Tag Archives: America

Guest Article: What Comes Next?

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By

Larry Kummer*

As a Boy Scout Troop leader, I met a group of extraordinary men. Men with integrity, strength of character and body, successful in the world. The opportunity to work with these men was the largest influence we had on the young men in the Troop. “More is caught than taught.” That is, we lead by example. We have kept in touch with our Scout as they moved out into the world. We advise them, hear of their deeds – and they watch us.

What is the big lesson these young men learn from us? One by one, they see marriages fail. Most divorces are initiated by wives. This the background of their lives. This is a core reality of our time.

From my work helping the Blue Star Moms and editing the FM website, I have come to know some impressive veterans. Strong men who are impressive in several dimensions. Today I got yet email from one, a message I see quite often. His wife attacked their bank accounts, served him with a “protective order,” and filed for divorce. These orders claim harassment or assault, and are an easily deployed and powerful tool used mostly by women in divorce cases (see here and here).

In decades as an investment advisor, I have seen the same drama played out countless times.

 

Girls’ Game

There is much chatter these days about men using “Game.” It is mostly big talk and imaginary posturing.

In fact our time is shaped by Girls’ Game: romance the man, stage the party-of-her-life, marry, have kids, divorce when they are in school – then get community property, child support, and independence. The husband provides support during those first few difficult years raising the children, then is dumped. She then gets the children she wants without the bother of having a husband. It is the logical strategy for women raised to value their independence above all else.

Sound data is rare, since In 1996 the National Center for Health Statisitics discontinued funding to states for the collection of detailed marriage and divorce data. We saved pennies per person! (The elephant is powerful but prefers to be blind.) But perhaps a third of marriages end this way. The shadow of this frequent event affects most families.

Girls’ Game was an immense success for the women of the Baby Boomer and Millennial generations. Combined with increased access to higher education and careers, this is the closest any generation of women has come to “having it all.”

One result of Girls’ Game: in 2005/06 less 60% of US adolescents (11, 13, and 15 years old) lived with both birth parents (per the OCED Family Database), the lowest level in the OCED. Today probably even fewer do.

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What do young men learn from this?

Men trod paths blazed for them by prior generations. Young men do not just learn from the strong men around them. They aspire to be like them (“role models” in modern cant). Today’s young men look at these older men and see that their education and career success – decades of hard work in the rat race – mean nothing to the wives that dump them (other than cash). Many draw the logical conclusion: “if these big men couldn’t make marriage work, I probably can’t either.” Some will take this logic one step farther and drop out of the rat race. This might explain a mystery that has economists guessing.

“During the 1996–2016 period, the nonparticipation rate increased the most for younger men of prime working age, those age 25 to 34. In terms of education, the largest increase in nonparticipation was seen among men with the middle levels of educational attainment – those with either (1) a high school diploma but no college, (2) some college, or (3) an associate’s degree.”
— “Men’s declining labor force participation” by Douglas Himes in the BLS’ Monthly Labor Review, May 2018.

A man with few aspirations can live just fine outside the rat race. No great career, but steady work. No long-term relationships with women, just casual sex (much, little, or none depending on one’s taste). Lots of booze, drugs, sports, and games. No ties to the community, nation, or religion – none of whom have done much for them.

Patriarchy was the reward to men for running the rat race. This is the implicit subject of countless books, plays, films, and TV shows. One of the best – most stark, no sugar-coating – is the wonderful film A Thousand Clowns (1965).

 

What comes next?

America provides special courses for girls. Scholarships for girls. College programs for girls. Films are carefully scrutinized for correct attitudes about women. A flood of media in every form counsel women to own the future. Governments are taking the first step to enforce quotas (e.g., California), although informal quotas are commonplace in public and private agencies.

I wonder if all this is in vain, and if men’s decisions will shape the future of America. Will the men of Generation Z join the rat race, marry, and help build communities for the 21st century? Not many need choose a different path to radically change America in ways we cannot predict – but are unlikely to be good.

 

* Larry Kummer is a former investment and portfolio manager and the editor of the Fabius Maximum Website. The original of the present article can be found at

https://fabiusmaximus.com/2019/09/15/teaching-boys-about-marriage/.

