Latest / Words & Numbers / Episode 440: Debunking the Religion of Decline

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Episode 440: Debunking the Religion of Decline · Words & Numbers

0:00
Hi, I'm James and I'm Anthony. And this is words and numbers.
0:08
So, Anthony, what's new and exciting in our world this week?
0:13
Well, a couple things. We should start off by telling
0:15
our listeners we have a new affiliation and a producer with.
0:20
And if I might, I might interrupt our.
0:23
Viewers. Yes, our viewers, right.
0:25
Yeah, of course. What am I thinking?
0:27
We've teamed up with an organization, civil that's
0:31
dedicated to what is the word they use, Rebuilding
0:35
civilization. That's a tall order.
0:38
Yeah. And we'll do our little part
0:40
here as we talk about things in politics and economics.
0:44
But the fallout for our listeners is our listeners now
0:47
get to be viewers also as will be appearing on video.
0:50
And because Civil will be handling our producing, we're
0:54
going to be able to ratchet up to two episodes a week.
0:58
Maybe even. Three.
0:59
Yeah, well let's let's get 2 under our belt first.
1:04
We'll see how it goes that that seems right, that seems right.
1:08
But thank you to Civil for having us.
1:10
They've been a joy to deal with thus far, and we look forward to
1:12
a long and fruitful relationship with them.
1:15
So my interesting thing for this week is a similarity between a
1:19
Nobel Prize winner in medicine and the movie Jurassic World.
1:24
That doesn't seem right. Yeah, well, I wouldn't think so
1:26
either. And coincidentally, these two
1:28
things crossed my path at the same time.
1:30
My wife and I went to see Jurassic World recently, and I
1:34
won't go into the story, but at the end of the thing, she turns
1:38
to me in the movie theater and says, who was the villain?
1:44
And as I thought on it, I'm thinking, you know, it's
1:48
actually the heroine. Now, of course, that's not the
1:51
way it was it was built. It's not the way the script was
1:54
written. The heroine is is the heroine.
1:56
But I argue the heroine was actually the villain.
1:58
And I'll tell you a little bit about the story here to, to set
2:01
the stage. Our heroine and the people who
2:05
surround her are going to this island in the Equatorial world,
2:10
Equatorial Earth, to obtain dinosaur blood with which
2:14
they'll be able to cure some heart disease, right?
2:19
And, and the movie ends with her and her posse saying, OK, we've
2:27
got this dinosaur blood. We've gone through all of this
2:29
stuff. It belongs to the world.
2:31
We're not going to give it to the evil corporation, right,
2:35
that sponsored this whole thing. That's going to be doing the
2:38
research. We give it to the world.
2:40
We're going to open source it. And as an economist, I have to
2:45
paint her as the villain, as actually there are two villains
2:48
here. She's one of them.
2:49
Because the fact of the matter is she she's committing the same
2:54
error that Marxists fall into repeatedly of they begin their
2:59
story after all the hard work has already been done.
3:04
The the entrepreneurs have taken their risks, the investors have
3:08
taken their risks. They've invested their capital
3:10
and they built something. And then the Marxists come along
3:13
and say, well, this should belong to everybody, which is in
3:16
effect what she was doing. Yes, she and her posse were
3:18
collecting the blood, but it was the corporation that funded the
3:21
whole thing. It was a corporation that did
3:22
the initial research that discovered that this was a
3:25
thing, that with this blood we could come up with this drug.
3:27
And she's going to do the Marxist thing and say, well,
3:30
this belongs to the world. Now we can look at that and say,
3:33
well, that's that's the right thing because the drug will be
3:37
cheap and everybody will get it. And that's absolutely correct,
3:40
just like the Marxists are absolutely correct.
3:43
If the government nationalizes all the big corporations and
3:47
hands the ownership over to the people, we all will be better
3:51
off yet. Sure, OK, that's fine.
3:53
But here's the thing. I point back to what I call the
3:56
babysitter principle, which is why do you pay your babysitter
4:01
and you don't pay your babysitter for the babysitting?
4:04
This just happened because the babysitting just happened.
4:07
Is is done right? Babysitter can't take it back.
4:11
You pay the babysitter so the babysitter answers the phone the
4:14
next time you call and want to babysit.
4:18
Yep, exactly so. And that's where everybody here
4:20
goes off the rails in the Marxist world, OK, everybody
4:24
ends up owning the means of production.
4:26
The profits are given back to the workers and all that stuff.
4:30
But that's the last companies you will ever see because you
4:33
remove the incentive to produce more.
4:37
And aunt, we've got the Venezuelan oil industry to point
4:40
to. Yes, exactly.
4:41
Venezuela sitting on the single country that is sitting on the
4:45
largest set of oil reserves in the world and they had to import
4:53
gasoline because they couldn't manage to get their industry
4:56
working because why? The government nationalized it.
5:00
And as a result of that nationalization, the entire
5:04
thing fell apart, right? Nothing was maintained.
5:06
Right, right. Corporations maintain assets.
5:12
That's one of the things that they do.
5:14
Governments, not so much. Yeah.
5:16
And maintain here means that you, you keep it up because the
5:20
assets depreciate. They physically literally fall
5:23
apart. You've got to things, repair
5:25
things and all of that. Yep.
5:28
And as if that weren't enough, I suspect, and I, I think most
5:32
people suspect right now, that we're about to see the same sort
5:35
of thing happen on a much smaller scale in New York City.
5:38
Yes, with their that, I'm very interested to see what happens
5:41
there with their social summary. But I'm glad you brought that up
5:45
because I said a moment ago that there were two villains in
5:49
Jurassic Park. And you'll notice the second
5:52
villain if you stop and say, OK, but hang on.
5:56
If this corporation had gotten possession of this dinosaur
6:00
blood, it would have come up with the drug and it would've
6:02
sold it for sold the drug for for tremendous amount of money
6:06
per dose. And so lots of people wouldn't
6:08
be able to afford it. And so only some people will get
6:11
the drug and lots of people wouldn't.
6:13
To which an economist would say, yeah, but if there's
6:17
competition, other companies are going to want to get in on that.
6:21
And in getting in on that, they'll bid the price.
6:24
The competition will knock the price down.
