Abandonment of Middle Class – Page 3

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:

Biden compromises on the social spending bill. Still, it’s not certain to pass:

If only there was a solution to our supply chain problems:

Why Won’t Manchin Help Keep Jobs in West Virginia?

The Daily Escape:

Grand Canyon NP at golden hour – photo by indieaz

Viatris is a new pharmaceutical company formed by the merger of Mylan and Upjohn late last year. Their strategy for improving profits post-merger was as is usual, to restructure and cut $1 billion in costs. One victim of the cost-cutting is the Viatris plant in Morgantown, West Virginia. The company announced the plant would close last December.

The Morgantown plant has been in operation since 1965. It employs between 1,500 and 2,000, whose jobs will be offshored to India and Australia. These are well-paying jobs in one of America’s poorer states. The bulk of the layoffs will occur on July 31, when 1,246 people will be let go, including 764 union workers and 482 nonunion staff. Complete closure will happen by March 2022.

Mylan reported $3.9 billion in profits in 2019. Naturally, local union president Joe Gouzd had harsh words for Viatris:

“This is the last generic pharmaceutical manufacturing giant in the US, and executives are offshoring our jobs to India for more profits. What is this going to do to us if we have another pandemic?”

The local union represents about 900 workers. Gouzd said:

“…we’re going to rid ourselves of 2,000 high-paying jobs in north central West Virginia, taking out $150m to $200m out of the local economy…”

The West Virginia legislature passed a bill calling on Governor Jim Justice and Joe Biden to save the jobs. Biden has proposed taxing companies that offshore jobs, but it remains to be seen whether he will be successful.

Senators Elizabeth Warren and Marco Rubio introduced the Pharmaceutical Supply Chain Review Act to study America’s over-reliance on foreign countries in pharmaceutical industry, but neither West Virginia Senator has sponsored the bill.

The Guardian reports that Republican Senator Shelley Moore Capito has ignored pleas to work with Biden officials to save the plant. Democrat Joe Manchin, whose daughter Heather Bresch served as Mylan’s chief executive until she retired in 2020, didn’t fully ignore their requests to get involved; he held a Zoom meeting in December that might as well have focused on “thoughts and prayers.”

Isn’t it curious that the state’s two Senators aren’t trying hard to keep jobs in their state?

You probably hadn’t heard that Bresch collected $37.6 million when she stepped down from Mylan. You also missed that under her leadership, Mylan recently undertook what’s called a “tax inversion”, changing its headquarters for tax purposes from Pittsburgh, PA to the Netherlands, reaping big tax breaks. So, less tax revenue for America.

Earlier, Mylan disclosed that it is in an ongoing lawsuit by the Public Employees Retirement System of Mississippi that alleges misconduct by the company. The suit alleges “misrepresentation and concealment of violations of FDA regulations governing pharmaceutical product quality and safety.” In 2016 and in 2018, the FDA found documentation, record-keeping, quality-control and cleaning issues. The plant was shut down temporarily after the 2018 findings. It then reduced production volume by about two thirds, and “right sized” plant staff.

But we initially heard about Ms. Bresch during Mylan’s EpiPen pricing controversy. They had been hiking prices for years on their epinephrine injector to the point where many people could no longer pay for it. Along with the EpiPen fiasco, Mylan paid $465 million to the federal government to settle claims it underpaid Medicaid rebates.

Understandably, the town and the state are looking for ways to head off the layoffs. Last week, members of the union and others rallied outside the state capitol in Charleston to urge Republican governor Jim Justice to help save the facility. According to the union, Justice said his administration was trying to find an alternative to closure, including holding talks with two companies that have expressed an interest in buying the plant.

But Justice said that Viatris was not cooperating:

“We’ve talked with Viatris, and we continue to struggle with them….They’re difficult to work with. The least they could do …is be cooperative.”

So, Viatris isn’t the best of corporate citizens. That doesn’t make them different from most multinationals. That means political pressure is the only leverage that will keep these jobs in America.

Yet, when you see these two “bipartisan” Senators not lift a finger to help the soon-to-be unemployed citizens of their own state, you have to ask: Why haven’t they done more?

Nomadland Is Best Picture

The Daily Escape:

Desert Lilies, Desert Lily Preserve, Desert Center, CA – photo by Bob Wick for BLM

The film “Nomadland” won best film, best director, and best actress at this year’s Oscars. Wrongo and Ms. Right kept our tradition, and didn’t watch the Oscars, but we have seen the film twice.

If you haven’t seen it , the film is worth your time. It offers a sympathetic view of what’s happening to the American working class in what’s becoming a de-industrialized America. It shows the hollowing out of middle America, and the growing regional inequality that stems from the US economy being concentrated in fewer and fewer corporate hands, and often, in fewer places.

Our changing economy has left wide swaths of rural America in decay. The movie’s story centers on Fern, an older widow. She worked in the US Gypsum plant in Empire, Nevada until the Great Recession reduced demand for drywall, and thus the mine and the plant were closed.

