patrick.net

Now we have virtual worlds in which poor people can be rich and ugly people can engage in cartoon sex.

Escapism through addiction has always been an opiate, so to speak, of the masses. This was true before industrialization, and is just more efficient post internet.

But hey, you can own a cartoon island and have cartoons slaves too, so what's not to like.

(Peter P was referring to Second Life, my recent nemesis, for anyone wondering 'WTF?')

isn't what we have now just corpratocracy? and isn't that the epitome of wage disparity, top-down? that's always been the vanguard of this trend. In a corporate culture the non-execs are just cogs, easily outsourced or internized. I don't see anything changing along those lines soon. A real pisser.

I agree wealth distribution is an enormous global issue, one which is much worse in the developing world and third world than in industrialized countries. Nonetheless, by any measure the current distribution fails the test of plausibility (in the words of the IMF).

My criticisms of the Gini Coefficient as used in practice:

* Usually the measures of inequality are based on ratios of equal country-to-country units, weighted by population. This measure is almost entirely useless, irrelevant, and misleading. It is also the most commonly used mechanism because it provides the most stunning shock value.

* Other measures do not attempt to directly compare country-to-country but simply focus internally on a country (or regions therein). This is accurate, but not useful in saying things like "It's worse in the US than in the EU".

* Finally, there is an exchange weighted (currency) or PPP (purchasing power parity) method for determining the coefficient. This is not often seen because (a) it's hard and takes lots of work, (b) it doesn't tend to punish the US as much as other metrics. I think, unsurprisingly, that PPP is the *only* honest method to determine the actual economic wellbeing of comparative peoples in comparative strata.

For example, someone in the lower quartile of US socioeconomic distribution, weighted by PPP, is marginally better off than their equivalent in most of Europe (excluding the UK).

But few (aside from "The Economist") like it when the US doesn't look terrible, so they tend to use the other methods.

* Finally, comparison between the US & Europe have been heavily criticized using Gini, and even the Wiki article makes some reference to the debate. The problem is that, if you take the Eurozone on its own, compared to the US (and using a flawed metric as described above), then the US scores poorly. But, if you look at the actual standard-deviation of the income distributions, the Eurozone scores poorly. That's because the US is more homogeneous, while Europe has wild differences country-to-country. The point is, using Gini to make any kind of structural social comparison betwixt the EU and US is probably worse than useless.

The “middle class” students who graduate with crushing student debt have something in common with the people taking on too much debt to buy a house that they really cannot afford.

sybrib,

I wouldn't exactly equate borrowing for a college education to overborrowing for a house or HELOCing to pay for bling (disclosure: my loans are fully paid off). One is really about consumption and instant gratification, while the other is about attaining the minimum price of admission to the white collar job market (used to be a H.S. diploma). If you wish to enter some professions (doctor, nurse, teacher, scientist, etc.), you are required to have a degree. Realistically, unless you want to work at fast food or retail for the rest of your life for low pay, you pretty much need a degree. You don't really "need" a HELOC or McMansion.

It's true that its possible to reduce the cost of a college education partly by (a) going to community college for the first two years, then transferring, or (b) stretching a 4-year FT schedule out and working PT, or even (c) ROTC. However, it's naive to think it's possible to counteract the huge inflation-adjusted increases in college expenses and student debt load vs. 30-40 years entirely by exercising personal choice

Actually, aside from overborrowing, the average working and middle-class student debtor has something else common with the FB: s/he has been priced out of many colleges and universities thanks to the (sound familiar?) reckless borrowing by others. 30-40 years ago it was possible to finance a college education entirely by government scholarships and grants. The majority of Boomer graduates either did not graduate with any debt, or had very little relative to the incomes of the day. This is basically impossible today, even at a public University.

And guess who sets the "market price" of college education these days?: The responsible pay-as-you-go, hard-scrabble student, or the profligate, borrow-to-the-moon student debtor? Just like the housing market, highest bid wins.

Another interesting similarity between today's housing market and higher education: a federally guaranteed (but for-profit) company named "Sallie Mae". Does that name sound familiar? A little like "Fannie Mae" perhaps? Once again, the government comes to the rescue, by underwriting the banks and "helping" students to accumulate massive debt loads they get to carry around for many years after college.

