Ouch

Cambio climático con modelo en espiral By Ed Hawkins

Why So Much Wealth at the Top Threatens the US Economy

Policymakers and the media are paying too much attention to how quickly the U.S. economy will emerge from the pandemic-induced recession, and not nearly enough to the nation’s deeper structural problem – the increasing imbalance of wealth that could enfeeble the economy for years.

Seventy percent of the US economy depends on consumer spending. But wealthy people, who now own more of the economy than at any time since the 1920s, spend only a small percentage of their incomes. Lower-income people, who were in trouble even before the pandemic, spend whatever they have – which has become very little.  

In a very practical sense, the U.S. economy depends on the spending of most Americans who don’t have much to spend. That spells trouble ahead.

It’s not simply a matter of an adequate “stimulus.” The $2,000 checks contained in the American Rescue Plan have already been distributed and extra unemployment benefits will soon expire. Consumer spending will be propped up as employers add to their payrolls. Biden’s spending plans, if enacted, will also help keep consumers afloat for a time.

But the underlying imbalance will remain. Most peoples’ wages will still be too low and too much of the economy’s gains will continue to accumulate at the top, for total consumer demand to be adequate.  

Years ago, Marriner Eccles, chairman of the Federal Reserve from 1934 to 1948, explained that the Great Depression occurred because the buying power of Americans fell far short of what the economy could produce. He blamed the increasing concentration of wealth at the top. In his words:

“A giant suction pump had by 1929-1930 drawn into a few hands an increasing portion of currently produced wealth. As in a poker game where the chips were concentrated in fewer and fewer hands, the other fellows could stay in the game only by borrowing. When their credit ran out, the game stopped.”

The wealthy of the 1920s didn’t know what to do with all their money, while most Americans could maintain their standard of living only by going into debt. When that debt bubble burst, the economy sunk.

History is repeating itself. The typical Americans’ wages have hardly increased for decades, adjusted for inflation. Most economic gains have gone to the top, just as Eccles’s “giant suction pump” drew an increasing portion of the nation’s wealth into a few hands before the Great Depression.

The result has been consumer spending financed by borrowing, creating chronic fragility. After the housing and financial bubbles burst in 2008, we avoided another Great Depression only because the government pumped enough money into the system to maintain demand, and the Fed kept interest rates near zero. Then came the pandemic.

The wealth imbalance is now more extreme than it’s been in over a century. There’s so much wealth at the top that the prices of luxury items of all kinds are soaring; so-called “non-fungible tokens,” ranging from art and music to tacos and toilet paper, are selling like 17th-century exotic Dutch tulips; cryptocurrencies have taken off; and stock market values have continued to rise even through the pandemic.  

Corporations don’t know what to do with all their cash. Trillions of dollars are sitting idle on their balance sheets. The biggest firms have been feasting off the Fed’s corporate welfare, as the central bank obligingly holds corporate bonds that the firms issued before the recession in order finance stock buybacks.

But most people have few if any assets. Even by 2018, when the economy appeared strong, 40% of Americans had negative net incomes and were borrowing money to pay for basic household needs.

The heart of the imbalance is America’s wealthy and the corporations they own have huge bargaining power – both market power in the form of monopolies, and political power in the form of lobbyists and campaign contributions.

Most workers have little or no bargaining power – neither inside their firms because of the near-disappearance of labor unions, nor in politics because political parties have devolved from giant membership organizations to fundraising machines.

Biden’s “stimulus” programs are fine but temporary. The most important economic reform would be to correct this structural imbalance by reducing monopoly power, strengthening unions, and getting big money out of politics.

Until the structural imbalance is remedied, the American economy will remain perilously fragile. It will also be vulnerable to the next demagogue wielding anger and resentment as substitutes for real reform.

The housing crisis considered as an income crisis

I'll be in TUCSON, AZ from November 8-10: I'm the GUEST OF HONOR at the TUSCON SCIENCE FICTION CONVENTION.