6:26
But in this movie, had they given the blood to the
6:31
corporation and the corporation did what was going to do, what I
6:34
just laid out would not have happened.
6:36
And here enters our second villain.
6:39
It wouldn't have happened because the world governments in
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this movie had come together and agreed to make this band of
6:45
Equatorial region of the earth where the dinosaurs were off
6:48
limits to everybody. That sounds right.
6:52
In other words, the governments set up this corporation to be a
6:56
monopoly. Yeah, as and and look, that's
7:00
the only way monopolies exist. Right.
7:02
Yeah, largely speaking now people are going to start waving
7:05
their hands and say what about natural monopolies?
7:07
And and IA good friend of ours, Howie Bacher, once challenged me
7:12
to name a single natural monopoly that can persist in the
7:17
long run, and I couldn't do. It I can't do it, yeah.
7:20
I can't in the long run. They get replaced by alternative
7:23
technologies. Now I'm going on about Jurassic
7:27
World. I introduced it by saying that
7:29
it's got something similar to do with a Nobel Prize winner in
7:31
medicine, Charles Rice, Nobel Prize winner in medicine.
7:35
He was part of the team that has come up with a treatment, or
7:38
cure, I should say, for hepatitis C, has said it's a
7:44
crime that a drug exists that could cure everyone, yet not
7:49
everybody has access to it. I feel for you.
7:54
I agree with the statement, but it's more complex than that.
7:59
Charles Rice would have us give away or have the company give
8:02
away this treatment for free and that's fine.
8:05
Everybody would get the treatment to hepatitis C That's
8:07
superb. But like the babysitter, it's
8:10
the last drug you will ever see. Yeah, and you know, it bears
8:14
mentioning that MD's don't typically study economics in any
8:18
detail. Right.
8:19
Right, right. And and I had the same reaction
8:22
many years ago when I read Albert Einstein's Political
8:25
Meanderings. It was like reading a 7th
8:28
grader's take on politics right now.
8:30
He was a brilliant physicist, but as an as a political thinker
8:34
he was garden variety bad. Yeah.
8:36
And the fact is, if you or I held forth on physics, he would
8:39
have the same opinion, rightly so, of us.
8:42
Rightly so, rightly so. And we often, you know, what's
8:48
the word I'm looking for? Criticize.
8:50
It seems a little too light popes when they get busy with
8:54
things other than religion. Right.
8:56
Other than popping right? Other than other than popping,
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that's right. Well, and I want to on a
9:01
four-star scale, what do you give the movie?
9:04
It's a solid 3 1/2. So it's really good.
9:08
No, no. I mean, a 5 is really good.
9:11
Oh, you said on a four scale. I'm sorry.
9:12
I'm used to 5 on a force. It's a 2 1/2.
9:18
It's all right. It's one.
9:20
I developed a scale, a mental scale for movies that I find
9:23
very intuitive. And the top level is it's a
9:27
movie that is so good. I would go back and see it
9:30
multiple. I would pay to see it multiple
9:32
times Next level down. It's a movie that was well worth
9:36
seeing. I'm happy I paid to see it once,
9:38
but I'm not I I wouldn't pay to see a second time.
9:40
Next level down. It's a movie that maybe isn't
9:45
worth the ticket price, but it was worth it was worth removing
9:52
the uncertainty of whether it would have been worth the ticket
9:55
price, moving it from an unknown to a known right, and then the.
10:00
Really overthink of this the. Bottom list is of course, it's
10:02
not even worth. I could have been happier not
10:05
knowing whether I'd like the movie, then just sit through the
10:07
thing. So better off mowing your lawn.
10:10
Right. Yeah, exactly this one, this
10:12
one, I'd give it that rating of it's worth.
10:15
It's worth the ticket price to convince to to take away the
10:19
uncertainty as to whether you would have liked it.
10:22
Well, stay tuned for next week because I'll have Superman to
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talk about. Oh, excellent, excellent.
10:27
Yeah, I think I'm looking forward to it.
10:29
So I want to bring our attention to South of the border, to our
10:33
our friends, to the South. The Mexicans who tearing a page
10:36
out of our playbook are now becoming hostile, let's just
10:43
say, to American immigrants. Oh really?
10:47
They're becoming a hostile to American immigrants to Mexico?
10:50
Are there that many American immigrants to Mexico?
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Not that many, but there's a fair bit who retired there,
10:56
right? Because the the cost of living
10:58
in Mexico is dramatically lower and yet it's still like living
11:02
in the West. So people do retire there.
11:05
But now the Mexicans have have apparently had it and they're
11:09
coming out swinging against what they call gentrification.
11:12
And they don't want that American money if it comes with
11:16
Americans. And I find this to be endlessly
11:21
amusing, that my heart goes out to Americans who uprooted their
11:25
lives to retire there. But this is the danger of
11:28
retiring to a foreign country. And everybody says, I hear this
11:32
constantly, I'm not staying in the United States.
11:35
OK, pumpkin, where are you going?
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And there's never a particularly compelling answer to that.
11:41
Now I look around for places to retire to and I I was thinking
11:45
Mexico might be a good option. I also think Portugal would be
11:48
lovely. There's a big American expat
11:50
community in Portugal. I've got my eye on Portugal
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also. Yeah, but when things turn
11:56
politically, you're out in the wind.
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Yeah. And, and you know, they're at
12:00
the mercy now of Mexican mobs. Oh my.
12:05
Well, yeah, the people, Mexican mobs are running through the
12:08
street smashing windows and things like this.
12:10
And it's, it's quite indiscriminate at this time.
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I'll put a story in the show notes so people can read up on
12:15
it a little bit. But it's one of those things
12:19
where I understand, I get it. And yet everybody loses.
12:24
The Mexicans are going to lose. The Americans in Mexico are
12:26
going to lose. Everybody's going to lose.
12:28
As a result of this, a rising tide lifts all boats, even if it
12:33
doesn't seem like it at first. Which of course, aunt, brings us
12:39
to the foolishness of the week. Have you a prediction?
12:42
I have not been paying attention to the news, just just keeping
12:46
my nose above water on things to do with interest rates and
12:50
inflation. But the politics I haven't had.
12:52
I have not read the Wall Street Journal in about nine months.
