Everyone has to be rich now??

[Peteyboy]

I'll disagree based on the data. The debt is an issue, no doubt about that. But rising debt hasn't led to higher inflation. Take a look at annual inflation in the US over the past century. Other than the 2022-23 global inflation spike resulting from the bounce back from the pandemic, inflation hasn't been anywhere near the 1970s (post-1950) peak.

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Fair to say the tax brackets have shifted significantly since the 50's. The ultra-wealthy don't pay diddly squat now.

 

[GregC]

I remember a TBer who used to preach the bootstraps homilies. (Inactive for a few years now.) I later realized he married a doctor. I guess that's one way to do it.

 

[moon-bass]

It absolutely impacts it, which I was going to mention. We are a product of many factors. I think the biggest gift that poverty gave us was the early realization that we couldn't buy our way out of challenges in most cases. If a sewer pipe breaks under your trailer, you can't call a plumber to fix it. You're gonna be the one under the house crawling through sewage to fix it. If the car breaks, you gotta figure it out. There's literally no other option. You either figure it out yourself, or it doesn't get resolved. It builds a self-reliance that is impossible to replicate when you have plenty. My kids will fortunately (and unfortunately) grow up in such a way that they'll never really know that mindset. They'll have to learn it artificially somehow.

Yup. Good old poverty-induced self-reliance I also don't waste anything (drives my wife nuts sometimes), I compost, recycle, and I take great care of my material possessions.

On the subject of finance and consumerism, being poor has negative habits as well (at least for me, YMMV) - when I started making decent money, I made it a point to buy a lot of the things (re: basses and amps) that I lusted after while growing up but could never afford. I also have a very deep-rooted desire to never be poor again - maybe that's a good thing as it influences things like saving, work ethic, etc.

 

[ac100X]

I live on Cape Cod, which up until the late-80's or so was someplace a middle-class guy like me could afford to live in. We bought our house in what I now realize was the last-gasp of affordability.The average 2-3 bedroom house is now $5-600K and climbing, which means no young families who didn't inherit their parents house can afford to live here, including my 4 sons. It's quickly becoming like Martha's Vineyard and Nantucket, a place full of wealthy people serviced by legions of working stiffs who have to commute from ever farther off Cape. Sign of the Times as social and economic inequity gets more extreme every year.

Compared to California those prices are dirt cheep.

 

[moon-bass]

Bootstraps, folks.

Not everyone has the ability, resources, etc. to be able to do that. There's nothing wrong with asking for help or needing help.

Don't shame poor ppl.

 

[GregC]

Yes, but I wasn't talking about the lattes and avocado toast cliches. I am talking about structural issues. People can eat all the avocados they want.

If you look at the housing issue, it's a confluence of factors. It's partly consumer demand; people who are in a position to buy houses want "nice" houses, by which they mean big ones with lots of space around them. The way we sell houses, touring around multiple options, there's a psychological effect where you "fall in love" with the "nice" house and then the humble little ranch feels like a let down, so you run yourself into debt you shouldn't so you can be "happy" with your decision. But there's also a provider issue; contractors prefer to build bigger houses because they get a higher profit margin on them. As a result, there's less modest-sized housing on the market in the first place, which gets scooped up quickly, and the limited supply pushes prices up.

High interest rates since COVID have been an attempt to keep inflation at bay, but in housing, it means that if you got a place at a low rate before that (as we did, in 2017), now it's hard to sell because you'd take a bath getting a mortgage at the new, higher rates on whatever you move to. So people don't sell, there's less inventory on the market, smaller supply -> higher prices. People can't afford to buy under these conditions so they rent, now there's higher demand on rentals, and off we go.

There was an interesting article a while back on walkable communities. Basically, they're better in just about every way. City planners always advocate for them. But in America, consumer demand is against them. I once asked a class (for different reasons) what they envisioned when they thought of a "nice neighborhood." The recurring answer that surprised me was, "Space between houses." The article I spoke of pointed out how the American insistence on space between houses leads to suburban sprawl. Not only is it bad for the environment; it also demands more public services. You need to do more road maintenance so people can access all those spread-out houses, water and sewer systems need to stretch longer distances to them, power lines too, and so on. This all costs more. It also means people need to drive everywhere, to get groceries, to get kids to soccer practice, to go to church, doctor's appointments, whatever. Which means they "need" more cars per household and burn more gas (and wear out the roads more, requiring more tax-funded road maintenance...).