Once the factory went, so did the town. It became so de-populated that it even lost its zip code. Now, Fern, (played by Frances McDormand), sleeps in an old, converted van and works a seasonal job with one of the few employers left in the area: An Amazon shipping center.

But the film isn’t about Amazon. It’s about coping with downward mobility. Fern travels the southwest mountains, working a variety of gig jobs: In addition to Amazon, she’s kitchen help in a Wall Drug. She works at a beet processing plant throwing cases of beets into a hopper. She helps run a small RV park.

The film avoids clichés about the formerly middle-class, mostly White Americans it depicts. None of them blame Black people or immigrants or the left-wing media for their problems. They simply no longer play by the norms of an economy that ruined their lives.

Ironically, these characters don’t follow the usual White working-class stereotypes. Unlike Trump voters interviewed by the media in diners across America, they don’t turn to racism or blind acceptance of patriotism because of their economic uncertainty. Fern and the rest of the characters in “Nomadland” demonstrate dignity, decency, and stoicism in the face of the structural forces grinding them down. They teach each other how to survive while living off grid. They help each other when the chips are down.

Eric Cortellessa at Washington Monthly offers great insight:

“Unlike JD Vance’s flawed Hillbilly Elegy…this film does not blame the victims for their own downward mobility. It doesn’t point to bad habits (drugs and laziness), bad morals (racism and Trumpism), or bad attitudes (toxic masculinity and perverted Christianity). Instead, it shows humble men and women who don’t scapegoat others and who manage to preserve their dignity and, to a large extent, their own personal freedom in the face of systemic forces that are exploiting them.”

Let’s point out that since 1985, the average Wall Street bonus has increased 1,217%, from $13,970 to $184,000 in 2020. If the minimum wage had increased at that rate, it would be $44.12, instead of $7.25. And $7.25 equates to $15,080/year, nowhere near enough to make a payment on the US median home that’s priced at $301,000. It’s not even enough for a tiny dump of a house, like the one Fern left in Empire NV, which probably cost one-third of the median price.

Jessica Bruder, the author of “Nomadland: Surviving America in the Twenty-First Century,” that the movie is based on, wrote over the weekend about her exploration of this growing subculture. Bruder says a scene depicting Fern spending a night in her van when she hears “the knock” is chillingly accurate:

“No overnight parking! You can’t sleep here.”

The knock, Bruder explains, “is a visceral, even existential, threat,” one that nomads try to evade by hiding in plain sight: “Make yourself invisible. Internalize the idea that you’re unwelcome.”

Some places forbid overnight parking. Others outlaw living in a vehicle. Penalties can pile up fast. Unpaid, they can lead to the cruelest punishment of all: Your home gets towed. Failing to pay the impoundment fee means losing your home. Bruder says that people ask her what they can do for the nomads:

“Letting vehicle dwellers exist in peace would be a fine start. Individuals have the power to help. When you see someone living in a car, van, or RV, don’t call the police.”

Wrongo was struck by how the nomads helped each other. In our little New England town, people do the same, they try to help. The bystanders at George Floyd’s murder tried to help prevent Floyd’s death.

The only people who don’t seem to care about helping one another are corporate executives and Republican politicians. How did they get like that?

See the film.

Limbaugh and Texas

The Daily Escape:

Observation Deck, Niagara Falls – Feb 9, 2021 photo via Darcy Bowers

A quick thought about the death of Rush Limbaugh, and a few thoughts about the Texas power outage.

Many on the right are angry because others are happy about Limbaugh’s death. But we’re under no obligation to tolerate what we perceive as evil. Make no mistake, Rush Limbaugh promoted evil, and Wrongo celebrates the passing of that evil. As Bette Davis said:

“I was told only to speak good of the dead. Joan Crawford is dead. Good!”

On to Texas, and their electric grid disaster. Texas governor Abbott tried to blame the disaster on the “green new deal” and renewable energy sources. That’s a ludicrous argument. No part of the “green new deal” has been passed in Texas, and while Texas is the Saudi Arabia of wind power, only about 33% of its outage came from offline wind power.

A few facts: America is divided into three grids: one covers the eastern USA, another the western states and the third is the Texas grid, which covers most of the state. The Electric Reliability Council of Texas, (ERCOT), manages about 90% of the state’s power for 26 million customers.

The real reason for the sustained outage is that Texas Republicans made sure that Texas had its own electric grid. That was because they wanted to be outside the regulatory reach of the federal government, to set their own rules. So Texas doesn’t follow the maintenance protocols of the other two grids. The other grids have protocols for all power generation equipment in winter weather, including for wind turbines. Of course, Texas doesn’t follow them.

An expert told the Houston Chronicle:

“The ERCOT grid has collapsed in exactly the same manner as the old Soviet Union…It limped along on underinvestment and neglect until it finally broke under predictable circumstances.”

Texas mistakenly thought that by seceding from the power grid, they would provide the benefits of a market solution to delivering power to the state. What really happened is that a lack of capable governing allowed an important and life-sustaining system to rust.

