Monday, November 04, 2013

The Big Bust theory

Has the quality of American life gone down during my span on this planet? Have things worsened economically since Reagan transformed Milton Friedmanism into an article of national religious faith?

One way to answer that question may be to take a look at the popular sitcom The Big Bang Theory. My question: Why do Sheldon and Leonard share an apartment?

According to this site,
That two-bedroom one-bath in an older, no-frills building with a simple lobby and communal laundry room would likely rent from $1,800 to $2,200 a month...
I have a particular interest in this problem because Sheldon and Leonard have incomes roughly comparable to that of their friend Howard Wolowitz. My dad pretty much was Howard.

Okay, my father wasn't Jewish, and he didn't go into space. Personality-wise, he was somewhere between Sheldon and Leonard, obnoxiously convinced of his own genius but (just barely) capable of behaving in society when required.

My father -- who died of his second stroke at the frighteningly young age of 36 -- was an engineer who worked on projects Mercury, Gemini and Apollo. Although I never liked math, my father had an extraordinary gift for it; I grew up hearing stories about his ability to solve complex equations after barely glancing at the board.

If you can imagine Howard and Penny getting together, you'd have a pretty good picture of my parents' marriage. My great fear in life has always been that I would inherit his looks and her brains. (Incidentally, my mom didn't work. Two-income families were unusual, then.)

My father's lifestyle should offer a fairly good approximation of what Howard, Sheldon or Leonard might have earned in the mid-1960s. To your left, you will find Google Earth's picture of the house my father bought new in 1964. Alas, he didn't get a chance to live in it very long.

Ah, that photo brings back memories...

Although the grounds are much greener now -- that tree used to be tiny, and instead of grass, we had a hideous iceplant lawn -- the place hasn't changed much. I can still recall the layout: The house has four bedrooms, including a very large master bedroom. There was supposed to be a fifth bedroom, but my father told the builders to knock down one wall and combine that room with the living room. That's where he kept his baby grand piano. (Dad played jazz in various clubs on weekends. He also painted abstracts.)

The house is on a corner in a hillside community near the San Fernando Valley. At the time, we lived by the edge of an undeveloped area, and my brother and I went out hiking the nearby hills every day, in search of spiders and snakes and dinosaur bones. Occasionally, we saw wild horses. An unforgettable sight.

I once tried to build a raft in that garage. An episode of Please Don't Eat the Daisies gave the same stupid idea to every kid in the neighborhood.

Enough nostalgia; let's return to the main issue.

My father had a position in society very comparable to that of Howard, Sheldon and Leonard. Yet my dad seemed to have a much better life. In the 1960s, it was unheard-of for a well-employed male in his 30s to need a roommate.

What changed?
Comments:
My son is the only one in his circle of friends I know who can swing any apartment on his own. He got bored with the "luxury" apartment and now lives with a friend. He's a programmer. And *hates* Big Bang Theory, tho I love it for the engineer lingo like "Problem solved!" that he uses as well.

Whatever you want to say about Clinton, it wasn't all "bubble" economy when he was president. It was an employee's market and I made more then than I do now.

Why the American people put up with this crap is beyond me. All we need is language, our own memes, to put this in perspective that the populace will understand. Some of that reading you gave us recently was eye-opening. Especially the article that explained that when a bill was passed to bring overseas funds back here...the businesses FIRED more people instead of hiring.

Pitchfork time, folks.
 
But how many iPhones did our primitive ancestors have?

Obviously the problem is more resources going to the rich and the weakened position of labour.
 
We have experienced 30 years of flat median household income not budging an inch in real (inflation-adjusted) terms. It might have hit its real dollar peak in 1978 or 1979.

Making the same in inflation-adjusted terms doesn't pay for as many of the things that have skyrocketed above the rate of the cpi, such as housing in so many markets. California is ground zero for that phenomenon.

The causes for wage stagnation are various. The decline of Big Labor. Outsourcing. The cost of health care as a company perk has doubled and re-doubled, rinse and repeat, so companies still offering it hold pay raises down even as total compensation goes up. And while there is plenty of extra money around, it's been sopped up by the upper brackets. The top 1% has doubled their share of the national income from 10% to 20% over this 30 year period. 95% of the income gains in the past decade have enured to the benefit of the top 1%.

XI
 
I'm priced out of the housing market because people view homes as investments and can't stand the idea of not financially coming out ahead despite the years of indispensable use they get from them. Decades of that nonsense is utterly unsustainable. Meanwhile every acre of county land has been grotesquely inflated by the agriculture bubble. I suppose that I could go into debt to purchase a home instead of renting an apartment, but taking on a mortgage is a capitulation to the kind of society that I despise. And emptying everything I've saved into my city's shitty lead and arsenic contaminated properties simply isn't worth it.
 
I have a similar tale to tell. My father came to California from Texas in the 1950's. My dad had a sales job working for a now long-gone electronic parts supplier that catered to the aerospace and defense industries. Back in those days, we referred to the stretch between San Diego and Santa Monica as the Gold Coast, because those industries were running at peak levels and anyone working in them was doing pretty well. He was able to afford, on $15K a year, a 3 bd, 2 ba house on an 1/2 acre, a travel trailer pulled by a Jeep Wagonner, and his pride and joy, a Porsche 912. Oh, and had time to wrangle his unruly teenage son into helping out with the small grove of fruit trees out back. So, nice home, nice toys, leisure time to enjoy them. And Mom didn't have to work. Check.

