If I were the parent of a pre-teen or teenager, I would not allow him or her to use Facebook or Instagram. Continue reading
What do you see when you look at this chart?
This kind of stuff fascinates me, Vera. Humans are basically the same, yet in certain respects we are vastly different. Take, for example, the above graph. People will look at it and see different things. Continue reading
“The soonest you can file for Social Security is age 62. For each year filed early, there is a penalty of 8%. Despite this, 72% of Americans collect at age 62.
If you delay collecting until age 70, benefits will increase by 64%!” (Josh Brown) Continue reading
Prices are going up. For years, we’ve been told we’re in a deflationary period. Economists have further opined that the retirement of the Baby Boomers would be deflationary. But I’m thinking they’re wrong. Continue reading
We think it will. We live as if it will. But it won’t. Continue reading
What do I understand (or at least think I understand) now that I wish I had understood when I had began my journey through adulthood? It’s of no consequence to me, of course: it’s impossible to turn back the clock. But it might be of some help to you, Vera.
In looking back I’m struck by how naïve I was when I came out of high school and, four years later, college. I had little appreciation for what the world was really like. Growing up in a working-class family in homogenous rural south-central Pennsylvania hadn’t exposed me to much. My world was very small.
More than four decades of career experiences in law, business (CEO), government (special agent for DOD and, later, cabinet secretary), and higher ed (college president) changed that. To a degree. There is still much about life I don’t understand or, perhaps more accurately, refuse to accept. I’m still learning and always will be. Nonetheless, life has imparted a few lessons along the way.
Some of the lessons were easy to learn; some were hard. Some were moments of euphoria and left fond memories; some were painful and left scars. Others were learned merely by reading or observing. (It’s always preferable to learn from other people’s wisdom or mistakes.) I decided to compose a list of what I consider to have been some of the most important lessons.
What the list isn’t, however, is a list of rules to live by. I’m not fond of rules and would never suggest life is so easily mastered. Moreover, as I’ve mentioned before, I have absolutely no desire to tell you how to live your life, Vera. Rather, I’m simply sharing some of the things I wish I had better understood when I was young, starting out.
Some of the lessons are practical; some are of the existential variety. The list is neither complete nor final. After all, I’m still learning.
Please don’t infer an order of priority, for none is intended. “You” and “your,” below, refer to me; it is as if life is speaking to me. Occasional personal comments follow parenthetically. Continue reading
If you’re confused about President Trump’s trade policies, I suggest you revisit the transcript of a March 2011 interview, where Mr. Trump put forth his views clearly and succintly. Here’s an excerpt:
Now, most economists don’t like this reasoning, not one bit. They think it’s ludicrous for people to pay more for products and services than they’d have to pay if the market was allowed to find an equilibrium unencumbered by tariffs and other trade barriers. In other words, why pay $2,000 for a sofa made in North Carolina when you can purchase an equivalent one made in China for half that price?
Understandably, though, people who’ve lost they jobs to foreign producers see it differently. Being unemployed, or severely underemployed, tends to frame most issues in a deeply personal way. Their concern is jobs, plain and simple. They don’t much care whether shoppers at Walmart will have to pay more.
This is a gross oversimplification of the issues, of course. Economists could and have written entire books on the subject. But people tend to see issues in pretty simplistic and stark terms. Nuances and complexity don’t count for much when your job is at stake, whether you’re a domestic worker or a foreign one who’s making products for the U.S. market.
The one thing most people can agree on is the need for fair trade. And, admittedly, many of the trade rules aren’t fair by any reasonable standards. It’s not that some people and companies, including Americans (including most consumers who have good jobs), haven’t benefited from the rules as they are. They have. But that’s merely an acknowledgement that, no matter what the rules are, there are always winners and losers.
From my perspective as someone who may be retiring soon, the tariffs aren’t a welcome thing. My income will be relatively fixed (depending on my investment returns) while the costs of goods will increase due to these new taxes and the inevitable upward pressure on prices, and downward pressure on quality, caused by less competition and imbedded structural inefficiencies.
But, of course, the tariffs may be welcome to some people, namely, those who may secure jobs that are supplanting imports. However, the number may not be significant, and they may be dwarfed by the number of people who lose jobs due to retaliatory tariffs imposed by other countries. Even without the offset of lost jobs, the number added may not be as significant as some people believe.
