Buy, Buy, Miss American Pie
I'll Buy That!
An extraterrestrial being, newly arrived on Earth - scrutinizing what we mainly present to our children
- Carl Sagan
The World According to the United States of America
Source: the cover of the 23 October 99 issue of The Economist - a truly great magazine.
You Notice None of These Are the Least Bit Flattering...
Homes As Hummers
by Robert J Samuelson
We Americans seem to be in the process of becoming wildly overhoused. Since 1970 the size of the average home has increased 55% (to 2,330 square feet), while the size of the average family has decreased 13%. Especially among the upper crust, homes have more space and fewer people. We now have rooms specialised by appliances (home computers, entertainment systems and exercise equipment) and - who knows? - may soon reserve them for pets. The long-term consequences of this housing extravaganza are unclear, but they may include the overuse of energy and, ironically, a drain on homeowners' wealth.
By and large, the new American home is a residential SUV. It's big, gadget-loaded and slightly gaudy. In 2001 about 1 in 8 homes exceeded 3,500 square feet, which was more than triple the average new home in 1950 (983 square feet). We have gone beyond shelter and comfort. A home is now a lifestyle. Buyers want spiral staircases and vaulted ceilings. In one marketing survey by the National Association of Home Builders, 36% of buyers under age 35 rated having a "home theatre" as important or very important.
Of course, homeownership (now a record 69%) symbolises success in America. The impulse to announce more success by having more home seems to span all classes. In his book Luxury Fever, Cornell University economist Robert Frank noted that Microsoft co-founder Paul Allen built a 74,000-square-foot house. According to Frank, that roughly equaled the size of Cornell's entire business school, with a staff of 100. Frank sees a "cascading effect" of imitation all along the social spectrum. The super-wealthy influence the wealthy, who influence the upper middle class - and so on. People constantly enlarge their notion of "what kind of a house does a person like me live in."
Another cause of this relentless upsizing is that the government unwisely promotes it. In 2005, about 80% of the estimated $200 billion of federal housing subsidies consists of tax breaks (mainly deductions for mortgage interest payments and preferential treatment for profits on home sales), reports an Urban Institute study. These tax breaks go heavily to upscale Americans, who are thereby encouraged to buy bigger homes. Federal housing benefits average $8,268 for those with incomes between $200,000 and $500,000, estimates the study; by contrast, they're only $365 for those with incomes of $40,000 to $50,000. It's nutty for government to subsidise bigger homes for the well-to-do.
But otherwise, why shouldn't Americans buy what they can afford? No good reason. The trouble is that freedom doesn't confer infallibility. With hindsight, some homeowners may regret sinking so much money into ever-grander houses. One possible problem is future operating costs. Homes exceeding 3,500 square feet use about 40% more energy than those between 2,000 and 2,500 square feet, says the Energy Information Administration. Suppose electricity or natural gas prices rise because (for example) new power plants or terminals for liquefied natural gas aren't approved.
A harder question is whether bigger homes might lose value. Say what? Gosh, we're in the midst of the greatest real estate boom in US history. Since 2000 home values have risen 55%, to nearly $18 trillion, says the Federal Reserve. Americans have borrowed and spent lavishly against rising housing prices. That has kept the US and world economies advancing. Americans increasingly believe that they can't lose by investing more in their homes: they can enjoy themselves and make a pile.
But booms have a habit of imploding. The latest evidence that cheap credit and speculation have artificially inflated home prices comes from a study by the investment bank Credit Suisse First Boston. It finds that home buying is increasingly driven by purchases of investment properties and vacation homes. In 2004 these buyers accounted for 14.5% of all home sales, up from an average of 7.5% from 1998 to 2002. Cheap credit also abounds. In 2004 almost a fifth of all new mortgages were interest-only loans (requiring no principal repayments in early years), the study finds. Speculative booms usually end when some speculators cash in or when credit tightens.
Even if home prices don't collapse, their long-term performance may disappoint. In a new edition of his book Irrational Exuberance, Yale economist Robert J Shiller, who accurately diagnosed the stock "bubble" of the 1990s, examined home prices since 1890. His startling conclusion: after adjusting for inflation, home prices rose only 0.4% annually through 2004. After periods when they've outpaced inflation - say, right after World War II - home prices slow down. Their recent surge is, by Shiller's figures, unprecedented. The implication is that prices may soon enter a period (after inflation) of stagnation or decline. That would probably preserve big gains for longtime homeowners, though perhaps not for the 22 million who purchased in the past 3 years.
