Week 17 of the Quarantine
Bye-bye, baby, baby goodbye
Bye-bye, baby, don’t make me cry
– The Four Seasons, 1965
SAN MARTIN, ARGENTINA – Who didn’t see this coming?
From Yahoo! News:
Writing in the New York Times Monday morning, Lucian K. Truscott IV says his ancestor’s former estate at Monticello is enough of a tribute and that the Jefferson Memorial, located next to the Tidal Basin in the nation’s capital, should be replaced with a statue honoring the abolitionist hero Harriet Tubman.
Yes, and what about George Washington? Wasn’t he a slave owner, too? And the Statue of Liberty; wasn’t it always a lie?
But wait… What’s this? Here’s The Washington Post:
A statue of famous abolitionist and orator Frederick Douglass was torn from its pedestal in Rochester, N.Y., on Sunday, the 168th anniversary of his famous speech “What, to the American slave, is your Fourth of July?”
We have no opinion on the merits. But we see people taking sides – some pulling down statues of slave owners… some pulling down statues of former slaves.
Since money is our beat, we can’t help but wonder… America’s stocks and bonds are “priced for perfection.” That is, they are at their highest levels ever.
But perfection may not be what lies ahead. Maybe not even “so-so”… middlin’… or C-minus.
And for the benefit of our new readers, if there are any, we will lay out why we think “perfection” is a long-odds bet.
All living things have life cycles. Markets, societies, and businesses, too. We know of no exceptions.
Great nations follow patterns, too, says 19th-century English poet, Lord Byron. They begin with freedom, then move on to glory, wealth, vice, corruption… and finally barbarism.
Our hypothesis today is that you can tell where you are in the cycle based on whether the monuments are going up or coming down. They go up when a nation celebrates its heroes. They come down when it turns on its old gods and sinks toward barbarism.
Over the Independence Day weekend, we found ourselves reminiscing. Fifty years ago last month, we stepped out into the world – fresh out of college.
What a different world it was. We owed nothin’ to nobody. We had no trouble getting a job. We couldn’t imagine that it wouldn’t be upward and onward for the rest of our life (though we had no idea how it would happen). And we had wheels.
Our wheels were not exactly Corvette quality. Instead, they were on a ’52 Chevy truck modified with a slightly more modern engine. It had been rebuilt by a friend in his backyard in Albuquerque. It purred like a kitten.
But it was tight. It was impossible for the 6-volt starter to turn it over. Instead, we had to remember to park on a hill… so we could roll it down, pop the clutch, and get it running.
But despite the humble beginnings, we had great expectations.
Progress seemed inevitable. Wealth seemed unstoppable. We recall the feeling of freedom – to go where we wanted and do what we wanted.
The Hong Kong Flu crossed the country that year, killing 100,000 (like COVID-19, mostly old people). But life went on as usual. There were no facemasks. No TSA checks at airports. Not even any routine auto safety inspections.
The music of the 1960s, too, was full of energy and innovation – The Doors, The Beach Boys, The Rolling Stones (before the death of Brian Jones), The Beatles – Sympathy for the Devil… California Dreamin’… Little Deuce Coupe… Yesterday…
It was an exciting time… with nothing but upside.
Little did we know that the country was already rolling over… from the glory of General Lucian K. Truscott Jr., who commanded the 3rd Infantry in World War II… to Lucian IV, mentioned above, who writes novels and wants to turn the Jefferson Memorial into a monument to Harriet Tubman.
By 1968, America had already launched onto a long, sad string of unwinnable foreign wars. And just three years later, it would begin printing up fake money to pay for them.
In 1968, we earned $5.25 an hour working in the summer, completely unskilled, painting TV towers on “Television Hill” in Baltimore. It was the highest wage we could find (because it was dangerous working at such heights). But we needed the money to pay tuition (we worked as a night clerk in a hotel to get a free room and washed dishes in a sorority house for food).
Converting our wages to gold as a stable measure, a week’s work was enough to buy 6 ounces of gold. At today’s gold price, that would be the same as getting paid – in cash, no less – $10,662 per week. Good gig for a college student, no?
But now, even if the student gets a good-paying job on a construction crew, he’s likely to get only about $25 an hour. That would be $1,000 a week… or only a bit more than half an ounce of gold. In real money – gold – he’s down more than $9,000.
At that rate, it is almost impossible to “work your way” through college. The University of New Mexico is not exactly the Harvard of the Southwest. Still, its website tells us that a new student should count on paying $40,204 per year for an out-of-state student, including $10,000 for room and board.
Take out the room and board (assuming you can still work at hotels and sorority houses) and you’ve still got a $30,000 bill. Even if you could pocket and save $1,000 a week for the 12 weeks of summer, you’d still be nearly $20,000 short.
If you borrow the $20,000 per year… at the end of your four years on campus, you’re $80,000 in debt.
Add the COVID Lockdown… the trade war… monument toppling… trillions in fake money… and auto, housing, and credit card debt… and the picture is very different from our sans-souci bell-bottom years.
As economist George Gilder keeps pointing out, “time prices” (the amount of time you need to work to pay for a pound of beets or one gigabyte of computer memory) keep going down.
But not for a college education. The twelve weeks of summer were enough to pay tuition for a year in 1969. Not so in 2020.
Progress, in other words, is no sure thing – not even with time prices. One generation learns. The next forgets. One puts up monuments. Another generation pulls them down.
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