A paradox: in 1970, everyday Americans found it relatively easy to afford a house, and the average American house cost 5.9x the average American income. In 2024, Americans find it nearly impossible to afford a house, and the average American house costs…5.9x the average American income.

Feels like a puzzler, right? Can it really be true that the average American house is as affordable to the average American earner as it was in 1970? It is true, as you can see from Blair Fix's latest open access research report, "The American Housing Crisis: A Theft, Not a Shortage":

https://economicsfromthetopdown.com/2024/10/23/the-american-housing-crisis-a-theft-not-a-shortage/

Fix also points out that is even more true of rents than it is of house prices. The ratio of rent to average income has actually fallen slightly since 1970. Rents are also, in some mathematical sense, "affordable."

Now, those of you who are well-versed in statistical card-palming will likely have a pretty good idea of the statistical artifact at the root of this paradox: the word "average." If you remember your seventh grade math, you'll recall that "average" has more than one meaning. Sure, there's the most common one: add several values together, then divide the total by the number of values you added. For example, a nonzero number of people have one or zero arms, so the average human has slightly fewer than two arms.

That average is called the "mean." The mean US wage is pretty robust: $73,242/year:

https://fred.stlouisfed.org/series/A792RC0Q052SBEA/1000

But the majority of Americans are not earning anything like $73k/year. Since the Reagan years, the number of Americans living in poverty and extreme poverty has climbed and climbed. And while their declining income sure drags down that average, it's dragged way, way, way up by another group of Americans – the ultra-rich.

You see, as Fix writes, back in the Reagan years, America initiated an experiment in redistribution. Reagan enacted policies that moved most of the nation's wealth from the great majority of working people to a tiny minority of people who ended up owning pretty much everything. Throw their income into the mix, and the average American's income is sufficient to finance the average American home, with plenty to spare.

In other words, this isn't an "average human has fewer than two arms" situation, it's more like a "Spiders Georg" situation. Spiders Georg is a Tumblr meme about a guy who eats 10,000 spiders every day and is thus single-handedly responsible for the (false) statistic that the average human eats two spiders a week:

https://en.wikipedia.org/wiki/Spiders_Georg

The American rich – Reagan's progeny – are the Spiders Georg of house prices. By hoarding the great mass of American national wealth, they create a statistical mirage of affordable housing.

Now, that's interesting, but where Fix goes next with this is even more fascinating. If the average price of housing (relative to average income) has stayed fixed since 1970, then it follows that the price of housing isn't being driven up by a problem with supply. Rather, these numbers suggest that America has enough housing, it's just that (most) Americans don't have enough money.

If that's true – and I have a couple of quibbles, which I'll get to in a sec – then the most common prescription for solving American housing (building more of it) is somewhat beside the point. For Fix, using public funds to subsidize cheaper housing is like using public funds to pay for food stamps for working people whose wages are too low to keep them from starving. Sure, we should do that: no one should be without a home and no one should be hungry. But if working people can't afford shelter and food, then we have a wage problem, not a supply problem.

Fix – as ever – has a well-thought through, painstakingly documented "sources and methods" page to back up his conclusions:

https://economicsfromthetopdown.com/2024/10/23/the-american-housing-crisis-a-theft-not-a-shortage/#sources-and-methods

And while Fix acknowledges that reversing the mass transfer of wealth from working people to their bosses (and their bosses' idle offspring) is a big lift, he rightly wants to keep the question of wages (rather than housing supply) front and center in our debate about why so many of us are finding it hard to keep a a roof over our heads. We need progressive taxation, higher minimum wages, protection from medical and education debt, and hell, why not a job guarantee?

https://pluralistic.net/2020/06/25/canada-reads/#tcherneva

I love Fix's work, and this report is no exception. He does it all in his spare time. Some nice progressive think tank should give him a grant so he can do (a lot) more of it.