As Shiller notes, home prices can't rise too much faster than average incomes for too long without excluding many buyers from the market. Among home builders, realtors and economists, the dominant view seems to be that the housing market is basically sound. Younger families and immigrants underpin demand. Some local "bubbles" may pop; elsewhere, price increases may subside. One way or another, Americans might want to reassess whether their passion for ever-bigger homes is good for them and the nation. Do we need to go from SUVs to Hummers? Maybe we should revert to sedans.
Source: washingtonpost.com The Washington Post Wednesday 13 July 2005 page A21
What Men Really Want in a Home
by Gail Ravgiala
There apparently are a lot of guys out there like the client who came to architect Andrew Sidford for a consultation on a home addition. "All he cared about was getting a 3-car garage," says Sidford of Newburyport. "He said just put a cot in there for him to sleep on and he'd be happy. His wife could take care of the rest of the design." For sure, the 3-car garage is at the top of the wish list for many men searching for their suburban Nirvana. So is a room, preferably in the basement (all the better to contain the surround sound), that can accommodate a multiplex-size plasma-screen television. According to several real estate brokers, one of the first questions men ask about a house is whether there is a good spot for a big-screen tv.
Those same brokers say that, for the most part, couples fall into classic gender stereotypes when they are looking to buy a home. "The men head right for the basement," says Eileen Hamblin of ReMax Heritage in Melrose, "even if they have no idea what to look for in a furnace, they want to see it." Women tend to be more interested in "the softer points," says Patty Daly of Carlson/GMAC in Natick. "Things like colour and light. Women care about how a house looks." But in a world of working women and stay-at-home dads, the traditional roles and interests of the sexes are changing. "The man is just as apt to be the cook in the family," says Hamblin. "Today, women have no problem saying, 'I don't cook.' "
Take Jack Tierney, an orthopædic surgeon at New England Baptist Hospital. When he and his partner, Margie Hegger, a physical therapist, decided to build their house in Westwood, "I had three things I cared about," says Tierney, "the kitchen, my study, and the power plant. The rest was up to Margie." Because Tierney loves to cook, he installed a 6-burner professional-style stove and commercial-size ovens, a standard refrigerator, plus two refrigerated drawers and two dishwashers, all in a kitchen with an open floor plan and lots of storage. As for his study, "I've always wanted a room with a solid mahogany coffered ceiling." And the power plant is a state-of-the-art "all-green" geothermal heating and cooling system. Tierney also got the requisite 3-car garage, and a barn where he plans to set up a complete woodworking shop. It was also important to Tierney to have a lot of property. The house, garage, and barn sit on 3 acres of what had been a 5-acre pasture on a country estate.
"Men like a lot of land," says broker Richard Walsh, also of Carlson/GMAC in Natick. "Preferably near woods, which gives them seclusion and privacy. Women prefer a neighbourhood, where the yard doesn't need to be so big." Rather than isolation, he has found women tend to favour a sense of community. A nice piece of land was the main objective for general contractor Peter Nelson when he was looking for a place to build his made-to-order 4-bedroom house. He settled on a 3-acre lot in Plainville where he was able to add about 5 adjacent acres of wetlands to create his own private nature reserve. "I looked for years before I found this," says Nelson, a bachelor. "Having a lot of land and privacy was my number one priority." Next on his wish list? A 4-car free-standing garage. Granted, Nelson has a lot of work-related vehicles to house, but the 28-by-36-foot garage is mostly for "lots of toys - snowmobiles, motorcycle, that sort of thing." Nelson figured he would spend so much time there that he installed a $30,000 radiant heat system in the concrete floor. "The garage has its own Burnham boiler," he says, "and you can sit on the floor in your pajamas and slippers and wax the snowmobile." The house, which has a conventional forced hot water heating system, has been a work-in-progress for more than 2 years, but Nelson expects to complete it and move in in March. It has a "nice big kitchen," a master bathroom with a Jacuzzi and a custom 5-by-5-foot shower with multiple spray heads, 3 working fireplaces, and front and back stairs. "I just really like stairs," he says. Oh, and a 2-car garage on the basement level. Nelson hopes to one day finish the rest of the basement space so he can set up a wood stove and a pool table, which is now in his father's house.