12:57
Now my subscription is lapsed. I haven't read it in nine months
13:00
either. Anyway, what is foolish?
13:02
We return. We return, of course, to our
13:05
commander in Chief and big toe, Donald Trump, who while in
13:09
Liberia asked the Liberian president where he learned
13:14
English because apparently it was so good that Trump couldn't
13:19
fathom where he might have learned it, not realizing that
13:22
English is the official language of Liberia.
13:26
In his defense, I didn't know that, but it's not my job to
13:30
know that. It is.
13:31
You didn't get a briefing before our episode today.
13:35
As Air Force One travels. People should be telling him
13:39
things, you know, things like this, because this is just
13:43
foolish. But at least given the
13:46
foolishness of the week last week, we returned to the light
13:48
hearted nature of the segment. We're happy to announce that
13:52
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Your support helps us continue to advocate for a more civil
15:13
society. This week, I want to talk.
15:18
Let me set the stage here. I recorded a video at the
15:22
Liberty Con, which is Students for Liberty's big event back in
15:26
January and it just aired a couple days ago on the on the
15:31
show Dad Saves America. And in this it's we went on.
15:36
This is a like 2 1/2 hour interview.
15:39
I checked in, I checked into it and I thought 2 1/2 hours of
15:42
Anthony Davies, No thank. You.
15:44
Yeah. Not even I could watch that.
15:50
But The thing is there on YouTube and of course people are
15:53
commenting And I, I was saying and we talked about lots of
15:57
things, but one of the things I was talking about was the fact
16:00
that Americans seem not to understand how much better off
16:06
their lives are today versus the past.
16:08
And we talked about why that might be so.
16:10
And I point to the media for some of it, but people were just
16:15
excoriating me in the YouTube comments saying, you know, I
16:20
don't know what's going on. And, you know, maybe some things
16:24
are better, some things are cheaper, but certainly not.
16:28
And several people mentioned kept mentioned the same three
16:30
things houses, higher education and cars and.
16:37
You got to point out that that's right.
16:39
Well, it's kind of right. One of one of them is absolutely
16:42
right. Let me say this Those things are
16:46
more expensive, but they're also much, much better.
16:50
Yeah, that's what well, yeah, two of the three are much, much
16:53
better. Yeah, two of the three.
16:55
And that's worth that's worth talking about.
16:57
But there's maybe a a higher level conversation to be had
17:02
here. And now that we were just
17:03
joining our our friends on civil, this might be a good time
17:07
to talk about it. And that is that here on words
17:10
and numbers for ever since our inception, whenever that was
17:14
2016 or so, we have, we have been committed to following the
17:21
facts and reason wherever they lead.
17:24
Understanding we're going to get things wrong.
17:26
We have our own biases, but to the extent that we can hold true
17:30
to that following the facts, following the reason will tend
17:33
to get it wrong much less. And James, I tell you because I
17:39
interacted, I commented, responded to some of the
17:41
comments on YouTube. And what came to me was this
17:45
sense that that these, the people who were arguing against
17:50
me, weren't arguing from fact. It was as if they had a
17:56
religious devotion, and I mean that seriously to this idea that
18:01
the world is becoming a worse place.
18:03
And they were deeply offended that I would challenge their
18:06
religion. Well, the world is in some
18:11
respects becoming a worse place, and in most respects becoming a
18:15
much better place. Yeah, that's the thing.
18:17
It is. I mean, you could point to
18:18
specific things that that are becoming worse and certainly
18:22
specific people, you know, somebody said on there, well,
18:25
you can't tell me cars are cheaper.
18:27
I haven't experienced this. The fact is what an individual
18:30
experiences is completely irrelevant to the statement.
18:34
We're talking about people in general.
18:37
And this is the difference, and we talk about this a lot between
18:40
anecdotes and data. Yeah.
18:43
Right. What happens to you matters, but
18:45
it also matters what happens to everybody else.
18:48
It does when you're dealing with anecdotes.
18:51
The problem is you can find an anecdote to support any
18:54
position. And literally anything.
18:57
So that's right. They they're not at all helpful
18:59
in in a discussion like this, you need to go the data and ask
19:03
what's common, what's typical. All right, so what's common?
19:07
What's typical? Well, here's the interesting
19:09
thing. Because I, I went and pulled and
19:11
I had not pulled this data for some time.
19:14
And I pulled it expecting to find that they were basically
19:19
right, that things have become more expensive.
19:21
And I was going to say things like, OK, but that gets
19:24
mitigated by certain things. What turns out that that's not
19:28
really the case. So let me throw out some facts.
19:31
And I, I picked the dates I'm going to say to you are simply
19:35
the dates I picked because they were a response to somebody
19:37
who'd said, who said something on the UK.
19:40
Comments now like the people who commented, I'm already angry
19:44
with you because I've been to grocery stores, right?
19:50
Right. Think things things are more
19:52
expensive. We just experienced real
19:54
inflation. Yeah, we did.
19:56
And that's, that's a little bit of a family in the ointment that
19:59
we experienced this 2022 inflation which.
20:02
Which makes things relative to 2020, things today are way
20:07
expensive, but relative to 1980, relative to 1920, they
20:12
absolutely aren't. Right.
20:14
Yeah. And this is a thing, right?
20:16
You The longer your horizon, the more accurate your results.
20:20
Yeah. And I, and I think someone might
20:23
say in response, OK, but what was going on in 1920 doesn't
20:28
matter because what matters is I bought food in 2020 and I bought
20:32
food in 2024 and the food in 2024 is more expensive.
20:36
And I get that. But we're we're not asking the
20:39
question what's what is, what is your particular experience?
20:45
We're asked, I was talking about how humans have been progressing
20:49
generation to generation. They're going to be hiccups in
20:52
this, but generally speaking, generation to generation, things
20:56
are moving in an unequivocal loop, unequivocally good
21:00
direction. People are always.
21:05
They get on me pretty hard every time I say violent crime is
21:09
down. And yet if if you look at the
21:12
chart from say 1990 to right now, it's it's down so much that
21:19
it it probably doesn't even exist by 1993 standards.
