among the people who actually operate the trains, leading to brutal schedules and dangerous working conditions.”

The Precision Schedule Railroading (PSR) system made trains more efficient by keeping workers on very tight schedules. Any disruption in those schedules, like a family emergency, brought disciplinary action and possible job loss for the worker.

In the US, the 40-hour work week provides on average, 104 weekend days off per year, plus federal holidays. How many American workers would accept the total of 21 days off that most rail workers will accrue in PTO under the now-rejected Tentative Agreement?

The Railway Labor Acts of 1926, 1934 and 1966 control not only railroad labor disputes but also airline labor disputes. There is a series of steps that must be taken by both sides, and the final steps are where a union may strike, and Congress can step in and enact a law codifying an agreement between the companies and the unions.

The US Chamber of Congress and some 400 business groups, representing a wide range of industries, have sent a letter calling on Congress to intervene before the strike deadline if a deal is not reached to “ensure continued rail service.”

You would think that puts Democrats in a bind. They’re pro-union, but in this case, they’re jumping to the tune of big business. And why did Biden make his announcement a week in advance of the possible strike? A good negotiator would create some uncertainty in the minds of both the companies and the unions. There should be at least the appearance of a strike being possible.

Shouldn’t the “most pro-labor president” in a generation (in 1992, he was one of only six Senators to vote against legislation that ended another strike by rail workers), demonstrate that he’s proud to be on the workers’ side, at least until he isn’t?

Congress also has the option to dictate a cooling-off period, allowing parties to continue negotiating until they reach an agreement, or force both sides to enter arbitration, where a third-party mediator gets involved.

The unions knew that Congress would likely intervene. So workers would rather have a bad deal forced on them than to vote for it.

Four paid sick days is nothing. The fact that the rail companies are unwilling even to give four sick days says everything you need to know about American corporations in 2022.

Monday Wake Up Call – October 3, 2022

The Daily Escape:

Baxter Lake, Baxter State Park, ME – September 2022 photo by Laura Zamfirescu Photography

“We moved to a better neighborhood”. That’s the story of millions of Americans whose lives tracked toward success. In a way, that IS the American Dream, to escape from where you are to someplace better, safer, more upscale.

That version of the American Dream dovetails with our 21^st century desire to be isolated from other people. We order dinner from Doordash. We buy housewares from Amazon. We buy automobiles online to avoid talking to the manager at the dealer.

Many of Wrongo’s grandkids say that they hate people, meaning that they only wish to speak with their friends, and not to anyone who might be their customer.

So is alone in a better neighborhood now the American Dream? What about billionaires? They already live in the best neighborhoods. They have battalions of staff insulating them from the rest of us. Have you ever had a meeting with a multi-billionaire? It isn’t an easy thing to do. Over the years, Wrongo has worked for two of them, and they were perfectly fine individuals. But they were completely insulated.

And they made their money the old-fashioned way, inheriting it from their Robber Barron parents.

Today’s mega-rich have mostly found ways to extract value from consumers and businesses via software. Take a look at Bloomberg’s Billionaires Index. It’s a list dominated by people who have made money from the digital technology revolution.

And what are they doing with all this wealth? Many are quietly plotting their own survival against the world’s demise. Wrongo heard an interview with Douglas Rushkoff, author of “Survival of the Richest: Escape Fantasies of the Tech Billionaires”. Rushkoff is Professor at City University of NY, also a founder of the Laboratory for Digital Humanism, and a fellow at the Institute for the Future.

Rushkoff explained that billionaires worried about the end of the world know their money will likely be of little value. They’re thinking about political instability, social breakdown, and environmental catastrophe. A number of the world’s richest people are preparing for these events by building bunkers in New Zealand and in other remote locations. From Rushkoff:

“Most of these guys that we think are going to save us are actually wishing for the apocalypse. This is not just something that they fear. It’s something that at this point they’re ready to bring on.”

