American Whining and the Culture of Dependency

The AP wire story “Americans’ unhappy birthday: ‘Too much wrong right now’” link appeared the day after Independence Day. The story uses an Optimist Club meeting to discuss the general feelings by Americans that their nation is “on the wrong track” and that “something must be done.”

... talk turns to the state of the Union, and the Optimists become decidedly bleak.

They use words such as “terrified,” “disgusted” and “scary” to describe what one calls “this mess” we Americans find ourselves in. Then comes the list of problems constituting the mess: a protracted war, $4-a-gallon gas, soaring food prices, uncertainty about jobs, an erratic stock market, a tougher housing market, and so on and so forth.

One member’s son is serving his second tour in Iraq. Another speaks of a daughter who’s lost her job in the mortgage industry and a son in construction whose salary was slashed. Still another mentions a friend who can barely afford gas.

Joanne Kontak, 60, an elementary school lunch aide inducted just this day as an Optimist, sums things up like this: “There’s just entirely too much wrong right now.”

Some things Americans should feel unhappy about. The skyrocketing cost of gasoline is a big part of the pessimistic mood gripping the country. Seeing the price blast into the stratosphere through $4 a gallon heading into $5 gives us the feeling of a linear progression. What will stop it from hitting $6, $7 or more? People feel helpless and believe that there is nothing they can do.

But a dose of reason is in order.

First the ministers of OPEC themselves have stated that there is a bubble in oil right now. Contrary to what many think, OPEC does not like bubbles because it recognizes that high prices bring new supply onto the market as oil is extracted from deposits that were considered unprofitable at $70/barrel. Add in the cut in demand brought by higher prices and a collapse in oil prices is inevitable. While bubbles irrationally overinflate prices, collapsed bubbles (“corrections”) inevitably overshoot the true value of commodities as producers flood the market with product in order to get the best price they can before the price declines more. This floods the market further, and coupled with decreased demand the effects of collapsed prices take a long time to clear.

There are several factors that play into this including the concept of “peak oil” and political meddling with markets – such as the Indian and Chinese government subsidizing of petroleum products and environmental opposition to drilling in ANWAR and use of oil derived from shale. “Peak oil” remains a controversial topic and the political meddling with markets inevitably breaks down from the high cost of subsidies and the political cost of keeping supplies off the market.

Like all bubbles – tulips in the 17th century, precious metals in 1980 and Internet stocks in 2000 – the oil bubble will pop. The key is to curb our tendency to demand that government “do something” since such meddling could only make the situation worse. Anyone who remembers the lines at filling stations during the Carter administration should be surprised at their lack during the Bush administration. The difference is due to the Carter’s meddling in the market with price controls, something that Bush – for all his real and imagined faults – has not instituted.
Contrary to what some politicians have said, there are no magic bullets that will help Americans with high fuel prices. Options include driving less, buying more fuel efficient vehicles including those with manual transmissions instead of automatics, and for those who heat their homes with oil, lower the thermostat. But these options take time to work, and they don’t elect politicians to office.

Rising home prices caused by the real estate bubble gave home owners a sense of wealth that encouraged indebtedness and excessive spending. Now that the bubble has collapsed, home owners are left with the bills at the same time they watch properties sell in their neighborhood for less. Those with adjustable mortgages are in their own private hell as they are squeezed between higher payments, declining values, and higher fuel costs. Those who can get some relief through refinancing; unfortunately for many in thjs difficult position bankruptcy is not an option anymore thanks to the bankruptcy “reforms” sponsored by Democrat senators Joe Biden and Tom Carper. The only option is to walk away from their homes, which eventually leads to more properties on the market, driving down real estate values in a self-reinforcing cycle.

For those that keep their homes there aren’t any easy solutions. Home values will continue to decline until the supply of homes is met by demand for them. In the meantime homeowners should pay down debt and save more so that they can leap at the buying opportunities that will come around once the real estate market has bottomed out.

