Read this article at USA Today:
WASHINGTON — “The economy,” Federal Reserve Chairman Jerome Powell declared this week, “is doing very well.”
And it is. Steady hiring has shrunk unemployment to 3.8 percent — the lowest since the 1960’s. Consumers are spending. Taxes are down. Inflation is tame. Factories are busy. Demand for homes is strong. Household wealth is up.
Yet the numbers that collectively sketch a picture of a vibrant economy don’t reflect reality for a range of Americans who still feel far from financially secure even nine years into an economic expansion.
From drivers paying more for gas and families bearing heavier child care costs to workers still awaiting decent pay raises and couples struggling to afford a home, people throughout the economy are straining to succeed despite the economy’s gains.
and consider the reasons for the present state of affairs. Here’s my list:
- The ownership of (mostly paper) assets is far too important a factor in measuring how well we’re doing as a country.
- Higher education is a racket.
- Educational loans are a racket.
- Our present social arrangements are not conducive to well-being.
- We need an economy that’s well-suited to the people we have not people who are well-suited to the economy we have.
GDP is a lousy metric for how well we’re doing as a country just as net worth is a weak metric for how well you’re doing as an individual. For what shall it profit a man, if he shall gain the whole world, etc.?
GDP (nee GNP) was introduced as an economic metric in 1934. At base it was a justification for the proposition that digging holes then refilling them was good for the economy. Craziness. A $20 pair of jeans plus a $.05 label sells for $100 – bumps GDP. When you can buy a computer for $25 (Raspberry Pi) that far outperforms a $10 million one from not too long ago that decreases GDP.
“For what shall it profit a man, if he shall gain the whole world, etc.?”
This concluding paragraph from an essay by Russell Kirk is a propos:
“The great line of demarcation in modern politics, Eric Voegelin used to point out, is not a division between [classical] liberals on one side and totalitarians on the other. No, on one side of that line are all those men and women who fancy that the temporal order is the only order, and that material needs are their only needs, and that they may do as they like with the human patrimony. On the other side of that line are all those people who recognize an enduring moral order in the universe, a constant human nature, and high duties toward the order spiritual and the order temporal.”
http://www.kirkcenter.org/detail/ten-conservative-principles/
I’m not sure what the first dot point really means; that paper really just represents claims on real assets. Anyway, the health care and education “rackets†narrow well being. The breakdown of the family unit has been horrible.
But here’s another issue (which will surely get me in trouble), yesterday’s luxuries have morphed into today’s necessities, at the expense of real necessities, creating angst. I know that growing up we had modest cars, drove to vacations, generally low cost vacations like fishing in Canada etc etc. Coupons were clipped, clothing was handed down etc etc. Not now, people fly, stay in hotels and eat in restaurants they can’t afford. Cell phones and their attendant plans. I could go on. Money diverted from real necessities, and/or paid with debt. No one saves.
And then some bonehead comes along and whines about the topic of the day – gas prices, or the emotionally charged child care. How about a basic dose of responsible personal financial management?