Why American Kids Keep Killing

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(I first posted this article in July 2014. Do I need to explain why I am re-posting it now?)

American kids keep killing each other, their teachers, and any other adults who happen to be present when they go berserk. Since December 2012 alone there have been some 74 school shootings, more than two a month on the average. Each time something of the kind happens the media go even more berserk than the children themselves. So far neither metal detectors at the gates nor armed guards in the corridors seem to have made much of a difference. Proposals for dealing with the problem have ranged from providing teachers with handguns to covering students with bullet-proof blankets.

As a foreigner who has spent some years in the U.S while his children went to school there, and who has written a book (in Russian) about the U.S, I may be in a better position than many others to shed some light on this question. Here, then, are my observations.

* Owing to the way the healthcare system is constructed, American infants are more likely than some others to die during their early months or years. For many years now, even the States that do best in this respect tend to lag behind many other developed countries, including some that are much poorer. Though America’s fertility rate may be the highest among developed countries, its kids are skimped on before they are born as well as immediately after birth. Arguably the fact that the problem affects lower-class socio-economic families much more than it does those above them only makes things worse.

* Compared to many other developed countries, America spends relatively little of its public wealth on raising its children. Family payments, measured in absolute numbers, are lower than in Australia, Austria, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, the Netherlands, New Zealand, Norway, Sweden, and the U.K. They are also much lower than the OECD average. Relative to the earned incomes of employed single mothers, the overall value of cash transfers per family is low and declining. As a result, the percentage of children who live in poverty is higher than in most other developed countries.

* As if to make up for these shortcomings, American parents, and society in general, are extremely demanding on their children. At school they are supposed to get straight A’s. At home they are supposed to perform “chores,” meaning unpleasant tasks adults do not want to do. In addition they have to excel at sports—the reason being that, doing so, they may be able to get through college with the aid of scholarships and thus save their parents tens if not hundreds of thousands of dollars. I personally knew some perfectly nice middle-class parents who more or less compelled their teenage daughter have an operation on her knees, which were hurting, so she could to go on playing basketball. If all this were not enough, during their vacations they are expected to hold a job—the kind of job, needless to say, that pays so little that nobody else would want it—so as to cover at least part of their expenses.

The outcome is that many teenagers are busier, and enjoy less leisure, than in any of the many other countries I have visited or in which I have lived. Talking to some of them, I never understood how they managed it. Inevitably, some fail to do so. All this is done in the name of teaching children how to cope with “life”—yet judging by the results, it is often counter-productive.
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* Even as they encourage their children to grow up in a competitive world, American parents and society in general put them under any number of restrictions. If American adults are greedy for an endless supply of high-quality goods and services, then the American Psychological Association will commission a study on the effect of advertising on children with the goal of making them less so. If many Americans swear, then an American seven year old will be punished by his school principal for telling a classmate that his mother was gay, as indeed she was. If Americans supposedly smoke too much, then American youths up to age 21 are forbidden to smoke and may, indeed, be sent to jail for buying a pack of cigarettes. If not enough Americans join the Armed Forces so they can be sent to get killed in useless wars on the other side of the world, then any school that receives federal money must admit Pentagon recruiters and must provide those recruiters with students’ contact addresses even without their knowledge, or that of their parents. Ironically this requirement, which was enacted in 2001, was part of a law known as “no child left behind.”

If American adults like to drink while riding in stretch limousines, then out of fear that kids may do the same they are prohibited from using those limousines for their coming-out parties and must content themselves by being bused instead. If over sixty percent of American adults are overweight, then one can be certain that their children, far fewer of whom are, will be made to pay the price by having sweets, snacks, candy and various soft drinks banned from their schools’ vending machines. The list is endless.

Thus children are caught in a vise. From the moment of birth on, they are taught they must grow up so as to make their way in society. But that very society also puts them under endless prohibitions and, claiming that they “cannot handle it” (whatever “it” may be) infantilizes them. As one American told me, that explains why American children are so keen on sport. It is the only adult activity on which they are allowed to engage.

