That’ll be ninepence.
I’m not dead.
Nothing. There’s your ninepence.
I’m not dead.
‘Ere, he says he’s not dead.
Yes he is.
Well, he will be soon, he’s very ill.
I’m getting better.
No you’re not, you’ll be stone dead in a moment.
Well, I can’t take him like that. It’s against regulations.
I don’t want to go on the cart.
Oh, don’t be such a baby.
I can’t take him.
I feel fine.
Oh, do me a favor.
Well, can you hang around for a couple of minutes? He won’t be long.
I promised I’d be at the Robinsons’. They’ve lost nine today.
Well, when’s your next round?
I think I’ll go for a walk.
You’re not fooling anyone, you know. Isn’t there anything you could do?
I feel happy. I feel happy.
Ah, thank you very much.
Not at all. See you on Thursday.
Neoliberalism’s “Die Faster” Is Helping Pension Funds…But Not Doing Enough for Young Homebuyers
by Yves Smith, Naked Capitalism
August 9, 2017
One of Lambert’s principles of neoliberalism, up there with “Because markets” is “Die faster”. It’s now playing out as US life expectancy hasn’t just stalled out but has actually declined as older people are shuffling off the mortal coil at a faster rate. But in our best of all possible worlds, Bloomberg tells us that this is a Good Thing because it’s helping reduce pension fund underfunding, since actuaries had assumed increasing lifespans. No joke, the headline is Americans Are Dying Younger, Saving Corporations Billions.
(T)he decline is recent, but the underlying causes have been grinding along for some time, like termites eating away at a foundation. Neoliberalism seeks to treat people as isolated actors operating in impersonal markets. Therefore social relations, like involvement in one’s community, attachments to colleagues at work, or even one’s family (caring for an aging parent, not moving to pursue a “better” job because it would be bad for the kids), are seen as secondary. If you make enough money (as in are a winner at playing the neoliberal game), these things are all supposed to take care of themselves.
Nevertheless, the crisis and the way it was resolved is a major contributor to the decay. 9.3 million families lost their homes, due either to foreclosure or forced sales, out of a total of 54 millionish homes with mortgages. This was a tsunami of financial and psychological trauma. During the “recovery,” until the last few years, only the top 1% benefitted from GDP growth, leaving everyone else in aggregate worse off. The racial wealth gap is now wider than in the 1960s.
And even those who on paper might be doing OK are generally not in a very secure position unless they are exceedingly affluent. Half of Americans live paycheck to paycheck. Ever-rising medical costs and loophole-filled insurance policies mean a costly medical problem will also lead to stressed finances and potentially a bankruptcy. Job tenures are short and if it takes more than 6 months to land a new job, you may be permanently unemployed. Until 2013, most of the jobs created in the recover were part-time, and even now, the level of part-time jobs is high for an economy which the Fed keeps pretending is near full employment. And those in part-time jobs are subject to depression at a 50% higher rate than those in full-time jobs. And even those who look comfortable on current income basis are unlikely to be putting enough away for retirement.
In other words, members of the shrinking middle class often recognize that the gap between them and the precariat is not large. As we pointed out from the inception of this site, high levels of inequality in and of themselves impair health and longevity, even among the top income group. Among other reasons, highly stratified societies have weak social ties, which is a negative for health. People at each level know they would lose their supposed friends if they were to suffer a meaningful fall in income. They’d no longer be able to afford to participate in the events that were normal for their peers (for the rich, catered dinner parties, memberships in the right clubs and boards, keeping a second or third or fourth home in a posh community, participating in the mutual backscratching of political and charitable fundraising).
Even though the author of Bloomberg article on pensions had the good sense to sound alarms about the broader societal implications, another Bloomberg story tonight is bizarrely depicting older Americans as selfish, or at best inconvenient, for staying in houses they’ve owned a long time: Baby Boomers Who Refuse to Sell Are Dominating the Housing Market. “Refusing to sell”? Why is anyone who owns anything obligated to sell? If you believe in markets uber alles, people who have property rights are free to exercise them as they please. And if there’s a dearth of new building, it’s simple-minded to blame existing owners, when longer term factors are often in play. For instance, as Robert Fitch has documented, New York City has had a long-term plan of turning Manhattan into a community for the wealthy since the 1930s.
The removal of what would have normally been starter homes for the young has increased generational stress, yet the article perversely heaps all blame on older stick-in-the-muds.
Particularly in light of a dearth of safe, income-producing investments and strained market valuations, many if not most retirees have become even more frugal with spending. That means if you are in a home at a low annual cost, staying there will often be cheaper than any other option. Moving to a smaller home means transaction costs, often fix-up costs, and given how high prices are, not necessarily a reduction in burn rate (as in freeing up equity is likely to translate no lower and probably higher current expenses).
Moving into a retirement community is even more expensive. Most require $400,000 to $500,000 deposits which are either not refundable or only partially refundable upon death. The big motivation for many to move in isn’t cost savings but the risk of needing more care later on (assisted living, nursing home care) and not being able to get into a “better” facility (retirement homes use the lower-cost “independent living” to subsidize the higher-care programs).
But even then, staying in one’s home and having care-givers come in is almost always cheaper than being in a nursing home…provided you can find a reliable service. That usually requires oversight by family members, and if they aren’t nearby, the higher-cost nursing home option is the default.
That is a long-winded way of saying that the Bloomberg posture of implicitly treating older people as selfish for not getting out of the way of young people ignores the realities of the need of retirees to minimize costs, which above all includes hanging on to housing. And that’s before you get to the psychological benefit of staying in a familiar setting with established neighbors and friends.
So you see, Zombie-Eyed Granny Starver is no exaggeration.