POITOU, FRANCE – Yesterday, we needed to get gas for the car. Simple enough.
But this is France, where environmental regulations have caused small, mom-and-pop gas stations to disappear.
And this is August, when stores close and people go on vacation.
And this was August 15th, a national holiday to boot.
We ended up having to drive to a 24/7 automatic gas station a half hour away and get in line with the other sad sacks who needed to fuel up.
And the saddest of them were foreign vacationers whose credit cards didn’t work in the French machines. They had to beg the locals to trade cash for the use of their cards.
Sack the Swamp
How different from the U.S… where there is a pump on every corner… manned by people named Patel or Kim who never get a vacation… and who will sell you all the gas and handguns you want.
Which brings us to our subject: America’s place in the world.
When the calendar rolled over on January 1st, 2000, the dreaded Y2K disaster didn’t happen. The ATMs and credit cards worked as before.
Instead, America rolled over. At least, that is our hypothesis.
Neither New York nor Washington has been sacked yet. Americans have not been put to the sword. Our armies are still unbeaten in the field.
But after January 2000, stocks (our most important capital assets) began to fall.
Measured by gold, the Dow is worth less than half what it was worth at the turn of the century.
The stock market famously “looks ahead”; is it looking ahead to a weaker, poorer America?
We don’t know. But in the 21st century, GDP growth rates slowed. Debt increased. Imports soared; exports slumped. And the perversities and absurdities increased.
A $1 million trailer… “no doc” mortgages… $16 trillion of negative-yielding debt… $2 million sneakers… a $134 million super-ugly mansion… Salvator Mundi for $450 million… WeWork…
Nothing is quite what it seems (because the price signals have been distorted by the feds).
And no lie is so outrageous that it won’t be taken as gospel fact by half the population.
Fin de Bubble
Yes, Peak America may be past tense.
And now as we await the barbarians, we enjoy a delightful Fin de Bubble period… full of fantasy and delusion… claptrap and subterfuge.
Meanwhile, America slides. Foreign Policy:
By many measures, the United States looks like a decidedly middle-of-the pack country or even one at the bottom of the set of rich countries. Consider the classic three American goals: “life, liberty, and the pursuit of happiness.”
On measures indicating the quality of life, the United States often ranks poorly. The U.N. Human Development Index, which counts not just economic performance but life expectancy and schooling, ranks the United States at 13th, lagging other industrialized democracies like Australia, Germany, and Canada. The United States ranks 45th in infant mortality, 46th in maternal mortality, and 36th in life expectancy.
What about liberty? Reporters Without Borders places the United States at 48th for protecting press freedom. Transparency International’s Corruption Perceptions Index ranks the United States as only the 22nd least corrupt country in the world, behind Canada, Germany, and France. Freedom House’s experts score the United States 33rd for political freedom, while the Varieties of Democracy project puts the quality of U.S. democracy higher – at 27th.
As for happiness: The World Happiness Report places America at 19th, just below Belgium. Belgium!
The U.S. stock market managed a weak bounce yesterday, after the feds reported decent numbers for consumer spending.
But if you’re counting on consumer spending to keep the economy in expansion mode, you’re likely to be disappointed.
Household debt has gone from 35% of income in 2000 to nearly 44% today. Dragging so much heavy baggage from past spending, it is very hard for consumers to do much future spending.
And many households live only a single paycheck from disaster.
Earlier this year, GOBankingRates reported that 62% of households had less than $1,000 in savings; about half of them had no savings at all.
And a report from Forbes tells us that:
More than 4 of every 10 American adults didn’t have enough money after paying their bills, so they skipped a vacation, a restaurant meal or another recreational activity during the past year, a new survey shows.
Skipping a vacation was the most popular choice: 42% of respondents to the Bankrate.com survey decided not to take a vacation with at least one overnight stay since July 2018.
Here in Europe, vacations are compulsory. The Frenchman gets about 5 weeks of paid vacation, 11 public holidays, and works only 35 hours per week when he is on the job.
And woe to the company that lets its employees work too much. Inspectors come by to check and can levy high fines.
Not that we approve; it’s none of the feds’ business how much people work. But it is just one of many signs of America’s decline.
Compared to much of the rest of the world, Americans work longer hours and get less from it.
They put in more time on the job than the British, the French, the Germans – or any other advanced economy. But it doesn’t take them very far.
The median wealth per adult in the U.S. is only $61,000. That puts him behind citizens of 20 other countries, including Spain, Italy, Taiwan, and South Korea.
Make America Great Again
The Bureau of Labor Statistics (BLS) tells us that unemployment is down to 50-year lows. But the BLS counts anyone who works 10 hours a week parking cars or braiding hair as “employed.”
Since 2000, almost all the new jobs have been created in low-paying service industries or low-productivity government: restaurants… pizza delivery… Lyft… taking care of old people and their pets… Homeland Security… and so forth.
Real, “breadwinner” jobs, on the other hand, have fallen by 5 million during the entire 20-year period. And during that time, the U.S. population increased by 47 million people.
Also during that time, 5.8 million workers disappeared.
Search parties have come back, reporting that these people have been found lying on couches watching TV or sitting at Starbucks pretending to work on a new startup.
“Declining workforce participation” is how the economists describe it. It’s what happens when the jobs on offer are so unattractive (so poorly paying) that people decide not to bother.
And adding these things together gives us an average American man with an income nearly 30% below where it was in the 1970s.
Or, calculating in terms of the time it takes him to buy an ordinary pickup truck and an ordinary house, he is 50% worse off.
Obviously, these facts weighed heavily on voters in 2016. They were eager to Make America Great AGAIN.
How that has worked out for them is something we’ll take up next week.