Monday, February 10, 2020

Crises Crisis

Since everything today is deemed a crisis, we are having a crises crisis.

The media loves a good story -  that will get you to click.   And sadly, no one is going to click on a story that says only marginal changes are occurring in our society. They have to announce a crisis is at hand in order for people to take notice. Unfortunately, this means people no longer can distinguish between what is a real crisis and what is it made up one.

This recent article in the Atlantic is a case in point. The article proclaims that we are in an "affordability crisis" and even though the economy is doing well over the last 12 years, Americans are suffering.  Not merely suffering - they are being bled dry! They throw around a lot of specious statistics and claim these are the result of the "affordability crisis."  For example, they make the bold statement that we have become a nation of renters because home ownership is dropped from 70% to 65%, a measly 5% change.

Of course, there is no analysis as to whether this minor trend toward more people renting might be explained by elderly people ditching their homes, or perhaps a housing bubble making it more advantageous to rent than buy.   And of course, they trot out statistics about the cost of housing in San Francisco and New York, as if these are somehow relevant to the rest of the country.  It is akin to how the media discusses the cost of college by trotting out the tuition levels at Harvard and Yale.  I guess if you are member of the media this is where you go to college.  Anything less is a trade school.

Of course, in stories like this, it is considered taboo to bring up actual facts. For example, what about the person pleading poverty or claiming they "live paycheck-to-paycheck" but in fact has spent thousands of dollars on tattoos, piercings, or hair extensions?   Or maybe they put bling rims on their car, or have the latest iPhone and expensive cell phone plan?  These are all things that I can't afford, so why should I feel sorry for someone who has them?  These issues are never brought up in articles like this, even as the person profiled in the weep-fest has his face covered with $5000 worth of tattoos.  It is akin to the Appalachian Princess Phone.

In addition to this idiotic article in The Atlantic, there are other instances where the word "crisis" is thrown around, and it really is meaningless.  Social security has been "in crisis" since I was born.  I've been told my entire life - 60 years now - that Social Security will be bankrupt next year.  Next year is when Elio is supposed coming out with his three wheeled car and I'm pretty certain that's not going to happen either.

Simply stated, there is no complex formula for figuring out Social Security. Money comes in, and money goes out.  In order to fix the so-called problem, all you have to do is increase the amount of money coming in, or decrease the amount of money going out.  And probably one or both solutions will be tried in the near future.

The other part of the equation is almost laughable.  People say that Social Security is going bankrupt and that the so-called trust fund will run out in 2030 or 2040 or 2020 or wherever.  However, the so-called trust fund is illusory.  Money comes in through payroll taxes into this trust fund and is immediately replaced by an IOU from Uncle Sam. In other words the money just mixes in with a general tax income of the United States.

This so-called trust fund is just a number representing the amount of money that is a surplus in the Social Security scheme.  When this number reaches zero it doesn't necessarily mean that Social Security has to stop paying out, only that the government will do what it does best - deficit spending.    If we can pay for billion dollar defense programs through deficit spending, I'm sure we can meet Grandma's Social Security payment the same way.  Instead of the government borrowing from Social Security, Social Security can borrow from the government.

There you go. Crisis averted.  You can thank me later.

But what about the national debt? There's another crisis that's been going on since I was born - 60 years ago.  Republicans used to trot out a "debt clock" which had numbers that scroll an alarming rate.  They argued that we would never pay off our national debt because of prolific deficit spending by Democrats. You notice lately the Republicans haven't been trotting out this debt clock very often, although I suppose if a Democrat wins in November, they'll dust it off.

Like Social Security, the national debt is the same deal - money coming in and money going out. We can reduce or eliminate the deficit - as we did during the Clinton administration - and actually pay down this debt. There was no real rocket science involved, Clinton cut the defense budget and cut some welfare programs and the economy improved and the amount of taxes collected increased.  More money in, less money out.   You increase spending and cut taxes, it isn't hard to figure out what happens next.

These are not impossible things to do, they just take some political will by both of the parties. We spend more on defense in the next 8 largest militaries in the world combined.  Trump has claimed he's going to withdrawal from foreign wars, but he shows no real propensity to do so - or cut the defense budget.  Far from it, in fact.

Homelessness is another so-called crisis that's been talked about since the late 1970s.  In recent years, people are talking about crisis of homelessness in San Francisco and Los Angeles which they claim is reaching epidemic proportions. I should also note that the term epidemic proportions is probably also been overused in addition to the word crisis. As the world experiences an actual epidemic, we understand the difference between gradual shifts and changes and the exponential rate of increase that occurs during a real epidemic.

The reality of these so-called homeless crisis is less than 1% of the population United States is homeless at any given moment.  Actually it's closer to one tenth of 1%, but even those numbers may be skewed.  As I noted in another posting, children are counted as homeless if they're living with their grandparents or in a trailer park or staying the night in a motel or hotel.   By this definition if you take your kids to Disney World they're temporarily homeless while you're there.

The media tries to paint the homelessness problem as a matter of home affordability - again pointing to the high cost of real estate in San Francisco and New York. But the reality is most homeless people have mental health or drug problems and do need help, but not necessarily a free house to live in.