That all said, I do have a quibble with his conclusion about the adequacy of the American housing supply. In California, we have a shortage of 3-4 million homes, a number arrived at through the relatively robust method of adding up the number of California families that would like to have their own homes and subtracting the number of homes available near those families:

https://en.wikipedia.org/wiki/California_housing_shortage

How to explain the discrepancy? One possibility is that the price of housing is artificially low, because more than 181,000 people are homeless here. Hundreds of thousands of more people are living in overcrowded housing, with multiple families inhabiting spaces intended for just one (or even a single person). If all of those people were competing for housing, the price might rise even higher.

Think of the people who have given up looking for work – because they're not in the workforce, wages go up. If they were competing in the labor market, wages would fall. Maybe all those people would prefer to have a job, but they're missing from the statistics.

That's one theory. Another is that we're getting tripped up on averages again here. California does have some towns with many vacancies, extra supply that is pushing down prices; it's also got many places with far more people who want to live there than there are homes for. It's possible that there's enough supply on average across the states, but – as we've seen – averages are deceptive.

Ultimately, I think both things can be true: we have a wage problem and we have (many, localized) supply problems. Both of these problems deserve our attention, and neither is acceptable in a civilized society.

Tor Books as just published two new, free LITTLE BROTHER stories: VIGILANT, about creepy surveillance in distance education; and SPILL, about oil pipelines and indigenous landback.

If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

https://pluralistic.net/2024/10/24/i-dream-of-gini/#mean-ole-mr-median

Just wow…

A DM’s Fair Play Guide To Plot Twists

I love running a game with a lot of surprises. The challenge to pulling this off well is that, unless you’re playing a one on one game, your players outnumber you: and between them, they have a good chance of figuring out what’s going to happen, no matter how sneaky and clever you are.

The first way of dealing with this - which I’ll just call the bullshit way - is to not give your players the information they need to solve the mystery. Don’t let them find out about the secret society until it’s too late. Don’t give them any reason to suspect that their NPC ally is planning to kill them. Don’t let them find the murder weapon, don’t let them locate the witnesses, don’t give them the chance to skip to the end of their investigation.

This sucks, and if you run your games like this, you’re going to piss off your players. Because it isn’t fair.

In mystery literature, a “fair play mystery” is one where the reader is given all of the information they need in order to figure out the solution before the Big Reveal. It’s what makes the reveal good: that GASP, the “oh shit, the knife! the knife from the party! that was hers! I forgot!”

Pulling off a twist in a fair play game is an incredible feeling. Your players will think you’re a genius (or an absolute dick bastard, which is just as good) and they’ll respect it more when they land in hot water that they plausibly could have avoided. So how do you run a fair play game without your players figuring out the twists ahead of time, given that you’re definitely not smarter than all of your players put together?

By fucking with their expectations.

Here are some things that I keep in mind, to keep my players guessing. And it’s important, with all of this, that if your players see through something, let them have it. They should figure out a lot of things on their own! But if you’re regularly seeding your stories with all of this stuff, eventually your players will miss something. Those are somethings you can build on. The same way that a low level enemy who gets away once can keep coming back again and again until they become an important antagonist, a misapprehension your party proves to have a blindspot for can grow and develop until they get smacked with a breathtaking twist. 

What’s a twist if not the sudden overturning of an assumption you never thought to question?

1: Make your powerful friendly NPCs know a lot…but not as much as the players think they do.

Player characters often end up with powerful allies. It would be very convenient for the party if those allies always had accurate information. Make sure they don’t always enjoy that convenience.

It’s a balancing act: you want your powerful NPCs to be powerful. You want this alliance to be meaningful and beneficial to your players. But give your NPC an Achilles heel of some kind, when it comes to the information at their disposal. The Noble General commands powerful forces and knows the lay of the enemy’s land well…but that doesn’t mean he knows what every squadron and scouting party is up to. The Political Mastermind may know the ins and outs of the court, and have keen insight into the motivations of others: but he has an enemy who pisses him off so much that he loses all objectivity around her. The Powerful Wizard can call upon great magic to aid the party: but his divinations aren’t as accurate as he thinks they are, and he’s prone to finding, in his signs and omens, what he wants to see, more than what’s actually there.