Frank Clark, a broker with ReMax Real Estate Center in Norwood, says that his ideal property would be at least 2 acres. He'd have a house with a finished basement with a big-screen TV "for football games," and "a nice, good-sized deck for cookouts. And if I had the money, I'd have a little putting green out back." Most people may never get their dream house, but Sidford, the architect, says the proliferation of home design magazines and television shows has raised his clients' level of exposure to the possibilities of design and the availability of products. "They have more of a sense of what is attainable. There is an increased expectation," he says. That can make the interplay between a couple all the more interesting. "It is foolish to assume that the guy won't be interested in what goes in the kitchen, or that the woman won't get involved with the financing. It is rare that I find one person does more than the other. And that makes it more fun." Still, he says, "Never have I had clients who agree."
One thing both men and women seem to want today is a home office, says Karen Kennedy of Hammond/GMAC in Brookline. "There are no more sewing rooms," she says. Instead, people want a place for their computers. Or, more than one place, says Walsh, "Couples want his and hers work spaces. They want a private place to go."
Source: boston.com 9 January 2005 © 2005 Globe Newspaper Company.
America's "Big" Thing: All Americans Think Bigger Is Better
by Rebecca Goldberg
As recent studies have shown, perhaps our America is not such a small world after all. Within the past 50 years, America has hit a growth spurt, producing many products with larger and longer dimensions. According to Lynn Kahle, Phd, professor of marketing at the University of Oregon, "America has always been about expansion. Bigger isn't just better here; it's considered a measurement of progress and success."
The food industry's modern standard measurements would have been considered king sized in past years. In 1942, a standard Kellogg's Raisin Bran box was 15 ounces, now it weighs in at 25.5 ounces. In 1980, a Dunkin Donuts coffee with cream and sugar was 10 ounces, while today the modern coffee serving is a Starbucks venti-mocha: 24 ounces. In 1955, a McDonald's combo meal of a hamburger and fries and a Coke was 600 calories while today's Super Size Value Meal of a Quarter Pounder with cheese, fries, and a Coke is 1,550 calories.
Due to the colossal proportions of American dining, we in turn are becoming fatter. Obesity rates are up 50% in the past decade. In America, 31% of women are overweight, while 33% of those are obese. In attempt to remain in proportion, marketers have vastly increased the size of clothes, beds, dinnerware, et cetera. In 1997, the average bus seat was 17" wide while in 2003, the average bus seat was 18" wide. In 1970, the average home was 1,400 square feet. In 2003, the average home was 2,230 square feet. Traditional dinner plates measured 8" in diameter, while the contemporary version measures 12" in diameter. The once traditional coffin was 22.5" wide; however, a new "triple wide" version can now be purchased which is 44" wide. A standard full mattress was once 53"x75", yet today's California King is 72"x84". Even bras are getting bigger. The average bra size in 1991 was a 34B. Today's average is a 36C.
As Americans, we are prone to a fascination with "Big". We like our houses, televisions, cars, and meals at a larger than life size. Yet, as stated by Paco Underhill, author of The Call Mall, "As evolution and history have taught us, the quick and the smart often triumph over the big and the strong." Our obsession with big is putting our health in jeopardy. Every year, 300,000 Americans die from complications related to their weight.
In an attempt to fight back, try to squeeze more movement into your day. Park your car at the end of the lot, so you are forced to take the extra steps. Instead of lying on the couch while watching tv on your big screen, exercise while you watch - sit ups, leg lifts and jumping jacks can all be done while watching your favourite show. Instead of sitting at your computer for more than 2 hours, give yourself an allotted 45 minute break to get some fresh air. Both fresh air and sunshine increase seratonin levels in the brain, a chemical that suppresses hunger.
Though we tend to view bigger as better, when it comes to our own proportions bigger isn't better - it's just plain unhealthy.
Source: The Youngtown Edition (County College of Morris student newspaper) 28 January 2004
Americans Want It All, and Hang the Consequences
by Andrew Gumbel
In the 1970s film Five Easy Pieces, Toni Basil plays a hippie who is hitch-hiking to Alaska (in Jack Nicholson's car) because it's the only place she can think of that is still clean. The rest of the US, she frets, is filling up with more and more crap. "They got so many stores and stuff and junk full of crap, I can't believe it," she says. "Pretty soon, there won't be any room for man."
The film came out in 1971 and coincided almost exactly with the birth of the modern environmental movement, the launch of Earth Day, and the realisation that the limitless consumption of the capitalist-era American Dream simply could not go on forever. In the intervening years, the accumulation of rubbish has continued pretty much unabated - not helped by a population increase of almost 100 million people, and an orgy of environmental deregulation of industry. But so too has the level of anxiety about the consequences. Today's counterparts to Toni Basil's character are still relatively marginal figures, if less eccentric in their obsessions. They also tend to be rich and successful - environmental consciousness now carries a high price tag. Of course, they go to open-air farmer's markets to seek out pesticide-free organic fruit and vegetables supplied by small, family growers but they also pay a premium for it. They might drive energy-efficient, low-emission hybrid cars but they also pay more for their fancy petrol-electric engines than they are likely to recuperate in petrol savings over the lifetime of their car.