I had the good fortune to live in Germany for a year (2004-5). Germany isn't paradise and has its own challenges, but the comparison was revealing. We lived in a suburb of Munich with 14,000 people. We could walk pretty much anywhere in town in 20 minutes and do anything we needed without a car. The kids walked to school. The commuter station for the train into the city was a five-minute walk. We lived the entire year without a car, except for renting a van twice at the beginning and end of the year to pick up a couch from friends and then to return it. I don't know any town of 14,000 in America where we could do that. Everything was built in a compact fashion, green space was public parks around the fringes of town and community gardens rather than everyone having their own yard, yet we never felt like we lacked privacy.

So my point is not that anyone who wanted could do just fine on a minimal income if they turned off Netflix and stopped drinking lattes. This IS a structural problem. But part of the problematic structure is consumer behavior, which comes from unexamined dysfunctional cultural values. We do ourselves a lot of damage.



Oh, don't! I'm a medieval historian, and there actually was no such thing as a "feudal system," and what modern society is suffering from is not a recurrence of anything medieval.



I often get history students writing essays attributing this or that historical figure's actions to "greed." If I get a wave of them, I ask the class a question; who wants to have more money than they have now? Everyone raises their hand. So, we're all "greedy." That's kind of baked into human behavior, but it doesn't explain why one era is different from another, precisely because it is universal.

But another way to think about it is that we label people "greedy" when their pursuit of "more" seems to step outside of accepted boundaries. Stay within the bounds and they're just admirably "hard working," "ambitious," or "driven." That can help us think more analytically about all this. The question then isn't, whether or not they're "greedy" (since we all are), but what are the boundaries? How has society defined them, marked them, how is it enforcing them (if at all)?

An ethics professor I once had was fond of citing a verse from the Bible, commanding landowners not to harvest their fields right out to the very edges. In other words, they weren't supposed to squeeze their resources for the maximum profit; they were supposed to take enough to prosper, but leave a little around the edge for the poor to glean. There are endless stories like in the movie You've Got Mail, not just cute little schmaltzy bookstores but family-owned bodegas and drugstores and hardware shops (and guitar shops) and things, that got driven out of business not because they weren't profitable, but because they weren't AS profitable as something ELSE, so they got squeezed out by landlords eager to maximize their rent incomes. Or other outside players.

A lot of people have posted about "late-stage capitalism," but I think the problem is not the existence of capitalist institutions and markets, but that we've let them operate in a void, untrammeled by balancing institutions and traditions that would keep them in bounds.

For all the talk about consumerism and bigger houses, there are two important factors that rarely seem to get mentioned in these discussions. One is the stratospheric rise in health care costs, leading to higher premiums and copays as well as arguably worse coverage. I don't have the numbers handy, but a lot of personal debt is the result of this trend.
Student loan debt is another big issue. As you well know, tuition costs have far outstripped income growth as well as grant and scholarship money. And while I've seen a lot of "you don't have to go to college" advice dispensed online, it seems like more jobs than ever require a bachelor's or advanced degree. Not getting that paper stacks the odds against getting a good-paying job.

 

[fdeck]

Say what you want about the French, but they knew how to deal with an out of control aristocracy.

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From what I've read, only a small fraction of people murdered during the Terror were aristocrats.

 

[TOOL460002]

It absolutely impacts it, which I was going to mention. We are a product of many factors. I think the biggest gift that poverty gave us was the early realization that we couldn't buy our way out of challenges in most cases. If a sewer pipe breaks under your trailer, you can't call a plumber to fix it. You're gonna be the one under the house crawling through sewage to fix it. If the car breaks, you gotta figure it out. There's literally no other option. You either figure it out yourself, or it doesn't get resolved. It builds a self-reliance that is impossible to replicate when you have plenty. My kids will fortunately (and unfortunately) grow up in such a way that they'll never really know that mindset. They'll have to learn it artificially somehow.

I think there is a balance because that can both build resilience and induce trauma. The Great Depression pushed my grandparents on one side to be overly austere but I personally know some examples where it did the opposite and led to hoarding. Mixed bag.

