Latest / Words & Numbers / Episode 503: Is the American Dream Dead?

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Episode 503: Is the American Dream Dead? · Words & Numbers

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Next on words and numbers, Tobacco socialist grocery
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stores. A scam I can't wait to get in
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on. And is the American Dream really
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dead? Hi, I'm James.
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And I'm Anthony. And this is words and numbers,
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and I believe you have an announcement.
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I do henceforth, and I'll have to do this every episode, that I
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want to underline that the views that I put forth here do not
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reflect my employer in any way, and I'm going to leave my
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employer unnamed on top of that. The views I express here should
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be held by everyone, employers, people, you name it.
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Every entity in the world should just get on board and follow me,
0:55
and we'll all be better off than we were before.
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But anyway, that nasty business behind us, apparently, for today
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and every other day we ever do this.
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What's new and exciting in your world this weekend?
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So I've run across references to Mendami, you know, when he was
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running for election for a mayor of New York said about he's
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going to open up grocery stores because of food deserts.
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Completely glossing over the question of why are there food
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deserts? But that's fine.
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And these are supposed to be, these are supposed to be like
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city owned public service type things.
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And there's a couple of things I want to talk about here. 1 is
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the price tag he put. He said he wanted to build 5
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grocery stores and has, I don't know where the money came from,
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but he has a chunk of $70 million to do this.
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And apparently he's dropped 30 million, almost half of that on
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one grocery store. And I didn't know anything about
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grocery stores, but I was interested.
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I looked it up to see what is the cost of building a grocery
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store, and of course it's going to vary, but I'm finding numbers
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in the $6 million range. That's soup to nuts, including
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architects and the contractor in the building and materials and
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all that, you know, apply the stuff you need inside $6
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million. So somehow he's some his grocery
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store is right off the bat costing five times what a
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typical grocery store would cost.
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Now granted it's in New York City where things are more
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expensive. However, if I've read the
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article correctly, the land it's sitting on is being donated or
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provided by the city itself. So that's a huge chunk of the
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the build out that isn't shouldn't be costing him
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anything. And yet he's still at 5X the
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numbers that I'm seeing. You have nothing to say about
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that. Oh, I do.
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As is our custom. I will make a prediction, it
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will come true and then I will point out that there were two
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guys on the podcast who were on top of this before the 1st
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shovel went in the ground. This isn't going to work.
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Well, it's not going to work the way he wants it.
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Now what? He No, it's not going to work.
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At all. Not going to work at all.
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Well, I don't know. I mean, he's going to get a
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grocery store and it's going to sell food.
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Grand. Open it now.
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Grand. Closing.
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There's all kinds of footnotes to that one.
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One of the things that interested me is he said he
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wants to open these grocery stores and charge fair prices.
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And that has got me bothered right off.
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I mean, there's the philosophical question of, well,
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what do you mean by by fair? And kind of the fall back
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position is, well, if I own something and you want to pay me
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money for it, the object belongs to me, the money belongs to you,
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and the fair prices, whatever you and I both agree to.
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So as long as there's nobody interfering with this
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transaction, by definition, what comes out as fair.
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By fair, I'm sure he probably means something else like lower.
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Well, come on, the profit margin on grocery stores is a percent
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if you're lucky. And he's already behind the 8
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ball with his grocery store, the building costing five times what
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it should. I'm not sure what he means by
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fair here. Now, he might mean something
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that is so low that the the grocery store is actually losing
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money, except that that's, I don't know how you want to say
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fair. Certainly the people who are
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buying groceries there for pennies on the dollar are going
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to like it. However, the New York taxpayer
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is subsidizing that because the money's got to come from
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somewhere. So that's, you might say it's
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fair as far as the consumer is concerned, but it's decidedly
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unfair as far as New York City taxpayer is concerned.
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But all of that stuff aside, I want to do something.
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I want to take the socialist position seriously for a moment.
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Let's suppose with dogs, let's suppose we wanted to open up a
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grocery store in in a, in a fully socialist environment,
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communist, if you'd like to say it that way, that we're not
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going to charge people money. We're not going to pay the
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workers because they're going to get free food.
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The whole thing. How is this?
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How would it work? And, and let's make it really
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easy. Let's assume that the land, the
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building, the appliances all just appear out of thin air or
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somebody gives them, right? So they're not going to cost
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anything. The only costs here, if you want
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to call them costs are acquiring the food and and the workers.
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And we've already said, well, the workers are going to work
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for for free. That's what you do in a
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communist system. You know, you to each according
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to their needs and from each according to their abilities.
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So we'll have people who work and you and people can other
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people come in, they just get the food.
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We're not going to charge them. Notice we've got it.
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And again, I want to take this really seriously.
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We've got some hurdles we've got to overcome, such as the people
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who work in the grocery store, how much food are we going to
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give them in exchange for working?
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Is it going to be steaks? Is it going to be hamburger?
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Is it going to be as much as they want?
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Is there going to be a limit on it?
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And so do people who come in the door, they're going to come in
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the door the, the, the customers, and we're going to
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just give them this stuff at no charge.
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Do we give them as much as they want?
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Do we put limits on things like you sometimes see one per
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customer? We've got to work that through.
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And then we've got perhaps a thornier issue, which is the
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farmers and the truck drivers who produce and transport the
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food. They've got to be paid in some
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fashion. And if we're going to take
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socialism seriously, we'll say, well, we're going to pay them in
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food also. So the truck driver brings the
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brings the goods and we're going to give him some groceries from
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that. We've got the same question of
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how many groceries? What's, you know, sorts of
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things do we give him? What if we end up giving him
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something he doesn't want, like, you know, baby formula and he's
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a single guy with, you know, no kids.
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That doesn't work, right? So we've got to work through all
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that. The farmer, how do you pay the
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farmer? I mean, he grows food, right?
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It's not like we're going to say, well, we'll give you, you
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know, a pound of flour. Well, that's where we got the
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flour from to begin with. So we'd have to give him
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something that he isn't currently growing.