“There are so many things you have to do to survive now,” says Larue Lawson of Forest Park, Ill. “It used to be just clothes on your back, food on the table and a roof over your head. Now, it’s everything.

“I wish it was just simpler.”

Lawson, mind you, is all of 16 years old.
Stay-at-home-mom Heather Hammack grapples with tough decisions daily about how to spend her family’s dwindling income in the face of rising food costs. One day, she priced strawberries at $1.75. The next day, they were $2.28.

“I could cry,” she responds when asked how things are.

“We used to have more money than we knew what to do with. Now, I have to decide: Do I pay the electric this week? Do I pay for gas? Do I get groceries?” says Hammack, 24, who lives with her boyfriend, a window installer, and their 5-year-old son in a rented home in rural Rowlesburg, W.Va. “You can’t get ahead. You can’t save money. You can’t buy a house. It just stinks.”

When you have a sixteen year old whining about how complex life is, or a 24 year old stay-at-home mom crying about a $.53 increase in the cost of strawberries, then it’s time to open up a can of some old fashioned Protestant work ethics and values.

First off, Ms. Hammack has bigger problems than $2.28 strawberries. Getting married would save some on taxes, but the best thing to improve her family’s situation would be for her boyfriend to get training to do a job that pays more than window installing. Another idea would be for them to leave the rental home for a cheaper apartment. How much space do three people need after all? There are existing job training programs for low income wage earners; her boyfriend needs to take advantage of them. I am an advocate of stay-at-home parents; maybe her boyfriend should be the one taking care of her child at home if Heather Hammack can earn more than he can on the current job market. Regardless, it’s not the federal government’s job to improve their lot in life – it’s theirs! As for the sixteen year old, what perspective can he possibly offer on our current economic situation?

I’ll be honest and state that I am earning the same wage today that I was eight years ago. Am I angry at the government for that fact? No. During those years I invested time and money in building up my Wife’s career. She’s now in her last year of residency and poised to double our family income.

This is not the result of a government program to improve our lives; it was a conscious decision we made 10 years ago. Like any investment it was fraught with risk: What if the Wife doesn’t pass the MCAT? What if the Wife doesn’t get accepted into med school? What if the Wife can’t find a residency program that wants her? What if the value of the Wife’s specialty decreases while she’s in school and residency? And the biggest risk of all, what if we get divorced?

I switched careers five years ago because I viewed my old one as becoming technologically obsolete. Again there was considerable risk to doing this; developers in my specialty could do better as others left for greener pastures. Has it worked out? Aside from the importation of H-1b/L-1 labor that depresses my wages (an example of more government meddling in the labor market), whether it has or not is not the government’s fault. I made the choice.

Since the Bush administration was pilloried in 2005 for its slow response to Hurricane Katrina, some politicians including Barack Obama and leading Democrats like Harry Reid and Hillary Clinton have encouraged Americans to expect more from the federal government. This is taking the culture of dependence which saw Katrina victims waiting for help from the federal government instead of relying upon state and local governments and even themselves. The Democrats see such dependence as an avenue to power, a strategy that has been successful for them in large cities such as Chicago, Philadelphia and San Francisco. Now they want to take that patronage machine national, and turn the entire country into Chicago or Philadelphia.

Republicans are not spared blame for this malaise. Instead of extolling the benefits of free trade, lower taxes and smaller government, they expanded government entitlement programs during an economic boom fueled by trade while ignoring the pleas for lower taxes and responsible government from the Republican base. They became RINOs – Republican in Name Only. By doing so they allowed Democrats to portray the party as out of touch and corrupt – the very criticisms that the party’s base was leveling at the party leadership. As a consequence Democrats are on the attack using empty words like “hope” and “change” and the GOP plays the Democrats’ game by reacting to the statements instead of attacking the Democrats with their own rhetoric. “Change? You’re going to need it to pay your taxes when the Democrats win in November.” “Hope doesn’t stop al-Qaeda from slamming aircraft into skyscrapers.” But Republicans are in disarray and many in the base are waiting for the clobbering in November to return the party to its roots.