 

[klyph]

The other is that the household that a 50s salary supported was WAY more modest than a modern one. Middle-class families today generally need both partners working, which strains the schedule and stress levels and all that. But that's because we are living in houses TWICE the size of what they were in the 50s; new home construction in the 21st century literally has double the square footage of what it was 70 years ago. We also drive more cars; the typical 50s family only had one car, if it had a car at all (a much higher percentage of households didn't). I suspect you might be able to afford to support a family on a single full-time income today, if you're willing to raise three kids and a dog in 1100 square feet, only drive one car, and do without internet broadband or cell phones or streaming subscriptions or air conditioning or any of that stuff.

Sorry man, I realize you have some pretty nuanced views, but this still comes off as uninformed victim blaming. The base cost of building any permitted dwelling in any municipality ( at least in many parts of the US, not all) has increased exponentially in the last thirty years, without a single realized benefit to the owner or tenant. Nobody's house is saved from burning down or flooding by any of the administrative and building costs imposed by states and municipalities since the late eighties. Everybody builds as big as they can get away with because there is ZERO reward in doing otherwise. I'm sure that a 400.000$ build cost for a large home sounds really extravagant until you realize that a small house will still cost 300,000$ because of the INSANE building codes. especially here in the North- and then you're saddled with a home that is viewed as a "teardown" by a realtor when it's time to sell.
No Internet? No cell phone? How exactly are you going to find a JOB without "all that stuff"? What planet are you living on? In what century?
Gonna start your own business? Excellent! Hope you don't need any permits- The only meaningful ones I can think of are six figures for the PERMIT, before you break ground. Unless you want to be a barber. That's only a couple grand... but you had better be good, because there's plenty of competition from guys who couldn't afford the half million dollars in permits necessary to open a mechanics garage, body shop, etc.
The US has no real administrative law the way it exists in Europe or the advanced Asian economies- you can literally run a business that kills hundreds of thousands of people intentionally (see: the Sackler family) and never even worry about jail time. That is not possible in Germany or Japan. But the average entrepreneur can be financially prohibited from entering the marketplace by the little that exists, Usually with the fig leaf of "environmentalism" that a multinational can buy their way around. Of course, some businesses are SO polluting that they could never be based here no matter what, but of course feel the need to lie about it. The best example of this is Apple. Tim Cook literally gets millions of dollars per year to make up excuses for why his products can't be made here that have to do with wages, or some idiotic idea of a "education gap", but the real reason is that tens of millions in bribes and payoffs let them poison the air and groundwater in China, whereas the abatement plans and permitting to run that scale of electronics manufacturing in the US would run into the billions. Yeah, it's cheaper to employ the Chinese- but man, it's REALLY alot cheaper to poison them. But saying that won't drive sales...

 

[klyph]

From what I've read, only a small fraction of people murdered during the Terror were aristocrats.

Correct. Several waves of "revolutionaries" massacred each other. Napoleon became popular by exporting that sentiment. Better to kill some prussians or brits than your own countrymen.

 

[Major Seven]

You do realize these are two FICTIONAL TEEVEE SITCOMS, right?

TeeVee shows are not demographic data.

I still wish I could live in Mayberry. Or Bedford Falls.

 

[Major Seven]

Okay, you completely lost me with this. That's a ridiculous notion. Have you ever actually been poor? And not $200k a year poor lol. Food insecurity. Homeless. No healthcare. No clothes. Etc. like, poverty poor.

AND already 60 years old, sleeping outside and your old co-workers ignoring you now.

 

[Major Seven]

Compared to California those prices are dirt cheep.

Maybe, but I went camping in Wellfleet every year since the 70s. $6 campsite. Last time I went in 2010, $60. Can't even have a working class vacation there any more.

 

[pb9717]

I grew up in NYC area. I cannot afford to live where I grew up. I cannot afford to live in any of the residences I lived in during my tenure there. I have since moved to the Cincinnatti area. I paid less for the 1300 sq ft cincinnatti home I purchased in 2020, that i live in now, than I did in 2001 for my modest home in central New Jersey. Moving to the Midwest became the best chance for survival in my retirement. Like many, my retirement pension is meager. When I went to Social Security to discuss benefits, essentially my choice was poverty, or to continue working. I know I’ll now have to work another 5 years before I can get a SS income that I might be able to survive on. My next great fear is that it won’t exist when the time comes, or I’ll be asked to work for more years before I’m not penalized.

I do not know how folks survive anymore. My daughter is 35 and works two jobs to pay her rent. I do not know anyone that has a single income home. Something is wrong, and I don’t see how things will get better.

