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“The doctors said he’ll never golf again.” - Mad Men

Today, we try to take a coherent break from consideration of finance reform. It’s a weight pressing upon my head, and I fear grey matter may be squeezed free of my ears.

Instead, I’d like to take a substantive look at one of the cliches strongly asserted at many of last month’s shouting matches nee town hall meetings. The phrase in question takes many forms, but the gist is either that “This isn’t my America” or, perhaps more descriptively, “This isn’t the America I grew up in.” Let’s neglect the dangling preposition; there are bigger fish to fry.

Now, from a strictly factual perspective, the veracity of this claim depends on whether one takes a House or a Senate view when defining the country. [Note: The question of whether the states' or the federal government represents a well-defined nation may be more compelling, but it shall be left for another day.] If you’re talking about the America they represent in the Senate, which is defined entirely by geography, then there’s no question that you’re wrong; The same 50 states have stood in unison for roughly 50 years and 35 days. If, on the other hand, you’re talking about the kind of America they represent in the House, where efforts are made to represent population equally, then you’re absolutely right. Life is transient, and thus the population shifts over time.

It’s too bad those models aren’t irrational enough to use, because that would make life easy. Let’s assume, instead, that the objections in question are inchoate expressions of frustration with long-term trends. If nothing else, it will give me an excuse to bag on Reagan.

Why blame Reagan? Well, he was big on the notion of supply-side economics. As I understand it, the active idea is that economic growth is encouraged by increasing producers’ incentives. In theory, that will spur greater productivity, higher employment, and generalized euphoria. The only problem is that “incentives” is a euphemism for cash money. Hence, providing incentives to businesses and their owners becomes a matter of systemically funneling most resources to the people who already have them. If you don’t believe me, then check the Census data. The proportion of American wealth held by the top 5% of the population reached its nadir in 1981, the year that Reagan took office. It increased during every year of his administration, having increased by more than 20% (3.3% of all American wealth) by the time he left office in 1989. The proportion of wealth held by the lower 3 quintiles necessarily decreased during that time, and the trend continued at a slower pace through at least the end of the millennium.

Considering that most people now have relatively less capital than they did 30 years ago, one can imagine why they might feel cheated by the system. Such feelings could easily be aggravated by the fact that the credit chickens have lately come home to roost, forcing much of the populace to begin living within its means.

To supplement the notion that people might be riled up about lacking remuneration, here’s a post from Angry Bear explaining that, once adjusted for the aging population, real wages have only grown about 3% since 1979.

Also, Stephen Vaisey wrote an interesting article [abstract only] about the effect of increasing education without increasing the number of jobs for the educated. It seems that the overqualified tend, among other things, to become disenchanted with effort-based reward systems. The contrapositive holds, as well, but it’s less of a factor in a country like ours, where the median education level has been consistently rising for some time. If you can’t get a job that utilizes your qualifications and don’t believe you can get ahead by working harder, then there might not be much left to do besides shout at the government.

Of course, people might view “my America” as being usurped for non-economic reasons. It could be a matter of identity.

As mentioned at the outset, populations change over time, and the U.S. is no exception. Between 1950 and 1990, the portion of the U.S. population identifying [PDF] as white decreased from 88.8% to 80.3%. The portion identifying as “White, not of hispanic origin” decreased from 79.6% to 75.6% in the 80’s, alone.

Looking at birth data [PDF], it’s clear that the decline of the white majority has been a long time coming. The data in question go back a full century to 1909, and in no year do they report a birth rate for whites equal to the overall birth rate. In other words, white people haven’t been putting in the, err, leg(?) work to maintain a majority. Considering the age of many of the irate town hall attendees, their failure to identify with the current population may be a matter of living long enough to see the effects of compound interest — of a demographic sort.

Then again, a person ought not jump to conclusions. By any reasonable measure, there are still a whole lot of white people. Those data may end in 1990, but I was still surprised to see that the number was so high. We’re ubiquitous.

Maybe, then — and this is admittedly the most far-fetched proposal in this post — it’s a matter of where people are living. Between 1950 and 2000, the portion of the American populace living in areas defined as rural (population less than 2,500) decreased from 36.0% to 20.781%. [1790-1990 PDF here; 2000 data here] Perhaps more astoundingly, the raw number of rural dwellers rose less over the entire half-century than it did between 1970 and 1980. If you’ve lived in a small town or its environs for a few decades, then you’ve probably seen it wither. That could be reason to riot.

At the same time, there’s reason to believe that those depopulating the hinterland aren’t going very far. Having culled data from the Census site, I’ve compiled this handy spreadsheet [Excel] that aggregates data on the 100 largest urban places in each of the last 9 Censuses. Even though Americans are flocking to urban areas, the percentage of us occupying the 100 most populous locations has steadily declined since 1930. It would seem that the kids are leaving the farm, but many of them are only going far enough to get cable.