* Finally, American parents, and society in general, have never learnt how to spare the rod. I well remember how, on first visiting the home of a prominent and extremely well educated lawyer, I was told that his two sons had been “grounded” for quarrelling and would not be allowed to leave their room for a couple of days. I well remember how my son, then thirteen years old and following his first day at an American school, came home with a fifty-page booklet listing all the things he was prohibited from doing and the punishments attached to each; and yet, as he said between tears, he had done nothing wrong yet! Worse still, with computers around no offense committed by a child, however trivial, is ever left unregistered or forgotten. It is as if the term “forgiveness” did not exist.

Some parents go so far as to send their rebellions children to a kind of boot camp where they are supposed to learn what is what. Others even allow those children to be kidnapped by personnel who work for the firms that operate the camps and take them there by force. Others still consult doctors who then prescribe Prozac, Ritalin and other chemical compounds to keep the children quiet. Wherever one goes one hears the advice, “talk to your children.” But how can American parents, especially busy career mothers who often work as hard as fathers and are always desperately trying to juggle career and housework, ever find the time and energy to do so the way it should be done? Instead, all they seem to do is nag their offspring about homework.

As the Roman philosopher Seneca used to say, repeated punishment crushes the spirit of some of those subject to it. At the same time it stirs up hatred among all the rest. Is it any wonder that some children, caught in an impossible world, take up a gun and kill everybody they meet?

Guest Article: The Big List of Reasons Why America Will Fall (with rebuttals)

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By Larry Kummer*

Summary: Here is a compendium of gloomy news about America, the news that drives political campaigns, fear-mongering op-eds, and advertisements for guns and gold. These stories cloud our minds with misinformation and dampen our spirits. Why are they taken seriously by so many people? Debunkings like this are the only antidote. Pass it on!
america-at-the-endToday’s post examines an unusually detailed prediction of doom for America. Like most doomster writing, the content is almost entirely exaggerated or wrong, but it shows us people’s fears and ignorance — both largely fed by propaganda. The author’s key points are given in quotes.

“The US Position is Untenable”
By Karsten Riise

(1) The rising US public debt will crush the US dollar

“The CBO analysis shows that Federal debt is on path to increase from 75% of GDP to 146% of GDP in 2046. …such high public debt figures are bound to lead to a fundamental crisis of non-confidence in the US dollar.”

Riise starts with the usual doomster favorite (as it has been since the New Deal): the US fiscal deficit. The wolf will always be at the door in 30 years! This is from the CBO’s 2016 Long-Term Budget Outlet. Also see the CBO’s slide deck.
Federal spending, revenue, and debt
These long-term predictions are useful planning tools, but range from unreliable to quite wrong. To treat them as indicators of certain doom is absurd. The many variables create a wide range of possible futures. In brief, the US government’s liabilities are among the easiest solved of America’s major problems (details here).

  • The government can change policies. Small changes can have large effects for 30 years such as increased taxes and reduced military spending (need we spend more than our rivals and foes combined?).
  • Forecasts of higher interest rates are one of the two major drivers of rising liabilities. The CBO’s economists assume rates will rise, as they have incorrectly assumed they would since the recovery began. Perhaps their forecast will prove correct during the next decade, or perhaps secular stagnation and low rates will continue.
  • The other large driver is rising health care costs. This is among the easiest solved of America’s major problems, as our peers have built and tested many ways to provide equivalent levels of care at half or one-third the cost (details here). The transition will be painful, but at least we know the way. If only our other problems had known fixes!

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The author also neglects to mention that the US government’s finances are among the best of the major developed nations. For example, its pension liabilities (for employees and public) as a percent of GDP are far lower than those of most (only Canada and Australia are lower). See figure 15 in this March 2016 research report by Citi.

“If something cannot go on forever, it will stop.”
— “Problems and Not-Problems of the American Economy” by Herbert Stein (economist) in The AEI Economist (of the American Enterprise Institute), June 1989. It is the key thing to know about the US health care system.

(2) The US is not competitive!

“The US economy is becoming less and less competitive.”