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Perhaps he grows wheat, so he doesn't have fruit and
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vegetables. So we'll give him fruit and
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vegetables. How much do we give him all of
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this? And notice how the question
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becomes really incredibly complicated.
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And wouldn't it be nice if we had some clean accounting system
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that we could say something like transporting a pound of flour to
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our grocery store is worth a can of cat food, Or if you don't
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like cat food, it's worth a can of something else?
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Sardines. And if you don't want sardines,
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well, you can exchange them for something else that's equivalent
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to sardines. And we have a list of things or
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equivalent to sardines that you can trade up for.
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And if you don't like anything on that list, well, you can give
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us two of the cans of sardines that we gave you in exchange for
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things on this list. And we have this all worked out
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in some fashion. You're killing me.
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Then it would it would start to work.
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But notice what we've just done. We've recreated the dollar.
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That's what dollars do, right? You bring your your pound of
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flour to the store and I'll pay you with dollars.
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And you can use those dollars to buy whatever it is you want.
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You can collect them over time and buy something that's more
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expensive. The dollars already answer all
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of those questions. Yes, they do.
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And, and all I'll do here is point out every single time
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anybody has tried with any level of seriousness to, to implement
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this sort of system in a wholesale way, you get bread
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lines and you get, you get famines.
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Yeah, because that ends up being these questions.
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The problems I just raised become so insurmountable.
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If you don't have a monetary system, that's you.
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Just the whole thing grinds to a halt.
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You get no food. And you hit it on the head
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without making it clear. In the end, farmers stop growing
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food because why the hell are they going to work like dogs all
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day long to get nothing? And you know, look, this is just
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a simple human nature observation.
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People will not work like dogs all day long to get nothing.
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And I'll, I'll say another obvious thing.
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Anybody who is in favor of this sort of system imagines himself
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in an office building running it, not out in the fields
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working it. Yeah, it's that.
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And I think they also don't appreciate all of the complexity
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that's going on in the background.
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I mean it from a buyer's perspective, it's all very
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simple. There's a store you walk in and
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you buy something and you walk out.
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You don't see all of the complexity that's going on in
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the background. The monetary system answers all
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those complex questions. But let's go back, let's go back
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to the these grocery stores that Mandami is setting up.
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And my prediction, I'll, I'll be a little softer with my
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prediction. My prediction is these grocery
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stores. Well, First off, grocery stores,
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plural may be incorrect. He may only end up building 1.
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Let's suppose he builds 2 of the five that he wanted.
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My prediction is they will continue and they will sell food
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at a cheaper price than what people can get elsewhere.
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And because of that there's their shelves will tend to be
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empty compared to other grocery stores.
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But on the other side, politicians when dummy included
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are going to say, OK, yeah, we don't have the selection that
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Walmart has, but people can buy things for pennies on the dollar
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here compared to Walmart. Fine.
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Completely ignoring the fact that New York City taxpayer is
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having to subsidize this. And when you include the
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subsidy, you'll find out that the groceries there actually
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cost three to five times what they cost at Walmart.
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All that's happened is Bandami has forced other people to
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subsidize the Shoppers groceries.
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And you will also find out that high end taxpayers are already
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leaving New York. Middle class taxpayers are going
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to be next because they're going to get priced right out of
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living there. He's done another remarkable
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thing. He's brought in kind of space
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age looking garbage cans to finally solve the problem of all
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the garbage bags that heap up on every street in New York City.
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But each of these comes at the cost of 1 parking space.
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OK. Yeah, that's going to be
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hilarious to to watch unfold. But I want to go from one put
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there's and there's a technical term that comes deep from my
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family, the Irish side of my family, for people like this and
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for people like the ones I'm about to talk about.
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And that term is just. You would you Please remember
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their children listening to this?
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Show Danny, you'll bleep it out. It'll be all right.
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To all, I apologize to all the parents out there, He's
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incorrigible. I was.
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And you have children. You understand what it is I
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have, James. I I have children, they think
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I'm hilarious. Anyway, I was first called.
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I should ask when I was probably Would you stop?
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It with that. But Danny will bleep it out.
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It's OK. And and it never stopped until
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all of the Irish side of the family died.
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They all died really young so it didn't last that long.
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It was equal parts cirrhosis ING of of the liver and cancering of
14:34
the lungs. Because you can figure out the
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two biggest hobbies on my on the Irish side of the family.
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Anyway, I want to get us to the other asses over in parliament
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in in the UK. Who?
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Have declared that smoking will be banned.
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Banned for anyone born after 2008.
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Wow. And you could see what math is
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going to do to smokers. How interesting their the
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criminal element is applauding this no doubt.
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They're going to get rich as hell.
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Yeah, that's right. Yeah, I'm starting to, I'm
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starting to work out how to get a train going from here to there
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jammed full of the illicit cigarettes.
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But it's it's worse. It's worse than it first sounds.
15:27
Because I did a little digging and of course, the the headline
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is smokers smoking will be banned.
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So to vaping, so to cigars. So too pipes.
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Wow. And why anything off the market?
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Because it's terrible in the the Karens don't like it.
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Busy bullies. You know what's next?
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I mean, if they are successful here, assuming that there isn't
15:56
a huge hue and cry about it, alcohol's next.
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Oh, I, I wonder about that because people are routinely
16:06
hypocritical about alcohol. They will talk about the, the,
16:12
the terrible things that legal weed has brought to us.
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And I'm, I'm not a crazy person. I walk through town, I can smell
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it. You can make an aesthetic
16:22
argument if you want. There's high people kind of
16:24
wandering around everywhere downtown on the weekends.
16:28
Now, personally, I don't care. What do I care about drunk
16:33
people who are fighting? Because drunk, because drunk
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people get violent? We smokers most certainly do
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not, right? So more weed, less alcohol in my
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world makes the world better. Not perfect, but better.
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OK, so I got I got to go back to the smoking thing.
