The Great Reversion

I don't plan to just re-issue old stuff that was written for a different website. But this piece, written around a decade ago, encapsulated how I looked at the macro environment surrounding my family, had actually looked at it for years before being written, and how I still look at it now.

When I used it to frame the previous article, it made sense to actually bring it back to help set the stage moving forward.

This new 2025 budget passed by the Republican House will take the Reversion of our living standards into a near-vertical nosedive.

A significant number of different terms described the economic environment after the Financial Crisis of 2007: Great Recession; Depression; Jobless Recovery; Deflation; Inflation; Stagflation. But all of that verbiage obscured the truth of where we as Americans are at. Economists can argue about what they perceive from the evidence, like three blind men feeling an elephant and pronouncing it as one thing or another. But the terminology can't obscure the fact that the elephant in the American Room today is a great reversion from the past sixty years of American economic dominance to a society of greater, choking debt, constrained resources, and fewer opportunities for our young people.

Continuing to cloud the circumstances with the same economic terms implies that what we're undergoing is cyclical and that with just the right magic combination of interest rate adjustments, monetary supply targets and maybe, just maybe, budgetary choices, we can once again regain our footing and right our ship. The simple reality to grasp is that this is a reversion to a standard of living most reminiscent of our great-great-great grandparents. There is no return to the glory days, whether we deem them as the 1960s, 1970s, 1980s or even 1990s.

Part of what I do, simply part of what makes me tick, is to pay attention to the world around me and the real-life economic data reflects that old line and the hits just keep on coming. If you have any notion of what's happening in the real world, you know that more Americans are going on food stamps than ever before and that jobs with livable wages and benefits are fewer and farther between. But there were two reports that caught my attention. The first was that the median American family wealth declined by more than a third between 2003 and 2013. The idea that the median family lost more than a third in one decade is stunning and given that more and more jobs created are part-time and/or without the benefits with which we were familiar, it's well-nigh impossible to see how this is going to be reversed and that level of wealth reclaimed.

The second report was that the amount of student debt carried by young adult college graduates was impacting their long-term financial health, as high school graduates with no debt had a higher net worth than college graduates with debt. The system is now terminally booby-trapped as American society propounds the necessity of a college degree, yet the attainment of that degree leaves the graduate so indebted that their long-term financial health is crippled. In a new environment in which the individual and family are going to have to pay greater attention than before to their own well-being, this is a set-up for failure.

There is so much that parents are supposed to do for their children - feed, house, love, discipline, raise - but the core goal of parenthood is not to raise a happy child, it is to raise a child who will be able to make his or her way in the world as a moral and productive adult. But parents have to understand that what's happening is not your typical ebb-and-flow recession; these are serious structural changes to the economy that will necessarily flow into so many other facets of our lives - food and cooking, housing, education, medicine, child-rearing. If we do not move beyond the economics jargon and wrap our heads around what's actually occurring, then we won't be able to adjust accordingly and more importantly, we will be raising our children to live in an outmoded world for which they'll be ill-prepared to function as the goal - moral and productive adults.

The model with which we were raised is gone. Dead. Finished.

It's time to recognize the reversion and move on accordingly.