Most of the time, their information should be good! That will make it more likely that your players will trust them the one time when it isn’t.

2. Let (apparently) less powerful NPCs sometimes know more than the players think they do. 

Most NPCs aren’t the Noble General or the Powerful Wizard. Most NPCs are Daves, designed to get the players from place to place. Most of those Daves know about as much as you’d expect them to. But some Daves have plans of their own.

You don’t always have to signpost with big blinking lights which of your NPCs are ‘important,’ and which ones are ‘unimportant.’ Sneak in a crafty Dave from time to time. That assistant they talk to, every time they go to see the prince? That bitch knows everything, and she’s almost ready to make her move. 

3: There is no such thing as a completely reliable witness. 

If the players only get information from one person, that information should be flawed in at least one, potentially small, but important way. Smart players will seek a second opinion, or at least allow for the possibility that their information may be incomplete. But even smart players get out over their skis sometimes.

4: Let your NPCs be aware of the power of a first impression. 

If an NPC gives a strong first impression of being a particular kind of person, it’s because they’re comfortable giving that impression. That might be because it’s who they are. But maybe not.

One of the first characters the PCs met in a VtM campaign I ran was Gawaine. Gawaine was a good old pine-scented man’s man, with salt and pepper stubble and a blue Ford truck. He listened to AC/DC, and talked about the war. He was affable and honest and willing to lend a hand. You already know Gawaine. Everybody knows a Gawaine. Gawaines are trustworthy, salt of the earth types. You don’t necessarily think to question a Gawaine.

That’s exactly why Gawaine was such a useful persona for Krystiyan, the Tzimisce Voivode, a cruel and alien sculptor of flesh who “never left his haven.” There were plenty of clues that they were the same person, but that campaign was in its endgame before the players put them all together.

5: Sometimes, dangerous and villainous NPCs should be helpful and cooperative. 

Not even necessarily because they’re manipulating the players, or even deceiving them about their true natures, but because their interests and the players’ interests genuinely align…for the moment. 

One of the easiest levers in your players’ brains to exploit is the expectation that people who help you are your friends. Even if your players know, consciously, that they shouldn’t trust this person, most of the time they kind of can’t help it, if the NPC is genuinely helpful to them and at least a little charismatic. 

6: Sometimes, good and valuable NPCs should be unhelpful and uncooperative. 

No matter how mature your players are, there’s a natural tendency to react to uncooperative NPCs with a reflexive, “Hey, fuck you! We’re the protagonists! This guy is an asshole!” so from time to time have a helpful, honest, good-aligned NPC have a wholly justified but as-yet-unknown-to-the-party reason to flatly refuse to deal with them.

7: Every NPC should have a secret. 

Not necessarily a bad secret. Were it to be revealed, it might even make the party like them more! But for their own reasons, the NPC does not want their secret to come out, and they will lie to the party to protect it. Players go crazy when they realize they’re being lied to, and often jump to some wild assumptions about your NPC’s motivations. I’ve had an NPC lie about the opening hours of a shop, and had the PCs assume that they were black market dealers for the villain when the dude just wanted to be able to close early so he could go smoke weed in the park.

8. As a DM, it’s polite to remind your players of the common knowledge their characters would possess…even when it doesn’t reflect the truth.

We all know it’s tedious when the DM calls for a roll when you’re just asking for common knowledge. I shouldn’t have to make a roll to know the dumb space word for plastic in a Star Wars game. I shouldn’t have to make a roll to know who the Holy Roman Emperor is in a game about medieval vampires. The DM should supply common knowledge for free, whenever it comes up.

That doesn’t mean common knowledge is true.

This is different from just lying to your players, because you don’t put the weight of DM word-of-God behind it. It’s not “You would know this guy is a Ventrue, based on XYZ.” It’s “it would be a common assumption that this guy is a Ventrue, based on XYZ.” He might not be a Ventrue. It might in fact be extremely important that he is not a Ventrue. But if it is commonly assumed that he’s a Ventrue, that is - word for word - something you can share with your players. If they don’t look any deeper than common knowledge, that’s on them.