The same is true for many other aspects of environmental consciousness. Who uses washable cloth nappies rather than throwaway ones? Who has solar panels installed on their roof? Only those who can afford them. The severely limited impulse to conserve is not only about economics. It is also deeply cultural. The United States is a place where the prevailing instinct is to want it all, no matter the consequences. Sure, there may be wars in the Middle East, Islamic militants on the march, smog in the air, pollutants in the water, hurricanes, floods and other tangible side-effects of global warming but that's not going to stop most people from hankering after a big car and a big house with state-of-the-art gadgets. Cutting back is not cool or sexy. Given the choice between laboriously reviving old city centres with apartment renovations and corner shops, or ripping up cornfields to create suburban developments with huge houses and monster shopping malls, most Americans opt for the monster.
People certainly have mixed feelings. At the height of the Iraq war, it was not uncommon to see huge, gas-guzzling four-wheel-drives sporting "No Blood for Oil" stickers. Americans aren't happy about their obesity epidemic or their tendency to overspend in grocery stores or over-order in restaurants, even while they consume 200 billion calories a day more than they need and throw away around 200,000 tons of edible food each day. But will anything ever change? Telling Americans to consume less doesn't work. Giving them environmentally smarter versions of the same things - more fuel-efficient cars, better insulated houses, less heavily packaged food - may be a more promising avenue. Until the government, however, gets serious about forcing manufacturers to produce these things, the age of the more rational American consumer will remain a distant prospect.
Source: comment.independent.co.uk 11 October 2006
Paying for What We Get
Astronomical federal debt, coming due as the Baby Boom generation collects Medicare, Medicaid and Social Security, is enormous. What these numbers portend are crippling tax increases on workers, slashed benefits for retirees, gutted budgets for homeland security, highways, research and everything else, and an economic decline or a financial collapse that devastates the middle class, as happened recently in debt-strapped Argentina.
Note that this is not the famous $422 billion annual deficit, nor the semi-famous $4.5 trillion US national debt. This is the other $72 trillion (yes, 72 thousand billion) that the federal government owes in promised payouts beyond the amount that its tax revenues will cover over our lifetimes. Or maybe it's $40 trillion or $47 trillion or $60 trillion; opinions in that article vary, but it's safe to say that the number is what the accounting profession would term "well into the multiple assloads".
"It's a number that's so large that people find it implausible, and so they don't think about it," said Alan Auerbach, a UC Berkeley economist who studies the issue. "But it's based simply on the projections we have for Social Security and Medicare. People aren't making these numbers up."
Despite all the tepid debates about tweaking Social Security, the vast majority of the problem ($62 trillion of the $72 trillion estimate) lies in Medicare, a program you may recall from such recent events as "Bush's Happy Cash Firehose of 2004." While Congress squabbles over whether the administration hid the new prescription drug benefit's 10-year cost - pegged by the White House at $534 billion versus CBO's $395 billion - the actual liability incurred by the new drug benefit is estimated at $8 trillion to $12 trillion. But surely somebody considered that at the time?
Not so much, no. Couldn't we have just bought every member of the AARP a gold-plated Rascal instead?
Democrats generally cite "trust fund" numbers that show Social Security - and Medicare to a lesser extent - remaining solvent for decades, even though government officials repeatedly call the numbers an accounting fiction. CBO director Douglas Holzt-Eakin last week said the funds contain nothing but "electronic chits" that measure government obligations to itself. Imagine if you discovered that you could pay your Visa bill by scrawling "I O U $75" with a Sharpie on a Post-It and mailing it in. At the end of a 50-year period, you could then argue that your credit debt was at a healthy level of zero, notwithstanding a coincidental "Post-It Note imbalance" of $275,000.00. Or, rather, you couldn't - since you don't operate a first-world nation that hundreds of millions of people trust with their very lives, you'd simply be jailed on charges of Stupid.