The book came from a meeting between Rushkoff and five billionaires at a desert resort. The topic? How to survive the catastrophe they know is coming. More from Rushkoff:

“And they spent the rest of the hour asking me really to…test their survival strategies…Do we go underground? Do I get an island?….What about space? And we ended up spending the majority of the hour on the single question, How do I maintain control of my security force after my money is worthless?…..because they’ve all got this money, they’ve…contracted Navy SEALs to come out to their compounds. But then they’re thinking, well, what do we do if our money’s worthless, then why are the Navy SEALs not just going to kill us and take all the stuff?”

Remember the back-yard bomb shelters of the 1950s: With that threat, how big would you want your bomb shelter to be? How luxurious and well-guarded? If the world were destroyed, you would try to live in that shelter full-time. Same thing with these billionaires.

Think about it: They want to use 21st century technology to revive a 13th century social order and impose it on the land and people who live around their protected fortresses. Missing from the plans of tech billionaires? Ideas to stop authoritarianism, decrease inequality, heal social divides, or slow climate change. Rushkoff explains:

“Even if we call them genius technologists, most of them were plucked from college when they were freshmen….They came up with some idea in their dorm room before they’d taken history, or economics, or ethics, or philosophy classes, and so they lack the wisdom needed to oversee their own perverse amounts of wealth.”

So maybe we shouldn’t rely on these guys to protect our future. In fact, Rushkoff says that these people who have the most power to change our current trajectory have no interest in doing so.

At this point in human history, making money is all that matters. In capitalist societies your worth is directly correlated to how much money you have. Everybody understands this. Billionaires are the most prominent symptom, but they aren’t the disease. Capitalism is the disease.

Time to wake up America! There is absolutely zero downside to relieving these people of a big slice of their wealth and putting it toward rehabbing our society. To help you wake up, watch, and listen to Carlos and Cindy Blackman Santana lead a Playing for Change global group of musicians in “Oye Como Va”:

Monday Wake Up Call – September 26, 2022

The Daily Escape:

Arches NP, UT – September 2022 photo by Nathan Smith

It can now take longer than 10 years for a typical first-time US home buyer to afford the down payment on a modest house, so says S&P Global in a July report (registration required). From the report:

“By fourth-quarter 2022, it will take 11.3 years for a first-time homebuyer with median income to save for a 10% down payment. It will take this homeowner 22.6 years to save for a 20% down payment. Both are over twice their pre-pandemic rates of five and 10.6 years, respectively.”

S&P estimates that with house prices rising so quickly, down payments are now twice the amount that they were before the pandemic. They also estimate that 60% of households could be priced out of the housing market by Q4 2025.

The NYT also is looking at the US housing market. They say that the US has a deepening housing crisis, including an acute shortage of:

“small, no-frills homes that would give a family new to the country or a young couple with student debt a foothold to build equity…”

Factors include land costs, costs of construction materials and government fees. The typical new home has grown in median size over the past 60 years, while the average number of people living in each home has declined:

These long-term trends were accelerated by the pandemic, which drove up demand for homes and house prices as people scattered, worked from home, and snapped up second residences.

Local policies are also driving this new reality. The Times reports that communities nationwide:

“…are far more prescriptive today than decades ago….Some ban vinyl siding. Others require two-car garages. Nearly all make it difficult to build the kind of home that could sell for $200,000 today,”

So, high prices due to high demand. High mortgage rates due to the FED clamping down on inflation. And cities and towns making it more difficult to build low-end homes. On top of that, investors bought about a quarter of all single family houses sold last year.

Wrongo grew up when homes were affordable for a one-salary family. His 1,400 sq.ft. “starter home” in a tidy NJ suburb (walk to take the NYC train to Wall Street) cost $28,000 in 1970. We sold it for $38,000 in 1976. Zillow estimates that it would sell today for $647,000, 23 times what it did in 1969! It’s unbelievable how high home values in that neighborhood have risen.