Yeah, I don't think you can say anything meaningful about "Europe" when that means economies as diverse as Luxembourg and Serbia. Even just restricting to the EU means a really wide variety of economies and standards of living.

Let's just restrict to the Northern European countries of Germany, The Netherlands, Norway, Sweden, Belgium, England and Ireland.

Randy H,

I don't think adjusting for PPP does anything to effect the relative wealth differences internal to a society (the GINI coefficient). It obviously effects cross nation comparisons, but I think that is kind of beside the point.

I'm trying to swallow my usual rant about materialism and our perception of the "middle class". But... ah, screw it.

[rant]

First, let me preface my usual rant by saying YET AGAIN that I'm kinda tired about Californians whining about house prices and how the "average man" can't afford a house near Silicon Valley. Newsflash from the rest of America: only millionaire DINK engineers live in Silicon Valley. If you haven't figured that out yet, please do us a favor and don't breed. The rest of the county is not like your insanely overvalued chunk of pseudo-reality. We don't think you people are suffering from a bubble, we think you're nuts. It's mostly because you're Californians. Nobody in their right mind ANYWHERE else (except New York City itself) pays $1,500,000 for a 1500 sq.ft. single family home built in the 1940's. And let's not kid ourselves, for all its faults, NYC is crushingly more awesome than the smog-infested pit that is Silly Con Valley.

Has it occured to anyone here that our definition of "middle class" has drifted ever upwards in the last fifty years? Drifted... hell, hurtled. Middle class used to mean a modest house and one car, the kids in an average school, a garden out back, a mutt from the pound and cutting the lawn on weekends. Maybe you drink a beer with your friends, watch some baseball or play some pool at the local pub while the women watch TV and eat popcorn with the kids.

Now "middle class" means a "small" wine cellar, marble in the bathroom, granite in the kitchen, Brazilian cherry on all the floors, Persian rugs around, a Lexus and a minivan (God forbid older than 5 years!), gymnastics for all three daughters, private soccer lessons for the son, a purebred dog, country club membership for him, monthly pedicure and manicure for her, professional landscaping, a weekly housekeeper, organic vegetables bought from a specialty store, eating out twice a week, a 1000+ CD collection, a plasma TV in both the living room and the family room, three computers (God forbid older than 2 years!) a fully finished basement with a pool table, a sauna and a spa outside with tinted concrete pad and custom tile inlay.

what. the. hell.

You guys think the middle class is getting SHAFTED?!? Are you frigging kidding me? The so-called "middle class" today lives almost equivalent to the elite class only 100 years ago. Can you doomsday lovers identify another period since the Pleistocene when the gap has been closing that fast? And all people bitch about is the fact that the CEOs and uber-rich are still stunningly wealthy. Well guess what. Some guy 100 years from now is going to be getting a blow&(* from his perfect blonde android. And he's gonna be bitching to his buddies on his implanted nose-phone that the rich-poor gap is getting even bigger this century, because the rich guys are getting blow^(*s from hotter blonde androids with fancier tongue options.

You know what? The standard of living for the U.S. middle class has reached such an apex that people don't know what the fuck to do with all their wealth. Seriously. We're forced to look to rich societies of previous eras just to find ways to blow the wad faster. You know why people have cherrywood floors instead of just plain wood? It's because they have so damn much money that they have every conceivable pleasure they could want, and they have to spend the leftovers on something so the wealth isn't left to further generations. I present as evidence the "lowly" McMansion. 4000 sq.ft. on a 6000 sq.ft. lot. Because when you don't need land to be productive anymore, you might as well convert it into a 700 sq.ft. sunroom, piece by piece. Which by the way, was the size of your immigrant great-grandparents' entire damn cottage!