Fast-forward 20 years and the wife and I have combined our two incomes to buy a house on .19 acre of land, surrounded by a thousand other 1950's era tract shacks. But this is Bay Area real estate, so a bit pricier then the SoCal variety. Still, it's a smaller house that needs two incomes to buy. However, I had more children than my Old Man had, so its not gonna be perfect equivalence. It's the Clinton era and we were getting paid, like seemingly all those around us were at the end of the 20th Century. Life wasn't perfect, but it was better than the '70's (inflation) or '80's (desperation). But I couldn't afford an RV or travel trailer, and I didn't have a porsche. Closest I came to that was a Geo Metro convertible. I take that back. That isn't even close. And we didn't really have the leisure time to run off and enjoy such toys, anyway. We were trying to cover the bills, then save enough for retirement.

Move forward to today, and my kids have all moved away. Only one, at age 31, has come back, with grandson in tow. The rest figured it out that they weren't going to knock down the money that would be needed to maintain even a lower-middle-class lifestyle, so the ones that are still living here are living with friends, like your example of Big Bang Theory, or they have decamped to cheaper states, where you might not be making much money, but it doesn't cost much money to live there, either.

There is one factor of this depressing equation I would mention, just because I think it's relevant. The first part of this family saga is set in a time when 98-octane premium was $0.39 a gallon. I remember the price, because it's what I used to buy on a Friday night. Check the oil, check the tires, dollar gas. Compare that to today. My old beaters used to get 10-15 miles per gallon, but my car today would have to return about 100-150 MPG to match the price curve of gasoline. Spending so much on energy, all types of energy, means you cut back somewhere else. AND, Cali real estate is Stupid Expensive. It's the one thing I can leave to the kids that is sure to yield a big enough check for all of them to buy houses where they live now, even divided between them. Housing where they live now is very cheap.

So, yeah, we seem to be on a long downward glide path. It's been very gradual. But I can see it, looking back, I can see the changes. Now what, Cap'n?
 
Well, pbx, I'm not sure what to do in the long run. In the short run, I'd like to hear more stories like yours.
 
11I went to work in a sawmill at age 18 in 1964 for $2.30 an hour, which was a higher rate than my father had ever earned in his life. In the early 70s I went into trucking and quickly rose to $5/hour. In my experience things peaked for the working class in the US in 1974 or 75. Nice tract houses from the 50s sold for $20-25k, and a new Buick went for $4300; a VW was $2k. Then Carter deregulated trucking, smashing the Teamsters' Union in the process, and life began going downhill. Reagan continued the smashing of organized labor, beginning with the air traffic controllers, and the process of turning American workers into peons was well under way.

NAFTA was passed in the early 90s under Clinton and tens of thousands of industries began leaving the US. A General Electric plant I worked in after my military service was boxed up and sent to Mexico, as was an RCA plant in the same town. Illegal aliens were allowed to flood into the country in the millions, and they sopped up many of the low-level jobs that used to serve as entry points for kids or as a last resort for the down and out.
They also put downward pressure on wages for anyone doing manual labor.

One of my sons was savvy enough to get through a tech school and he acquired a career in an industry that serves the 1%. The other one spent time in the military and now shares a small home with two other young men, all of whom live a precarious existence on temporary jobs, military disability checks, or whatever they can scrounge off their friends. And people ask me why I don't vote. Both major parties have been complicit in the systematic destruction of this country, and there should be politicians hanging from light poles all over America. This has been an eyewitness report from the lower classes.
 
What chaps me raw is when some omadhaun starts railing about food-stamp moochers with their "cable tv and potato chips". The idea that poor people aren't entitled to take some comfort from cheap, high-fructose, pseudo-food and a few meager luxuries is appalling. Do we need to see photos of hollow-eyes, orange hair, and swollen bellies before we admit we have poverty in the U.S.? The ghastly third-world photos of Katrina victims didn't seem to move the compassion needle very far. When you add up all his mansions, Romney has probably close to 100,000 square feet of private living space, but some poor minimum-wage schlub with a widescreen is the one who gets blamed for dragging society down. I despair.
 
Why? Raygun and the loss of the Fairness Doctrine allowed lies to be sold as truth.

Here in Appalachia we don't notice bubbles and bursts so much. The Depression was barely a ripple. The desperately poor just got very desperately poor. The women worked a bit; the men worked a lot. Sometimes whole families starved and now it is returning, yet again, as the need for three minimum wage incomes to feed four people increases.
 
There's a simple thing to note here. I work for a large company; my job category is 'senior professional.' People like me across the nation and across industries have seen flat wages (inflation adjusted) for 30 years; (I entered the workforce in 1982.) The only times I ever got a significant bump was when I changed jobs, and that was nice, but not huge.

Over the past 20 years, my company's revenue has grown double digits per year. Executive band has reaped the benefit, but no one else.
 
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