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I'm assuming that applies to marijuana also.
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I don't believe so. You're kidding me.
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They're going to want to. They're going to want to walk.
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Around you could walk around any town that in which there is a
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legal weed regime smoking weed and and getting a side eye look
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and the cop will probably tell you to knock it off.
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I dare you to walk around smoking cigarettes and watch
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what happens. Wow, the world is upside down.
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It is, and This is why some years ago you might remember I
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remarked that pipe tobacco will never be as cheap as it is
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today. Right.
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You remember when I said that? And I went out and bought a
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lifetime's worth of tobacco about six years ago, and it has
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since then roughly tripled in cost.
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Yep. And sooner or later, some Karen
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in Congress is going to pull this same nonsense that they're
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pulling over in in the UK. And I'm going to keep puffing
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away until the day I die, no matter who, and I mean no matter
18:08
who it pisses off. I've run out of cigars and
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that's a crime against humanity. But I will never run out of
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piped tobacco. Anyway, that was not the
18:20
foolishness of the week, which should seem a little weird to
18:24
you, right? Because that was kind of
18:26
foolish. But for the foolishness of the
18:29
week, I want to go to a a a foreigner.
18:33
Can I be more specific? Northern Indian, a 22 year old
18:39
aspiring orthopedic surgeon from northern India.
18:45
It was poor, as medical students in northern India, I suppose
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often are, and they are everywhere else for that matter
18:55
too. Medical school is a meat grinder
18:59
and he came up with what I consider to be a brilliant scam.
19:05
He started making AI generated pictures of ladies in bikinis
19:12
and putting them on various platforms, hoping that the views
19:19
would come flooding in, replete with all the money that lots of
19:23
views come from. Not that you and I would know
19:25
anything about that, but we hear stories and it didn't work.
19:30
So he took to the AI and said dear Mr. AI, how the hell can I
19:37
make this work? And the AI suggesting targeting
19:42
a smaller but more dedicated audience.
19:46
And together he and the AI came up with an AI generated MAGA
19:55
girl to use as a grift against MAGA America.
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So the girl. What do you mean to use as a
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grift to? Grift.
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They're just getting money from these men who think it's real.
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OK so it's this it's an Indian man posting pictures of of this
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girl in American flag bikinis and the what not with anti
20:21
abortion words underneath or anti immigrant words underneath
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with that ever popular nonsense. Who is with me?
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Do you agree with me? Just like if you agree and also
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he's making thousands of dollars a month.
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So I got to, I got to get in on this because this seems too
20:45
easy. And here's here's where this is
20:48
going because I pay attention to the to two separate things that
20:54
are deeply related. As we have said many times, on
20:57
the one hand, the technology markets and on the other,
21:00
pornography. Now there are these suits that
21:04
you've seen actors in the green screen, right?
21:07
With these suits, with all the nodes on them right Catch body
21:11
movement. Well, smart men have realized
21:16
that they can put on those suits, get in front of a green
21:19
screen and be a naked woman on Only Fans.
21:23
Wow. I want people to think about
21:26
what they might be looking at next time they log into their
21:29
Only Fans account. Wow.
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AI turns them into women somewhere along the chain and
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apparently from what I've told, I've I've not seen this.
21:40
Believe it or not, I don't have an only fans account.
21:42
I don't I'm not active in that world.
21:45
But I would love to see one of these.
21:47
I want to see how realistic it is, how accurate, right if if a
21:52
regular person would buy it. And I suspect right now, a
21:56
regular person might not. But I also suspect that in one
22:00
year's time it will be utterly indistinguishable from the real
22:04
thing. A step this is just astounding
22:07
because I mean, the first thing comes to my mind is OK, you've
22:10
basically you're probably more than doubled the number of of
22:16
only fans providers want to call them that.
22:20
Oh, aunt, it's an order of magnitude higher.
22:23
I mean, the only women who could do it right now are really
22:26
pretty women. And right.
22:28
And pretty soon, every man in the world is going to be able to
22:32
be a really Pretty Woman. Right.
22:35
And even the not so pretty women can be pretty women that and
22:39
that's and that that's going to last for my guess is a year
22:45
before the AI gets good enough that you don't even need the
22:49
bodysuit and all of that. The a I'll just do the whole
22:52
thing. I can hardly wait, because in a
22:55
sensible world, that would actually be the end of
22:59
Onlyfense. Wait.
23:01
Yes. When you can't see what you paid
23:03
money to see, you should rationally say, well, this ain't
23:07
for me, I'm out. I don't think it's going to go
23:10
that way, but it should go that way.
23:14
And now and now we wait. But, but hats off to this dude
23:18
in India. I mean, this was a real smart
23:20
move and I might start doing it too.
23:24
It's just kind of just side of the street.
23:26
It's kind of disheartening. You know, we spend years
23:31
hopefully educating people on interesting things and elevating
23:36
the conversation and along comes some clown with.
23:43
Some clown comes along with fake, Fake in the truest sense
23:48
of the word fake boobies. And he makes more every month
23:51
than we do. Damn it all.
23:56
The market has spoken. James the Market.
23:59
Has in fact spoken. And the sad thing is, is we knew
24:03
what it was going to say all along.
24:05
And, and this and I think brings us quite nicely to the main
24:09
topic of the week, because we now, right this second, just
24:13
experienced in our own little way the death of the American
24:17
Dream. Yeah, So James sends me this
24:21
article. Who is this?
24:23
Is this LA Times? It just says, but they're
24:26
they're quoting them. They're quoting Pew at some
24:31
point. Yeah, they did.
24:33
They did. If you scroll if you Scroll down
24:36
to the bottom they they did their own compiling of their.
24:41
Yeah, and some of the data comes from you, you Gov which I've
24:44
I've used before. It's a good site and.
24:48
Catch any red flags in in the article that would indicate that
24:52
there's much wrong with it? No.
24:54
But the question is basically, you know, the polling people
24:57
about the American Dream and, you know, does it exist?