The author gives no definition or evidence for this bizarre statement, which is wrong in almost too many ways to list. First, look at growth in real GDP of the US vs. its peers. This graph from the OECD shows that the US (red) has grown slightly faster than the OECD average (black) since the crash, and is among the faster growing in the G-7 (light lines). Quite good for a large rich nation!
Real GDP of the US vs. the OECD average
Second, look at a narrower measure of competitiveness: exports — an American success story since 1972 (when Nixon took the US dollar off the gold standard, reducing its over-valuation), not just growing but doing so faster than US GDP (rising from 5% to 12% of GDP).
GDP shares of Exports of Goods and Services - 2015
Third, look at a leading indicator of economic growth: nationality of corporations in the fastest-growing industries. Eight of the top 13 technology companies are American; this is the pattern in most high-growth tech industries (e.g., software, internet, biotech).

“as pointed out by the economic guru Michael Porter, who also points out, that the level of bureaucracy and red-tape hindrances to business are enormous in the USA.”

The World Bank ranks all the world’s nations by “ease of doing business”. The US ranked as the 7th best in both 2014 and 2015.

(3) The US has a weak education system

“Furthermore, American public schools, hampered as they are by violence and other problems. are not exactly the best in the world. The US level of education is going down…”

The Program for International Student Assessment runs one of the best global assessments of comparative performance of national grade school systems. Their data shows that the US schools perform roughly at the OECD average. We are “not the best in the world”; our poor schools are a disgrace for one of the world’s richest nations. But ratings of the US are stable since 2000 by most measures, not “going down”.
The low rating of our grade schools is a result of inequality, as the US has some of the best schools in the OECD — and some of the worst. For more about this see “Education Gap Between Rich and Poor Is Growing Wider” in the NYT, “The Inequality in Public Schools” by Michael Godsey in the The Atlantic, and new research in “Local education inequities across U.S. revealed in new Stanford data set“.
Omitted from dirges about US education are our colleges and universities. Their large number of foreign students shows that they’re regarded as some of the best in the world.

(4) The US middle class is dying

“The middle class is disappearing in the USA, with now barely 50% of the population perceiving themselves as middle class. Median incomes have barely improved or even gone down the past 40 years, significantly reducing the middle-section of the tax base, which is normally the most reliable.”

The US middle class is dying, as is the middle class in most developed nations. See “A hollowing middle class” by Peggy Hollinger in the OECD’s Observer, and “Germany’s Middle Class Is Endangered, Too” in Bloomberg. The causes are similar to those afflicting the US.

“The American Dream is a night-mare for most Americans.”

Like most such confident assertions by doomsters, no source is given for this. There are many surveys of personal happiness and opinions about the “direction of the country”. These seldom agree with each other, or show any trend. As Dean Obeidallah shows, “We’ve Been on the Wrong Track Since 1972” — and perhaps longer (i.e., we always worry, since “only the paranoid survive”). Gallup’s “satisfaction with the United States” survey shows that peoples’ opinions have fluctuated with the economy since 1979. The Gallup-Healthways Well-Being Index shows no change since 2008.

(5) We can’t raise taxes on the rich!

“The Laffer-curve, stating that heavy tax-burdens on the rich will incur less total tax-revenues, still applies for the top-section of the US tax base. Any attempts to heavily taxate (fiscate) the upper 10% (or 0.1% !) of the US tax base will lead to US dollar capital-flight, and acute economic crisis.”

First, that’s not what the Laffer Curve means (see Wikipedia for an intro; also note Laffer’s explanation for the curve has changed over time). Second, there is no reason to believe that the current US tax structure is at the peak of the Laffer Curve (above which increases in the marginal tax rate decrease revenue). Third, research on this complex subject has given wildly different estimates for the peak rate — often in the 65-75% range (far above current peak rates).
Perhaps the most interesting contrary evidence is that that the top marginal tax bracket in the US was 70% – 90% during the high-growth decades after WWII.

(6) America’s poor just need more education

“Poor Americans lack education and training to make them competitive in the global labor-market. America’s left erroneously blames the high percentage of unemployed poor on free trade, but the real problem is the lack of education which prevents the under-class from obtaining productive jobs.”

There is no evidence that there are skill or education shortages in American, jobs ready to be filled by newly-educated poor people. For details see this, and Ignore the hype. There are few shortages of skilled workers in America. Not even the in the STEM fields.
More likely the problem is a shortage of jobs paying a living wage, let alone a wage allowing a middle class lifestyle.

(7) America’s poor at risk of starvation!