The point isn't that homelessness isn't a problem - it is, particularly for the people who are forced to live near these homeless encampments and deal with the rantings and ravings of crazy drug-addicted people who shit on the sidewalk and steal their things.  It's a problem, but not a crisis. And it's only been made a problem because people refuse act or use political correctness as an excuse not to act.  We can't discipline these folks or force them to move into shelters or get jobs - that would be cruel.  Letting them live in a tent under a bridge on the other hand, is A-OK.

In the 1970s we emptied out all the mental institutions and closed them down on the premise that these were cruel and inhumane places and that the mentally ill would be better off as outpatients receiving heavy doses of medications. Democrats supported this is an act of compassion. Republicans supported it as a way of cutting the budget and also supporting their friends in the pharmaceutical industry. What got us in the situation we are in today was touchy-feely politics. More touchy-feely politics isn't going to solve the problem.  And claiming something is a crisis when it isn't, isn't helping matters any.

Student loans are the another thing that is deemed a crisis, although it's been going on for well over a decade now.  The term crisis again has been misapplied.  Usually a crisis means something that is come to a head and has come on rather suddenly. The Cuban Missile Crisis for example, was a real crisis.  We were pushed to the brink of nuclear war and people seriously thought the world would end in a matter of days.  It wasn't a gradual thing we were living with for two decades.

Student loans on the other hand are not a crisis. People willingly sign up for these loans and don't think through the entire process.  If you're going to a regular (not-for-profit) school and getting a degree that has the least some modicum of usefulness to society, and you don't borrow more money than you need, chances are you will easily pay off your student loans within 10 years of graduation.  And the average amount of the student loans is around $25,000 to $35,000 - hardly more than the cost of a fairly plebeian new car these days.  This is not a crises.

But again, the media likes tell us this is a crisis by cherry-picking individuals who went on to get master's degrees in Useless Studies and ran up $100,000 or more worth of debt.  Some of the examples that used are laughably ridiculous.  I recounted before about how one media outlet bemoaned the fate of a woman to wanted to become a nun. She went to a prestigious Ivy League school and ran up a six-figure debt getting a master's degree in religious studies.   She later found out that the nunnery doesn't require any sort of college degree in order to become a nun and what's more does require that you don't have any debts before you join. Seems to me that somewhere along that six year journey through college she would have figured that out, perhaps by maybe even calling the nunnery one night and asking them a couple of questions.  Smart people can be really dumb - or maybe the whole "nun" thing was just a chance to play victim.

Are student loans a problem? You betcha. But mostly a problem caused by people who don't think through the process of college and whether a college education is worthwhile and whether there are cheaper ways to obtain a college education.   And after more than a decade of this being in the news, people today are still signing up for these college loans, probably encouraged by the fact that most political candidates are promising them they will wipe this debt out. That's the real issue there - when you start making promises that you're going to wipe out debts, people will start taking on more debts they cannot pay off.  I am sure right now and some dorm room somewhere, between bong hits, a student is holding forth about how Bernie is going to pay off all his debts, so he's not worried about it.  Shame on Bernie for leading people on like this - and Elizabeth, too!

The problem with calling everything a crisis is that people get crisis fatigue.  In the media it is posited that every damned thing that happens every day of the week is a crisis - and people become immune to the term. Pretty soon, one of two things happens. First, people start to assume that just everything is goddamn awful and falling apart and the world is going to hell in a handbasket - which is not necessarily true.  Second, people cannot distinguish between a real crisis and mere ordinary problems.

Of course, I know this isn't going to change anytime soon. People are idiots - look around you.  So long as we keep clicking on these clickbait stories about "crises" and keep referring to things ourselves as crises, the term will become diluted to the point where getting out of bed in the morning will be deemed a crisis.

In other words, once again, the problem is back to us. We can blame the media for using these clickbait titles to get us to read their articles and watch their advertisements, but it ultimately is up to us not to click on these things and throw the term "crisis" around.  We have only ourselves that is to blame.

* * * 

Of course, it is human nature to put off for tomorrow what can be done today.   We wait until things are at a "crises" level before acting on them, because quite frankly, we have enough on our plate every day.  I think also, humans let things rise to "crises" levels before acting, as when a real crisis occurs, you can do things you can't do in a non-crisis situation.  The current corona virus epidemic is a case in point.  Under ordinary circumstances, you cannot imprison people for two weeks because they may have been exposed to a virus.  But in the case of a readily transmitted virus - that can be caught by breathing the same air, extreme measures are needed.   Later on, once the crises is averted, no doubt the naysayers will pipe up and say everyone over-reacted.

Maybe that is why the media - and organizations - posit things as "crises".   If they didn't, there would be no impetus to act.   After all, if something is merely a "problem" and not a "crisis" then we can always shuffle that off to "tomorrow" - right?    If The Atlantic can convince enough people that the wealthiest country in the world experiencing the longest bull market in history with record low inflation, unemployment, and interest rates is in "crises" then maybe socialism doesn't sound like such a radical thing.

Well, they can try, anyway.