Today's American so-called "middle class" employs Mexicans to clean their toilets and cut their grass. What a fucking disgrace. You think this is what immigrants busted their ass for? So that their descendants could have servants for menial tasks? Kids, your immigrant forebears had more in common with Humberto the gardener than you. Humberto the gardener wants a used Chevy and a good school for his kids; you DINKs are complaining that your 5 year-old Trailblazer is "getting old" and lusting after some kind of rolling steel fortress with personalized DVD screens for the kids. But damn those Arabs for hoarding all the oil!

And you know what else? The "middle class" standard of living isn't much more enjoyable than the middle class around the turn of the century. They didn't have wine cellars, servants or metrosexual fashions. I will say this again because it bears repeating. The standard of living in Europe hasn't plunged relative to ours, except when measured in terms of useless shit. They seem to grasp the notion that the quality of life is framed by working hard 40 hours a week, and spending the rest of the time tending a garden, playing fetch with your dog, playing soccer with your kids (and grandkids), drinking a good beer (or three) and taking long walks with a modest woman who genuinely loves you. Everything else is pretty much bullshit that gets in the way of what's important.

America is screwed because it believes its own advertising. The middle class we see now is a product of generations that have never really known a tough time at home. Another Great Depression might do us good. This country (and most of the first world) needs a serious bitch slap to pull it back to reality. I know rich parents who spend no time with their kids, who in turn are basically being raised by coaches and tutors while their parents take an extra jaunt through the back nine. I know several fresh college grads in engineering who have more debt than assets, live in a fancy new townhouse/condo and drive an expensive European car. Hell, I know people who hire dogsitters. Dogsitters! Up until twenty years ago, only royalty had dogsitters! You are paying a servant to entertain your DOG. Jesus Christ. And you want to claim that the middle class standard of living has fallen? That the middle class is doing badly financially?

No, my fellow patrick.netters, the middle class is doing badly as human beings. If the middle class is unhappy, it's because it is realizing how truly empty wealth can be.

[/rant]

Brand,

Excellent rant. I may have to reconfigure some of my brain to properly process this information.

(Though...and presuming there is still a future history...we still need more millionaire DINK engineers - maybe breed them as sterile mules)

The skinny guy underneath might be a third world sweatshop worker, a lot of them are still skinny.

:lol:

Ok, by Brand's definition, I'm *definitely* not "middle class" (nor do I want to be).

Seriously, though, that description doesn't apply to anyone I know in my age range. In fact, anyone with a 4000 sft McMansion, their own wine cellar & dogsitter really cannot be considered "middle" class --you're upper class, buddy.

America's consumerist culture is the cultural equivalent of a peacock's unwieldy tail.

There's a bifurcation of America, we are a lot wealthier in terms of stuff, but we're also much more financially precarious. Even in this relatively successful blog, many (if not most) of us are only a lengthy unemployment or divorce or bout of serious illness from being completely broke.

Playing the devil's advocate - Brand, the American middle class is being economically rational, even if the collective result is disasterous. With globalization, stuff is cheap and fun (especially if you can buy on credit) while security (vigilantly saving, investing, exercise and good diet, regularly upgrading job skills) is expensive and no fun...and what if global warming or terrorists or Godzilla gets you first?

Learn to be like the grasshopper, my dear ant!

astrid says: America’s consumerist culture is the cultural equivalent of a peacock’s unwieldy tail.

I hate it when people can summarize my rants in a single sentence. :o

astrid says: Playing the devil’s advocate - Brand, the American middle class is being economically rational, even if the collective result is disasterous.

Oh Lord, if you keep pushing in that direction, I'm going to start agreeing with Sean. The role of government must be to restrain people's seemingly reasonable (in their own tiny context) but ultimately destructive tendencies.

Is there a version of capitalism where the "middle class" doesn't act like a bunch of uneducated drunken idiots with money they don't deserve?

Playing the Devil's Advocate, I think Americans should continue to close the gap between the rich and the poor by purchasing exotic goods that will improve their quality of life. If they need more money, just remember that Debt = Wealth. Hopefully the trend of you comrades closing the rich-poor gap will continue even as we diversify away from U.S. Treasuries and expand our hold on useful commodities like oil and natural resources, while continuing to educate our children.

Pay no attention to the man behind the (silken) curtain... he represents the interests of the proletariat. Move along, comrades, move along...