25:00
You think you'll be better off. And it's the kind of answers you
25:04
would expect. Well, the the thing to remark
25:08
right at the beginning is that there is perception and then
25:13
there is reality. And opinion polls mark come to
25:19
figure out what perception is and data yields reality.
25:25
But the problem, if indeed you want to call it a problem and
25:29
and I do, is that perception drives politics, right?
25:35
You and I know this. We, we, we often during the
25:39
presidential debates will live tweet.
25:42
Do we have to call it live acts? That just sounds all wrong.
25:46
We will live tweet telling what the truth is as the politicians
25:50
spin out their lies. But you have to know that the
25:54
lies get digested and the truth does not.
25:59
I'll give you a quick example. You might have seen in the last
26:04
day that Donald Trump ordered in some high level meeting that the
26:10
nuclear codes be used to launch against Iran.
26:15
And General Mattis, I believe the story goes, was the only
26:20
person in the room brave enough to stand up and say, no, you
26:24
must not do that. And that lie is, is halfway
26:29
around the world. And the truth, which hasn't even
26:33
gotten its pants on yet, is that no, that did not happen because
26:37
that's not how that works. There are procedures for this
26:42
sort of thing. And a president saying we're
26:45
going to do this right now is not the procedure.
26:49
I mean, I'll get it. I'll get into the larger
26:51
procedure. I'm, I'm, I'm, I'm actually
26:53
really digging into this and I'll, I'll get into the larger
26:57
procedure over on X. If people want it, they can find
27:00
it there when I get around to it.
27:02
But I mean, this is just the sort of thing, right?
27:05
What's the, what's the perception and what's the
27:07
reality? And the perception is that the
27:11
American Dream is either on life support or debt.
27:16
I think part of what's going on is the typical partisan thing
27:20
of, you know, if the guy you agree with is in office, then
27:24
things look good. And, and there's something to be
27:27
said for that. Not the not the political side,
27:29
but I think when people have hope or they perceive they have
27:34
hope that things seem much better.
27:38
And if you agree with the guy, if your guy is in the White
27:41
House, then in some sense you have hope.
27:43
Now, whether it's well founded, hope is neither here nor there.
27:46
The fact is, you sense that you have hope, and so you think
27:50
things are better. That's.
27:51
Really interesting, and I don't know that I've ever thought
27:54
about it exactly that way. Right, Because my knee jerk
27:57
reaction is OK. Your bastard is in the White
28:01
House. Here's all the things he's doing
28:04
that you didn't agree with 20 minutes ago.
28:08
But if you perceive, if you even think that you're about to get
28:14
your way in some meaningful respect, maybe that is enough to
28:18
keep you happy, even if it doesn't ever happen.
28:22
You know, I mean, look, in the end, is that not why we buy
28:28
lottery tickets? We all know intellectually we're
28:31
never going to win, but it's the ability to hope for a little
28:34
bit. Yeah, I and, and look, I do buy
28:38
lottery tickets and I frequently tell young people that lottery
28:43
tickets are a tax on people who are bad at math, you know?
28:47
Right. But you know, it could be both
28:49
those things. It is.
28:52
I want it. Lottery tickets are clearly both
28:54
of those things. We, this episode is going to
28:57
touch on, on some of the stuff that we talked about several
29:01
episodes ago It and, but I, I want to hit it again a little
29:07
bit because people wrote back when we said, look, adjusted for
29:13
inflation, people are better off today than they were.
29:16
We're not better off than they were in 2020, But you can't
29:19
count that because we were writing checks we couldn't
29:22
afford, right? So it was an illusion.
29:24
But apart from that, we're better off than were in the
29:26
past. And people say no, no.
29:28
And, and one of the things that people have said is that, well,
29:33
you're adjusting things for inflation and they don't trust
29:36
the inflation numbers and they start, you know, saying other
29:40
things. So I pulled the data here and
29:46
and I want to draw some comparisons and I'll start off
29:50
with the thing that some people push back against is inflation,
29:53
but inflation adjustment. But I'm going to start there and
29:56
I'm going to talk here everything that I'm going to
29:59
talk. And I've shared some of these
30:01
some of these charts with you. This is all the median, the guy
30:06
in the middle worker, his weekly wage.
30:10
Now we are assuming full time here.
30:13
So you can make arguments about part time workers versus full
30:17
time. And the fact is that goes up and
30:19
down. But generally speaking, there's
30:21
not a huge discrepancy now versus in the past.
30:25
But take a full time median worker, his purchasing power
30:31
that's adjusting for inflation is I'm just going to pick a
30:35
number out here like the mid like early to mid 1990s versus
30:40
today. It looks like he's about 20%
30:45
better off in terms of purchasing power versus the
30:49
1990s. And, and you can look at this
30:51
and he kind of goes up and down, but there's also very clear
30:54
upward trend. In fact, if anything here, it's
30:57
kind of stagnated. This median worker, he stagnates
31:00
from about 1980 to roughly 1997. And from 1997 Ford, it kind of
31:06
just goes up. So, you know, in inflation
31:10
adjusted terms, purchasing power, the median worker is 20%
31:16
better off than he was when, you know, we first got married.
31:19
Not you and me together, but individually.
31:23
Now, did get married after a fashion.
31:25
You know, one of the things that people should look at that kind
31:29
of gets to the heart of this is the Big Mac Index.
31:33
Yes, Right. It's a perfect example of this
31:36
sort of thing. What does a Big Mac cost now
31:39
versus in the past? What is a Big Mac now cost now
31:43
here versus there? And is it a perfect
31:47
representation of economics? No.
31:50
But can you learn a lot from a Big Mac index?
31:53
Yeah, you bet. Yeah.
31:56
Yeah, you can. Now, I should have thought to
31:58
look that up. I didn't.
31:59
I didn't. But I gotta find that one.
32:02
That one's easy. I've got some other things here.