In 2011, Texas faced a similar storm that froze natural gas wells and affected coal plants and wind turbines, leading to power outages across the state. And 10 years later, Texas power companies still have not made the necessary investments to keep plants online during extreme cold. From the Texas Tribune:

“Texas officials knew winter storms could leave the state’s power grid vulnerable, but they left the choice to prepare for harsh weather up to the power companies — many of which opted against the costly upgrades.”

Texas Republicans thought that squeezing more profits out of the power grid for wealthy energy interests was more important than protecting the grid. They were wrong, and Texas consumers are paying the price.

We’ve become the can’t do nation: Can’t stop the plague, even with great vaccines, can’t keep our Capitol safe, can’t keep the heat on in Texas. But once Ted Cruz gets back from his fact-finding mission in Cancun, Texas will fix this in no time.

Wrongo has been to Cancun. It’s good, but not destroy-your-reputation good.

Our New Normal

The Daily Escape:

Abyss Pool, West Thumb Geyser, Yellowstone NP – 2020 photo by eTeT

The “New Normal” is here. Tuesday was the first day for school buses on the streets of Wrongtown, CT since March. Until the buses rolled, we could keep lying to ourselves about the pandemic. But now that school has started up for kids in K-12, the new normal is here. We’re soaking in it.

It’s a patchwork of online and in-person formats. Here in Wrongtown, we’re following a hybrid formula of kids physically in class for some days, and participating remotely on the rest. But confusion reigns. One parent asked on the town’s Facebook page whether her kid had to log on to the class website on the days when they were at home:

“He is in school on Thursdays and Fridays but do we need to log on every day Monday thru Wednesday considering those are the days he is home? Any advice would be greatly appreciated. Thanks.”

Or, this one:

“Hi does anyone know how to sign in to distant learning?”

Ok, the new normal hasn’t been completely reduced to practice, and with respect to getting our kids an education, we’ve still got lots of learning to do.

But other things also dominate our new reality. First, despite the happy talk about the economy, many jobs aren’t coming back. Temporary layoffs are now starting to look permanent. From Barron’s: (emphasis by Wrongo)

“Before the pandemic, a temporarily unemployed worker had a roughly 60% chance of finding a job in the next month. Lately, that probability has fallen to about 40%, while the chance for a permanently unemployed worker to find a job in a given month is about 20%.”

The US workforce is becoming increasingly divided into two groups: Those who are confident in keeping their jobs, and those who are pessimistic that they will ever return to their old jobs. The question for them is how will they cover their expenses as federal jobless benefits decrease or expire.

And we’re still more than 11 million jobs down from where we were in February.

Even if there is some GDP and jobs growth in the September report (the last one before the election), it won’t be enough to bail out the unemployed. The pandemic disproportionately hit workers in the leisure and hospitality sector (restaurants, hotels and travel); employment in that sector is still down around 25%.

Trump and the Republicans didn’t create the problems faced by low-wage Americans, but they made them worse by not dealing promptly with the pandemic, and then, by stressing the economy over the pandemic, which allowed Covid to roar back. And what economic recovery we have is bypassing those who most need to recover!

Finally, our new COVID reality: About 30,000 Americans died of Covid-19 in August. And the number of new coronavirus cases has plateaued. Between Labor Day fun, and school re-openings, there’s a pretty good chance that America’s virus situation is about to take another turn for the worse.

Hundreds of colleges that had planned on having their students on campus have reversed their stances and decided on a virtual semester. The NYT reports that colleges have seen 51,000 cases since schools opened.

Kevin Drum reports that from August 2nd to September 2^nd, the US recorded 1.4 million new cases of COVID-19. And according to a new study, 19% of those cases (266,000) were caused by the Sturgis Motorcycle Rally in South Dakota.

The riders refused to mask up, just like the college kids. People are tired of wearing masks, and they are tired of being cooped up. Apparently, six months of compliance is all that Americans can do. They want normalcy, but there’s a new normal that’s already here.

Until we have a safe and effective vaccine, there is no alternative to wearing a mask and staying physically distant whenever possible. We’re nearing 200,000 deaths and the flu season is coming. Think for a minute about that possible vaccine:

It needs to be approved, and 600M doses have to be manufactured and distributed.
We need 600M doses because the best guess now is that people will need to get two shots.
And we’re not sure how much time is required between shots.

Only when all people mask up, will most companies hire again. Only then will most kids be physically in school. Only then will most people be able to pay their bills with money earned in a paycheck. Or we can wait for the vaccine.

We have just 54 days until the election.

People shouldn’t get distracted from surviving the new normal by BS from the Trump campaign about Nancy Pelosi’s salon visit, or Biden’s supposed cognitive issues.

The new normal is the only issue that matters.

Vote to turn that into a non-toxic normal. And get your friends to vote for a non-toxic person.

The Wrongologist

Geopolitics, Power and Political Economy

Category: Abandonment of Middle Class

Monday Wake Up Call – September 26, 2022

Monday Wake Up Call – September 12, 2022

The Great Resignation

Why Won’t Manchin Help Keep Jobs in West Virginia?

Limbaugh and Texas

Our New Normal