Brand Says: I hate it when people can summarize my rants in a single sentence. :o

I agree, it's a curse and it's probably gonna get me killed the next time somebody nearby goes postal (or collegiate, if you will).

As to the problems of collective action. The question is: have we fallen too far morally to make recover that eden of responsible sustainability? The mob drives the government and the electoral process in recent year seems focused on concentrating the idiocy.

The older I get, the more libertarian/objectivist I get. There are many areas where I can see a lot of potential for positive government intervention (healthcare, education, pollution control, fuel conservation, safety), but I no longer trust the voters to vote for the correct legislators and make the correct choices.

"Newsflash from the rest of America: only millionaire DINK engineers live in Silicon Valley. If you haven’t figured that out yet, please do us a favor and don’t breed."

Sorry but we are unable to keep these fabled millionairs in the valley. If you take to time and go to Intel or HP web career sites and list out open spots outside of SCC. You will find many more out hired/employed in other states. Intel has more Engineers in Oregon, Washington and Sacromento. Fact is SCC are no longer the center of any engineering. I guess you can ask why companies like 3com and now Borland who started here back in the late 70s early 80s have moved out altogether?

Im dont know know when you came SCC but your rant is off base here. I been here since the 70's and history does not bear with your comments.

The only Californians whinning about high home prices are your, mine and everyone elses CEO/CFO and heads of operations. They have no interest in overpaying high salaries when then can get a better deal elsewhere.

Sure NYC is a great city better than SCC, but its you and many others out of state people that has been pumping prices in to millions for shitbox next to Google. When in the past did we natives pervert home prices? When

Why dont you look at the actually numbers of employeed engineers, they are a small percentage of SCC workforce. They occupy around less than 22% of operating expenses of many comanies. If anything there is less of a need for engieers today than 1o years ago. Xerox Pac in PA only employees 30% less today than in the hey day of years ago.

You know,,,,I just keep thinking of the Romans.
I'd wager a bet that there were many conversations such as this in the Forum...just before the Vandals broke down the gates of the city. Call me an old doom-and-gloomer, but the similarities between the two empires just keep haunting me.

HARM says: Ok, by Brand’s definition, I’m *definitely* not “middle class” (nor do I want to be).

Seriously, though, that description doesn’t apply to anyone I know in my age range. In fact, anyone with a 4000 sft McMansion, their own wine cellar & dogsitter really cannot be considered “middle” class –you’re upper class, buddy.

Ok, I'll tell ya what. Knock off the housekeeper, the lawn care guy and the dogsitter. How many "middle class" people do you know that has 75% of the following: a “small” wine cellar, marble in the bathroom, granite in the kitchen, Brazilian cherry on all the floors, Persian rugs around, a Lexus and a minivan (God forbid older than 5 years!), gymnastics for all three daughters, private soccer lessons for the son, a purebred dog, country club membership for him, monthly pedicure and manicure for her, professional landscaping, organic vegetables bought from a specialty store, eating out twice a week, a 1000+ CD collection, a plasma TV in both the living room and the family room, three computers (God forbid older than 2 years!) a fully finished basement with a pool table, a sauna and a spa outside with tinted concrete pad and custom tile inlay.

For the record, I know plenty of "middle class" people in that 75% range. I bet most of them have a net worth of $100K or less once you take assets - debts. It's just that they have the ability to service that debt. But they're counting on their underfunded 401(k), a retirement plan and Social Security to get them through the lean times when they're old.

Several decades ago, the middle class wanted nothing more than to get out of debt. They wanted to own their own house and have a lifestyle that would be sustained into retirement (including medical and SS). The Great Depression did that to people. But now that we're two generations removed from remembering the Great Depression ourselves, people have bought back into debt=wealth. It's the new era!

America reminds me of the decaying Roman empire. Importing luxury goods from across the lands, hiring lower cost people at geographic extremeties to do our dirty work, depending on the state to fund our ever more elaborate lifestyle (and fill in the gaps from our youthful irresponsibility later in life).

Space Ace says: The only Californians whinning about high home prices are your, mine and everyone elses CEO/CFO and heads of operations.

