My parents grew up in the 1930's. This affected them for the rest of their lives.
My grandparents also were deeply affected by the Great Depression. My mother's father was an engineer in the meatpacking industry, so he always had a job. He was a middle-class man. But he never had much money above the basics. My mother told me in the 1960's that he was once offered two lots in one of the most expensive areas in the United States: Balboa Island. One of them was on the water. The other was across the street. He could have bought them both for $3,000. I think this was probably in 1933. He didn't buy these properties. Bayfront homes on Balboa Island sell for $2,500-$3,500 per square foot. He used to take me to Balboa Island once in a while when I was a young boy. He rented a property for a week. That was in the late 1940's. By then, prices had moved up. He still did not buy. He was afraid of committing money to real estate investments.
Both of my grandfathers worked hard. They paid their bills. They never accumulated much capital. They did not leave large inheritances. They had strong work ethics. My mother's mother, divorced early, worked until she was in her mid-70's. She never owned a car. She walked everywhere.
My father was in the FBI. He had to work long hours. J. Edgar Hoover required all agents to work overtime virtually every day. That was part of his sales pitch to Congress every year. He was the one bureaucrat in Washington who would return money from the previous year. I never heard of any other agency in Washington that did this. He had a sales strategy. It meant that he always got every dime that he requested of Congress.
My father retired after 20 years, and he never worked again. He retired in 1972, and he died in 2010. He struck it rich. But he did not leave a large inheritance. He worked hard, but when he got the opportunity to stop working, he took it.
My peers did have money to spend in their teens. We were the first generation ever to have enough money to spend of our own that it enabled us to create our own subculture. That was reflected by rock 'n roll. This was true in Great Britain. It was true in Western Europe. But our parents had gone through the Great Depression, and all of my social peers worked hard. Young people of the 1950's were not rebels. Rebel Without a Cause (1955) was entertaining, but most of the high school students at the school in the movie were like us: squares. My peers' ideal job was a safe, secure job in a large company. They planned to stay in those companies all of their lives. They wanted to get pensions large enough to give them comfortable retirements in their old age. For the most part, we have achieved this.
But all around the West, the good times that have prevailed since 1946 have produced new generations that are not imbued with the work ethic that Western civilization had prior to World War II and immediately after the war. I'm not sure when the change came, but certainly in the second half of the 1960's, we began to see it in articles about the youth culture. Remember, however, that the youth culture or counterculture was limited. It was not representative of the vast majority of American young adults. The vast majority of American young men went to work or college after high school. But most of them wanted to stay out of the Vietnam War after 1967. So, they shared the anti-war outlook of the hippie, counterculture activists.
The best description of the post-1970 activists can be found in David Brooks' book, BoBos in Paradise (2000). Bobos are the people who have combined the Bohemian mindset with the bourgeois mindset. This reflects what in retrospect has become known as the "me decade" of the 1970's. (The phrase was coined by Tom Wolfe.) That shift fundamentally changed American culture and Western culture. The social disruptions between 1970 and 1980 changed Western society. New attitudes towards wealth became dominant. New attitudes towards work also became dominant. The Puritan work ethic got bad press after 1970. That bad press, when coupled with Lyndon Johnson's Great Society welfare programs, led to the undermining of the older work ethic in the lower middle class white culture. The best book on this is Charles Murray's Coming Apart (2012).
SKILLED, DEDICATED LABORERS
The existence of Angie's List testifies to a problem that we all face, namely, locating competent, skilled workers who show up on time. The superrich can afford to hire the best of these people on a full-time basis. But for those of us who cannot afford this, we have to hire services on a piecemeal basis. The trouble is, we cannot find dedicated, skilled workers at anything like middle-class prices. This has been true for a generation. It is not getting any better.
The almost perpetual boom of the West since the end of World War II has reduced the fear of permanent unemployment. People can get jobs fairly easily. They don't have to be super-efficient. They don't have to be highly dedicated. They are governed by Woody Allen's law: "80% of success is just showing up." This has been true for a generation. It was not true in 1935.
We have been the beneficiaries of what are replaceable consumer goods. Instead of repairing them, we throw them out, and we buy new items. We have adopted replacement as a substitute for repair. But in those areas in which we need skilled laborers, such as house painting, deck building, and so forth, we find it difficult to find reliable, competent workers. The kinds of jobs described by Mike Rowe in his show, Dirty Jobs, do not attract the top 20% academically of high school graduates. Parents want their children to go to college. They would rather have their children major in sociology than become plumbers. It is a social phenomenon. The dollars and cents of it tell us that it's better to be a plumber than a college graduate with a degree in sociology . . . or any of the liberal arts.
This outlook has been made possible by continual economic growth and the absence of any major recession, except the one in 2008 and 2009, since the end of World War II. Americans who have come of age since 1965, meaning most of the baby boomers, have not faced employment markets anything like what their parents faced. Their parents still understood the term "lean and mean." Those who have come of age since 1965 really do not understand this phrase. My generation was in the middle. We understood lean. We did not understand mean.
