Defining Prosperity Down? Yes, We’d Better Do That

The title of Paul Krugman’s Sunday New York Times column, “Defining Prosperity Down,” got me thinking, but not in the way Krugman probably intended.  It was mistitled – I expected to see the view shared by many other liberal commentators that Americans should be entitled somehow to have the same financial results they did a decade or more ago, but the column did not go that way.  It started with much the same point I made in last week’s post two days before;  Friday’s employment data was mid-range, and though the new jobs number showed progress, it would need to be the same for several years for us to see pre-2009 unemployment  rates.  He then went to his thesis that we need continued monetary stimuli, and although he flubbed by calling current times a “continuing, if low-grade depression,” elsewhere in the column he almost bought into the Work’s New Age principle that the jobs crisis is permanent and will not be solved by better times.

We do, though, have a problem now with prosperity expectations.

During the Winning by Default Years, which ran from 1946 through 1973, we picked up a mindset which warped our views on how affluent we should be.  That age included the great growth of the middle class, and its trappings – the two cars, the suburban house, easy employment for at least the husband, and no real financial threat from either health care or college tuition.  We once thought these gains were permanent, a new American birthright, and when that era ended with the energy crisis, expectations still stayed high. 

Even over the past five years, when the permanent nature of the jobs situation began becoming clear, some commentators have claimed we should still all be middle class, especially those with at least bachelor’s degrees.  On the July 3 episode of PBS’s Democracy Now, a strongly left-leaning radio program focusing on misbehavior by government and corporations, the host and others discussed that view, which they apparently shared.  Some measures they advocated were a healthy rise in the minimum wage, lowering interest rates on existing student loans and forgiving large amounts of them outright, and concocting some way of allowing graduates to choose jobs they liked instead of those most likely to help them pay off debt.  Others, elsewhere, have said Americans should almost be guaranteed owning a house, as the main near-entitlement of this middle-class package.

However, reality makes those things impossible.  Although it may happen anyway, we cannot viably forgive the $1.1 trillion former and current American students owe for their educations.  As a result, with generally weak job prospects and high debt, we need to accept that it will be a long time before most people now in their 20s can afford houses.  Those who have borrowed a lot of money may need to find ways of paying it off, even if that means working in positions less emotionally rewarding.  And college attendance as the norm, established by the G.I. Bill in the 1940s and cemented by the Vietnam War and promises of higher lifetime earnings decades later, may need to end.  Discriminatory or not, private student loan providers must assess individual customers’ chances of becoming well employed.  Borrowing money for education, or houses for that matter, should be viewed as the speculative endeavor it is.  Cars for many people, especially in more cities, may need to be seen as luxuries instead of necessities;  indeed, younger adults’ collective attitude toward driving, which is much less enthusiastic than that of those little older, will prove appropriate. 

These are tough times, and with the next recession they will get tougher.  There is no iron rule that each generation should at least match the prosperity of the one before.  We must all make adjustments.  We can no longer afford to think, because college degrees are statistically associated with more income, that therefore almost all high school graduates should enroll.  If universities, with their huge endowments and shelter from many economic realities, will not take more responsibility for what is happening to their students after graduation, then we will need to be keenly aware of such outcomes ourselves.  Colleges have profited immensely from a common confusion of correlation with causality, in which too many people think education itself is responsible for superb results originating more from intelligence, maturity, drive, and perseverance, and they need to be held more accountable for the failures. 

As unfair as it may seem, every American is not going to be in the top half of affluence.  We will need to understand that while there are many great things about modern-day America, which usually do not get included in prosperity as we usually measure it, no guarantee of certain possessions or assurances is among them.  We all must choose what is most important, personally, for ourselves, and worry less about the rest.  That, not saddling others with obligations which ultimately cannot be fulfilled anyway, is the way to deal with the unstoppable changes we face.