32:04
One of the big things that people talk about, of course, is
32:08
is houses. And so I'll do the same thing
32:11
here, talk about the median worker and talk about the median
32:17
house that sold today's. It's not necessarily new house,
32:19
it's just of all the houses that were sold, new ones, old ones,
32:23
whatever. Take the one in the middle, and
32:27
with his income, he can afford, with one week's wages, 3/10 of a
32:34
percent of a house, which is actually a little bit more than
32:39
he could afford in 2005. Now it's less than he could
32:43
afford. Actually, it's about on par with
32:45
what he could afford in 2020. A little bit less, but about the
32:49
same. So it's less than what he could
32:52
afford back in the 1980s. Yeah.
32:55
And look, I'm going to, I'm going to play devil's advocate
32:58
here a little bit and say, all right, so stipulated the point
33:05
you just made. However, life itself is simply
33:10
more expensive now than it was back when and all those other
33:15
things that eat up your paycheck take away money that you could
33:19
have used on a house. Thus, you can't afford a house.
33:24
Yeah, look, I'm saying this is this is the argument you're
33:28
going to get. And it's not a terrible
33:31
argument. Well, but it's not exactly
33:34
correct either because there are plenty of things that have
33:38
become cheaper which should enable you to afford more house.
33:42
For example, I'm looking here at vehicles and the median worker,
33:50
the guy in the middle, one week's worth of wages will buy
33:55
him 2% of a new car, 2% of a new car.
33:59
In 2000, it would only buy him 1 1/2 percent of a new car.
34:05
But you know Aunt for a fact that we have a problem in the
34:08
car market and it's easier to see in the car market than it is
34:12
in the housing market because very typically for a very long
34:16
time, the Max loan that you could get would be spaced over
34:21
60 months, five years. You can now get an 8 year car
34:25
loan. 8. The average car isn't going to
34:29
last eight years. People are going to be upside
34:33
down on these things forever. I'm with you, I I'm with you
34:37
there. But I think we're conflating two
34:39
different things. One is the car.
34:41
It costs something. And what the data are very clear
34:44
here is it relative to people's incomes, cars are actually
34:47
cheaper now than they were in the past.
34:52
The other thing, the other thing is financing.
34:55
That's a separate, separate product.
34:57
I I agree, but you know, and so stipulated again, but something
35:03
is happening to the disposable income of people and I can't
35:08
quite get my fingers on it. I.
35:11
Can't either. James and I keep coming back and
35:15
I have a I'm going to tread very cautiously here because I have
35:19
no data one way or the other, but the only thing I can come
35:24
back to when I look at all of these numbers and some things
35:27
have gotten a little more expensive, some things less
35:29
nothing stands out. Not even a group of things stand
35:33
out to possibly explain what you're describing, except for
35:37
the possibility that people are simply buying more things, that
35:43
there's a wider variety of things.
35:45
I mean, think about typical things I pay for.
35:48
Typically there's the streaming service, a couple of them.
35:52
There's, you know, things that you get on Amazon.
35:55
There's the cell phone, there's the computer, there's the
35:59
Internet connection. Little things that that fall
36:02
under your radar, typically that didn't exist 20-30 years ago.
36:08
Yeah, it doesn't seem that that would account for enough to
36:13
price people out of things that we have considered necessities
36:18
for a very long time. I don't know any one of them
36:22
know but but let's let me just throw out a couple of things
36:26
here. So I mean, Internet can Internet
36:29
connections, 100 bucks a month, Amazon Prime, I think that's
36:34
like 20 bucks a month, something like that.
36:38
The cell phone thing plan is, you know, of course, I've got
36:42
several people on mine. So I don't know what a single
36:44
person's is. Let's say $75.00 a month, you're
36:47
at 200 bucks a month just on those three items.
36:51
Now, younger, younger people now are more used to eating out,
36:57
having food delivered than was the case in our days.
37:01
I don't know what that runs to, but if it's a, if it's only $100
37:05
a month, you're a $300 a month. I mean, you're halfway to the
37:08
car payment right there. And let's not forget the $1000
37:13
Plus iPhone, the $2000 Plus MacBook Pro.
37:18
Yeah. And and I want to, I want to be
37:20
cautious here. I'm not, I'm not saying that,
37:23
well, you know, people are just squandering their money on, on
37:27
various things. Rather, I'm saying I'm pointing
37:30
out that the suite of options available to the modern consumer
37:36
is much larger than the suite of options that were available to
37:40
the consumer and 20 years ago. I think this is more likely
37:45
closer to the truth than anything else you and I have
37:48
said about this, right? Because I do think that people
37:53
want and expect a certain lifestyle and then they also
37:59
want and expect to be able to afford a big fancy house.
38:05
Then they say this was possible 40 years ago, but it wasn't
38:12
because the lifestyle was nowhere near the same.
38:15
Nobody had a gym membership 40 years ago.
38:19
Yeah, sure, sure. Come on, you know, the big, the
38:24
big luxury expense was something like AAA, which incidentally we
38:30
did not have in our family. We changed our own tires when
38:33
the car broke down on the side of the road.
38:38
So I, I think we've got in no one in no small way mismatched
38:42
expectations. And on the other hand, I still
38:47
think these people have a point, right?
38:50
It's not only is it hard to get into your first house, it's damn
38:54
near impossible. Right, right, right.
38:58
Let let's. Just be honest.
39:01
It's damn near impossible, and it always was.
39:06
But somehow it was just a little bit less impossible Once Upon a
39:11
time. Yeah, Yeah, I suppose, I suppose
39:15
you're right. And and I go back to the idea
39:20
that we there were less things that you had to have in the
39:25
past. And that's not and and I I don't
39:28
mean that as a negative. I think it is superb that we
39:33
have the options available today that that we do.
39:36
But but they come at a, they come at a trade off, and the
39:38
trade off seems to be the house. That's the big one that people
39:43
talk about. Well, yeah, but when we talk
39:47
about the American Dream, the house is only part of it, right?