Also, home buyer expectations are higher today. If a home doesn’t have an open floor plan, three bathrooms and granite countertops, most young buyers think they are settling for much less than they want.

Owning a home has been a part of the American Dream, but it’s one of the three legs of that dream that are currently being killed: (1) High housing costs (2) Stagnant wages and (3) High health-care costs. When you add college debt to the mix, you have the makings of a revolution against the 21^st century’s form of capitalism.

Part of the American dream is for your kids to succeed. That starts with a good education in a school district that aligns with that goal. That can rule out most public schools in our larger cities. If young families can afford the costs of private schools in cities, they must be very well off.

The only way that most people can choose that kind of school is to look in the suburbs. Suburban school districts pay for their good schools with taxes on expensive homes. That means parents, and the local government all have a stake in keeping local property values as high as possible, thus the difficult zoning regulations that make houses larger.

But smaller homes are also desired by many retirees. People who are living out their golden years often want to “downsize” into an affordable small home, condo, or townhouse. Many of these developments are being built throughout America. They can be beautiful inside, but they are often attached or semi-attached boxes crammed together on land that was never supposed to be developed.

Time to wake up America! Today in most parts of the country there is hardly anything on the market for under $300,000. Not much that resembles the tidy starter home Wrongo purchased 52 years ago.

Affordable housing prices aren’t coming back without government intervention. America needs to look carefully at its housing policies along with how we have let financialization take over the housing market.

Financialization of housing refers to the increasing presence of corporations and organizations that are creating or using real estate management, mortgage processes, and financial instruments to profit-seek against individual homeowners.

To help you wake up listen to Buddy Guy perform “Gunsmoke Blues” along with Jason Isbell. The tune is highly relevant, and very powerful. It’s from Guy’s album ,“The Blues Don’t Lie” due out on September 30^th:

Lyrics:

Trouble down at the high school
Somebody got the gunsmoke blues
Trouble down at the high school
Somebody got the gunsmoke blues
Read it in the morning paper
Watch it on the evening news

…

Some folks blame the shooter
Other folks blame the gun
But that don’t stop the bullets
And more bloodshed to come
A million thoughts and prayers
Won’t bring back anyone

Monday Wake Up Call – September 12, 2022

The Daily Escape:

Harvest Moon, Cape Cod National Seashore, MA – September photo by Tom Baratz

With all of the media’s coverage of the comings and goings of the British monarchy, Wrongo’s certain that you missed the reviews of a new book, “Slouching Towards Utopia” by Brad DeLong, an economist from UC Berkeley. Dylan Matthews in Vox quotes DeLong from the book:

“The 140 years from 1870 to 2010 of the long twentieth century were, I strongly believe, the most consequential years of all humanity’s centuries.”

Matthews thinks it’s a bold claim. After all, homo sapiens has been around for at least 300,000 years; DeLong’s “long twentieth century” represents 0.05% of that history.

But DeLong says an incredible thing happened during that sliver of time that had eluded our species for the other 99.95% of our history: Before 1870, technological progress was glacial, but after 1870 it accelerated dramatically. More from Vox:

“DeLong reports that in 1870, an average unskilled male worker living in London could afford 5,000 calories for himself and his family on his daily wages. That was more than the 3,000 calories he could’ve afforded in 1600, a 66% increase….But by 2010, the same worker could afford 2.4 million calories a day, a nearly five hundred fold increase.”

DeLong is speaking of the nations of the rich north, not about all nations. He’s saying that food surplus was the key driver of progress. What’s implied is that the greatest difference between the wealthy and everyone else was that the poor were living on the verge of starvation. Those basic economic facts shifted once having enough to eat ceased being society’s most critical status distinction.

Another interesting statistic from the book:

“…the average number of years of a woman’s life spent either pregnant or breastfeeding…has gone down dramatically, from 20 years of a typical woman’s life in 1870 to four years today.”

