Why This Recession?

Part I:  World Population

          Do you believe you know why we are in this recession?  Do you fall in with conventional wisdom, which puts the blame on toxic mortgages, or fiscal irresponsibility in government (including the Bush tax cuts, or not), or the greedniks on Wall Street, or China’s unfair currency and trade policies, or consumers getting too far into debt?  Is income disparity to blame?  Are out-of-control health care and entitlement costs?  Any or all of these, and more, could be pointed to as the catalysts for the economic straits we are in.  But I have a hunch that the problem is deeper than it appears, that these factors are symptoms, not true causes.  To understand why this particular recession occurred, and was inevitable either now or a little later, one has to look at deeper systemic globalized problems. 

            One underlying problem is excessive population growth, not only in terms of the sheer number of human beings currently on the planet, but also in terms of the speed at which the population has grown in the last century, and especially in the last 60 years or so.  Around 10,000 B.C., there were a million or so people on the planet. By the beginning of the common era, there were around 300 million people.  At around 1800 C.E., we had reached approximately one billion.  In other words, it took us approximately 12,000 years to go from 1 million to 1 billion human beings living on the planet, or put another way, to grow by a factor of 1000.

            The nineteenth century saw the human population almost double, and the twentieth century saw the population grow by a factor of more than 5, so that by 2000, the population had reached a little over 6 billion.  In 2010, we are about to break the 7 billion mark, i.e., we have added nearly a billion in a mere decade, whereas it took us twelve millennia to reach our first billion.  Although population increase seems to have slowed down and may soon (by 2050 perhaps) stabilize at between 9 and 10 billion, the effects of such rapid growth should not be left out of economic (as well as political and environmental) discussions.  It may be that once the population does stabilize, solving our many population-based problems will be possible, but in the meantime we should consider the effects that such rapid growth has had on our current, rather than our future, situation. 

            Broadly speaking, the rapid increase in population over the last century or so has had numerous large effects on agriculture and the environment.  Naturally, all these people need to be fed, and while temporary solutions to food production problems have in fact increased agricultural production worldwide, those improvements have consequences that go beyond mere bushels and pounds produced.  For example, agricultural output has increased significantly because of new agricultural technologies, but with the unintended consequences of increased soil loss and water pollution (with significant effects on the productivity of the oceans, which are poisoned by runoff from fertilizers and animal wastes).  More relevant to the economic issue, however, is what these technologies have done to traditional rural populations.  To be cost effective, the new technologies and methods require large-scale farming, which has in turn led to urbanization of traditional farming and peasant peoples.  In the United States, for example, only about 2% of our present-day population is farmers, whereas in the mid-nineteenth century, about 90% of U.S. residents made their livings by farming.  Most of us live in urban or suburban areas today and buy our food at supermarkets rather than growing it ourselves.  We therefore have little real sense of Nature or the land or of what it takes to grow the food we eat too much of—not to mention how much we throw away.  More importantly, however, the ways we do make our livings have unobvious effects on economic conditions (which I will get to a bit later).

            Similar trends occurred in other countries of what we now call the developed world, and historians of the industrial revolution have written much about the disruptions caused by this mass migration from the farms and villages to the big cities (made bigger by the influx of unskilled and uneducated workers from the countryside).  Now these trends are occurring in the developing world, in much the same way and with many of the same consequences.  Land is being consolidated into the hands of a few, mostly corporate, owners; marginal land, including wilderness lands in such places as South America (the Amazon rainforest) and Africa, is being forced into artificial productiveness (often as a prelude to desertification); traditional food crops and animals, in all their variety and hardiness, are being replaced by fewer species and less genetic variety as developing-world farmers plant commercial, usually patented varieties of a limited menu of food crops.  Meanwhile, peasants and small farmers (for whom life was never a picnic in the first place) are being displaced and migrating in their millions to the new, rapidly growing mega-cities of China, Mexico, Africa, and other countries.  Because these migrating agricultural peoples are little prepared, whether by tradition, culture, education, habit, or temperament, for urban life, they usually find meagerly-paid, sweatshop-style work, if they find work at all.

            At the same time as agriculture is being consolidated and requiring fewer laborers, the same kinds of technologies (i.e., industrial rather than craft) are growing, requiring exactly what the depopulation of the countryside is supplying, an abundance of cheap, powerless, unskilled labor.  Thus third-world countries undergoing their belated industrial revolutions can undermine the manufacturing economies of first-world countries, where labor unions and other late industrial measures had forced industries to pay workers close to what their labor was worth (at least in human quality-of-life terms), thus lowering consumer prices, often quite dramatically.