Current proposals for dealing with this are pathetic. Bush promises to plunge into the ocean with a spoon:
Bush proposes adding private accounts to Social Security for younger workers, which could reduce future government obligations, but would do so by diverting a portion of the payroll tax, adding $1 trillion to the short-term deficit which won't happen, because many people who mistakenly call themselves "fiscal conservatives" are frightened by the sudden appearance of $1 trillion in "spending", even though it produces a corresponding $1 trillion reduction in "magical fairy dollars" or whatever these people imagine that the Social Security shortfall is denominated in. There is no longer any remotely palatable solution. Typical non-palatable solutions include:
These are merely 2004 snapshots: for example, that first option escalates to a 33.5% payroll tax if we ignore the problem until 2008, which we will. And I think the last one is a bit of gallows humor: yes, we could close the gap if we gave up entirely on national defense and the legal system and stopped building things and converted the entire United States government into an engine for taking money from young people at gunpoint and handing it to older people. Assuming there were no other side effects of such a program.
This story appeared in the Chronicle a week ago, but I just noticed the link on a discussion group populated by gold-backed-currency enthusiasts. Gold enthusiasts, of course, argue that the above demonstrates the inevitable failure of government-issued paper currency, and while it's true that they've predicted several dozen of the past zero US dollar collapses, the goldbugs do have a point. The United States, fiscally speaking, tends to get away with shit because foreign people are traditionally happy to lend it money and to hold large numbers of American dollars as their standard reserve currency. Neither of those factors is guaranteed by any law of nature, and nobody knows where the outer edge of getting-away-with-shit is, but it's safe to assume that it's somewhere this side of a massive public default on all future pension obligations.
Also, there isn't likely to be any advance warning when the real crisis hits (unless you count a $72 trillion unfunded liability as a "warning"): If this sounds far-fetched, former Bush Treasury Undersecretary Peter Fisher and former Clinton Treasury Secretary Robert Rubin both alluded to such a scenario at a June budget forum in Washington. The world has seen fiscal imbalances of this sort before, in Asia and Russia in the late 1990s and more recently in South America. Such financial panics can be triggered by any number of events - a flight from Treasury bonds by the foreigners who buy much of the US debt, for example - if investors' views of the market, which are focused on the short term, suddenly change.
"If you look at financial crises, they occur seemingly overnight," said Kotlikoff. "More and more pieces of straw drop on the camel's back, and all of a sudden, the camel collapses. ... Nobody knew exactly what day Argentina was going to go south or exactly what day Russia was going to default. The timing is up for grabs." In short, whatever happens, we can assume that the US economy in its cozy and familiar post-WWII form simply will not exist 20 years from now. It may end up better or worse, in the long run, but there is a very nasty discontinuity coming; traditional responses to currency failure include civil war and Hitler. And if you're still sleeping well, consider that Europe will melt down for similar reasons several years earlier, so we should be well into a worldwide recession by then. This kind of puts the War on Terror into perspective: oh, so we have to forcibly convert half a dozen nations to either democracy or toothlessness at a cumulative cost of maybe $5 trillion? Pocket change!
So now what, Mister Buzzkill? One conclusion is obvious: try to make money earlier rather than later, and if you're under 45, consider all your payroll deductions a dead loss. At first that seems like the universal solution - if we all agree to write off our benefits, the problem vanishes! - but the fact that we have these programs in the first place is a pretty clear indicator of the strength of our irrational belief in free money. It is customary to quote Alex Tytler here (and to incorrectly attribute his quote to Alex de Tocqueville):
Until now, I hadn't heard the rest of it:
I'd place us somewhere between "apathy" and "dependency" on the Tytler scale, but you have to score one for the Scots - this guy sat down in 1801 and basically wrote: sure, this "America" thing looks pretty good on paper, but I can see the wheels coming off around 2000 or so. Zing!
Source: 101-280.com 20 September 2004
The attribution of this quote to Alex Tytler was subsequently refuted. I don't know who is now considered to have said it. Whoever it was, I can only feel they were on to something.
Subject: Notice of Revocation of Independence
To the Citizens of the United States of America:
In the light of your failure to govern yourselves, we hereby give notice of the revocation of your independence, effective today.
Her Sovereign Majesty Queen Elizabeth II will resume monarchical duties over all states, commonwealths and other territories. Except Utah, which she does not fancy. Your new prime minister (The rt. hon. Tony Blair, MP for the 97.85% of you who have until now been unaware that there is a world outside your borders) will appoint a minister for America without the need for further elections.
Congress and the Senate will be disbanded. A questionnaire will be circulated next year to determine whether any of you noticed. To aid in the transition to a British Crown Dependency, the following rules are introduced with immediate effect:
Source: Internet spammed email
Who Killed JFK?
Source: The Economist 19 December 2002 - some of the 109,000 web pages Google found containing the words “conspiracy” and “Kennedy”
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