 

[TOOL460002]

This stuff also vastly varies. Example: My former neighbor (don't worry he's not dead) sold his land here (Santa Cruz, CA) and bought a place in one of the Carolinas and retired. He was cool with me roaming around when the transfer was happening. Dude traded a chunk of land with almost zero potential for building and minimal infrastructure in one state for a place to retire elsewhere.

I couldn't buy the home I mostly grew up in today, but I also don't know what I'd do with that kind of space. I've looked at what I could sell my current residence for (2bd 2ba) and it's in the seven figures area, but when I look at moving from Santa Cruz to somewhere else and using that same dollar amount it makes zero sense to move. It would be at best a lateral move. Probably backwards but cheaper. I like the ocean and the forest. And dislike heat. Where else am I going? Even if I could afford it... and I can't lol...

 

[12BitSlab]

I grew up poor. My mother was an alcoholic before I was born and my father was extremely violent.

My mother blamed me for my father’s violent outbursts (I believed her since I was only 2 or 3). I believed my father when he told me that my mother couldn’t control herself because of her drinking.

Today, I get around with a walker because of injuries suffered as a result of being beaten when I was a young person. Moreover, I still have physical scars because of the beatings I endured.

I started working part time as a musician when I was 13. At 14, thanks to being a musician, I started working full time.

When I was in HS, i took the Preliminary SAT as well as the standard SAT. I got a perfect score in both sections. I was required to retake the SAT two times because of my scores. I replicated my perfect score both times.

When I hear others say that I had privileges that others didn’t have, I ignore them. I didn’t have any privileges that others would recognize.

After I got a real job, a friend of mine and I started a new company based on InfoSec (i.e., Cyber Security) When my friend died in an automobile accident, I became President and CEO. I grew the company from $2.5 million per year to $186 million per year in revenue.

I made the decision to cut every employee in as an owner. Everyone owned stock in the company.

It is very difficult for me to hear that every company that has ever existed has screwed every employee. It’s simply not true.

———————-

Thanks to my wife who helped me type this message. I am dealing with the early stages of Alzheimers and struggle to compose a somewhat long message.

 

[pb9717]

I grew up poor. My mother was an alcoholic before I was born and my father was extremely violent.

My mother blamed me for my father’s violent outbursts (I believed her since I was only 2 or 3). I believed my father when he told me that my mother couldn’t control herself because of her drinking.

Today, I get around with a walker because of injuries suffered as a result of being beaten when I was a young person. Moreover, I still have physical scars because of the beatings I endured.

I started working part time as a musician when I was 13. At 14, thanks to being a musician, I started working full time.

When I was in HS, i took the Preliminary SAT as well as the standard SAT. I got a perfect score in both sections. I was required to retake the SAT two times because of my scores. I replicated my perfect score both times.

When I hear others say that I had privileges that others didn’t have, I ignore them. I didn’t have any privileges that others would recognize.

After I got a real job, a friend of mine and I started a new company based on InfoSec (i.e., Cyber Security) When my friend died in an automobile accident, I became President and CEO. I grew the company from $2.5 million per year to $186 million per year in revenue.

I made the decision to cut every employee in as an owner. Everyone owned stock in the company.

It is very difficult for me to hear that every company that has ever existed has screwed every employee. It’s simply not true.

———————-

Thanks to my wife who helped me type this message. I am dealing with the early stages of Alzheimers and struggle to compose a somewhat long message.

Your generosity towards your employees is the exception not the rule. And yours remained a private company. Once a company goes public, its pretty much over for th employees. the stockholders take precidant. Murca.

 

[klyph]

I made the decision to cut every employee in as an owner. Everyone owned stock in the company.

It is very difficult for me to hear that every company that has ever existed has screwed every employee. It’s simply not true.