            One might think that lower prices for consumer goods are a good thing, and many economists and pundits argue exactly that.  Such arguments forget, however, that “consumer” is an abstraction, a linguistic category convenient for thought and explanation, but not a discrete entity.  After all, someone who is a “consumer” must also be a “worker,” because in order to consume, one must have money to buy—and proverbially, money does not grow on trees.  So, if manufacturing jobs move overseas in significant numbers, and therefore decline here, a lot of people are either out of work (more or less permanently) or they need to find some other occupation. 

            Not too long ago, it was conventional wisdom to assert that the American economy could grow as a service economy; in fact, we were told not to worry about all the jobs that our corporate and political wise men were shipping abroad, for while other countries did the grubby work of manufacturing things, America would supply services and innovation, and grow even richer as it did so.  There was, superficially, reason to think such a thing:  Although the United States has, since World War II, had its boom-and-bust cycles, generally speaking the people thrown out of work in a series of recessions were largely those engaged in some form of manual rather than mental labor:  factory workers, mainly.  People in the service “industry” were for the most part immune to these downturns.  Not so today.  Layoffs and job losses have occurred across the job spectrum, not just in lower-end or non-service sectors.  Bankers, information technology people, teachers, bureaucrats, managers and accountants—all have been hit, and men have been hit harder than women, often leaving families with wives/mothers as the sole wage earner in the family, and since women still on average make less than men (about 83 cents to the dollar), many middle-class families are living on very reduced incomes.

            Thus, one of the implications of rapid population growth and the pressures that growth places on economies is the transfer of low-skilled manufacturing jobs to developing and third-world countries, the consequent undermining of the blue-collar middle class in developed countries, and the urbanization of formerly peasant populations. 

            As these new urbanites gradually improve their incomes, acquire better educations, and become more accustomed to urban lifestyles, they increase their demands for better wages or salaries, better homes and apartments, better diets (including more meat), and more consumer goods (including automobiles).  The pressures on resources and on the distribution of wealth increase the competition with developed-world economies, including that of the United States.  The United States absorbs about 25% of world economic output, but has approximately 5% of world population.  We use close to 25% of world oil output as well.  As the middle classes of China, India, Brazil, Mexico, and other large developing nations demand more consumer goods and more automobiles (plus the trucks to transport those goods), they are going to want a bigger share of oil output.  Even if there is no impending oil production decrease, the supply relative to demand per oil consumer will decrease.  That will raise the price of gasoline and lower the percentage that America can purchase. 

            Thus, because of population pressures, even if things remain the same, for Americans they will change.  What was once cheap will be expensive; what was once seemingly assured (increasing prosperity for all) will be uncertain; what was once taken for granted (America as #1) will be contested by other economies and political systems.  And what only America could do, other countries will be able to do, too.

Part II: Education

          Conventional wisdom holds that a key (in some people’s minds, the key) to maintaining and improving the American economy is education.  Recognizing that many American manufacturing jobs have been shipped overseas and that many service operations can be outsourced as a consequence of the Internet, pundits and politicians have argued that the kinds of jobs remaining for the American worker are those which require a higher level of education and the intellectual skills that higher education is believed to instill in students.  Data showing the higher incomes of college-educated individuals is often trotted out to underscore the importance of post-secondary education to middle-class status and prosperity.

          Equally, as we look at competition from other countries, such as the rapidly growing economies of China and India, we have come to believe that our primary hope lies in continuous innovation in all aspects of our economy, and innovation requires smarts.  Furthermore, as competing nations improve their own education systems, they threaten to compete with us at higher levels of economic production, such as research, engineering, digital technology, financial services, and so forth.  Thus, politicians and philanthropists have been turning increasing attention to improving American education at all levels, and the Obama administration has made raising the percentage of Americans with a college degree a priority and wants to regain world leadership in that regard by 2020.  Everyone also is in agreement that K-12 education must be transformed, restructured, or made more competitive to ensure that children are well-prepared for college and to increase the high school graduation rate (which now stands at less than 70%). 

          To that end, President Obama has promised to increase funding to colleges and to make tuitions more affordable.  As part of the federal economic stimulus package, the federal government has sent billions in grants to community colleges and universities, as well as to K-12 school systems (even as state governments reduce their education budgets).  Private philanthropic organizations have provided funding to innovative education projects.  Meanwhile, educational institutions are being pressured to show better results, and teachers and their unions have come under fire for being lazy and too entrenched.  Both governments and private citizens want more accountability.

