Last week, protests broke out again in Europe, from Rome to London. The month-long Occupy Wall Street demonstrations in New York have spread. The current unrest follows this summer’s riots in London and flash-mob incidents in U.S. cities. In 2009 and 2010, tea parties turned out hundreds of thousands in protests against the Obama administration’s policies and eventually gave him the largest midterm rebuke since 1938.
All of these protests, of course, are vastly different — or are they really?
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Ostensibly, the Wall Street protests rail against a small elite who makes a lot of money by lending, investing, and speculating — although the protesters don’t seem to worry much about the mega-salaries of actors, professional athletes, or sympathetic multimillionaires such as Al Gore, George Soros, and John Kerry. American flash mobbers and London hoods thought it was okay to take things that were not theirs, since they have less than others. The tea partiers were simply tired of paying more taxes for big-government programs that they thought only made things worse.
In the current left and right anger — somewhat analogous to the upheavals of 1848 or the 1930s — the common denominator is frustration that Western upward mobility of some 60 years seems to be coming to an end. In response, millions want someone or something to be held accountable — whether Wall Street insiders, or wasteful and corrupt governments, or the affluent, who have more than others.
Unfortunately, political leaders — unwilling to risk their careers by irking the people — have offered few explanations for the root causes of all the various unrest. Instead, they assure us that Social Security is solvent, or that pensions and wages can remain sacrosanct, or that billionaires and millionaires are alone culpable. Sometimes they exploit race and class divisions in lieu of explaining 21st-century realities.
So here goes an explanation for the multifaceted unrest. For the last six decades, constant technological breakthroughs and growing government subsidies have given a billion and a half Westerners lifestyles undreamed of over the last 2,500 years. In 1930, no one imagined that a few pills could cure life-threatening strep throat. In 1960, no one planned on retiring at 55. In 1980, no one dreamed that millions could have instant access to civilization’s collective knowledge in a few seconds through a free Google search.
Yet, the better life got in the West for ever more people, the more apprehensive they became, as their appetites for even more grew even faster. Remember, none of these worldwide protests are over the denial of food, shelter, clean water, or basic medicine.
None of these protesters discuss the effects of 2 billion Chinese, Indian, Korean, and Japanese workers’ entering and mastering the globalized capitalist system, and making things more cheaply and sometimes better than their Western counterparts.
None of these protesters ever stop to ponder the costs — and ultimately the effect on their own lifestyles — of skyrocketing energy costs. Since 1970 there has been a historic, multitrillion-dollar transfer of capital from the West to the Middle East, South America, Africa, and Russia through the importation of high-cost oil and gas.
None seem to grasp the significance of the fact that, meanwhile, hundreds of millions of Westerners were living longer and better, retiring earlier, and demanding ever more expensive government pensions and health care.
Something had to give.
And now it has. Federal and state budgets are near bankrupt. Countries like Greece and Italy face insolvency. The U.S. government resorts to printing money to service or expand entitlements. Near-zero interest rates, declining home prices, and huge losses in mutual funds and retirement accounts have crippled the middle classes.
Bigger government, marvelous new inventions, and creative new investment strategies are not going to restore the once-taken-for-granted good life. Until “green” means competitive renewable energy rather than a con for crony capitalists, we are going to have to create and save capital by producing more of our own gas and oil, and relying more on nuclear power and coal.
Westerners will have to work a bit longer and more efficiently, with a bit less redistributive government support. And they must confess that venture capitalists, hedge funds, and big deficit-spending governments are no substitute for producing themselves the real stuff of life that millions now take for granted — whether gas, food, cars, or consumer goods.
Otherwise, a smaller, older, and whinier West will just keep blaming others as their good life slips away. So it’s past time to stop borrowing to import energy and most of the things we use but have given up producing — and get back to competing in the real world.
This isn't a bad essay by Hanson. He at least seems genuinely concerned about the problems we face, and not totally in denial.
A few points though:
(1) We aren't going to return to the days of a huge number of people making "stuff" on a large scale. The reason is that we have gotten so darn good at making stuff, that only a small percentage of the population is necessary to do so. A similar pattern exists in manufacturing as once existed in agriculture. At one time, an overwhelming majority of the population worked on farms in order to grow food. Now, only a small sliver of the population can realistically aspire to have a career as a farmer. The same reality is true in manufacturing. Mr. Hanson's appeal that we will solve our economic problems by making the "real stuff of life" isn't realistic. We have moved on to the information age.
(2) Our system is currently experiencing a massive inefficiency. We have millions of people who are unemployed. These people are perfectly capable of producing value. Yet, given our current collective balance sheet problems, there is inadequate demand for the value they could produce. This is simply a massive waste. Our number one priority should be to get unemployment down to reasonable levels. When that happens, a lot of good things happen. These people pay taxes. They stop collecting unemployment benefits. They gain skills that will serve them in the future. Until we get back to full employment, we will really not know what our new normal looks like. It is premature to be talking about a diminished future just yet.
"They gain skills that will serve them in the future. Until we get back to full employment, we will really not know what our new normal looks like. It is premature to be talking about a diminished future just yet."
How do you propose we get back to full employment?
"Our number one priority should be to get unemployment down to reasonable levels."
True, but policy-wise it puts the cart before the horse. Employment is always the last thing to recover. It's also the last thing to get hit by a recession. A recession hits profits first, and the lack of profits hits the payrolls a few months later. Similarly, profits must be made first (i.e., a successful business climate), before the unemployed are hired again.
To focus on remedying the symptoms (unemployment benefits, stimulus, etc.) impedes the economic growth necessary to fix the unemployment problem.
Happy Halloween. The debt to GDP ratio will reach 100% on 31 October. The trick is that Krugman and his ilk now are floating the idea that we use nominal not real GDP to claim that the GDP is growing (i.e. inflation grows to offset a drop in consumption—buy less but pay more). External Link . (Look to the Fed on this one).