39:50
Because part of it is getting a great job that you're qualified
39:56
for, right? That you worked hard to become
39:59
qualified for, and then you get your reward and that you stay at
40:03
that job for a very long time, maybe even retiring from that
40:07
job. I'm describing a world that is
40:10
long gone, Right, right, right there.
40:13
There. There is no such thing as
40:17
employer loyalty to employees anymore.
40:21
You can make an argument that there might not ever have been.
40:24
But there certainly isn't now. And as a result, there is
40:29
certainly no such thing as employee loyalty, right.
40:35
That relationship, employer to employee has been utterly
40:38
fractured, probably, probably due to things that each side has
40:44
done. But I'm going to lay most of the
40:47
blame at the employer side, right when they started treating
40:51
employees like cogs that you put into a machine instead of human
40:56
beings that need to make a living and have self-directed
40:58
goals and lives outside of this place of business.
41:04
Yeah, right thing. And that was a big part of the
41:06
American dream too. And.
41:09
I think it's, well, yeah, although I think it's coming
41:13
back in a different form, thanks largely to these younger
41:18
generations, the millennials and the and the the Gen.
41:21
Z who are putting their feet down and demanding a better work
41:27
life balance. This whole business about remote
41:30
work I think is just superb. And it would not have happened
41:34
if it weren't for those two generations plus COVID forcing
41:38
the older generations to get online.
41:40
A big part of me thinks that those generations are filled
41:44
with a bunch of whiny little bastards, right?
41:47
No, no, no, I'm not doing that. My, my optimism comes from
41:53
people in those same generations, oddly enough, and
41:57
and then younger generations who are far more entrepreneurial
42:02
than people in our generation ever were.
42:05
And they say, I don't like working like this.
42:07
I'm going to start my own place, right?
42:10
Yeah, right. And, and I think there's just a
42:12
lot more of that happening now. And oddly enough, I think people
42:17
like that treat their employees better because they know why
42:23
they're doing it, right. So I I have a fair amount of
42:26
hope, too. I just don't know how long it's
42:28
going to take the filter out so everybody can latch on again to
42:33
what we kind of euphemistically call the American dream.
42:37
Hey, can I throw outlet me throw out another number because I
42:40
prepared these numbers, I want to say them.
42:44
Price of gas, of course, is the big thing now being so expensive
42:47
because of everything that's going on in the Middle East.
42:50
The median worker with his wage can afford to buy roughly 350
42:57
gallons of gas versus IN2012225. Well, people forget just how
43:05
high gas was in 2012. And then you add in the
43:08
inflation and right, you know, I still pick myself.
43:13
There was, there was a time when we were both living in western
43:17
PA, when somebody was selling a nearly new Ford Expedition
43:23
because the price of gas was so high for $8000.
43:27
And I thought, oh, I got to go buy that.
43:30
Right. And I looked at the price of gas
43:33
and I said, where is it going? I said it's probably going down,
43:36
but you never do, no do you? And that beast was getting like
43:39
8 1/2 miles to the gallon. Oh well.
43:43
Split milk, but the fact is for for people who are interest
43:47
First off, I don't think there's anything wrong with the consumer
43:50
price index in the adjustments that are made there in and
43:54
people who complain about it. Almost all of the ones I've
43:58
encountered have this observation bias.
44:00
They say consumer price index can't be right because the price
44:04
of this, the price of that, the price of the other thing went
44:06
up. Well, of course you notice the
44:08
prices that go up. You don't notice the prices that
44:11
go down. That's why we have a consumer
44:13
price index. It looks at all of them.
44:16
But if you don't like that, if you don't like that.
44:20
Let let me get in this and make a real point here.
44:22
When prices neither go up nor go down overtime, those prices are
44:28
going down. Right.
44:30
They're going down because your wages will tend to go up.
44:33
Yeah. I mean, look, inflation being
44:35
what it is, if you have a product that never changes its
44:39
price, that's a product that gets cheaper every year and
44:44
people forget all about that. But for for those who are
44:48
skeptical of consumer price index, do what I've done here.
44:54
Take the median worker, his median weekly wage.
44:57
You can find this online and divide it by prices of goods and
45:03
see how how many gallons of gas could you buy now versus then?
45:08
How many gallons of milk, how many pounds of ground beef now
45:12
versus then. And you can do this for all
45:14
sorts of things. And some things you will find
45:16
are markedly more expensive, but other things you'll find are
45:20
markedly less expensive. And when you put the whole thing
45:23
together, at least if you follow the consumer price index, it
45:27
says on average, yeah, we're actually better off than we were
45:30
in the past with footnote except for 2020 and 2021.
45:34
Yeah. And yet people still emotionally
45:38
feel like they're not. Yes.
45:41
And and that's the problem, right?
45:44
Because as long as they feel that way, our politics will
45:48
reflect that reality. Yeah, they're going to be
45:51
disgruntled. Well, the the University of
45:55
Michigan's Consumer Sentiment Index came out just a couple
45:58
weeks ago. It is the lowest reading since
46:02
1952. Oh God.
46:05
Yeah, Americans hate this economy worse than they hate
46:10
every other economy for the past 75 years.
46:14
Wow. Wow.
46:17
Some of the. But I think the I think the bulk
46:19
of it is psychological. The two last years of Carter and
46:22
the first two years of Reagan were unbelievably terrible.
46:27
Yeah, Oh, unbelievable. They were horrific.
46:30
The first couple years of Carter, the mortgage rates,
46:33
people complain about 6% mortgage rates today.
46:36
They were 15% then. And, and they went up because I,
46:42
I say this often you could get ACD at the bank for 17%.
46:48
Right. Yeah, basically a savings
46:51
account, yeah. Yeah, right.
46:53
Something that a year and a half ago was paying .2%.
46:58
I just, but you know, I think, look, sent sentiment matters.
47:03
And with politics it does. Sentiment is all that matters.
47:08
Perception is reality. I think one of the things that
47:12
contributes to this, what what I think of as a, as a skewed
47:17
perception is social media in that, not social media itself,
47:23
but the fact that we all present the best parts of ourselves.
