I received this query from someone we will call AK via e-mail:
Was wondering if you might be help with a mental exercise I’ve been toying with the last few weeks pertaining to the roll of timeframe of consequences, and whether we will be hit with a shock or slow-burn when gravity finally kicks in.
I’ve had the opportunity to work in a position where I’m able to interface with many different people, for a very large electronics company. Three very distinct themes come to mind when I attempt to summarize my experience thus far;
1) My generation (recently graduated from college or currently enrolled) will be the first generation in American history that will experience a decreased standard of living, when compared to the previous generation.
2) The current investment/return ratio (starting salary, post-graduation) on an undergraduate education for most major Universities has completely fallen apart. A significant portion of my friends are either doing Teach For America, Peace Corps, or making $11/hr. Their parents, with the same level of education 25 years prior, were able to leave and find a job with a $50K starting salary, no sweat.
3) The gutting of the middle class will continue until there’s nothing left.
Obviously, these are some very broad observations to make from a technical sales role, but I feel privileged to have this experience. It has truly opened my eyes to how grossly dysfunctional things are at the ground level. The boomers are particularly breathtaking; the modus operandi is ‘buy first, ask questions later’. I have never encountered or have read about a system in nature in which this type of behavior is sustainable.
This isn’t to say opportunity has left completely. On the contrary, times have never been better for the truly brilliant. A good friend has been the recipient of venture capital funding, and his company has received a few (very) large rounds of Series-C funding. Again though, the truth can be found in the numbers; compared to my one friend who has ‘made it’ vs. those making roughly $11-15/hr., how does this historically compare to my parent’s generation? Not favorably.
The grand unified theory on this, which with more scholarship, I feel woud yield a few Professor Emeritus positions in the few remaining Political Science departments that can still afford such chairs, is that the United States stopped functioning as the country we currently know directly after 1971, when Nixon axed Bretton Woods system of exchange. When we left the gold standard, we abandoned truth, and deferred consequence. The largesse the country had been living off of post-WW2 had vanished, and real wages have been declining ever since. The proliferation of nuclear weapons has boxed us into waging satellite wars over countries with abundant natural resources, in an effort to keep pumping a necropsied heart with epinephrin.
Another lesson I’ve learned is that the Universe over the long run is a perfectly balanced and reflexive system. Which brings me to the question I’ve been pondering for the last few weeks; since humans deal extremely poorly with unknowns and typically chose to defer consequences, should we continue in the attempt to bring the truth of transgressions to the public, or would our efforts be better spent preparing ourselves for the forthcoming panic, and to establish release mechanisms that may alleviate the ‘creative destruction’ that may be wrought (wrongfully) on those who have attempted to enlighten. To be frank, I sometimes worry that innocent parties at the margin might be swept up in the fervor when emotions are finally released.
Although AK’s focus shifts away from the problems of young people, the way the economy is limiting their vistas is really disheartening. I recall one of my Japanese colleagues telling me how the lost decade was “killing the dreams” of young people because so few could find real jobs (many were temps) and even those who were fortunate enough to secure a position were faced with a career of little in the way of pay increases and constrained opportunities. And the poor employment prospects have long term implications: not just in terms of career development and satisfaction, but their finances and mental state.
I’m a good bit older than you, and I don’t see the end of Bretton Woods as the turning point you do. Johnson lied so often and so badly to the media that the press started using the expression, “credibility gap.” Bretton Woods was abandoned due to stresses that had been building up for years. The root problem was running big deficits in a period of growth; that was due to Vietnam and the space program (hugely costly, people forget about that) and the war against poverty. That set the inflation in motion.
You need to read Jim Hamilton on the gold standard. Contrary to what its fans would lead you to believe, countries cheated on the gold standard all the time. They’d go on and off it and revalue. And the vaunted “stable value of money” was achieved by a great deal of short term changes in the inflation rate, from inflation to deflation, and fairly large changes by modern standards. But it is curious that Nixon chose to go off BW rather than just devalue. This might have been due to the input of Milton Friedman. I haven’t heard a good explanation.
The problem with preparing for social upheaval, I think, is that it tends to involve survivalist retreat. For people who might enjoy going off the grid and being closer to nature, that might have some appeal regardless. But one of my friends argues, “When the hegemon goes down, there is no place to hide.”
I wonder what answers readers can provide to AK’s question: “Should we continue in the attempt to bring the truth of transgressions to the public, or would our efforts be better spent preparing ourselves for the forthcoming panic?” Or are there other options you regard as more fruitful?