Of course not, and I don't think anyone in this thread has said that (although some may have come close). But, you do realize that you were an outlier, don't you? Most small and medium sized companies try to do right by their employees, but vanishingly few will go to the length of establishing a co-operative compact. The problem in America is that most mid sized companies that have grown over time and have weathered downturns or bouts of mismanagement are repositories of material wealth that is easily plundered, but difficult to milk long term growth from. Sales, manufacturing, logistics, it's all hard work! Nobody with meaningful amounts of capital wants to work that long or hard to grow it. It's HILARIOUS to hear middle aged, middle class "bootstrappers" blame the young and the poor for being "lazy" when it's the investor class whose laziness is destroying America. It's like Hollywood movies- everything is a cannibalization of some old brand or idea because *that's how we make the most money with the least outlay*. I've seen this happen first hand in manufacturing. You'd be amazed at the number of successful manufacturers who sold their companies thinking it was the only way to preserve what they had built, only to see all of their employees out on their @ss within three years. What's even worse is when people with this mindset choose to acquire service based industries in order to debase them and engage in rent seeking behavior. This is happening with veterinarians, dental offices, medical imaging, etc. Ordinary people are paying through the nose for poor service because that is the business model.
I'm glad to know that someone who did right by their employees is a member here, but... you must know that your benevolence is not reflected by most practitioners of modern investor capitalism.
I had the opportunity to join a worker owned business about twelve years ago, but passed it up in favor of a job closer to home in a field I was experienced in. I can't say I "regret" it because I'm doing alright and playing gigs, but it was probably a short sighted and lazy decision on MY part! I'd be doing much better financially NOW if I had bit the bullet then. So it goes...

 

[definenredefine]

There's so much here and it's been heartening to see a civil conversation around what is a very sticky and nuanced topic (with a lot of interrelated topics as well.) This is why I like Talkbass.

Anyway, there are a few things I saw that I felt compelled to address -

We have the fattest poor population anywhere.

This isn't because poor people are just riding high on public assistance or don't wanna work or whatever other moral failing is unfairly attributed to them. Although I am well off, I used to live in a neighborhood that had a lot of impoverished folks close by. It was close to the town center, so I wanted to live there for more to do within walking distance. You know what wasn't in walking distance? Any store selling affordable fresh, whole foods. Plenty of places to buy food, yes, but pretty much only ultra-processed, overly sugary/salty, calorically dense crap that, while it meets the basic needs for people, also causes a wealth of consequences for people's health. Things like diabetes, hypertension, and yes, obesity.

There's always the argument of "hey why don't they just go to the grocery store?" Well...2 things - first, what if you don't have reliable transportation? In my town, we have absolutely crap public transit, and a lot of poor folks don't have a reliable car, if they have a car at all. So how would they get to the store that has actual food, instead of food-like substances?

And second, why on earth would any reasonably dense urbanish area not have a grocery store within 10 minute walk? In my old neighborhood, you could walk to several bars and restaurants within 5-10 minutes, but the closest grocery store is 2 miles from that neighborhood. My town is around 120,000 people. By comparison, I once went to small town (12,000 people) in between Prague and Brno, Czech Republic. There was a Lidl right in the middle of town, easily accessible to everyone.

The term "food desert" exists for a reason.

Our system works better than anywhere else. Maybe not every single person, but on whole, yes.

I beg to differ. Take the example I provided above about grocery stores as just one counterexample. As another, public transit. As yet another, our nightmarish healthcare system (more on that below.)

That doesn't mean that America is bad, but our system objectively doesn't work better than anywhere else.

One is the stratospheric rise in health care costs, leading to higher premiums and copays as well as arguably worse coverage. I don't have the numbers handy, but a lot of personal debt is the result of this trend.

I work in healthcare and boy howdy is this true. We get a significant number of patients who are hospitalized because they can't afford to refill their meds. It's so heart breaking.

At the same time (and going along with the predominant theme of this thread), hospital staff on the ground (nurses, RTs, techs, medics, etc) are increasingly taking heavier patient loads for the same amount of money. Meanwhile, the C-suite is given increasingly more money because they made the system "more efficient" (read - cheaper.)

Student loan debt is another big issue. As you well know, tuition costs have far outstripped income growth as well as grant and scholarship money. And while I've seen a lot of "you don't have to go to college" advice dispensed online, it seems like more jobs than ever require a bachelor's or advanced degree. Not getting that paper stacks the odds against getting a good-paying job.

As I've gotten older, the idea that education should be a means to an end really started to bother me. Education should be the ends! People should learn things just because it's neat to learn about neat things! And it should be free for all because an educated citizenry benefits everyone.

 

[djmay]

I grew up in USA, lived in Switzerland for 9 years, then Germany for 3 years, then returned to Switzerland in 2017. My quality of life soared when I moved to Europe. Switzerland and Germany are not perfect, but compared to USA they are paradise. Everyone has access to healthcare, good grocery stores and public transportation. I do not own a car; when I need one, I rent. Europe also takes existential threats, be they environmental, social or military, more seriously. It is a tough world out there.