Most historians present modern history as a long 19th century (from the French revolution in 1789) to the crisis of 1914. Which is then followed by a shorter 20^th century ending with the fall of communism. DeLong, by contrast, argues that the period from 1870 to 2010 is best seen as a coherent whole: the first era, he argues, in which historical developments were overwhelmingly driven by economics.

From the Economist:

“…despite the Industrial Revolution…for millennia, technological improvements never yielded enough new production to outrun population growth. Incomes had stuck close to subsistence levels. Yet from around 1870, growth found a new gear, and incomes in leading economies rose to unprecedented levels, then kept climbing.”

DeLong says that economic policy in this period was a duel between the ideas of Friedrich von Hayek, who extolled the power of the free market, and Karl Polanyi, who warned that the market should serve man, not man serving the market.

Before WWI, markets generated rapid growth along with soaring inequality. People pushed back, demanding greater political rights, which they used to pursue regulation of the economy and improved social insurance.

After WWII, a mix of a market economy and a generous safety-net made for a happy marriage of Hayek and Polanyi, improved by Keynes, who said that governments should act to prevent economic recessions. This led to a three-decade post-war period of growth unmatched before or since. DeLong calls them the Thirty Glorious Years; from 1945 to 1975, as the US and Europe recovered from World War II.

But when growth sagged and inflation rose in the 1970s, voters supported politicians promising market-friendly, or “neoliberal”, economic growth reforms, like lower taxes and reduced regulation. But those reforms didn’t keep economic growth high. And they also led to even worse inequality. Still, the US and other rich countries pressed on with them, right up to the 2008 global financial crisis, which marks the end of DeLong’s 20th century.

According to a paper by Carter C. Price and Kathryn Edwards of the RAND Corporation, had the more equitable income distribution that America experienced in those thirty glorious years stayed constant, the aggregate annual income of Americans earning below the 90th percentile would have been $2.5 trillion higher in just the year 2018. That’s an amount equal to nearly 12% of GDP.

Price and Edwards say that the cumulative inequality cost for our 40-year experiment in government-supported income inequality added up to $47 trillion from 1975 through 2018. And probably equaled $50 trillion by 2020.

That’s $50 trillion that would have made the vast majority of Americans far more healthy, resilient, and financially secure.

So, the big unanswered question is: Can we again return to a period where we see both economic growth and equitable growth? It’s highly doubtful. As DeLong says in Time:

“Our current situation: in the rich countries there is enough by any reasonable standard, and yet we are all unhappy, all earnestly seeking to discover who the enemies are who have somehow stolen our rich birthright and fed us unappetizing lentil stew instead.”

The problem here is that our entire culture, economy and even our civilization is predicated around growth and people haven’t known anything else. Hope you’ve enjoyed the ride.

Time to wake up America! We need to reimagine capitalism, our taxation policies and our welfare scheme if we are to survive. Expect a rough adjustment. To help you wake up, listen, and watch Bruce Springsteen perform “Darlington County” live in London in 2013:

Tuesday Wake Up Call, Unhappiness Edition – July 26, 2022

The Daily Escape:

Smoke in Yosemite Valley from the nearby Oak fire – July 25, 2022 photo via Today’s California

At a family party this weekend, my daughter who owns an upscale restaurant, mentioned that while post-Covid, the restaurant is full again, the patrons are much more mean and nasty. That made Wrongo revisit the answers to the latest data on the happiness of Americans from the General Social Survey (GSS), produced by NORC, a nonpartisan research organization at the University of Chicago.

The GSS has been monitoring societal change since 1972. The last GSS survey came out in January 2022. Here’s a significant chart:

Since 1972, the GSS has asked the question: “Taken all together, how would you say things are these days–would you say that you are very happy, pretty happy, or not too happy?” As you can see above, historically the “very happy” people have outnumbered the “not too happy” group by about 3:1 for about 45 years.