Democratic politicians do not know anything except the culture of dependence and entitlement. It is the culture they learn in the corrupt political machines of the cities, and from the agricultural subsidies they feed Agribusiness in the Midwest. They peddle a poison that paralyzes its victims and saps them of their humanity, turning them into slaves beholden to their masters that feed and clothe them. “Ask not what your country can do for you, ask what you can do for your country,” has become “What will my country do for me?”

The solution is not more government but less. It is the solution that ended the economic malaise of the Carter administration. Less government was the mantle worn by Ronald Reagan when he took office in 1981, and it remains the solution a generation later when Reagan’s old foes from the Carter administration are poised to retake the presidency under Obama.

Americans must counter the rhetoric of more government with a demand for personal responsibility. It is not the government’s job to make you happy; it’s job is to create the conditions that allow you to pursue happiness. Americans have forgotten this, and there is no Reagan around to remind them.

Being Free isn’t easy. With freedom comes responsibility, and Americans don’t seem to bear the latter very well. Weathering the financial storm that lays ahead with the continued collapse of the real estate and stock markets as well as the rising cost of energy and food will be tough. However electing politicians who promise “change” and “hope” will only place people in power with prior experience at really screwing the economy up. The price of energy will come down; home prices will stabilize if only Americans take responsibility of their own situations and not expect the federal government to fix it.

But will we?

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  1. Responsibilities | Pirates! Man Your Women!:

    [...] at The Razor takes a hard look at the current economic realities and shows why we’re pretty boned.  [...]

  2. Chad:

    23 year old with a 5 year old son, and no father. I’m surprised AP stopped there and didn’t find the same woman, only on crack in a lesbian relationship.
    At least the market is up today…

  3. The Glittering Eye » Blog Archive » Eye on the Watcher’s Council:

    [...] The Razor, “American Whining and the Culture of Dependency” [...]

  4. 16 Down » American Whining and the Culture of Dependency:

    [...] American Whining and the Culture of Dependency …and the political meddling with markets inevitably breaks down from the … Lawson, mind you, is all of 16 years old. [...]

  5. The Glittering Eye » Blog Archive » The Council Has Spoken!:

    [...] for the most outstanding posts of the preceding week. The winner in the Council post category was The Razor’s post, “American Whining and the Culture of Dependency”. Second place honors went to Wolf [...]

  6. Jack Coupal:

    The Doug and Wendy whiners quoted by the AP article sound like today’s Americans who live in the “Sissy Nation”, a new book out.

  7. Scott Kirwin:

    Thanks for the tip.
    I’ll look for it.

  8. The Razor » Blog Archive » The Council Has Spoken: July 11, 2008:

    [...] American Whining and the Culture of Dependence. [...]

  9. ThePioneer:

    I found this whilst searching for the phrase “culture of dependence”. In the swirl of stupidity about these things it’s particularly nice to read someone saying something smart about the proper response to a popping bubble: nothing. And largely I agree with you, certainly with the statement “It is not the government’s job to make you happy; it’s job is to create the conditions that allow you to pursue happiness.” However, you take the position of “the government can do nothing to stop the harm of this particular market correction” so rigorously as to imply (at least to me) that the government has no responsibility to stop future ones.
    And I disagree. Policing markets is part of the government’s job, whether that market is for contraband, or merely illegal technique in legal markets. The housing bubble was fueled by a banking bubble, which was fueled by an investment bubble. Had the SEC not been asleep at the switch, the bubble could have been smaller.

  10. Scott Kirwin:

    You make an important point: government policing could have stopped the bubbles from expanding. Unfortunately such regulation is hard to do: either it’s too restrictive and it kills job creation or it’s not restrictive enough and it encourages bubbles.

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