          Such goals seem laudable, but is it really true that improving education or increasing the number of people with college degrees will ensure that the material prosperity that Americans are used to will continue, let alone increase?

          There is first the problem of cost.  Education is not cheap, even when it’s not all that good.  The federal government’s education budget is $63.7 billion, and the stimulus financing for education is $96.8 billion.  Education costs at the state level, nationally averaged, constitute 25% of state budgets for K-12 and 12% for higher education.  Add to this county and city education budgets, where applicable, and then the costs of private education—and the financial investments in education are indeed enormous.  Yet in the current recession, states and counties have been cutting back on education expenditures, simply because there isn’t the tax revenue to support them.  And angry anti-tax citizens wonder why they are paying so much to get so little, putting even more pressure on both the educational system and teachers and on politicians, to both reduce expenses and improve results.  So, to a degree, federal increases in funding are being offset or effectively cancelled out by state and local decreases.  This does not bode well for the Obama administration’s 2020 goals.

          Second, there is the problem of the students.  While American ideology maintains the myth that all are created equal, the fact is that people vary widely, not least because life itself is a very unequal affair.  As infants, we start from unequal positions in the race, some starting well along, due to family wealth and status for example, while others start far behind.  We are also influenced by the larger culture as well as by our more immediate social environments.  And as individuals we have different levels and kinds of talents, intelligence, motivation, and opportunities.  But in general, we are all funneled through the same basic educational system.  In any classroom of thirty or so students, there are thirty different personalities, interests, families, incomes, and experiences, yet all thirty are expected to reach the same outcomes by the end of the school year or semester.  This does not happen, and the consequences of it not happening affect not only the rest of the students’ lives, but the overall society and economy as well. 

          One consequence of the disparity (or, if you prefer, diversity) among students, coupled with the increasing obligations to obtain at least some post-secondary education, is that colleges, and community colleges in particular, take in a large percentage of students who are not “college ready.”  Others have explored the extent and significance of the number of first-year college students who need remedial instruction, so I won’t reiterate that here, but suffice to say, remedial education at colleges adds significantly to the cost of higher education.  For example, at the community college where I taught for many years, the administration estimates that remedial education costs $22 million per year, or 13% of the operational budget; but the return on that investment, in terms of successful transition to college-level courses and eventual graduation, is dismal.  In other words, a lot of money goes down the proverbial drain.  Pouring more money in might make a difference, but just how much more money will that take, and can we afford to invest so much?

          I can’t help but see an irony in all this.  Conventional wisdom says that, as other countries take over basic manufacturing, the United States can not only compensate but increasingly prosper as a service economy.  But one can hardly think of an “industry” more typically a “service” than education, nor one more dependent on “knowledge” and “education” for its own functioning—yet, to hear some tell it, one can also not think of a service industry less able to provide a reasonable, let alone good, return on investment than American education as it exists today. 

          And even if that return were reasonable, in terms of student success and graduation rates, will there really be enough well-paying service-sector, creative-knowledge-based careers for all those good students?

          The unemployment profile of the current recession suggests the possibility that there won’t be.  For example, the U.S. Bureau of Labor Statistics reported that the August 2010 total unemployment rate was 9.5%.  Unsurprisingly, high unemployment rates by occupation occurred in construction (17%) and durable goods manufacturing (10%), but what might be a little surprising is that service sector unemployment rates were high as well:  wholesale and retail trade (9.3%), information (9.7%), professional and business services (10.5%), and leisure and hospitality (10.8%).  To give a more specific picture, after the financial system debacle, Wall Street laid off thousands, and recent (October 2010) estimates are that another 80,000 layoffs are coming, due to slower than expected trading in recent months.  Microsoft laid off more than 5000 workers in 2009, and Yahoo has been laying off people piecemeal for over a year.  Service sector jobs were harder hit in this current recession than in previous post-World War II recessions partially, of course, because they constitute a larger percentage of the overall American job market than in the past.  But this also shows that service sector jobs are not insulated from recessions, whatever their causes, as some prognosticators seem to have thought.  As developing countries improve their own education systems, they will turn out more graduates with advanced degrees who will be able to create and innovate just as well as American graduates, and perhaps in greater numbers.  For example, if both the United States and China were to have 50% of their populations with bachelor’s degrees, China would have over three times as many individuals with such degrees as the U.S., because its total population is over three times as great.  In other words, services are no panacea for economic woes, and therefore neither is an educational system skewed toward preparing workers for service sector careers.