The reason is simple: technology. Robots and computer-assisted machines and processes already have displaced many workers, including many of the workers who mistakenly think they’ve lost their jobs to foreign workers. And this phenomenon is just getting started. It’s likely to spread farther through the ranks of both blue and white-collar workers no matter what happens with tariffs.
Which brings me to my main point: young people shouldn’t be distracted by the tariff debate. Rather, they should focus on that which they can control and influence, namely, their own learning, knowledge, and skills in the context of a world in which more and more human activity will be taken over by computers and computer-assisted machinery, no matter what tariffs are in place.
This transformation has huge implications for people. No one can be sure how it will all play out; however, it’s likely it will result in a further stratification of workers and even less equal distribution of income and wealth.
When I was teaching, I tried to challenge my students to address this question when choosing a major and potential career path: What will you be able to do that computers won’t be able to do better? Not only today, but in the decade ahead.
American workers’ stiffest competition in the years ahead won’t come from China: it will come from digital technology. Mr. Trump’s mindset is stuck in the 1950s. When you’re a 71-year-old billionaire, there is little risk in that. If you’re in your 20s and aren’t a billionaire, there is a whole lot of risk.
The aging Baby Boomers who are hostage to mindsets formed in the 20th century will be consumed by debating the president’s policies. The smart young people of the 21st-century will focus on the things they can control. And will be preparing for a future than will look very different from the past.
I can’t imagine carrying student-loan debt when I was 40 years old. Or 50. Or, for heavens’ sake, 60 or older. But that’s what happening in America according to the New York Fed.
Of course, some of this debt will never be repaid. The U.S. taxpayer, who holds most of the debt via its federal government, will have to absorb the losses. The winners in such a system are the colleges, who received most of the loan proceeds.
When I was a college president, I was shocked by the willingness of some students to incur ridiculous amounts of debt for a college degree with little economic value. There just didn’t seem to be any concern over the relationship between the debt and that which was being purchased with the proceeds, or about the impact of the debt on their lives in the years ahead. I believed then and believe now that we need:
- to do a much better job of educating our kids about personal finance; and
- to revamp a seriously flawed student-loan program.
Unfortunately, none of this seems to be a priority, either with our local school boards or our national government. So nothing has changed. Except the loan balance, that is. The total amount of student debt has grown to about $1.5 trillion. And it’s continuing to rise.
Just a reminder of the differences among the regional economies and real estate markets that comprise the United States.
The war is on. History tells us no one wins such wars. But the U.S. is throwing caution to the wind and proceeding nonetheless. Its president says he’ll win this war. But he’s a fool. No one of any substance believes him.
The war is picking up steam quickly. It started about a month ago with the U.S.’s announcement of new tariffs on steel and aluminum imports. China shot back with a list of 128 U.S.-produced products that would be subject to new tariffs.
The next battle in this war started last night, when the White House unveiled new tariffs on 1,300 additional Chinese products. It’s a long list. I found myself in bed scouring the list to see if a products that compete with any of my clients were included.
The Chinese struck back quickly. It took them only a matter of hours (by the time I got up this morning) to impose new tariffs on 106 categories of goods presently imported into China from the U.S.
The war is now on. In full force.
If you want to see a list of potential losers in this war, all you have to do is scan through the list of products that will be subject to these new stiff taxes and then start working your way backwards to determine who their producers and their suppliers are. Or wait for the inevitable news reports of layoffs and other financial hits that will be taken by affected industries and producers as well as their employees.
Prices may be affected, too. In certain cases, prices could rise due to lessened competition; in other cases, prices could fall, at least in the short term, due to oversupply. It’s too complicated to model in one’s head. We’ll have to await the economists’ modeling or be patient enough to observe price changes for ourself.
There may be other winners, including some domestic producers and other importers who now will have less competition from China. We’ll have to wait and see how this plays out.
Some people who have assessed the list of new tariffs imposed by the Chinese say it appears the Chinese have intentionally targeted states that supported Mr. Trump in the election. I hope so. It would only be fair to the states that didn’t support him. Targeted fallout is always preferable to generalized impact which, by its nature, ends up with innocents taking collateral damage. It’s only fair that those who voted for Mr. Trump bear the brunt of his reckless actions.
Based on everything the president and his minions have said to date, it appears unlikely this is the final battle in this new trade war. It’s likely our neighbors in North America will get pulled into this war as well as our Allies in Europe, especially Germany for whom the president seems to harbor ill-will.
Stay tuned. And hope you don’t get caught in any cross-fire.