9. Obviously untrustworthy NPCs provide great air coverage for less obviously untrustworthy NPCs.

The obviously untrustworthy NPC might or might not be planning to betray the party. But if you introduce two untrustworthy NPCs in the same storyline, and one of them seems normal and cool and has a genuine plot-related reason to be there, and the other one is Jaffar, Jaffar’s gonna get clocked, but Susan over there will probably slip under the radar, and might even get tapped to help out with the whole Jaffar situation. They might get Susan’s number, by the end of the session. Susan might become an ‘ally.’ Susan might even get romanced by a party member. Play your cards right, and Jaffar might just end up a footnote in the introduction of Susan, Scourge of Worlds and most hated NPC in the entire campaign.

10. Your villains should always have a secret plan B.

Your villain isn’t stupid, right? And your villain probably isn’t so arrogant that it is inconceivable to them that their plan might fail. They’ve been planning this ritual for ten thousand years, after all. It’s always possible that some plucky band of heroes could show up at the last minute and murder your high priest, or steal your amulet, or seduce your second in command. So what does your villain have in his back pocket to make the players go, “Oh, shit - he planned for this!”

This may mean that there is a whole separate plot happening, running alongside the main story. This is great, because when weird things happen, the players have to figure out whether this is part of Plot A or Plot B, and working out who did what and why gets a lot more interesting. If they end up foiling Plot A, great - your villain was also secretly behind Plot B the whole time, and will transfer all of his resources over to that. 

Sometimes your players will figure out that Plots A and B were both the same plot the whole time, with the same villain at the head, and they’ll feel like the smartest people on the planet, and it will be their favorite moment of the entire game. That’s great! You gave them that!

Sometimes, they won’t. And when the villain of Plot A, apparently defeated, starts laughing and reveals that he was also the mastermind behind Plot B, which is now too late to be stopped, that will probably be your favorite moment of the entire game.

“The Beatles were hard men too. Brian Epstein cleaned them up for mass consumption, but they were anything but sissies. They were from Liverpool, which is like Hamburg or Norfolk, Virginia a hard, sea-farin town, all these dockers and sailors around all the time who would beat the piss out of you if you so much as winked at them. Ringo is from the Dingle, which is like the f***ing Bronx.

The Rolling Stones were the mummys boys they were all college students from the outskirts of London. They went to starve in London, but it was by choice, to give themselves some sort of aura of disrespectability. I did like the Stones, but they were never anywhere near the Beatles not for humour, not for originality, not for songs, not for presentation. All they had was Mick Jagger dancing about. Fair enough, the Stones made great records, but they were always s**t on stage, whereas the Beatles were the gear.”

— Lemmy Kilmister

Possibly the Most important thing you'll read this year...

The following is the philosophy of Charles Schulz, the creator of the 'Peanuts' comic strip.

You don't have to actually answer the questions. Just ponder on them. Just read it straight through, and you'll get the point.

1. Name the five wealthiest people in the world.

2. Name the last five Heisman trophy winners.

3. Name the last five winners of the Miss America pageant.

4. Name ten people who have won the Nobel or Pulitzer Prize.

5. Name the last half dozen Academy Award winners for best actor and actress.

6. Name the last decade's worth of World Series winners.

How did you do?

The point is, none of us remember the headliners of yesterday.

These are no second-rate achievers.

They are the best in their fields.

But the applause dies.

Awards tarnish ...

Achievements are forgotten.

Accolades and certificates are buried with their owners.

Here's another quiz. See how you do on this one:

1. List a few teachers who aided your journey through school.

2. Name three friends who have helped you through a difficult time.

3. Name five people who have taught you something worthwhile.

4. Think of a few people who have made you feel appreciated and special.

5. Think of five people you enjoy spending time with.

Easier?

The lesson:

The people who make a difference in your life are not the ones with the most credentials, the most money ... or the most awards. They simply are the ones who care the most.