“The risk of starvation amongst the poorest in the USA remains high: In Obama’s presidency, one in seven Americans (14%) face the risk of not having enough to eat.”

This misrepresents the USDA’s conclusions. They found that in 2014 14% “had difficulty at some time during the year providing enough food for all their members due to a lack of resources” (roughly 5% of them reported losing weight). The number even remotely at risk of starvation is much smaller: “5.6 percent of U.S. households (6.9 million households) had very low food security … {where} intake of some household members was reduced and normal eating patterns were disrupted at times during the year due to limited resources” (~45% of them reported losing weight).
People starve to death in America (most estimates are several thousand per year), usually from causes other than lack of money (e.g., socially isolated children or elderly, drug abuse, mental illness). Anyone familiar with America’s poor knows that obesity is a far more widespread health problem than starvation.

(8) America’s military grows weaker!

“At the same time, the US military inventory is aging, and declining. The number of US ships and combat aircraft is declining, their average service-age goes up and their operativeness goes down. New US military hardware often take the form of useless ‘white elephants’, meaningless prestige-products like the 20-30 billion dollar Zumwalt class destroyer.
“…In absolute strength levels, the American military is standing still or going backwards. …If military budgets are not increased, the aging of the US military will be tough in the 2020’ies. …and the US military is going down in absolute as well as in relative strength.”

Other than China (playing catch-up in the great power game), the great powers are shrinking their conventional military strength. In the age in which the dominant forms of force are nukes and 4GW, conventional military power has use only in limited forms. US military spending accounts for ~37% of the world total — equal to the sum of the next 7 combined (4 of whom are our allies). While every nation’s military spending fluctuates, not only is there little evidence of America’s loss of military hegemony during the past few generations — it has grown immensely since the fall of the Soviet Union and Eastern Europe’s joining the West.
As for the Zumwalt destroyer, a trial production run cancelled after 3 ships is a bizarre basis to draw dire conclusions about the US military (continuing to build these expensive ships would have been evidence of a dysfunctional military). Also, the per ship cost was $6 billion — not $”20-30 billion” (including the program costs for a planned fleet of 32 on the 3 actually built is absurd).

(9) The US economy is unsustainable!

“The US economy is unsustainable.”

The author provides no evidence for this big assertion. Quite confident on the eve of a new industrial revolution (which might also void all the author’s other forecasts).
Note: the author does not mention one staple of the America is doomed crowd — private debt. It is high, but not unusually so vs. our peers. The US has the fourteenth highest private sector debt/GDP ratio in the OECD (2015, source here), and the fifteenth highest ratio in the OECD of household debt to net disposable income (2014, source here).

Conclusions

The Good News Is the Bad News Is Wrong
— Wonderful title to a 1984 book by Ben J. Wattenberg.

The doomster analysis of America is, yet again, not just unsupported but largely false. When reading these confident claims of End Times for America, remember that misinformation seldom just happens. It usually comes from well-paid propagandists working for special interests. These float through our minds until coalescing into predictions of doom, clouding our vision and sapping our spirits.

For More Information

 

* Lawrence Kummer is the editor of the Fabius Maximus website.

Why American Kids Kill

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American kids keep killing each other, their teachers, and any other adults who happen to be present when they go berserk. Since December 2012 alone there have been some 74 school shootings, more than two a month on the average. Each time something of the kind happens the media go even more berserk than the children themselves. So far neither metal detectors at the gates nor armed guards in the corridors seem to have made much of a difference. Proposals for dealing with the problem have ranged from providing teachers with handguns to covering students with bullet-proof blankets.

As a foreigner who has spent some years in the U.S while his children went to school there, and who has written a book (in Russian) about the U.S, I may be in a better position than many others to shed some light on this question. Here, then, are my observations.

* Owing to the way the healthcare system is constructed, American infants are more likely than some others to die during their early months or years. For many years now, even the States that do best in this respect tend to lag behind many other developed countries, including some that are much poorer. Though America’s fertility rate may be the highest among developed countries, its kids are skimped on before they are born as well as immediately after birth. Arguably the fact that the problem affects lower-class socio-economic families much more than it does those above them only makes things worse.

