Tuesday
Long, long ago, I used to go out
with a girl who was an authentic Rockefeller. Her great-grandfather
was John D. Rockefeller. She had no romantic interest in me, nor I
in her, but we hung out.
Aside from this woman, I do not know anyone of my generation who
is not better off than his great grandparents. Most of the people I
know who are millionaires and billionaires (to use Mr. Obama’s
favorite phrase) had ancestors who were just working stiffs or
farmers or salesmen. Even among the upper middle class, their
ancestors rarely — never — were as well off as they were.
Why? Why are we who are now in our sixties, seventies, and
eighties so much better off than our forebears?
I humbly offer a few reasons:
1.) We tend to have more education. That means we have a more
sophisticated, more powerful machinery inside our skulls, and thus
more human capital hitched onto us. It is the same as if we were
farmers and owned a powerful tractor instead of a mule.
2.) The society in general has more sophisticated machinery
available to all of us, whether in factory, office, shop, or
bureaucracy we have machines that allow us to produce more widgets
per unit of our time. These would range from immense excavating
tools to i-Pads.
3.) The society is (or was until recently) more efficiently
organized and operated under better laws that allow people to “be
all they can be,” to coin an Army recruiting slogan. When humans
were locked in the same jobs as their parents, their skills in
other areas lay fallow. Now, people can try their skills wherever
they wish and where they are most capable.
There probably are other reasons, such as compound interest,
which allows families to grow rich and pass on those riches to
their children and grandchildren.
This is a big factor in many lives.
The problem that I see happening, and which has been scaring me
for some time now, is that much of this is going into reverse.
Young people now are acquiring far less education than they used
to. Immense numbers never finish high school. Many of those who do
graduate from high school and go on learn next to nothing in
college. (My favorite recent example: a college freshman at a
lecture I attended who thought Pearl Harbor was a jewelry store.)
This has to take its toll.
Today’s data about scores on the SATs, showing that in some
areas they were the lowest they have ever been, are terrifying.
Yes, it is largely because so many brown and black people are
taking the SATs and we welcome that. But that venture is giving us
a window into just how poorly these persons are acquainted with
basic education, not to mention higher education. Getting these
fine people up to a meaningful level of education will be extremely
difficult for many reasons. Keeping the white ones at a high level
of achievement also turns out to be extremely challenging.
The advances in computing power and communications which give us
so much pleasure are not showing up as meaningful gains in
productivity. We do not know why, but it’s happening — or not
happening.
The rules of society, especially rules in finance and corporate
law, which are meant to increase overall wealth and efficiency,
have allowed wholesale looting of the savers and investors of
America. This has been a catastrophe for many families.
Deregulation has much to recommend it, but when it allows the
financial sector to take as much of the nation’s savings as it
does, then deregulation acts to intensify class divisions and
essentially to rob from the middle class.
On the other side of the coin, excessive environmental
regulation hinders the development of resources needed for
growth.
But the worst may be the disaster in fiscal policy. In the last
12 years, as taxes were cut and expenditures soared, the nation
went into a calamitous downdraft of dissaving. Our government
racked up debt as a basically peacetime nation on a scale never
seen before. The national debt went from being 15-20 per cent of
GDP in 2000 to over 100 percent of GDP by now. This rise —
alarming enough under W. — has been accelerating drastically
under. Mr Obama’s leadership. We have now reached a stage in which
the combined total of losses in asset value — primarily in real
estate — plus the immense addition of debt to the system, have
left us substantially poorer per household than we were in 1999 or
even in 1995.
“Are you better off than you were four years ago?”
Clearly, for the nation as a whole, no. This cannot all be laid
at Mr. Obama’s doorstep. The enemy is not solely Mr. Obama, nor is
it the Republican party. The enemy, as Pogo used to say, “is us”
and our lazy children and grandchildren (obviously some, not all),
our politicians who use the federal budget as a credit card to buy
votes. (Actually Mr. Obama has been too busy to submit a budget for
the past three years, a phenomenon not seen before — sort of like
his “scholarly” work at Harvard Law School turning out to be a long
love letter to his absentee father.) The enemy is our
something-for-nothing fiscal policy. The enemy is our abdication of
exercising discipline upon our children and upon ourselves. The
enemy is lassitude and carelessness and a society where the bribe
is the highest form of achievement in academe and in government,
and where the national religion is the worship of money.
Will my granddaughter live as well as my wife and I do? God help
her, but I don’t see how she can. This society is coming
unglued.