If the next recession is as bad as Jim Rogers thinks it is going to be, it is not going to be over in two years. Because of the magnitude of debt internationally, both public and private, the next recession is going to drag on a lot longer than any postwar recession. It will look more like the Great Depression than 2008 and 2009.
I don't know what will happen to high school graduates who do not go to college and then graduate. The jobs of the white middle-class and upper-middle-class are limited to college graduates. This has been true since the 1960's. There have been low-wage, low-prestige jobs available for high school graduates. They start working in fast food restaurants. They go on to salaried jobs in retail stores. Their careers are now threatened by robotics. This threat is going to increase. If things go well economically, these people are going to face massive competition from inanimate objects.
But what if things don't go well economically? Then these people are going to be facing a shrinking job market. Employers will be able to pick and choose. First, they will hire bright young people with college degrees. Then they will pick bright people without college degrees, but they will pay them minimum wages. They will not pick the graduates of inner-city high schools. They will surely not pick the dropouts of inner-city high schools.
The Great Default is going to undermine local welfare systems that rely on federal subsidies. The recession is going to place tremendous new pressures on local welfare programs. High school dropouts who are female will do what they've done so far. They will have children. They will go on the welfare rolls. They will not marry. But this is now the strategy of lower-middle-class whites, as Murray's book describes.
We are going to see the slow recovery of the Puritan work ethic. That ethic will be a wedge for people who want to get regular employment. The problem is this: it will take time for the newly motivated high school graduates who do not go to college to learn the skills necessary for them to break into careers that require skills and also dedication. Nobody in the West has faced this for half a century. It would be foolish to expect a majority of high school graduates, and especially male dropouts, to learn the basics of economic survival that prevailed in the 1930's. That would be like expecting Russians after 1991 who had grown up under the Soviet system to adjust to capitalist markets after 1991. If they were over 50 years old, most of them didn't make the adjustments. They lived in poverty.
The coming recession is going to transform the attitude towards work that prevails in the bottom 80% of the population of the West. It is also going to scare those in the top 20%. It is going to force them to give up leisure in order to keep their jobs. Those in the bottom 80% are going to have to learn new skills. They're going to have to stay ahead of the algorithms and robots. Most of them will make the adjustment. They will have to in order to keep their jobs. But for the high school graduates who were not sufficiently bright and not sufficiently self-motivated to get into college, and then graduate from college, the new world order is going to require them to make monumental changes in their attitudes towards work.
Two years into the recession, if you keep your job, and if your income does not fall significantly, whenever you want to hire a repairman, and you go to Craigslist, you're going to find a lot of options. Workers will lower their prices. They're going to have to show up on time. They're going to have to do good work. Their ratings on Angie's List will make a difference as to whether they stay in their line of work. A lot of negative comments on Yelp will doom them.
The broad masses of workers are going to learn the meaning of this phrase out of the Great Depression: "root, hog, or die." They will also learn about this equally popular phrase: "Use it up, wear it out, make it do, or do without." There are going to be a lot of repossessed cars and repossessed homes. There are going to be a lot of spectacular bargains for people who have cash.
I think this will be a good thing for Western society. I think one of the things that the West needs is a restoration of the outlook of workers in 1935. The problem, of course, is that demagogues will campaign against each other on the political platform of wealth redistribution. Someone like Bernie Sanders is going to be elected President at some point. But, like Old Mother Hubbard, he or she is going to find that the cupboard is bare. This libertarian phrase will finally have impact: "You can't redistribute it if there ain't any."
In 1935, President Roosevelt was not facing the enormous unfunded liabilities of the welfare programs that Roosevelt and Lyndon Johnson created: Social Security (1936) and Medicare (1965). The President who is elected in 2020, and who will seek to be reelected in 2024, is going to face these problems. They will not go away for the next 30 years. They will accelerate. They are in the pipeline.
I think there are going to be millions of young people who will be desperate to become apprentices. If they don't get mentors to take them under their wings, they are not going to achieve success in the new labor markets. They do not learn from bureaucrats in the public schools, who have guaranteed income, what it takes to survive in a competitive marketplace in the midst of a recession that does not go away. They will have to learn from somebody. They are not going to be paid much money to get the training they will need to get into the workforce and stay there.
In year three of the recession, people are going to come to the conclusion that the government is incapable of restoring economic prosperity. They won't know what the government should do, but they will know that things are not getting better, and that they are unlikely to get better. We will then see how many people adjust to the new conditions. There will be a lot of people who don't make the adjustment. I think it will be in the millions in the United States. These people will be locked out of the employment markets. If they are young, they will not be given the opportunity to learn the skills required and the outlook required to get a job, keep a job, and get promoted. My parents learned this in the late 1930's. I learned from my parents. My children learned from me, but my children are not typical. They did not attend public schools.
There really is going to be a new world order. The recession is going to produce it.
The West is not ready for this.
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