Really, if I had to wager on one or another of these postulations being the root cause of the “not my America” utterance, I’d go with the second. The median age of those claiming to be usurped appeared to be relatively high. Maybe they’re not racists — I’m not saying they are — but on some level they feel themselves becoming part of a population with which they don’t identify. One can reasonably assume this feeling would be exacerbated by the ubiquitous appearance of the first non-white U.S. President on broadcast channels. That’s really too bad, because he’s trying to help them, too.

“I have no plans to eat anybody.” - Where The Wild Things Are

I know I’ve been away for quite some time. The excuse is that I’ve been trying to formulate a substantive proposal/opinion on regulating the financial services sector, and that task has proven hairier than I’d originally hoped. To give you some perspective, the quagmire that is financial reform makes health care/insurance reform look like taking a nap. Taunter’s proposal would be one way to start, but it’s only one of many — one with obvious holes, no less.
As if looking at banking weren’t daunting enough, there’s also the matter of intertwining sub-fields. Planet Money offers some insight into interactions between the SEC and CFTC, for example. Keep in mind that, to this point, we haven’t even touched on questions regarding the nature of insurance or how to deal with its providers.
Thus, I ask regular readers — both of you — to remain patiently vigilant in the hopes that the coming days see me put everything in order. Until then, you might try finding coverage of Moamar Gaddafi’s extensive diatribe before the U.N. General Assembly today. The few minutes that I saw led one to believe that the man’s loquacity greatly outstripped his sanity.

“Matt Kibbe, the president of FreedomWorks, lied, claiming that ABC News had reported numbers of between 1.0 and 1.5 million when they never did anything of the sort…He did the equivalent of telling people that his penis is 53 inches long.” - Nate Silver

Yesterday, I was all set to write a post relating a personal conversation about the role lacking patience plays in our national character to the War of 1812. Slated for inclusion were such witticisms as “Unless you’re sitting between Jon Meachem and Doris Kearns Goodwin, Andrew Jackson is unlikely to arise as a topic of conversation,” and “Say what you will about the wars of the 20th century, but at least they didn’t include major battles after their negotiated peaces for lack of expedient communication.” As if that wasn’t bad enough, David Brooks wrote a column invoking V-J Day, and I didn’t want to be seen as piling onto the historical reference bandwagon.

Since I’m not going to write the War of 1812 post, however, I’d like to state my position on that conflict. (Canadians, stop smiling. At the time, Canada failed to exist as such; actually, unless whatever was passed in 1982 was stronger than it seems, I’m not sure how Canada can be reasoned to be an independent state.) Although it didn’t go so well for the U.S., the War of 1812 did help the British to realize that this continent was destined to be autonomous. Think of it as a material preamble to the Monroe Doctrine. Also, when considered in conjunction with the Louisiana Purchase, it illustrates the benefits of being on the sideline of an inter-empire conflict. That’s good soup.

Meanwhile, in the present, we’re living in tumultuous times. Well, it seems that way, but thus far, the “change I [could] believe in” has looked a lot like lipstick on the same old pig — with the addition of a dangling preposition. Emissions cap and trade is a boondoggle. A year after the collapse of Lehman Bro.’s, no significant changes have been made to our system for regulating the financial services sector. However you want to frame the mechanism by which health care is funded, its reform will either be neutered or pushed onto later Congresses.

To take the last part first, Max Baucus plans to release details of the bill allegedly negotiated with his Gang of Six today. I say “allegedly” because the bill has already been largely disavowed by Republican members of the Gang. Considering that the Baucus plan is getting little, if any, praise, smart people are wondering why it took so long to put together.

Chuck Grassley is a tool. I mean that in both the pejorative vernacular sense and in the sense that he’s spent the summer doing his party’s obstructionist dirty work. One would have thought Baucus would have looked askance at Grassley’s negotiating position when he rolled out the Death Panel assertion some time ago, but, as is becoming all too clear, there is no intelligence minimum for Senators.

Let’s keep in mind that “obstructionist” is actually the most important word in the preceding paragraph. Right now, Democrats nominally control both houses of Congress, as well as the Presidency. In reality, a whole set of Blue Dogs are actually Republicans in the wrong caucus, but that doesn’t change the fact that Republicans will benefit from the Democrats’ failure to press their perceived advantage when it comes to passing legislation. One needn’t be the Stand-Up Economist to see the lack of incentives for bi-partisan action. Either things will get done, or the Republicans will win.

This is what I want those of you anxious about “too much change” to consider: If you never do anything now, then nothing will change. We’re not talking about capital C change, necessarily. Yes, those changes need to occur, too. Right now, however, we’re talking about half-measures that are already bastardized beyond recognition by people like Evan Bayh and Claire McCaskell. Whining and waiting serves only to hasten the return of the Party founded on the idea that systems are too complicated, so we shouldn’t try to build good ones. Unemployment won’t be aided by the kind of non-solutions liable to gain support from Ron Paul’s followers.