21:24
Right. 1993 was the height of the violent crime problem in the
21:28
United States. It it's down like a rock falling
21:34
into a Canyon, right? And OK, does does that mean that
21:39
you're never going to experience violent crime?
21:41
No, it means you're far less likely to.
21:44
Yeah, versus a decade, 2 decades, 3 decades ago, Yeah.
21:48
Yeah. Now someone's going to say to
21:50
you back that can't be right because I feel scared.
21:55
Yeah, your feelings have nothing to do with it.
21:58
Yeah, I agree. They have nothing to do with the
22:01
question. However, I, I want to point out
22:04
that people feel scared, not all the time, but a lot of the time
22:08
because of what they perceive to be happening from the
22:12
television. Television shows something and
22:15
you just think that's the way the world is.
22:18
I've been watching with my wife. We've been binging on cop shows
22:22
recently on Netflix and Amazon Prime.
22:25
And as we do this, I'm reminded of things I've read over the
22:28
years, like this business about, well, you get a phone call when
22:33
you're arrested. Apparently that's not a thing.
22:36
Hollywood just made this up. Can confirm they've got to read
22:41
you your. Rights when they put the
22:42
handcuffs on you. No, they don't.
22:45
No, that's not they do not Now they do at some point.
22:48
Right at some point. Oh, in my favorite, which was
22:51
some show we were watching just the other night, they're oh, no,
22:55
it was Jurassic. It was Jurassic World.
22:58
They're in a tunnel, a small, you know, maybe 10 feet across a
23:01
bunch of people in a tunnel and our heroine pulls out a gun and
23:05
starts shooting at one of the dinosaurs.
23:09
Come on. All of those people should have
23:11
been deaf for the rest of their lives to be in a concrete tunnel
23:15
that enclosed with a gun going off or, or you see cops shows
23:19
them shooting the gun from inside the car.
23:21
Same thing. The thing is so loud it would
23:24
deafen everybody. I mean like permanently.
23:27
But what happens is we see this so often, we just think, well,
23:31
of course that's the way it is. It's not the way it is.
23:35
And the same thing is the case with the media.
23:37
We keep seeing the stuff the media shows us, but life isn't
23:40
really that way. They show us the.
23:42
Media stuff. The media is not going to show
23:45
you regular life. There's no story there.
23:47
Right. Right.
23:48
If it bleeds, it leads, and you're going to see the
23:52
aberrations. So were people murdered today?
23:55
Probably. You'll see it on the news.
23:57
Were people murdered in your town?
23:58
In your neighborhood? No.
24:01
Yeah. And somehow there's this
24:04
gigantic disconnect between what people know to be true in their
24:07
own lives and what they think to be true everywhere.
24:12
Or I should say everywhere else. And you, you have challenged our
24:15
listeners many times over the years.
24:17
And I love the thing that you do of you say, all right, what you
24:21
did it last in COVID when they were saying something like 10%
24:25
of the population was dying of COVID or whatever it was.
24:27
And you said to our listeners, look around in your own lives,
24:31
how many people that you personally know have died of
24:35
COVID? Because if it's 10%, you know
24:39
plenty. And yet nobody ever wrote back
24:41
and said, yeah, here's the list. Now I'm sure some of our
24:45
listeners do in fact know people.
24:47
The laws of large numbers start to apply.
24:49
But that so few of them did that what I said was generally
24:53
inoffensive to everybody is telling.
24:55
It's really telling. And and now I'm seeing all the
24:59
Facebook cranks in my world saying things like 74% of
25:03
everybody who took the COVID jab or dying. 7474, yeah.
25:10
Some something like it, right? It's, it's just idiotic.
25:13
And then you read a little bit into it and you find out that
25:16
they're really talking about a narrow gap of a certain kind of
25:20
people. And even then, it's asinine.
25:23
Right. Right. 74% of any demographic,
25:27
you're going to know dozens of people in it.
25:30
Yeah. Did 74% of them die?
25:32
No. No.
25:36
So to go back to to the thing you, I would say a viewer feel
25:40
scared because that's what the media shows you, scary stuff.
25:44
I have a friend who says you will never see the headline.
25:48
40,000 planes landed in the US today.
25:51
Safely. Safely, right?
25:53
You're never going to see that, despite the fact that happens
25:55
every day. Well, because it happens every
25:57
day. You're never going to see it.
25:59
Yeah, I I forget where I was. I was in another city just
26:03
recently. It's kind of sad that you can't
26:06
remember these things, but I was out walking around.
26:09
It was New York City. I was in Manhattan, and I was
26:11
out walking around like 11/30, 12:00.
26:14
There were all these young girls walking around with earbuds.
26:17
In with earbuds, Yeah, I saw that too.
26:19
Yeah, totally. Oblivious to their to their
26:22
surroundings, which can only mean they're safe and they know
26:27
it, right? And, and you see this over and
26:29
over again in hundreds of different ways.
26:31
This is just a cheap, easy example, but almost everywhere I
26:35
go, almost all the time, everybody's feeling pretty safe.
26:41
In the nut, the numbers bear that out.
26:42
When you talked about violent crime dropping in this country,
26:47
it's not just dropping a bit, it's dropped something like 90%.
26:51
Yeah, it's over 90% from 1993. I mean, wow, how'd that happen?
26:57
That's what we should be studying.
26:58
Right. Yeah.
27:00
How and why that occurred? Yeah.
27:03
And yet I don't hear theories about this.
27:06
Right. Instead we asked the question,
27:08
why do we have crime? We should be asking why do we
27:11
not have crime? And so too, because then we
27:14
could do that some more. Yeah, and economists say the
27:16
same thing about wealth. You know, we're all wringing our
27:20
hands saying what causes poverty, to which economists say
27:23
no, no, no, no. Poverty is the natural state.
27:26
That's right, we are born into poverty.
27:28
Yeah, you should be asking what causes wealth.
27:30
That's. The cool thing, how is it that
27:32
you came out of your mother and went home to an air conditioned
27:35
home? Yes, right, that that's the
27:37
interesting question. But let's get back to cars,
27:40
education, and was it healthcare?
27:43
So, so let me, I want to let's talk about houses first, because
27:46
this is the big house people point to in I'm going to do 1980
27:50
versus 20/24/1980, the median US home sold.
