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Veteran Morality Plays

I keep trying to bang out my thoughts on inflation, and common stupidity rears its head again.  But I think Robert Weissberg’s Fiscal Times column entitled The Disastrous Invention of a New Middle Class from May 28, 2012 is instructive in inadvertently stumbling onto a real problem.

Weissberg makes the case that income does not determine whether someone is middle class or not, saying it is possible to be a “well-paid entertainer” with “middle-class doodads” but still be classified as “white trash” (his exact words, which I oddly feel required to overemphasize) if said person exhibits what Weissberg considers to be vile behavior.  One could equate his tract as being in the exact same vein as David Brooks and treat accordingly, but instead of relying on ad hominum attacks I think dissecting Weissberg’s logic is in order.

Weissberg’s classification of middle class, which he admits is based upon a 1950s ideal, is entirely behavioral:

The core of being middle class was a strong work ethic, self-discipline, a willingness to defer gratification, an aversion for flashy consumption,  and an embrace of what might be called “respectability,” (i.e., sobriety), a morality that stressed honesty, a solid family life, being law-abiding, and valuing education (though not necessarily being “intellectual”).

Inner dispositions were associated with speaking clear, grammatical English, exhibiting decent table manners, never using profanity in public (and almost none in private, too), being “clean cut”  in appearances and always acting politely. Middle class members also abhorred the thought of taking government handouts.

People with liberal leanings likely roll their eyes at Weissberg’s statements, but he is onto something, albeit not for the reasons he espouses.  With the exception of profanity and the throwaway line about abhorrence of government handouts (which sounds suspiciously like it encapsulates all public payments of any sort to individuals) Weissberg’s moral description seems to fit military veterans perfectly.

These “square” traits were associated with material well-being but were really a result of middle class values, not its defining elements.  Weissberg doesn’t explain where these middle-class values came from, but the timeframe he starts with gives a major clue.  The decade he starts with began with a major war that sent 1,500,000 American servicemen to Korea.  The 1950-53 conflict started a mere five years after the largest war in human history put more than 13 million Americans into uniform.  The postwar boom is sometimes credited to the massive federal stimulus when these veterans started taking advantage of the GI Bill, but the fact that Uncle Sam spent a far larger sum to train millions of men and women to perform skills that would be in high demand by businesses seems largely overlooked as a factor.

Either way, the historical evidence flies in the face of the 1950s being some sort of grand morality-fueled, private market utopia that was lost with the dawn of the social science disruption Weissberg laments later in his piece.  With Cold War hysteria continuing at fever pitch following the 1953 armistice, the demobilization was partially offset with the mass production of the American nuclear arsenal.  American military spending would remain elevated for the following four decades, far above earlier peacetime levels in preparation for all-out global cataclysm.  Cold War public policy and its accompanying military budgets bestowed unparalleled power and influence to the defense production interests Eisenhower railed against in vain amidst his 1961 farewell speech.

Coincidentally the early 1960s ushered into the workforce the leading edge of the vast post-WWII cohort, the first time in thirty years the pool of working-age Americans was not composed exclusively of men and women tempered by the depths of economic depression and later wide-spread military service.  Weissberg identifies placing “middle class” at the midpoint of the SES Scale as the culprit that caused this sea change.

Weissberg, without mentioning the sources, helps identify the unique circumstances that created the 1950s ideal he wants his readers and students to return to (the decade in which Eisenhower’s eight years in office included three recessions).  The implication seems to be if the American workforce again is overflowing with workers that behave like typical veterans, the middle class will again thrive.  But the experience of veterans in the job market belies Weissberg’s claims.  Worse, recent experience  in the wake of the wars in Iraq and Afghanistan shows that veterans are having a tougher time finding employment than the rest of the American population.

Weissberg’s thesis should be thoroughly demolished by now, but his piece requires one more critique.  Some statements are just too galling:

Today’s policies are trying to build a middle class, absent promoting the core psychology that makes failure inevitable though a financial windfall for those supplying ersatz diplomas. Employers will quickly grasp that the “college graduates” they interview are imposters with little self-discipline who lack the tenacity for tough tasks.

If forced to hire them by some Department of Justice fatwa, the employer will relocate or substitute a machine rather than deal with an employee unable to show up on time. In other words, with no effort to inculcate old-fashioned middle class values, “middle class” status is counterfeited and the shoddiness is quickly discovered by employers.

Maybe it isn’t clear who Robert Weissberg is.  Using “ersatz diplomas” and actually putting college graduates in quotation marks in the same paragraph cannot be the writing of a college professor, could it?  Read it and weep: Robert Weissberg is Professor of Political Science, Emeritus, at the University of Illinois-Urbana.

Maybe I should rethink my thoughts about ad hominum attacks.  Weissberg makes no attempt to single out any particular university—his statements are a blanket indictment of higher education as a whole.  Methinks the trustees of UIUC might have a problem with this affiliated (retired) professor’s extended rant.  But that isn’t for me to decide.  I’m here to demolish falsehoods and faulty logic.

