THAT SINKING FEELING

Come on, tell the truth.  Do you really feel like the recession's over?  Of do you feel like maybe it's over for the economists, but it isn't over for you?

If GDP is growing like they say it is, why do you feel like you're treading water?   Okay, let's be honest here.  Why do you feel like you've been treading water for years?  Or (gasp!) maybe even slipping?  And why does it seem like just about everybody you know is in the same boat as you?

There really is an answer to this.  And it's a simple, little number compiled by the Bureau of Labor Statistics (BLS) called "Average Weekly Wages".  This little number -- almost never quoted in the press -- is the average amount people earn every week, adjusted for inflation.  And the sad truth is, according to the BLS, this number has actually gone down somewhat since Richard Nixon was in office. 

If you think that can't be true, you're right.  It's really much worse.

Because the BLS is cheating.  In order to make it look like real wages have only gone down a little bit (and do a few other things, like pumping up GDP and keeping the cost-of-living adjustments on Social Security to a minimum), instead of using a constant measure of inflation, the BLS keeps changing its methods to make it look like prices are going up less than they are.  If you calculate inflation on a constant basis, for example, applying the method the BLS used before Bill Clinton came to office, Average Weekly Wages have actually gone down more than the BLS admits.  A whole lot more.

There are a bunch of of reasons most people don't realize what's going on.   First of all, nowadays, more people in the family are working -- Mom's working, Dad's working, the kids are working -- everybody's working.  (Or anyway, they would be working, if they could find a job.)   If you add up all those jobs, it amounts to about as much as one person used to make when Tricky Dick was in office.

The second reason we don't see what's going on is that -- at least until recently -- the things we owned were going up in value, so it made us feel richer.  If we needed money -- for college, for a medical emergency, even for a vacation -- we could always borrow against the house. 

No more.

The third reason is, consumer goods have been cheap.  Why?  Well, the main reason is that the industrial revolution finally came to Asia, so hundreds of millions of Chinese, Indians, Indonesians,Vietnamese, and Malaysians have been streaming into the cities from the farms, flooding the markets with cheap labor. The result is, you can buy a suit or a sweater or a dress for less than what you paid thirty years ago, adjusted for inflation. The only problem is, the suit or the sweater or the dress has to be made in Asia.  And that means they're aren't any jobs making suits or sweaters or dresses (or toys or tools or TVs) in America anymore.  And that's one reason jobs are a problem.

Another reason we don't see what's going on is that the government and the financial media are so good at hiding the problems.  Economic statistics are now gamed to such an extent that they're nearly worthless.  By the magic of the "birth/death" model, millions of new jobs are assumed into existence on the theory that new businesses have been created, even though there is absolutely no evidence any new businesses have actually been created.  Through "hedonic adjustments", the prices of products that have actually gone up are "adjusted" to have gone down on the theory that their quality has improved.  By "geometric weighting" it is assumed that if the price of  an item goes up, people will use less of it, and therefore it's impact on inflation automatically goes down.

We hear constantly on television that Americans have the highest standard of living in the world, the best health care and so on.  So we believe it.

If you want to keep on believing it, go ahead.

It won't be true, but maybe it will help with that sinking feeling.

HEY, I KNEW THAT GUY IN HIGH SCHOOL

A friend of mine once made an offhand remark that wound up changing the way I’ve looked at people ever since.

“Everyone is someone you knew in high school,” he said.

Now there are a couple of ways you can take this, but in the context of what we were talking about at the time, I knew right away what he meant. And I had to admit, he was right.

There’s something about high school – a vulnerability, an inexperience, call it what you will. But somehow, in the light of it, all things stand revealed. In high school, nothing can be hidden, though we no doubt wish it could. Like it or not, try as you might, in the implacable judgment of yourself and your peers, you’re an open book.

That's probably why high school is the land of eternal archetypes – the jock, the cheerleader, the wannabe, the politician, the conniver, the hoodlum, the geek, the goth. The names may change, but the types sure don't. After high school we find ways to cover these things up. Speech, dress, manners, occupations, possessions. The jock goes to college and becomes a lawyer. The geek makes money and hires a personal trainer. The cheerleader divorces the jock and goes into real estate. The politician sells life insurance and takes up golf.

But the point my friend was making is that none of this matters. Underneath the carefully accumulated adult accoutrements, the archetypes aren't lost. The jock will snap wet towels in the locker room. The conniver will look for an angle. The politician will seek your vote. The cheerleader will ignore the geek. The geek will assume he’s being ignored.

When you look at people the way they were in high school, the fog of adulthood lifts, the disguises vanish, and the archetypes are once again restored.

So, what? you say. That archetype is just an idea, a category of thought.  We can always change it.  In theory, you're right.  But in the modern world, you're wrong.

In the modern world, we educate ourselves on every subject except ourselves. We never try to see ourselves as others see us, so we remain strangers to who we really are.  We get out of high school or college or post-grad and we think our education is over. We rush through life, avoiding what we’re afraid of, going after what we want. We lead unexamined lives, so when we get to the end, we haven’t changed at all. We're the same people we were in high school.



We age the way a house ages.  Year in, year out, buffeted by the seasons, we fade, become dated, lose function, get cluttered.  From time to time, we may try a makeover – change the furniture, update the kitchen, add a master suite, repaint, recarpet. But fundamentally, we’re the same – Gothic Revival, Georgian Colonial, Split-level Ranch, Mid-Century Modern.  The same old house.

That’s what my friend meant. Most people don't change.  So if you can see them the way they were in high school, the disguises will fade away and you’ll see who they are.

As you get older, this trick gets easier and easier to perform. Sometimes it requires no effort at all. You look at a person and at the same time you see someone else – call it, the “high school version”. You’ll see the whole thing – who they are, who they were, who they think they are, and what they want you to see. It’s almost embarrassing, to tell the truth.

I remember the first time I saw George Bush, I thought right away, “Hey, I knew that guy in high school.”

"Uh-oh."