But in 2021, the very-happies plummeted from 31% of the population in 2018 down to 19%, while the not-too-happies surged to 24% (the “pretty happys” remained constant at about 57%). For the first time in polling history, Americans are more likely to say they’re not happy than to say they’re very happy.

The Institute for Family Studies (IFS) has taken a look at the GSS data to see what’s driving this precipitous change. Here’s their chart of unhappiness by age:

Until 2018, fewer than 18% of Americans ages 35 and over claimed to be “not too happy”, while fewer than 16% of Americans under 35 had done so. But in 2021, unhappiness rocketed upwards for both groups, to 22% for those 35 and over, and to 30% for those under age 35.

The sharp increase for those under 35 indicates young adults are carrying a unique burden. They’re taking an extraordinarily dim view of the world and their own lives.

Among young adults, different groups had different levels of unhappiness even before Covid. For example, only 6% of married people said they were “not too happy,” versus 16% of the unmarried. The question is whether all groups saw the same spike in unhappiness. Here’s another chart from the IFS:

Unhappiness rose for every group: In each case, the red bars are higher than the blue bars.

In the GSS, social class didn’t protect people very much: Unhappiness rose about 16% for people with prestigious jobs vs. 15% for other people. People who attended college saw their unhappiness rise by 16% vs. 15% for people who didn’t attend college.

Some demographic traits did matter: Men saw their unhappiness rise 18%, vs. 12% for women. Unhappiness rose about 17% for non-Hispanic whites, vs. 12% for racial and ethnic minorities.

Religion seems to have buffered unhappiness. Among people who attended religious services at least two times per month, unhappiness rose only 4%, the smallest increase of any group.

Liberal Americans saw the largest increase in unhappiness of any group, by 19%. For moderates, it was 15%, and for conservatives, 13%. Despite what Tucker Carlson might try to make of this, the IFS says that given the sample sizes involved, those differences aren’t statistically significant.

We can blame the Covid pandemic for much of the increase in unhappiness, but we’ve also seen huge social disruption. Here’s a chart showing the percentage of 25-34 year-olds living with parents or relatives in the US:

In 1970, 11% lived with their parents, while in 2020, it was 29%. Note the decline in living with a spouse. From 80% to 38%. While people are getting married later, living alone is relatively unchanged since 1980.

This has occurred during a period when there was very little upside in real wages, and a huge increase in financial assets, which few young adults have, and in the cost of housing. This may also partially explain why young people are unhappy.

We’re about to head into a global recession and most of our politicians have zero idea how bad it will be, or how to fix it. When it comes to the midterm elections, nearly a third of voters say it doesn’t matter who wins.

Time to wake up America! We’re hoping that demography will save us before climate change slays us, or fascism overtakes us.

To help you wake up, listen to 9 year-old musical prodigy Ellen Alaverdyan perform a cover of Geddy Lee‘s iconic bassline on the classic Rush song “Tom Sawyer”:

Scroll away from the video, and she sounds like a pro. Very nice!

Saturday Soother – June 18, 2022

The Daily Escape:

Rainy morning, with Vista House at Crown Point in right foreground, Columbia River Gorge, WA – June 2022 photo by David Leahy Photography

Wrongo has written before about the crushing burden of consumer debt in the US. Medical debt is an American disgrace, and Noam Levey, Kaiser Health News (KHN) Senior Correspondent has written an excellent piece about it. He says that 100 million people in America, some 41% of adults, owe some level of debt to healthcare providers.

But most studies don’t reveal the actual extent of the debt because much of it appears as credit card balances, loans from family, or payment plans arranged with hospitals and other medical providers. To calculate the true extent and burden of this debt, KHN partnered with NPR, and the Kaiser Family Foundation (KFF) to conduct a nationwide poll designed to capture not just bills patients couldn’t afford, but other forms of borrowing used to pay for health care.