47:29
You don't show yourself, you know, with your hair mess,
47:32
washing the dishes by hand because the dishwasher's broken,
47:36
right? You show pictures of yourself on
47:38
the beach and drinking wine with your friends and that's the kind
47:42
of thing that you do and so on. A on a fake private airplane.
47:46
Right. And so when your hair is a mess
47:48
and your dishwasher's broken, so you're washing the dishes by
47:50
hand and you look at your friends on social media and you
47:53
think my life is horrible. Yeah, and, and I've got a bone
47:58
to pick with influencers. I don't think we need them.
48:03
I think it's a bunch of nonsense, what we need.
48:06
And I don't want people to hear this loud and clear.
48:09
What we need are examples, not influencers.
48:14
We need to be able to look at somebody and say, hey, he made
48:17
something to his life and he started from, you know,
48:19
relatively very little, but almost nothing.
48:24
And look what he built. Isn't that amazing?
48:27
You need examples, right? Exemplars, people who can
48:31
inspire and influencers, frankly, are a pack of lying
48:36
asses that that's all they do. They get their camera on and
48:42
they lie for a living. Now, there are all kinds of
48:45
other groups out there that the mainstream media comes to mind
48:49
pretty quickly, who also, for the most part, lie for a living
48:53
and a pox on their house too. But we'll get to them in some
48:56
other episode. The the perception that these
49:01
people are leaving entire generations is horrifying
49:06
because you can never live up to that, right?
49:09
No, No normal person can ever achieve what these people are
49:14
pretending to have achieved. And we have to remember that
49:17
this whole business of social media in the influencers, it's
49:22
recent enough. We haven't learned yet at a gut
49:26
level. I mean, it took us a while.
49:27
Do you remember you you study it in high school, the age of
49:30
yellow journalism when people would just print things in
49:33
newspapers that were completely false and and the public
49:36
believed it. It it took us a while with some
49:40
experience to be able to say, Oh yeah, the stuff that appears in
49:44
that newspaper is complete nonsense.
49:46
Yes, I know it says that aliens abducted your grandmother, but
49:49
trust me, don't bother believing it.
49:51
We know that we haven't gotten there with social influencers
49:54
yet. But Ant Ant.
49:55
I was a proud reader of the Weekly World News.
49:59
This was one of the greatest things ever produced, but you
50:04
kind of have to realize there's no such thing as bat boy when
50:08
you buy the you buy the thing at the at the grocery store aisle.
50:14
But you know, the, the thing that that I come back to is the
50:18
early days of AI generated moving, you know, visual
50:22
content, for all intents and purposes, films.
50:28
And I don't know if we can call them videos.
50:30
I guess we have to call them now.
50:32
Film isn't even involved, but they hit a point.
50:36
I mean, you remember when every, every person in an AI picture
50:40
had six or seven fingers? It was really easy to it was
50:43
really easy to spot the the dud in the room.
50:47
But now I'm seeing AI generated video that I can't tell.
50:56
Yes, and I'll give you I'll give you an example of this.
50:59
Somehow I got into, you know, you, you get into these rabbit
51:03
holes on Facebook and they start sending you all the same thing
51:05
again. Somehow I clicked on something
51:07
and I got a series of reels of mountain goats, you know, the
51:12
ones on the side of the Cliff and and I'm watching these
51:17
things. It's pretty cool.
51:18
This is a whole series of these and I look at them and then this
51:21
one jumps off the side of the thing and like down four stories
51:27
and lands and walks off and I realized, Oh my God, this is all
51:31
AI. Yeah, I've, I I saw a video of a
51:35
tiger snatching a young child with both parents running after
51:40
and like, Oh my God, that's wait a minute and.
51:43
Right. And you know, perception is hard
51:48
now and it's getting harder every day.
51:50
So this perception versus reality business, I can
51:54
guarantee you it's only going to get worse.
51:58
There has to be some answer to it.
52:01
We haven't stumbled on that answer yet.
52:04
And until we do, these public opinion polls are going to
52:09
continue showing the same downward trend of answers,
52:13
regardless of what real life yields.
52:16
And let me say something in support of the polls for a
52:19
moment, because someone who's listened to us thus far is going
52:23
to write in and say you guys are completely out of touch because
52:26
the economy is horrible and blah, blah, blah.
52:28
The economy could be a lot better.
52:30
It's not great. I don't think it's nearly as bad
52:33
as what people are portraying, but it could be a lot better.
52:37
One of the things that was interesting in this poll, it
52:39
asked Americans, do you think the economy is in recession or
52:45
will be in recession at some point in the next 12 months?
52:48
And, and the majority is like 60% of 60% of respondents said
52:53
either it's in recession now or it will be in the next three
52:57
months or it will be in the next 12 months, whatever it is, which
52:59
we got 60% of Americans. And, and the fact is the data
53:05
are clear. We're not in recession now.
53:08
However, for the first time, I've been watching this for
53:12
about 3 years now for the first time, pessimistic forecasters
53:18
are forecasting recession for Q2 and Q3 of of this year.
53:23
And that's, it's, it's only the pessimistic forecasters, but
53:26
nonetheless, it's the first time in three years that I've seen
53:30
even that. So there is something going on.
53:33
There is something going on, and I follow it on the political
53:36
side. And Donald Trump's opinion
53:39
rating his, his public opinion polling is diving.
53:45
Yes, 1 and I, you don't ever want to take one poll as the
53:50
only answer, right? There's a number, the framing of
53:54
questions matters. There's all kinds of things that
53:56
matter. But one poll had him at 32% the
54:01
other day. Really.
54:03
And I haven't seen anything that low ever.
54:06
Yeah. Yeah.
54:07
And you remember his, his toadies, especially Besant kept
54:15
saying, all right, we understand things don't look the way you
54:19
wanted them to yet. But next year, the economy is
54:24
going to skyrocket. And then that expectation has
54:29
been late. And next year the economy will
54:33
not skyrocket. It will.