What the hell blog do you read? Practically everyone on patrick.net bitches about the high home prices in the Bay Area. To my knowledge, pretty much nobody here is a CEO or CFO of any mid or large sized company.

speedingpullet says: You know,,,,I just keep thinking of the Romans.

Beat me to the Roman punch, I see. :)

"speedingpullet says: You know,,,,I just keep thinking of the Romans.

Beat me to the Roman punch, I see. :) "

Wow, me three! I was about halfway through with a post on the same thought, but then erased it because I was too lazy to go into a long discussion about imperial presidency and all that.

Where are these fabled engineers ... seems only 40% in SCC
have a 4 year degree or better.

Bachelor's degree or higher, pct of persons age 25+, 2000 40.5%

http://quickfacts.census.gov/qfd/states/06/06085.html

HARM,

I agree with you about the student debt, the "easy way out" for academia to continue to bubble up college costs.

I know the prices charged to resident students have gone up a lot. I watch this carefully, because my kids are approaching that age. But what was true in my day about pay-as-you-go or ("almost"-pay-as-you-go) is still within reach of California students, because of the largesse of the California taxpayer who heavily subsidizes the JC's and the public 4-year schools. This may change (probably will), but in the meanwhile, that's how it is right now.

What the people who borrow too much to buy more house than they can afford have in common with the students who borrow too much for schooling that they cannot afford is the impatience. They want it all now. The homebuyers don't want to wait for rational house prices, and the borrowing students want that BS degree rightaway, 4 or so years after high school, instead of 7-8 or so years after high school. Like it's really going to matter all that much by the time they are 35 or so. Hah!

Slow and steady, one step at a time, is a way (at least for the time being) to have it both ways, get the education, and not have the "crushing" student loan debt.

Brand,

The Great Depression wasn't too horrible on the US, but just look at what the economic pressure did to Germany, Japan, and a host of other countries who installed Fascist leadership. Do you really want to revisit that in the nuclear age? With a bunch of religious fanatics (Christian, Muslim and God/gods knows whom else) who thinks they'll be rewarded for blowing themselves in a crowd of innocents and that they'll be raptured up any day now.

Where are these fabled engineers ... seems only 40% in SCC
have a 4 year degree or better. That includes many in this county
in all kinds of degrees and all kinds of professions.

Bachelor's degree or higher, pct of persons age 25+, 2000 40.5%

http://quickfacts.census.gov/qfd/states/06/06085.html

Brand - I think we posted simultaneously - but great minds think alike ;-)

But it is eerie to see the similarities - huge superpower no longer rising like a meteor, imports the majoirty of its food and goods, uses slaves for its menial work, huge disparity between rich and poor, a level of passivity and lassitude in its more affluent members not seen in previous generations, a huge ineffective and cumbersome military section propping up the edges of the empire at all costs - all in the setting of global unrest.

Nothing good will come of it, I tell you.

Astrid,

Were here for the Great Depression? Were any of your relatives here for it? When you say it really wasn't so horrible here, do you really know what you are talking about?

Have you read the Grapes of Wrath?

There is a "wealth" of information about the topic on internet and in the library. It was horrible here. It might have been even worse in other places.

But it was very horrible here, too.

Space Ace says: Where are these fabled engineers … seems only 40% in SCC have a 4 year degree or better.

Those engineers come from many places, including rich families overseas. They are also produced by clans of technical ninjas from mountain monestaries where they have been trained in software since birth. These super-engineers are buying up all the land in the Bay Area, which is why mere MBAs and lesser twerps like manufacturing peasants are priced out forever.

By the way, I'm using a literary technique from East of the Mississippi. I think maybe it's from Scotland or Ireland. It's called sarcasm. NOTE TO CALIFORNIANS: You can pretty much assume I'm going to use some sarcasm anytime I go off on a rant about the greedy middle class and its soulless worship of the perceived superiority of the financial elite. Sarcasm is kind of like the irony of paying over $1,000,000 for a shitty house on a .15 acre lot, except that you're the one laughing.

Anyway...