          The protracted period of dependency that higher education requires of young adults tends to delay the onset of adulthood (all too often even into the thirties) and the assumption of adult responsibilities and social contributions.  It also bores thousands of young people out of their minds.  Cheating, plagiarism, inattention, dumbed-down curricula, drug-and-alcohol assisted recreations, and so on, are more common on college campuses today than they were fifty years ago, when a much smaller percentage of high school graduates went on to college.  As bachelor’s degrees become more common, they become worth less (law of supply and demand), and consequently more people must further delay the start of their adult lives while they go on to get masters and doctorates.  That is an awful lot of people in prime young adulthood who are still more like children in their claims on the economy than like productive adults.  And if there are insufficient jobs when they graduate, they may well wonder if they have wasted their own time and money, not to mention the resources of society.

          Thus, while education is a good thing, something that not only prepares for a career but enriches a person’s life, it is not sufficient to solve the fundamental problems of the American economy.  We need to continue to support and improve our education system, but we should not expect it to solve all social and economic problems.

Part III: Surfeit

          In this current recession many middle-class Americans are re-discovering an old truth:  there can be too much of a good thing.  One can have too much house, too many cars and big-screen televisions, too many cell phones, computers, and electronic gadgets; too much food and too much debt—too many consumer goods overall.

          Since the end of World War II, we have grown accustomed to the notion of endless more, but now may have to get used to the idea of enough, just as our pre-war ancestors did. 

          Given that this recession is due in large part to an unprecedented real estate boom-and-bust, let’s look at the history of housing in a little more depth, not in terms of prices but square footage.  According to the National Association of Builders, the average square footage of American homes in 2004 was 2,349.  In 1950, by contrast, it was 983.  The average 1950’s home had one bathroom, and children generally shared bedrooms,  even though family size was generally larger back then, so for example three brothers might well share a single bedroom (hence the popularity of bunk beds).   Furthermore, closets were much smaller, “reach in” rather than “walk in.”  Clearly, people simply did not have as many clothes then as they do today, and clothes were meant to last longer, so storage of clothes that were “old” and no longer worn or, even, never worn was not an issue.  (Remember “hand-me-downs”?)  People got by on less living space and with fewer changes of clothing.

          One has to ask what the difference in square footage of homes suggests about how people lived then compared to how we live now.  As someone born in the late 1940’s, I can speak to that question from direct experience.  In the 1950’s and 1960’s, we spent a lot more time outside, even in the depths of Minnesota winters.  Outside was play, inside was chores and boredom.  For adults, outside was work and errands and socializing, gardening and picnics, and just going for a walk.  We ate plenty, but fat people, kids or adults, were rare.  We walked to school:  just a few blocks to elementary school, but about a mile or so to junior high and high school.  Walking a mile did not strike us as too far—in fact, we hardly noticed the distance because we were meeting up with our friends as we went, and on the afternoon walk home, we could stop in at the mom-and-pop stores that marked the major intersections. 

          At home, in the house there wasn’t all that much to do.  Television did not dominate our lives, as there were only a handful of broadcast stations, and lacking portable digital music devices, we had to actively place a record on the record player if we wanted music, and get up to turn the record over, and a lot of us took music lessons—piano, violin, trumpet, etc., and so could produce our own music.  No computers or Internet, so we couldn’t get information at the touch of a button or a book at the click of a mouse.  If I wanted a book, which I often did, I had to walk a fair distance (there were sidewalks everywhere) to a business intersection where there was a small bookstore, or take the bus downtown to the main library.  If I wanted to talk to a friend, I had to walk to his house to do so (telephones were not for children).  Inside, we ate dinner, slept in our beds, bathed by turns in the one full bathroom, and otherwise were out and about in the world, which was the only place where most of the things and experiences we needed or desired were located.  So, in a real sense, we didn’t need a lot of square footage in our homes. 