54:35
Not oddly, there is something that could cause it to skyrocket
54:40
and that's. If yeah, let's easy their
54:42
killer. Easy.
54:44
Let's let's not. Well, the interesting thing is
54:47
if he if he put an end to this Iraq, US nonsense and
54:52
simultaneously Iran, Iran, excuse me, excuse me, Iran, US
54:58
and simultaneously rolled back all of those tariffs, the
55:03
economy would the economy would skyrocket, but but it would be
55:08
just to be going back to where it would have been had he never
55:10
done that in the first place. On the tariffs business, there
55:14
is now a website that you can go to a government website to
55:17
reclaim your tariffs. Really.
55:21
Really. And how do you show how much you
55:27
have paid in tariffs? I, I don't think you're going
55:29
to, unless you're a corporation that had an accounting
55:32
department keeping track of that sort of thing.
55:36
But that does mean that the tariff nonsense is in fact over,
55:41
regardless of what gets said about it in public.
55:45
And, you know, to the people who were convinced that foreign
55:48
countries were going to pay all those tariffs, how come the US
55:52
government is now repaying those tariffs?
55:55
Yeah. Yeah, yeah, I know.
55:58
I asked the moon and the stars when I asked people to look
56:01
beyond their partisan leanings and find find out the truth of a
56:06
matter before having a deep opinion on it.
56:08
But that's really what this whole episode has been about.
56:12
The really annoying thing about that is those, not all of the
56:16
tariff, but the the lion's share of the tariffs were passed on to
56:19
consumers in the form of higher prices.
56:21
Yeah, almost. It's the corporations that are
56:24
going to get it back. So at the end, all the tariffs
56:26
did was take money out of our pockets and hand it to the
56:29
companies. Yep, that's right.
56:31
Which is exactly what we were told was not going to happen.
56:35
Yep. Yeah.
56:37
Anyway, we'll be getting back to perception versus reality in the
56:42
future. I I could estimate with 100%
56:46
certainty until then. Well, before we close it out,
56:50
let's take a moment to thank once again all of our Patreon
56:53
sponsors. There's been a lot more action
56:56
on the Patreon site of late. People are posting questions,
56:59
and both you and I are getting in there answering them.
57:03
So if you're not a Patreon member, by all means join and
57:07
participate. We need 10,000 people to give us
57:12
$1.00 a month and I have to say a lot of people are taking me up
57:16
on this $1.00 a month business. Yeah.
57:19
Right. A dollar a month doesn't kill
57:21
you. You know, it's just a dollar.
57:24
But when you add them together with all the other $1.00 a
57:27
month, we actually can pay a producer to fix this show.
57:32
We can pay all the all the hosting and and maybe one day,
57:37
if everything works the way I needed to, it could be my job
57:43
because I really need a job and nobody's offered.
57:46
Let me be, I should say. Anybody out there got a really
57:50
big money job and you're not looking for a lot of output from
57:53
me? I'm your man.
57:55
I am the highest price do nothing consultant of all time.
57:59
And let me actually let me throw in a pitch for you here because
58:03
I have worked with James for seven plus years now and not I
58:09
mean you see us in in words and numbers, but James and I have
58:12
worked in an in a variety of situations.
58:16
Well, it was. Before I went to Iraq, we were.
58:17
Working well, I guess so. I guess so.
58:19
So words and numbers has only been seven years, but it's we're
58:22
probably what, 15 or something? But James is has many serious
58:29
managerial chops. I've seen him in managerial
58:33
positions and he is if your company is running smoothly,
58:38
he'll annoy everybody. On the other hand, if you need
58:42
things shaken up and set to rights, that is exactly the guy
58:46
you want at the helm. It is, if you got a mess on your
58:49
hands you best call me 'cause I'll get it sorted for you real
58:53
quick after I fix it. It's going to be like Winston
58:56
Churchill, right? The minute it's, it's the minute
59:00
Hitler is, is dead and gone, Winston Churchill finds himself
59:04
out of a job. But we'll hey, that's a bridge
59:06
to jump once we, once we get to it.
59:10
I thank you for your confidence in my abilities.
59:15
That's nice. That's nice.
59:17
And and just to take back to walk back something I said
59:21
earlier, I actually do work pretty hard.
59:26
I'm, Oh yeah, I'm, I'm always doing something.
59:29
I just not always doing something that pays all that
59:31
well lately and that's got to change.
59:33
So if you're out there, you give me a call or 10,000 of you can
59:38
give $1.00 a month on Patreon and.
59:41
That'll solve everything. That's patreon.com/words and
59:44
Numbers. And and I want to echo Anthony's
59:48
sentiments and I try to to echo the sentiment with each person
59:52
individually as they join. I I send a little thank you
59:56
note, as you know, as best I can keep up with it, I've got
1:00:00
something to do today. I've let it go for maybe a week.
1:00:05
We. We.
1:00:06
Couldn't be more moved by your support in any way that I can
1:00:11
imagine. It's been genuinely moving and
1:00:15
we appreciate every last one of you, even those of you who
1:00:19
joined the Patreon and and don't give anything absolutely cool by
1:00:25
us, right? Just kind of be in our orbit.
1:00:27
We love having you around. Join words numbers backstage.
1:00:32
We we love all the malcontents there, even though they give us
1:00:36
too much grief for all kinds of things.
1:00:39
I became the the victim of a of a harassment campaign just last
1:00:43
night. But you know, it's all in good
1:00:47
fun. We wouldn't be there if it
1:00:50
weren't enjoyable. So come on over.
1:00:53
It's all right. And if you do, great.
1:00:56
If you don't, great. But no matter what you do, for
1:01:00
God's sake, for the love of Pete, will you just be nice to
1:01:04
each other? Doesn't take that much.
1:01:07
And it means the world to the people to whom you are nice.
1:01:10
And I'll catch you next week. See you next time, James.