Most Bay Area residents can barely afford to live there. Millionaire DINK engineers might have a chance of clinging to housing in the face of $1.5M single family homes. Everyone below that cutline is pretty much screwed.

If I were below that cutline with a huge home equity appreciation, I would take the cash out and run for somewhere nicer and cheaper. Lots of locations to choose from. In the last 10-15 years, only the rich can truly afford the Bay Area.

Oh wait. Sarcasm? Hmm. Yeah, sarcasm.

The role of government must be to restrain people’s seemingly reasonable (in their own tiny context) but ultimately destructive tendencies.

In that case, you'll need a benign dictator, not a democracy.

Here's an interesting article that I read today that mentioned the growing disparity:

http://news.yahoo.com/s/ap/20070422/ap_on_re_us/virginia_tech_shooting_strangers;_ylt=AkswddqZSPfwdrESEucZuWoDW7oF

Criminologist Fox speculates that the increasing popularity of workplace killings, and public shootings generally, may be partly due to decreasing economic security and increasing inequality. America increasingly rewards its winners with a disproportionate share of wealth and adoration, while treating its losers to a heaping helping of public shame.

"We ridicule them. We vote them off the island. We laugh at them on `American Idol,'" Fox said

http://www.labormarketinfo.edd.ca.gov/cgi/databrowsing/occExplorerQSDetails.asp?searchCriteria=engineers&careerID=&menuChoice=occExplorer&geogArea=0604000085&soccode=151032&search=Explore+Occupation

I suggest you look at the stats... you will find engineers are not at the top.
Good freaking almighty engineers have big EGOs... Bahahahahah ! Its all about you and pampered lives.

Total 866,300
Office support 177K
Sales 85K
Managment 72K
Computer and Mathematical 67K
Food Prep 60K
Production 57K
Engineer 55K
Finance 46K

sybrib,

Given that I seriously consider the complete annihilation of humanity within my lifetime, my definition of historically terrible is rather more severe than other people's.

Oh, BTW, you've been here for long enough so pay attention. I am ethnically Chinese. In the last two hundred years, the Chinese have gone through two extremely bloody civil wars, one major invasion/occupation plus half a dozen substantial imperialist incursions, several large scale peasant revolts, a whole generation forcibly stripped of formal education and sent down to the countryside, several large scale famines - one of which is complete man made and killed upwards of 30 million people, and one totalitarian government complete with reeducation and purging (rinse and repeat).

Yeah, I know something about history.

sybrib says: Were here for the Great Depression? Were any of your relatives here for it? When you say it really wasn’t so horrible here, do you really know what you are talking about?

I tend to agree with sybrib on this one. Most of my family hit American dirt in the 1870's and 1880's. Their tales of the depression are horrifying indeed. No work at the factories, no aid from the government. They raised chickens in their backyards and farmed small fields, often without any hope if the crops failed. Several of my own relatives turned to bootlegging during Prohibition.

We can talk about living paycheck to paycheck before bankruptcy. Those folks were living harvest to harvest before the grim reaper. But perhaps hence their financial conservativism (and their fascination with food gardens). I wonder if Germans like gardens because they still remember worthless Deuschmarks after WW-I...

Space Ass: Can you possibly be that dumb? I WAS BEING SARCASTIC.

You strike me like a monkey trying to play jax, staring absently at the marbles while you munch on the prickly thing.

Brand,

I'm well aware of the farm foreclosures and the Okies and all that, I spent five and a half years in Oklahoma public schools! I said "too horrible" in comparison to Germany, Japan, etc. The American government didn't topple, Americans didn't start rounding up Jews or re-enslave the blacks. I was highlighting that the global event that you thought was horrible enough to teach Americans a lesson about frugality was also horrible enough to topple the Weimar Republic and send 6 million Jews to their deaths.

I WAS BEING SARCASTIC

HAHAH Thats OK I wasnt!

"Were here for the Great Depression? Were any of your relatives here for it?"

No not the 1929-33 one but I did survive the Silicon Valley Depression of 1989-92 and 2000-2002. Many others left for Utah and Washington.

-Deuschmarks
+Deutschmarks