The results are contained in the KFF Health Care Debt Survey. The KFF poll found that half of US adults don’t have the cash to cover an unexpected $500 health care bill. As a result, many simply don’t pay their medical bills. The flood of unpaid bills has made medical debt the most common form of consumer debt in America.

Over the past five years, more than half of US adults report they’ve gone into debt because of medical or dental bills. Moreover, a quarter of adults with health care debt owe more than $5,000, and about 20% with any amount of debt said they don’t expect to ever pay it off.

Debt incurred for health care is forcing many families to cut spending on food and other essentials. The poll also found that millions are being driven from their homes or into bankruptcy:

So, if 100 million people were in debt and 17% declared bankruptcy or lost their home, that’s 17 million people! The KFF poll found that the debt is also preventing Americans from saving for retirement, investing in their children’s educations, or buying a home. And debt from health care is nearly twice as common for adults under 30 as for those 65 and older. And that age cohort is supposed to be much healthier than the elderly.

Perversely, about 1 in 7 people with medical debt said they’ve been denied access to a hospital, doctor, or other provider because of unpaid bills. An even greater share (two-thirds) have put off care that they, or a family member need because of the cost.

Hospitals are among the culprits. They are capitalizing on their patients’ inability to pay. Hospitals and other medical providers are pushing millions of patients who can’t afford to pay into credit cards and other loans. These are high interest rate loans, carrying rates that top 29%, according to research firm IBISWorld.

This collections business is fed by hospitals, including public university systems and nonprofits granted tax breaks to serve their communities, who sell the outstanding debt to collections companies.

Welcome to the best country on earth, (maybe) one that doesn’t have the best health care system (and certainly one without health insurance for all). We have a system which shackles 100 million people to medical debt while at the click of a computer mouse, we send $billions in armaments overseas before those same dollars are recycled into the coffers of our Military-Industrial complex.

That’s all for this week. It’s time for our Saturday Soother, when we take a break from the J6 public hearings and whether Ginni Thomas was another Trumpist plotter. Let’s focus on calming ourselves for whatever insults are coming next week.

Here at the Mansion of Wrong, we’re engaged in an air conditioning project, adding more central air to our home. Hey, we’re aware of the crummy stock market, and the rampant inflation, but consume we must.

To help you clear your head on this warm weekend, grab a seat outdoors and brew up a cup of Supernatural coffee ($18.45/12 oz.) by Lee, MA’s own Barrington Coffee Roasting Company. This espresso is said to have flavors of Concord grape, dark chocolate, plum and tangle berry pie!

Wrongo has no idea what tangle berries look like, much less what they taste like.

Now, put on your wireless headphones and listen to the “Adagio for Oboe, Cello, Organ and Strings”, also known as “Elevazione” or “All’Elevazione” by Domenico Zipoli.

Zipoli was an Italian Jesuit priest who lived much of his life in what is now Argentina. He studied with Scarlatti, became a Jesuit, worked as a missionary, and died in 1726 in Argentina at age 38. If fate had granted Zipoli another 20 to 25 years, he might be regarded today as a major composer. Here it’s performed in 2015 by the Collegia Musica Chiemgau conducted by Elke Burkert :

The Great Resignation

The Daily Escape

Sunrise, Alpine AZ – November 2021 photo by Ed Kendall. Alpine is at 8,200’ elevation.

From Krugman:

“You’re probably aware that the US is experiencing what many call the Great Resignation — a significant fall in the number of people willing to accept jobs, at least at pre-Covid wages. Four million fewer Americans are employed than were on the eve of the pandemic, yet the rate at which workers are quitting their jobs — usually a good indicator of labor market tightness — has hit a record, and the scramble of employers to find workers has led to rapid wage increases.”

People see the “now hiring” signs everywhere. They assumed that generous unemployment benefits were discouraging workers from accepting jobs. But the enhanced benefits went away with no visible change in the US labor force participation. So, what’s going on?