27:55
And this is an interest in the numbers come from the Federal
27:57
Reserve and it's US homes sold because in this, in this YouTube
28:03
conversation, people were saying, well, it's not the price
28:06
of the houses, it's the price of the land they sit on.
28:08
And you can parse all of that. You don't have to worry about
28:11
it. This statistic is asking how
28:14
much did it cost? So the house, everything, you
28:16
know, whatever is in it, the land it sits on, what's the
28:19
median sale price? And this is, this is of homes
28:23
sold. So it's not necessarily new
28:25
homes, It's all the homes that were sold in 1980.
28:28
Sixty, $5000. That's the house in the middle.
28:33
Some will be more, some be less, but the one in the middle,
28:35
65,000. Today 2024.
28:38
The House in the Middle 420,000. And what is 60,000 in 2025
28:44
dollars? And this is the thing people do
28:48
the inflation adjustment. And I'm going to argue here that
28:52
that's not the appropriate adjustment to make.
28:55
Look, in the end, what inflation adjustments are trying to do is
29:00
to get it. The answer, what does this cost
29:02
me? What is my purchasing power?
29:05
A much better way to do it, instead of that of trying to do
29:09
the inflation calculation, which in the reason I'm going to step
29:12
away from it is because the way we calculate inflation
29:16
introduces a bunch of subjectivity that we can
29:20
sidestep here. Can I ask another?
29:23
Yeah, yeah, yeah. Can I ask another question then?
29:25
How many hours would it take me to buy a house?
29:27
That's the question. That's the thing that we can ask
29:31
that doesn't invoke any of the inflation nonsense.
29:35
OK, so here here I have it. So you've already worked this
29:38
out. Yes, I have it on my spreadsheet
29:40
right here. You and your spreadsheets. 1980
29:45
The median full time weekly wage was $260.
29:53
In 2024, the median full time weekly wage was 1161 thousand
30:01
160. Significant difference.
30:04
Yeah. So, So what we've got here is a
30:07
situation where from 1980 to 2024, the price of the median
30:11
house went up by a factor of 6.5.
30:14
The median full time weekly wage went up by a factor of 4.4.
30:20
OK, so it didn't exactly keep pace, but it.
30:23
Came reasonably close. Yeah, it's not off by a factor
30:26
of 10, but, you know, we are lagging behind.
30:29
Except this is not the end of the story.
30:32
And here the story gets very interesting.
30:35
The median home back in 1990 was 1600 square feet.
30:41
The median home today is 2150, 2150 square feet.
30:48
So the median home today is about 35% larger.
30:53
Yeah, now. Let's I think that would work
30:56
out to what, 2-2 large rooms? Yeah, probably it's it's well,
31:03
I'm in Excel, so let's do it here. 1 minus the other 550
31:08
square feet. Yeah, that's a more than two.
31:11
That's a yeah. Look, a standard bedroom is
31:14
about 10 by 10 or 100 square. Feet and you know, square
31:18
footage of a house. They don't count the garages.
31:21
Well, it was one garage back in 1980.
31:23
It's 2 today is the typical. What?
31:27
Oh, you have like 3 don't you? 4 Here's what we can do with all
31:35
of these numbers. And this is where we get to the
31:37
thing you were asking. I can ask 1981 square foot of
31:41
housing was what fraction of the median weekly wage?
31:47
That that would be a really good measure.
31:49
And that's 15 percent. 15% of the weekly median wage was one
31:55
square foot of housing. Now that doesn't mean that 15%
31:57
of your wages went to housing because when you buy the house,
32:01
you're not paying cash or you have monthly mortgage payments.
32:05
So you're, you're out of pockets going to be much less than this.
32:08
But if you just think about that, the ratio of the cost per
32:11
square foot to your income, it's 15% today, 17%.
32:19
Yeah, and let's not forget the batch of government regulations
32:25
that require all kinds of things in 2025 that were never even on
32:31
the table in 1980. Yeah, 19. 80 I would, I'd
32:34
venture say that most middle class households did not have
32:37
air conditioning. Yeah, we didn't.
32:39
Yeah, I can remember we were, we were middle class to upper
32:43
middle class and it was, I can remember it was like 19.
32:46
Well, it was 1980 when we got our first air conditioner.
32:49
It was one of those wall units. So basically.
32:51
We got a whip. We got a.
32:53
Yeah, there. You're right.
32:54
So there were two rooms in the house that were cooled, the rest
32:57
were not. Our kitchen felt great.
32:59
Our bedrooms were on the other end of the house.
33:02
Not so great. Now you know.
33:04
I remember. Strategically setting up fans in
33:06
the hallway to. Blow to blow the cold air down.
33:09
These are the things. These are the things that
33:11
regular people did. Now I walk up to a magic box on
33:15
the wall and press a button. Right, right.
33:18
So when we're done here, you know, the difference is about do
33:24
all the math and I would say on a square footage basis compared
33:28
relative to what we earn, houses are about 9% more expensive
33:34
today than in 1980. And the real question to ask,
33:37
the question that nobody ever asks, is, are you 9% better off?
33:42
Right, right. Right.
33:44
Because if you're spending 9% more, it should be at least 9%
33:51
better. And I would argue it should be.
33:53
It should probably be 18 or 27% better.
33:57
Yeah. And I think the easy way to
33:59
answer that is to say would you, would you be willing to take a
34:05
10% cut on the price of the house in exchange for down
34:10
grading it to 1980 quality? If the answer is if the answer
34:13
is no, then that 9% is well worth it to you.
34:17
Almost nobody would do it. Right, right.
34:20
There might be a couple of places in the country where the
34:23
natural breeze offers enough comfort, right, and you don't
34:27
need the square footage in your own life and this kind of thing.
34:31
But almost nobody would make that deal.
34:34
I wouldn't not not, not in 100 years would I make that deal.
34:37
So let me restate this because I it's an important number.
34:41
I'm not saying that houses today are 10% more expensive.
34:44
They're much more expensive than were in 1980.
34:46
What I'm saying is on a on a price per square foot basis
34:55
relative to our incomes, they're 9% more expensive.
35:00
Right. And wouldn't it have been fun if
35:02
we didn't have the explosion and home prices that we've had in
35:05
the last 2-3 years? Right.