The treat is, as always, the beleaguered taxpayer. Will the governing class forgo the masks and silly hats? There is enough of that in the OWS.
Thank you for this cold slap in the face. Now, if only someone running for president would read this into a camera. It would tick people off, but the truth always hurts. We are wasting time as we watch our country slip into third-world status. "Competition" -- what a nasty 20th Century word...shouldn't we just all "share"? That's the latest BS that will drag our country down further to the Left's socialist "utopia."
The reality, for most people, is that education and training are now required to make a living. With the possible exception of retail and service industries, the days of graduating from high school with no marketable skills and landing a job that provides the requisite ojt are mostly gone.
Key unemployment rates:
- college grad 4.2%
- h.s. grad 9.7%
- non h.s. grad 14.0%
- workers over 25 years old 7.8%
- teenagers 24.6%
- blacks 16.0%
- hispanics 11.3%
Combine the realities of a changing world with massive government intervention in the form of taxes, mandates, regulation and layabout incentives, and our destination is no mystery. The OWS crowd is clamoring for more of the medicine that's already killing them.
Amen, Chad. My only quibble is the use of H.S.-college graduation criteria within a discussion of training. A sufficient number of college grads are equipped for little else than to sit in the scorner's seat, and to hurl the cynic's ban. They find "jobs" infesting the Babu bureaucracy or academe, but it would hardly be wise to add to their portion by increasing college ranks. I realize you didn’t suggest such an approach, but I felt a certain responsibility to point out a largish boulder in your implied stream of thought.
"With the possible exception of retail and service industries, the days of graduating from high school with no marketable skills and landing a job that provides the requisite are mostly gone."
I don't agree if you mean there's no paths to success with just a HS degree. Somebody coming out of HS (or even a dropout) can apprentice in a trade and with hard work do very well.
A competent and professional plumber or electrician will typically end up earning more than your cubicle jockey middle manager, and have no worries about offshoring. Auto repair - cars will always need to be fixed. HVAC, welding, etc. All can be learned with apprenticeship or some relatively cheap tech schooling. (germany has a great apprenticeship program and is a good model)
Anyone who is good with people can start a career in sales no matter their education level. Sales numbers speak for themselves. Get a job selling books door to door, or copiers office-to-office, put up some big numbers and the next employer will love to have you. That can lead to being a millionaire soon enough if you have the knack and work hard.
The military offers many paths out of HS.
There's also endless avenues for entrepreneurship.
I think he meant what he said, i.e a HS degree and no marketable skills means you are in trouble. For all HS graduates there are paths to obtain marketable skills. One is, as you point out, to learn a trade that doesn't require a college degree, but will require training. The other is to get trained for a marketable skill in college. I believe we are all in violent agreement that the key is a marketable skill, which is why a HS degree alone probably won't cut it, and a degree in whatever studies probably won't cut it.
What is sad to me is that large parts of the population seemed to have been blinded to the fact that it really is having the ability to do something useful that allows us to extract a living wage from the world. The propaganda, both from the purveyors of the welfare state, and from the "get a college degree and life will be easy" snake oil salesman, has led to this, and this is something that we in the middle and upper classes that knew better and didn't speak up (or speak up loudly enough) are at least partly culpable.
My brother-in-law didn't even graduate from HS, he had to go back to get a GED. He started as a dishwasher in a local restaurant. Went on to become a cook, then the kitchen manager, then store manager. Then he managed several stores. At present he is in charge of all stores in the southeast. And earns a lot more than I do with my BS in electrical engineering.
Uncledave, those are valid points, and I don't disagree. In my area of flyover country, the initial training for many of the trades begins in high school in the vo-tech system. As such, these kids graduate with skills and are immediately employable. For a hard-working individual, opportunities are always available.
I have to agree with you here. My company (12,000 employees) has no educational requirements for entry level positions. They hire employees starting part time around age 16 or 17 (depending on state laws) All employees are required to have a great attitude and strong work ethic.
There is a well-defined career path in our starting right at the bottom and going all the way to the top.
All the executives in our company started out the same way -- in entry level positions.
In fact, most positions in the Corporate office require only a high school diploma and relevant work experience and skills.
Everybody has to bring something to the table. If you don't have the education or the skills, you'd better be prepared to start at the bottom, have a good attitude and be willing to work really hard.
And that's the problem I'm seeing with many of those unemployed quoted in the MSM. They seem to feel that a great paying job should just somehow show up; they don't need to actually make an effort to get it or put in a few years to work up to it.
"the days of graduating from high school with no marketable skills and landing a job that provides the requisite ojt[?] are mostly gone."
I don't think those days ever existed. Back in the day - people used to graduate high school with marketable skills. I don't know if you're old enough to remember shop class and vo-tech, but there were even classes to teach girls shorthand, typing and basic bookkeeping so they could get jobs as secretaries. Yeah, I know, the good old days weren't always so good, but people DID graduate from high school with "marketable" skills.
The world has changed. The dumber half of America used to be able to support a family on one 40-hour a week manufacturing job. Not everyone can write code or practice medicine. Those Americans who can no longer find lucrative work on an assembly line are stuck with $11/hour jobs bagging groceries and staffing the night desk at the Courtyard by Marriott.
Either we take money from hedge fund managers and pay these grocery baggers and night clerks $22 an hour, or we let the market run its course and we slide into a nation full of low-paid service workers serving a relatively small class of highly compensated professionals.
It's our choice. Really. Just because the hand's invisible doesn't mean we can't shake it or push it gently aside.
I think that if he could have the manufacturing job his father had -he would certainly give up all of the cheap (albeit dubious quality) goods at Walmart.