Back to Krugman: (brackets by Wrongo)

“…[the] Great Resignation, it turns out, is largely an American phenomenon. European nations have been much more successful than we have at getting people back to work. In France, in particular, employment and labor force participation are now well above prepandemic levels.”

Barry Ritholtz says that there’s a massive transformation underway in America’s labor markets. When we look at the total Quits Rate for all Nonfarm payroll workers since the Great Financial Crisis (GFC) ended in 2009, the trend in the “quits rate” has steadily moved higher for all workers and really accelerated this year:

The red trend line shows that the rate that people are quitting has now returned to its level in 2016, and except during the pandemic, it has continued to rise.

If you look at only the Quits Rate for Professional & Business Services, those white-collar workers who did okay during the pandemic, their trend isn’t the same as the overall quits:

There’s been virtually no difference in the rate of professional quits since 2008. That’s telling us that the Great Resignation is taking place in the lower half of the employment wage scale, entry-level jobs, and the tiers just above them.

This has deep ramifications for the American economy.

Companies who rely on cheap labor are having hiring problems. Those companies that pay the minimum wage (or slightly higher) are having a hard time finding workers. Part of this is the failure of the Federal government to raise the minimum wage, which has been the same since 2009. That hasn’t kept up with inflation, or the growth in corporate profits.

Instead of gradually raising the minimum wage over time nationally, putting it on a path towards $15 or higher, we’ve allowed wage pressure to build for years. Then, during the pandemic, we experienced an 18 month period when low-wage workers reconsidered their careers. The dam broke, and we’re seeing both a sudden spike in wages and a shortage of workers.

Along the way, some labor has upskilled, gotten certified, degreed, and found new fields to work in. Now we have millions of people launching small businesses, striving to make it to the middle class, and towards self-determination. From the WSJ:

“The pandemic has unleashed a historic burst in entrepreneurship and self-employment. Hundreds of thousands of Americans are striking out on their own as consultants, retailers and small-business owners.”

The number of unincorporated self-employed workers has risen by 500,000 since the start of the pandemic, to 9.44 million. Except for a few months this summer, that’s the highest total since 2008. It amounts to an increase of 6% in the self-employed, while overall US employment total remains nearly 3% lower than before the pandemic.

So far this year, these entrepreneurs applied for federal tax-identification numbers to register 4.54 million new businesses, up 56% from the same period of 2019. That is the largest number on record since 2004. And two-thirds are for businesses that aren’t expected to hire employees.

Sunday Cartoon Blogging – October 24, 2021

Last Friday, Wrongo and Ms. Right got their Covid booster shots. It’s a sample of one, but at our local drugstore here in a very conservative part of Connecticut, there was a line to get shots. Some were there for their first vaccinations, but most were waiting for a booster. There’s never a line around here for anything, except when the lobster food truck rolls into town.

But sadly, this isn’t the story for the rest of the country, particularly for cops and heath care workers. Some are saying that the vaccine mandates do little. But health workers who don’t really believe in science are leaving the job. And cops who don’t really care about public safety are leaving policing. Sounds like mandates are working just fine. On to cartoons.

Mandates are nothing new:

Most Republicans want boosters:

Texas got two new districts. Then the GOP redrew urban districts so that incumbent minority congresspeople are now running against each other:

One of our two political parties thinks that elections shouldn’t be the basis for choosing our representatives. That means democracy doesn’t matter to them anymore. They say it’s because there’s too much voter fraud, and no one can trust the result of any election now, anywhere.

So, the Dems think the next step is to change the Senate rules, modifying the filibuster. That would pave the way to pass the Protect the Vote Act. But there’s real danger that when the Republicans inevitably regain the majority, they will change that law to whatever the next Trump-like Republican leader wants voting rights to be. Could it be that Republicans are blocking the bill, not just to deny voting rights to minorities, but to lure the Democrats into changing the filibuster?

The economic ship sails on, and 40 years later, there’s zero thought to changing the message: