One group of people who make good canaries are rich celebrities who were once more or less normal people but who can (1) suddenly get away with a lot of bad behaviors because the people around them give them a pass, (2) their wealth allows them to have access to and afford to buy all kinds of vice-enabling goods and services.
And so, for example, when it comes to propensity to overdose from drugs, we have Hank Williams Sr., Elvis, Michael Jackson, Prince, Lenny Bruce, Judy Garland, Jimi Hendrix, Janis Joplin, Jim Morrison, Bruce Lee, Sid Vicious, John Belushi, River Phoenix, Chris Farley, Dee Ramone, Anna Nicole Smith, Heath Ledger, Amy Winehouse, Whitney Houston, Philip Seymour Hoffman, Joan Rivers, Tom Petty (and his bass guitarist, Howie Epstein, also Beetles manager Brian Epstein, and do I need to mention Jeffrey Epstein’s wealth-enabled unleashed-by-norms behaviors … )
And this list goes on and on and on. And as soon as similar drugs become widely available, cheap, and popular, well, as the canaries showed up, “opioids crisis” and “deaths of despair”.
I see there being two basic consumption baskets (this is an oversimplication of course): a “basic needs” basket (food, energy, clothing, etc) and a “aspirational” basket (healthcare, education, nice real estate). I think most people would take todays “basic needs” but the 1970s “aspirational” basket.
It turns out that most people dislike politics, and when you talk to those people about “Republicans” and “Democrats” in survey questions, they don’t think about the average person who happens to vote for those candidates or have conservative or liberal opinions in general. They are thinking of those disagreeable ideologues and the loudmouth blowhards in their lives whose self-identification centers around their political beliefs and affiliations and who are obsessed with politics and indefatigably relentless in talking about it
Ed Glaeser: “In 1983, the 75th percentile 25- to 34-year-old had $45,000 in home value. Thirty years later, that same group had only $21,000 of net housing wealth. Among 65- to 74-year-olds, by contrast, the 75th percentile household’s net housing wealth rose from $150,000 to $225,000 over that period—and the 95th percentile’s climbed from $427,000 to $700,000. Housing is the main store of wealth for most Americans, and regulations have clearly helped redistribute wealth from young home-buyers to old home-sellers.”
I think it’s fair to put the emphasis on illiberal policies and not the finitude of land.
About the 4th comment: houses are weird because they’re both assets and consumption.
And one thing that’s happened between 1980 and today is that interest rates on mortgages dropped from like 15% to like 4%. That cuts your payment by more than half. So houses can more than double as an asset and demand for them as a residence will be roughly unchanged. The fact is, many people who bought houses when mortgage rates were at their peak captured that fall in rates as an increase in home value. I’m not sure if we should be worried about that or not though?
The decline in interest rates led people (and governments) to take on larger debts. Larger debts mean that smaller changes in interest rates have increasingly devastating effects on the economy. The effect is that the Fed has much less ability to adjust demand in the economy compared to the Volcker years.
Those numbers looked a lot better in 2003 than in 2013. It’s not helpful to treat that 30 years as a single period. The wealth shock after 2006 is doing most of the work here, and the idea that it was an inevitable step in that 30 process is highly suspect.
2. Consumption Baskets: Basic Needs vs. Aspirational.
I find this mental model useful but somewhat confusing when drilling down into product categories like energy, clothing, and housing since they tend to target both segments.
Another perspective is products that use cost based pricing (i.e. commodities) vs. value based pricing. Value based pricing often involves customer signalling. I like to think of the Industrial Revolution as the Global Industrial Cotton Revolution and nothing conflates the Basic Needs vs. Aspirational model more than clothing during this transition.
1. Isn’t that the secret to Donald Trump successful run? An everyday hard working Joe (Trump) can call Mexican Immigrants rapist, cheat on taxes, cheat on his wives and still be elected President.
2. Having a son with cancer we really should healthcare to essentials. Otherwise we would return to infant morality rates of 10% and few people living past 60.
4. I still hold if you want to win Grandparents as voters then we will more housing deregulation. Older people are much worse on this issue with local politics.
#4
It is the semi repeatable series of protective regulations, each generation doing it. Imbalances occur and the new generation executes the right to coin. Except, since the 1935 Supreme ruling on the sanctity of federal debt, the new generation has to perform some tricks to re- establish their right to coin..
#2
One consumption basket partially filled, looks like two. The aspirational basket is the package size, the nominal basket. The real budget is measured according to how well it fills the nominal basket. The central idea of quantization is to change the basket size.
#3
Avoid all political discussions in person.
Who would possibly want 1970 healthcare over 2020?