35:08
Because then it wouldn't even be close.
35:10
You're right then, it'll actually be less now.
35:11
One of the things that people say have said in response is,
35:14
well yeah, but how do you explain the fact that it takes 2
35:17
incomes now to maintain a household whereas in 1980's the
35:22
Zone took one? That's the wrong way to look at
35:25
it. Go tell.
35:26
Tell me I've got an answer. Give me yours.
35:28
No, I mean, look, you have to ask how much work it takes.
35:32
Yes. Right, because two incomes is a
35:37
new thing, but two workers was always a thing.
35:41
Yeah, 2 workers were always a thing.
35:42
What changed between 1980 and now is that that second workers
35:46
being paid. Yeah, now we have dishwashers
35:49
and washing machines and maintaining a house isn't
35:53
exactly a full time job anymore. I would say that back when my
35:57
mother was keeping our house, it was more than a full time job.
36:00
She was probably at it 6080 hours a week.
36:03
Oh, yeah. And and you know, at this point,
36:06
how many people spend that kind of time keeping house?
36:08
And. And the answer is none of them.
36:11
And if your house is that bad, you go to work and you hire
36:14
somebody to clean it once a week, Right, Right.
36:17
Things like this. But women entered the workforce
36:20
largely because their work at home was halved and then halved
36:24
again. Let me switch gears because we
36:29
talked about housing. The other thing people talked
36:31
about were cars. Cars are a little bit harder to
36:34
deal with here because I'm using using data from the Fed and the
36:38
Fed isn't giving me the median car price there, instead giving
36:44
me the price index for new cars. It's.
36:47
It makes it harder to talk about, but you can end up with
36:50
the same numbers. All right, well hold the phone
36:52
and tell me what a price index on cars is.
36:56
You, you can kind of think of it as the average price of cars,
37:02
except it isn't in measured in dollars.
37:04
And so it's, you can look at it. In fact, I could tell you in, in
37:08
1980, the new car price index was 88.
37:12
That gives you no information. But no, no, if I tell you that
37:17
the new car index in 2024 is 178, now you've got information.
37:23
It tells you that the average new car today is roughly twice
37:27
as expensive as the average new car in 1980.
37:31
Yeah, OK. So people are going to point to
37:34
that, say, see, I told you cars are twice as expensive.
37:37
And this is where I think it has to come back to our wages.
37:41
The median full time worker in the US is earning 4.4 times what
37:49
he earned in 1980. So yes, the price of the car has
37:53
doubled, but the income has more than quadrupled.
37:58
So relative to your income, a car today is half as expensive
38:03
as a car in 1980. And that, that's interesting,
38:06
right? I, I would have guessed that the
38:08
answer would have been worse than that.
38:10
Because I, I know all the regulations that go into cars
38:14
that add to the expense. The cars we drive now bear
38:17
almost no resemblance to the cars you and I drove when we
38:21
were 18. Yeah.
38:22
And and part of that's actually built into the number because
38:27
the when you're dealing with a price index, they're adjusted
38:30
for quality. So.
38:34
So everything is somehow considered.
38:36
Right. Everything's considered here the
38:37
fact that cars are safer and they have all the electronics
38:40
and all of that, that's baked into the numbers.
38:43
You know I I also get roughly 4 times the mileage I used to get
38:47
in my first car. You get 4 times the mileage in
38:50
terms of gas, gas, but also like maybe twice or three times the
38:56
useful life. I can.
38:58
Oh God, yeah, I can. Remember when I was a kid, a car
39:00
would last five years. You know, rarely do you see a
39:03
car with 100,000 miles. And 100,000 I don't even
39:07
consider getting a new car until I've had it for 10 years and
39:10
it's good. Clicking on 200,000 and even
39:13
then, it's probably got another third of a life left.
39:16
Right, right. Exactly.
39:18
Now mind you, I'm going to piss a lot of people off here.
39:21
I'm not buying Chevy's. Right.
39:24
Everything I buy comes from our friends in Japan who make a
39:28
better car that's cheaper to maintain.
39:31
The Germans make lovely cars too, but I can't afford basic
39:34
service on them. Yeah, but aren't the Japanese?
39:37
These are the kind, Yes, sometimes, but they're made
39:40
according to Japanese standards. Right, right.
39:43
Which which just makes them better.
39:45
And, and I've actually seen some people dig into this and they
39:48
claim that when you're buying a car and if you're going to buy a
39:51
Japanese car, you should go out of your way to buy one that was
39:53
made in Japan. Oh, really?
39:56
Huh. That it, it is actually
39:58
considerably better. Now, I haven't looked into that
40:01
myself, so I don't know how to test the veracity of the claim.
40:04
It passes the smell test, but that's never good enough, right?
40:07
That's the first cut. But you know, cars are just
40:10
simply different than they once were.
40:12
And I've said this a bunch of times before.
40:15
And this gets back to your, your anecdote problem.
40:17
I have said in front of very big rooms many times that when I was
40:22
a young man 16/17/18. We all knew someone who died in
40:27
a car accident. Yes, yes, that's absolutely
40:31
true. We.
40:32
All knew somebody who was paralyzed in a car accident.
40:36
Now I just know people who walk away without a scratch from
40:39
these disastrous wrecks. And there was one time I said
40:43
this and a young woman burst out into tears and she said that's
40:48
not true. My brother died in a car
40:51
accident. And I said, you know, you don't
40:53
want to hear this, and I don't want this to sound callous.
40:57
There are 150 people in this room and you're the only one.
41:01
Yes. Now my heart breaks for you, but
41:04
let's be realistic. You're still driving in cars,
41:07
right? It that's so dangerous that we
41:09
all don't do it. Yeah, I think there's and.
41:11
Isn't that something? There's two statements here, and
41:14
both of them are true, that her brother died in a car accident.
41:18
That's statement one, statement 2.
41:21
Very few people die in car accidents.
41:24
Comparatively speaking, it's a drop in an ocean.
41:26
And look, I'm willing to pay extra for that kind of safety.
41:32
Who wouldn't be? We talked about the two things
41:35
that went down in price. The one thing that's gone way up
41:38
in price and I think it's gone way down in quality.