To critique this effectively, I should start with a figure.  This too comes from Weissberg himself—in 2008 318,000 waiters and waitresses had earned college degrees against the 119,000 wait staff having held college degrees in 1992, according to BLS data.  His novel reason for this increase appears to be the inadequate time management skills of college graduates, going to go so far as to lay employee dependability as the major factor in businesses using automation and offshoring strategies to avoid Americans with degrees.  What evidence does Weissberg cite that this is a wide-ranging problem?  None—he materializes his justification out of thin air, along with this Department of Justice fatwa Weissberg believes will soon hang over businesses like a sword of Damocles.  I can only answer Weissberg’s inane concerns with a series of questions: since when did dependability issues concern only positions filled with employees holding college degrees, rather than all employees? More to the point, since when have businesses not had the ability to discipline employees over dependability concerns?  Since when could they not terminate employment for such infractions?  Since when did the threat of discipline up to and including termination not form a powerful deterrent against the very types of employee misbehavior Weissberg rails against?  Since when did it matter to most businesses if employees conformed to a vague notion of “middle class values” instead of simply following the ubiquitous rules and regulations laid out in the equally ubiquitous employee handbooks written and enforced by the businesses themselves?

I now must lay out (for my eyes, anyway—no one else is reading this) an alternative explanation for how the middle class has been crushed, almost tripling the number of waiters and waitresses slogging away despite having earned (yes earned, Mr. Weissberg) college degrees.

First some data on the state of the American workforce since the turn of the millennium: prior to the onset of the Great Recession in 2007-2008 the first decade of the 21st century was also the first decade since the Great Depression that produced less than a 20% increase in American payroll growth.  2000-2008 instead produced a 5% increase.  Before the crash of Bear Stearns and Lehman Brothers ushered in the destruction of all job gains in this millennium for America, only seven million of the 22 million American jobs the BLS had projected in 2000 to be created that decade were produced.  The 4 to 6% U.S. unemployment rate prior to 2008 can mostly be attributed to far fewer Americans joining the work force compared to prior decades, specifically a precipitous drop in the number of women joining the labor pool.  In the ensuing four years, employment has not recovered to its pre-Great Recession peak.

The United States of America is reaching a crossroads, in which the cost of joining the non-entrepreneurial workforce will eventually skyrocket if we continue on current path.  318,000 college-educated wait staff could be a harbinger of every American job applicant being required to hold a bachelor’s degree to be considered for employment.  Weissberg has a good point in the tangled mess below:

With passing decades this simplified university-manufactured definition came to dominate. To appreciate the depth of this shift, imagine if a presidential candidate in 2012 announced that his anti-poverty program entailed teaching the poor old-fashioned morality, a passion for work, self-reliance, restraining one’s consumption and saving for future purchases versus credit-card debt.  That is, traditional (pre-1960s) middle-class values. He would be vilified, accused of imposing “white” values and clobbered by a rival who instead promised instant cheap college loans as the instant pathway to the American Dream.

Weissberg wants a return to the status quo ante of “old-fashioned morality,” which I hope can be discounted given that his ideal mimics the behaviors of many military veterans, and veterans’ unemployment today can outpace civilian unemployment.  But it rings true when he lays out that current anti-poverty programs consist almost exclusively in efforts to educate the masses, which is close to being a fool’s errand when it comes to looking out for the welfare for the populace as a whole.

The age-old adage “stay in school for your future” seems self-evident.  High school graduates earn more than dropouts.  College graduates earn far more than those only holding a high school diploma, so its value must be intrinsic.  There must be some inherent value to education, because it isn’t free, so must represent an investment in the individual.  Weissberg seems to question this assumption, which has merit, but again not for the reasons he gives.  Businesses aren’t turning on automation and offshoring because the quality of the American workforce has diminished.  It is because it is a buyer’s market for labor.

The United States has become so steeped in supply-side hysteria for at least thirty years that the ethos has been extended into the labor market.   The belief that increased supply creates demand for its own products and services would seem to be at the center of the mania to increase the number of college graduates from American universities.  How else will putting more students through college automatically increase economic growth?  The BLS data on wait staff with degrees and its predictions for job growth in the 2000s missing by a factor of three initially indicates a far different reality.  The demand curve for labor has shifted inward within the United States since 2000, likely due to the increased ease global conglomerates had in taking advantage of access to the Chinese, Indian, Indonesian and the periphery’s labor markets.  The large reduction in wages paid per capita under this change coincided with a large volume of electronics manufacturing relocating to Southeast Asia, which might have played a significant role in reducing the acquisition costs of technology and contributed to greater automation in the American economy.  In effect, public policy promoting the welfare of billions in Southeast Asia had the side effect of exporting work from the U.S. and importing labor-eliminating technology and misery to large segments of the American workforce, all before the tsunami that is global finance drowned the battered U.S. workers as the financial industry was buttressed completely against the storm.

So Weissberg is right—promoting the middle class through increased numbers of college degrees does not and will not work.  There are solutions to the vexing issue concerning the crushing of the American middle class (hint—the same solutions to rescue the raped and pillaged American working class are required) but first, the U.S. must end its noninterference toward the destructive disinflation that has been plaguing America.

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