          Today we spend a lot more time inside our homes because that’s where much of the world is now available to us.  We have cable or satellite television, computers and access to the world wide web, video games and Wii, DVD’s and CD’s and MP3 players and magic cell “phones” that seem to bring the world to us.  So we don’t go outside, except to get in our cars to go shopping, we don’t walk anywhere (newer neighborhoods don’t even have sidewalks), we don’t browse bookstores like we used to (we download e-books, when we read at all); and much of our work is done in a sitting position looking at a screen.  Little wonder that obesity has become the biggest health problem in the United States; little wonder that the majority of my college students in recent years have been getting fatter.  Sixty-eight percent of adults are overweight.  In 1960, 13.4% of adults were obese; in 2005, 35% were.  Among children, 12.4% of two to five year olds are obese, 17% of six to eleven year olds are obese, and 17.6% of twelve to seventeen year olds are.  Our obesity increases as we get older because our physical activity decreases.  The square footage of our homes reflects our increasingly sedentary and unsocial lifestyle, with children sitting alone in their private rooms “friending” strangers on “social” networks while snacking on microwaved junked food, their parents doing the same in the “office” or “media room”. 

          As it turns out, our digital sedentary lifestyles are not only unhealthy, they are expensive.  Currently, Nintendo’s Wii console costs $199, a decent netbook at a discount store can run $400, and application software can run to several hundred dollars, depending on what one wants.  Then there’s the cost of Internet access, and today that often means multiple providers for multiple devices.  Dare any of us itemize all the costs of our ordinary digital lifestyles?

          But the costs of our sedentary consumer lifestyles, as symbolized by the increased square footage of our homes, does not stop with the retail prices of the things we stuff into those homes, nor with the interest we pay on our credit cards to purchase all that stuff.  It also extends to that other gorilla in the room, the high costs of health care.  While it is true that some of those high costs are accounted for by new technologies and drugs, as well as by an increasingly aging population, there is also the impact of our unhealthy lifestyles. Obesity is one of the biggest factors because overweight people are, by definition, unhealthy: heart disease, diabetes, certain cancers, etc.  These are chronic and expensive-to-treat ailments.  So, to the total you spend on sedentary occupations add the medical and insurance costs of your sedentary lifestyle.

          A sedentary life such as we have come to live it is also a nonproductive life.  It is the life of consumption, and when we consume more than we produce, we go into debt.  Interestingly, the modern credit card, the ones we use so nonchalantly every day, first came into existence in the late 1950’s and early 1960’s; at the same time, consumer debt as a portion of disposable income began to increase dramatically.  In 1950, for every $10,000 of disposable income, households had $3,400 in debt; in 1960, they had $5,800 in debt for every $10,000; by 2003, the household debt load per $10,000 of disposable income was $11,500.  In other words, since at least the turn of this century, we have been spending a great deal more than we earn.  And while declining real wages in part explain why we have increased our debt, at the same time, we have increased our total household income as wives have entered the workforce in ever larger numbers.  So declining wages alone do not explain the disproportionate increase in consumer debt.

          What also explains the increase in debt is the increase in the square footage of our homes and the increase in the things we stock those homes with.  Clearly, granite countertops are more expensive than plastic laminate, and “updating” a five-year old house is more expensive than living with unfashionable features.  Furthermore, while the average cost of building a new home has steadily increased since the 1950’s as homes have gotten bigger and amenities more numerous, the upsurge in prices during the housing boom of the 1990’s and early 2000’s shot home prices up faster than the real costs of building them.  Not surprisingly, then, when the boom ended and the bust began, homeowners found themselves in homes that were now worth less than they paid for them, and more seriously, less than they still owed on their mortgages.  But adding to the problem was the fact that many homeowners had used their homes to leverage ordinary consumer purchases—to use the cliché, their homes were ATM’s.  They had used real property, with increases in value supposedly to last forever, to purchase items whose value declines as soon as they have been purchased.  Last year’s big-screen television or laptop computer is, in terms of resale price, virtually worthless this year.  But the mortgage payments and line of credit payments keep on coming due.  In other words, a lot of us are still paying for a lot of stuff that has no value and which perhaps we no longer even have or have consigned to the garage.  Not a formula for long-term financial security, for either the individual or our society as a whole.

          One can hope that we have learned our lesson that endless spending on consumer products meant to obsolesce is not the means to a sustainable economy or a satisfying life.  It remains to be seen if we follow through, if and when the economy (at least temporarily) recovers.  But if we fail to learn these lessons, we will surely repeat our mistakes and face yet another great recession.

Why This Recession: Part 4, Land

          The recent collapse of the real estate bubble (both residential and commercial) illustrates the kind of disconnect between old paradigms and new realities that mark major transitions of human history.  Much has been written about the significance of the new global order and the revolution in digital technologies, and how those technologies are integral not only to the new global order but to major cultural changes in already developed countries such as the United States, but no one has yet, so far as I am aware, drawn any connections between these developments and a major shift in the basis of wealth.