41:41
Way down, way down in quality that.
41:43
Is is high our our. Yeah, our former line of work,
41:47
each of us. And I would argue here, what's
41:53
somebody pointed out in the discussion on YouTube, somebody
41:56
pointed out and said, well, look at this, this is clearly a
41:58
market failure, to which I responded, no, this is a
42:01
government failure. There's no market.
42:03
Right. The reason that higher education
42:05
has become expensive and lower quality is because the
42:09
government is interfering in the in the market, and it's setting
42:13
up a Guild, a an oligarchy. A cartel.
42:16
Thanks. A cartel?
42:17
Yeah. And the cartel is doing what
42:20
cartels do. That's right, they, they decide
42:24
that they first decide what we need is an accrediting, an
42:28
accreditation body to come in and pass judgment whether it's
42:31
good enough. And by the way, we've all
42:34
already passed and then the accredited, the accreditation
42:39
people start to keep other endeavors out of the field.
42:44
Right. That you and you and I talked
42:46
about starting a college for years.
42:49
And we're great, eminently qualified to do so.
42:52
Eminently qualified and it would have been fantastic.
42:55
And we know so many people who are willing to give up the
42:58
career they had for the career they might have if we were
43:02
successful. Yeah.
43:04
And there was no way we could do it.
43:05
Because of the cartel. The barriers to entry were so
43:09
high that there was number way we could do it.
43:11
We couldn't even establish a library that would have passed
43:16
muster. Do you need a library anymore?
43:18
I mean, look, I love libraries. I go to them.
43:21
I would live in one if I could. But how often do I have to do
43:25
research in a library now? And the answer is never.
43:28
Never right? Literally never.
43:30
So why is that the requirement? And it's the requirement to keep
43:34
people like us from starting college.
43:35
Right. It's to stop us from doing
43:37
exactly what we wanted to do. But we wanted to do and, and
43:41
look, I am never at this point in our history going to side
43:46
with or make excuses for or come to the aid of the American
43:52
University system. I'm just not.
43:53
It's, it's, it's declining severely and it's getting way
43:57
more expensive. So it loses, you lose on both
44:01
ends of the deal. It's less good than it once was,
44:04
and it's way more expensive than it ought to be.
44:07
Right, right. So people are right if they're
44:11
pointing to college as an example of something that's far
44:15
worse than it once was, they're right.
44:18
Now we should say that there was a time, and it's not too long
44:23
ago, when it wasn't the dream of every young person in the
44:28
country to go to college, right? You mean it was like 15, twenty,
44:32
25%. So we're sending many more
44:38
people to college then we should, and as we did that, the
44:42
government started making it possible for us to do that by
44:46
guaranteeing the loans. And I think in a sense, James,
44:49
we almost have to send so many people to college because our
44:53
primary and secondary schools have become so bad.
44:56
College. College.
44:57
High school. College is teaching what high
45:00
schools used to teach. The the first two years of
45:03
college are now high school. Yeah.
45:05
And I don't know what to say about that.
45:08
If I had my life to live again, I don't think I would get a PhD.
45:13
Really. I, I don't, I, I think maybe I
45:16
would have become an electrician.
45:20
I mean, you know, look, you work 9:00 to 5:00 or whatever five
45:23
days a week and you don't take your work home with you and
45:26
you're incredibly well compensated.
45:28
Right. Yes.
45:30
Well, I work for money. Why wouldn't I do something that
45:34
didn't bother me, right? I mean, do you really want to go
45:39
back and work at a college again?
45:40
I miss teaching a lot. I was great at it.
45:44
I don't miss colleagues. I don't miss faculty
45:47
administration. I don't.
45:49
I don't. I literally miss nothing other
45:52
than teaching young people. Yeah, yeah, I'm with you.
45:54
I have the same opinion. I really miss teaching young
45:59
people. It was incredibly rewarding.
46:02
I loved every minute of it. Everything else goes straight to
46:05
hell and I would never. Care Words and Numbers is a
46:09
Civil original podcast. James and I work with Civil to
46:13
advance their mission of upgrading civilization by
46:16
exploring ideas that promote civic equality and cooperation.
46:21
We believe that the most pressing issues humans face,
46:25
war, poverty, debt, tribalism, arise from coercive institutions
46:30
that bring out the worst in us. We're working with Civil to
46:34
rethink how people can employ voluntary solutions to these and
46:39
other problems. We invite you to explore Civil's
46:42
new platform at civil.com. That's civl.com.
46:49
Our friends at Civil have asked us something that many of our
46:53
listeners have asked us many times over the years,
46:56
particularly on on episodes where we're dealing with
46:59
something more controversial. Many people have said to me, So
47:02
what? What do you do?
47:04
So what? So our friends at Civil have
47:06
prompted us to add a new section to Words and Numbers, and
47:11
tentatively it's titled So what? So what?
47:15
So what can you do about? This, I don't know what you can
47:18
do about it, right? Because the first two things
47:20
that we talked about, cars and houses, I don't really see a
47:23
problem. I really don't.
47:24
I look, I wish they were both much cheaper 'cause I would like
47:28
to afford better ones. But I can, I can read data and
47:31
know what I'm up against and what I would have been up
47:34
against in 1980. And the they're 2 completely
47:37
different things. And things have in fact gotten
47:40
better. College, on the other hand, is a
47:42
cesspool. And if if you asked me what with
47:45
the colleges, I would say first, get government out of the
47:49
business of student loans, put it back in the hands of lending
47:54
institutions. We used to call those banks and
47:56
let the banks deal with the risk, because loans are all
48:00
about risk. I'll do you one better there.
48:03
Think there is a brilliant? Well, because I came up with it.
48:07
I already know what you're going to say, and I and I agree.
48:09
I agree with you wholesale. There's a brilliant solution
48:12
here to the college problem in in this college slash student
48:16
loan problem, and that's the following.
48:19
Colleges are sitting on endowments that are so large
48:23
that the typical college would be able to loan all of its
48:29
students the money they need for their tuition completely out of
48:33
the endowment. And then as the students
48:35
graduated and earned money, they pay those loans back and go back
48:39
into the endowment and become available for for younger
48:42
students. Even the small four year liberal
48:44
arts colleges with, you know, with some exceptions on the
48:47
edges, haven't have large enough endowments to do this.