* Compared to many other developed countries, America spends relatively little of its public wealth on raising its children. Family payments, measured in absolute numbers, are lower than in Australia, Austria, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, the Netherlands, New Zealand, Norway, Sweden, and the U.K. They are also much lower than the OECD average. Relative to the earned incomes of employed single mothers, the overall value of cash transfers per family is low and declining. As a result, the percentage of children who live in poverty is higher than in most other developed countries.

* As if to make up for these shortcomings, American parents, and society in general, are extremely demanding on their children. At school they are supposed to get straight A’s. At home they are supposed to perform “chores,” meaning unpleasant tasks adults do not want to do. In addition they have to excel at sports—the reason being that, doing so, they may be able to get through college with the aid of scholarships and thus save their parents tens if not hundreds of thousands of dollars. I personally knew some perfectly nice middle-class parents who more or less compelled their teenage daughter have an operation on her knees, which were hurting, so she could to go on playing basketball. If all this were not enough, during their vacations they are expected to hold a job—the kind of job, needless to say, that pays so little that nobody else would want it—so as to cover at least part of their expenses.

The outcome is that many teenagers are busier, and enjoy less leisure, than in any of the many other countries I have visited or in which I have lived. Talking to some of them, I never understood how they managed it. Inevitably, some fail to do so. All this is done in the name of teaching children how to cope with “life”—yet judging by the results, it is often counter-productive.

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* Even as they encourage their children to grow up in a competitive world, American parents and society in general put them under any number of restrictions. If American adults are greedy for an endless supply of high-quality goods and services, then the American Psychological Association will commission a study on the effect of advertising on children with the goal of making them less so. If many Americans swear, then an American seven year old will be punished by his school principal for telling a classmate that his mother was gay, as indeed she was. If Americans supposedly smoke too much, then American youths up to age 21 are forbidden to smoke and may, indeed, be sent to jail for buying a pack of cigarettes. If not enough Americans join the Armed Forces so they can be sent to get killed in useless wars on the other side of the world, then any school that receives federal money must admit Pentagon recruiters and must provide those recruiters with students’ contact addresses even without their knowledge, or that of their parents. Ironically this requirement, which was enacted in 2001, was part of a law known as “no child left behind.

If American adults like to drink while riding in stretch limousines, then out of fear that kids may do the same they are prohibited from using those limousines for their coming-out parties and must content themselves by being bused instead. If over sixty percent of American adults are overweight, then one can be certain that their children, far fewer of whom are, will be made to pay the price by having sweets, snacks, candy and various soft drinks banned from their schools’ vending machines. The list is endless.

Thus children are caught in a vise. From the moment of birth on, they are taught they must grow up so as to make their way in society. But that very society also puts them under endless prohibitions and, claiming that they “cannot handle it” (whatever “it” may be) infantilizes them. As one American told me, that explains why American children are so keen on sport. It is the only adult activity on which they are allowed to engage.

* Finally, American parents, and society in general, have never learnt how to spare the rod. I well remember how, on first visiting the home of a prominent and extremely well educated lawyer, I was told that his two sons had been “grounded” for quarrelling and would not be allowed to leave their room for a couple of days. I well remember how my son, then thirteen years old and following his first day at an American school, came home with a fifty-page booklet listing all the things he was prohibited from doing and the punishments attached to each; and yet, as he said between tears, he had done nothing wrong yet! Worse still, with computers around no offense committed by a child, however trivial, is ever left unregistered or forgotten. It is as if the term “forgiveness” did not exist.

Some parents go so far as to send their rebellions children to a kind of bootcamp where they are supposed to learn what is what. Others even allow those children to be kidnapped by personnel who work for the firms that operate the camps and take them there by force. Others still consult doctors who then prescribe Prozac, Ritalin and other chemical compounds to keep the children quiet. Wherever one goes one hears the advice, “talk to your children.” But how can American parents, especially busy career mothers who often work as hard as fathers and are always desperately trying to juggle career and housework, ever find the time and energy to do so the way it should be done? Instead, all they seem to do is nag their offspring about homework.

As the Roman philosopher Seneca used to say, repeated punishment crushes the spirit of some of those subject to it. At the same time it stirs up hatred among all the rest. Is it any wonder that some children, caught in an impossible world, take up a gun and kill everybody they meet?