          Traditionally, land has been the foundation of the wealth not only of nations but of individuals.  The more land a nation could acquire (generally, by building an empire) or an individual or family could amass, the wealthier they were.  Feudal societies built social hierarchies on the basis of land ownership—the extent of one’s estates determined one’s rank, as duke or count for example, and the phrase “landless peasants” meant the impoverished and downtrodden.  Likewise, when Europeans grabbed and settled the vast lands of the North American continent, they did so because Europe had run out of land that ordinary people could occupy.  The myth of the homesteader and small farm, Jefferson’s yeoman farmer and the South’s Agrarian Movement, articulated the notion that a people’s wealth and character were founded on land.  The myth of the homesteader, the person made secure if not wealthy by dint of property, underlies the more modern American ideal of home ownership.  Men and women of property can hold their heads up in society

          The typical checklist of Americans shopping for a home includes a large yard, preferably with a lawn and trees, with some space for a little gardening and barbecuing; and there is a widespread preference for traditional, even “country” style furnishings and a “homey” atmosphere.  People cite privacy, healthy outdoor living, and being able to do what they want among their reasons for desiring to own a single-family home.  And it is no accident or whim that among the most popular housing styles is the suburban so-called “ranch-style” house.  That financial advisors traditionally consider owning a home the best investment a middle-class family can make indicates how deeply the idea of land-as-wealth and -security is embedded in the American psyche.

          It is therefore not surprising that so many Americans who really did not have the financial means to do so ran out and “bought” houses (and to some extent condominiums) during the housing boom, on the assumption that they could only get “richer” by doing so, regardless of how leveraged they had to become to join in the stampede.  In fact, the boom brought a new term, “flipping,” as in buying a home not with the expectation of living in it (at least not for very long) but of turning around and selling it for a big profit, sometimes before the ink on one’s closing documents had dried.  It is also not surprising that those who probably should have known better, the bankers, real estate developers, and financial regulators, encouraged the frenzy, for they were as much subject to the myth as anyone else (though it is much less surprising that politicians did).

          But what the collapse may indicate is that land no longer is the guarantor of economic well being.  The myth arose when people actually made their livings off the land, as small farmers who produced much of what they consumed on their own land and sold their surplus to more or less local markets.  But early in the 20th century, the percentage of people living in urban areas passed the 50% mark and has been steadily growing ever since, to the point where today less than 5% of the American population works in agriculture.  Consequently, very few people actually generate their wealth through the ownership of land—and in fact most agricultural land is owned by large corporations or individuals and families who farm large acreages with the aid of machinery and genetically engineered crops.  These are not homesteaders in any genuine sense, no matter how much the trappings of the myth may still be trotted out for public relations purposes.

          Most people today make their livings not from the land, but from technology.  They work in offices and stores, drive trucks laden with manufactured goods on interstate highways; they manage, sell, file, digitize, and design; and many still assemble.  And increasingly, corporations do not need to be tied to geography.  Today’s digital companies, for example, can be located just about anywhere, so their decisions about where to locate have more to do with tax structures, education levels, potential employee pools, and other factors, and much less to do with land and “location,” that mantra of real estate sales babble. 

          Actually, for most people, ownership of land may now be more of a hindrance to wealth creation than a help, for if one owns a home but needs to move for a job, being able to sell one’s home before moving is a necessity—and in today’s market, good luck with that.  The smart young things of today might seriously consider renting their accommodations rather than owning them, so they will be ready to move on when the next opportunity knocks.  Parents might consider the possibility that the conventional notion of “affordable housing,” i.e., suburban subdivisions with long commutes, might actually be more costly than imagined.  Does it reduce their time with the children, to the detriment of their education and development, thus costing those children wealth over their lifetimes, for example?  Or does it put the family geographically out of reach of the opportunities and experiences that could create real added wealth, for both parents and children?  At the very least, people should consider factors other than owning a home when they plan their lives and financial futures.

          At any rate, the old myth of land as wealth and security does not hold true in our very different social, technological, and economic circumstances.  Wealth is created today by far different means, and anyone contemplating buying residential property should assess the real impact of owning a home on his or her long-term well being.



  • joiekarp  On January 1, 2012 at 7:05 PM

    I’m glad someone understands the population problem! I wish most people weren’t so defensive about it. It’s a serious problem that needs to be talked about.

  • joiekarp  On January 1, 2012 at 7:06 PM

    ps. nice connection to the recession. Most people think we need more humans to help us get out of this mess. Of course, more people to compete with will solve all of our problems!


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