48:50
So here's the solution. Get rid of government subsidized
48:54
student loans and require that colleges loan to the students
48:59
directly out of their endowments.
49:01
Now that's going to do 2 things. The first is it's going to get
49:05
taxpayers off the hook for all of this money.
49:08
And you talk about forgiving student loans and really there's
49:10
no forgiveness. It's just forcing the taxpayers
49:12
to pay it. And that's not even the best.
49:15
Thing no. The best part is you will see
49:18
overnight the entire landscape of universities change because
49:23
their incentives will change from what it is now.
49:27
Get as many students in the door as you can so you can suck up
49:31
that sweet, sweet government money.
49:33
It will change to generate courses majors that give our
49:39
students high earning power because they need that to pay us
49:44
back for the money we loaned them.
49:46
Yep, it's a return on investment and it's the only way to look at
49:50
it. And it would do the, it would be
49:51
the same if it was required over 5 or 10 or 30 years, that that
49:56
would be wholly irrelevant the length of the term.
49:59
But what you would see and I, you know, I always pick on the
50:01
exact same thing I made-up from whole cloth years ago.
50:05
You would see Never Again a major in medieval lesbian poetry
50:10
because there's no market for it, right?
50:12
Not because it's not good in and of itself.
50:15
It might be. There might be fascinating
50:17
things to learn there, but there's no return on it.
50:21
Where is the return? The STEM fields, the humanities
50:25
do pretty well actually, as these things go there.
50:29
It's not perfect, but people who major in the humanities do
50:33
better than I think most people realize.
50:35
And it's not to say that nobody will study Elizabethan poetry.
50:40
Rather. That's right.
50:41
If you have the if you have the means.
50:42
Go right ahead. Well, if you have the means and
50:44
and I would say there is a market for that.
50:46
It's just way, way smaller than what you would given the number
50:51
of people who currently study it.
50:53
Yep, I think that's all exactly right.
50:55
And I, I would like to see some version of this, even if it were
50:59
only half or 1/4 to start with, right.
51:02
Get the universities thinking about the long term prospects of
51:07
the people who graduate from those institutions and, and with
51:10
guaranteed student loans, the colleges and universities don't
51:14
have to care about that at all. And they don't.
51:18
I can tell you that they don't. I worked in them, I was in the
51:21
meetings. They do not care.
51:23
So that's, that's the first. So what I, I will give an answer
51:26
to. So what about the house housing
51:29
and the cars and all of that? And that is, and it's going to
51:32
sound trite, but it's absolutely the right answer.
51:35
Count your blessings. Look around at your life.
51:38
Don't look at what's on the television.
51:40
Look around at your life and take account of all the things
51:44
that you have that you're currently taking for granted.
51:47
The fact that you could walk into a grocery store in the dead
51:52
of winter and buy fresh fruit at affordable prices, that is an
51:57
astonishing It's astonished as something that's not supposed to
52:00
happen, and it happens so regularly we don't even think of
52:04
it. Yeah, no, a grocery store is
52:07
just a bunch of miracles under one roof.
52:10
Yeah. It's astonishing.
52:13
And look, aunt, I'll tell you, it's 111° outside here today.
52:16
It's 71° inside my office. Yeah, right.
52:20
Also something that shouldn't be happening.
52:23
Yes, please. More of that, please.
52:25
If I could afford it, it would be 67° in my office.
52:28
But you know, we have limits. The fact that you could walk
52:30
into the kitchen and turn a faucet and water comes out of
52:35
multiple temperatures and you don't have to worry that there
52:38
are bugs in it or something. No, it's, it's perfectly clean.
52:42
I mean, your life is a series of miracles from the perspective of
52:47
your grandfather. Yeah, just your grandfather,
52:50
right? Not your great, great, great
52:53
grandfather, your grandfather. And I'm, I'm reasonably
52:56
confident that when we're well, you're already a grandfather.
52:59
And maybe I will be 1 day too. When our grandchildren grow up,
53:03
they will be able to say the same thing.
53:05
And that's remarkable. And it's almost universally true
53:08
generation to generation. So item 1 is counter blessings.
53:12
Item 2 is when you watch the news, and you're going to
53:16
because despite my protestations, people keep
53:18
watching the news. Keep it in your head that you
53:21
are not seeing the world as it is.
53:24
You're seeing the worst parts of the world as they.
53:28
Are by definition, you're looking mostly at outliers, yes.
53:34
And as long as you can remember that look, I don't want you to
53:37
think there's no danger in the world.
53:39
There most certainly is. And you should be cognizant of
53:42
it, and you should take steps to avoid it, but it shouldn't ruin
53:45
your life. Yeah, and, and you're not going
53:48
to be able to avoid it if you think that it's everywhere
53:51
around every corner, you're going to miss the actual danger
53:55
while you try and avoid the the the, the fake.
53:57
Danger, that's exactly right. And you know, I, I don't know
54:02
what to tell people on that because it's hard.
54:04
It's hard to remember that what you saw on the news probably
54:08
never going to happen to anybody you you have ever known, but it
54:11
might. But it might.
54:12
I know know people who have been murdered, multiple people who
54:17
have been murdered, Right, OK. It's a drop in the bucket
54:21
compared to the number of people I have known.
54:24
It happens. It just doesn't happen that
54:26
often. And you have to stop losing your
54:28
mind about this kind of thing, because it actually takes away
54:31
from the life you do have. And I'll add one more thing.
54:35
Be careful about repeating things and be careful about
54:39
people who confidently repeat things.
54:42
Like everybody knows housing is more expensive.
54:45
Actually that's not the case. In fact, I I have found when it
54:48
comes to things economic, the things that I would put under
54:52
the heading of quote, UN quote, everybody knows, I'd say 90% of
54:56
that stuff is false. Yeah, I think that's generally
55:00
right of political things as well.
55:02
So there you go, our first. So whatever.
55:05
Not, not bad. We could do better.
55:07
I promise we will do better, and we'll see you next time.
55:10
Until that happens, be nice to each other.
55:13
See you next week, James. Get words and numbers on
55:17
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55:21
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55:27
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