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A Summation to Date…

Change happens.  It sometimes comes unexpectedly and in the blink of an eye and at other times, with considerable notice and more than a little planning.  As I write this, Middle is on the cusp of leaving for his freshman year in college; when I began writing this website, he was in the fifth grade.  Eldest is working two summer jobs to squirrel away money for her final year of college and she was in middle school when the first article ran in 2008.  Last night, I realized that Youngest has continued his persistent growth spurt as I now have to slightly incline my face to look into my eighth-grader’s eyes.  When I began this project, he was just entering kindergarten.

Some years ago, my better half suggested that I write a book.  I personally enjoy writing although it’s sometimes been frustrating because being the stay-at-home parent with active kids doesn’t always lend itself to long periods of time for reflection and composition.  Activities, errands, meals, laundry, paperwork and all of the things that make a household run means that the traditional model of sitting down for hours to compose an essay or article isn’t always operative.  Never having written a book and knowing that the fatherhood is cool but look at the funny things that happen when Dad is in the household meme was well covered, I opted to start with a website instead with the notion of moving on to a book. 

That hasn’t yet happened.  But after more than 740 articles and essays to date, I’ve learned a few things.  The first is that the writer that I’ve become is not the writer that I was at the inception of this site.  I believe that a writer has to have a voice and what I write now is nothing like what I wrote at first because I simply didn’t yet have one.  My voice is that of a father who sees massive change ahead and who wants desperately to raise his children to be productive and moral adults in an America that’s going to be truly different from the one in which I was raised.  I am a late Boomer, now in my mid-fifties, and believe that my generation has done a poor job of parenting, most especially in letting their children become wrapped into an electronic cocoon and devoid of the guidance and information that kids need in a complicated culture.  I do not believe that a person raised as part of the Me generation – who truly embraces that notion – is the best fit for a role that is as far removed from Me as being a parent.  It is personally galling to talk to a young person and hear the phrase I wish that someone had told me and my personal vow has been that my own children never be able to say that about me.

The second is that I’m not the kind of writer who can just sit and write a quick article in response to one thing or another.  A publicist told me years ago – yeah, I tried that – that I was what was referred to as a source writer, someone who wrote in the background and frequently provided materials for others but never engendered an avid following that left a lengthy comment thread.  She was correct because I find it difficult to write quickly and can indeed spend hours – and on a few occasion, days – to find the right information and words for a particular article or idea.  It’s honestly a bit lonely since I hear so little in response yet it’s immensely gratifying to know that over the years, so many have taken the time to place me on their Syndication Feed

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Keeping in Touch as Kids Age

One of the questions that I’ve asked myself as the kids age and begin to move out into the world – whether camping trips or high school trips – is how much I should try to keep in contact with them.  It was one thing when they were younger and going away and either my wife or I could expect the typical homesickness/touch-base call.  But it came into focus when Eldest went off to college three years ago and it’s one that I’m asking again as Middle now prepares for college departure.

One of the knocks on my generation’s parenting is that we’re helicopter parents, constantly there to protect and smother the kids in our effort to make their lives safer and better.  Yet that term can itself be confusing as Eldest’s college dean implied to parents at freshman orientation that parents who went to all of the kids’ events and games were such; after all, his parents – in the 1960s – only made one of his own high school games and my personal opinion is that he’s suffering a case of sour grapes.  In a conversation two years ago, Youngest – then still in elementary school – commented that he viewed hovering parents as shelter parents who attempted to shelter their children from all possible mishaps.  Youngest’s case-in-point then pertained to a baseball parent who yelled at a coach during a game; it’s an event that has happened since that time almost three years ago.  To his credit, Youngest has made it clear that if he gets yelled at by a coach in my presence, it’s my job to shut up.

But the question remains: how should communication occur after they depart?  My own experience in going to college was that, barring unexpected questions or situations, I should call my parents collect once a week on a predetermined night.  As it was, there were plenty of unexpected situations my freshman year and the phone calls were a bit more frequent for the first semester at least.  But the newer technology base makes communication easier and more ubiquitous.  Many parents require that kids with a Facebook account “friend” them, at least for the account that the folks know about.  Parents can thus see the latest photos of Junior dressed up with his date before the big party on the public account while Junior’s peers get to see the grisly after-party photos on Junior’s private account site.  No, kids, we’re not stupid.  The almost-universal presence of cellphones – or as I refer to them around the kids, texty-thingies – means that we parents have the capability to step in to help the kid with a problem on a moment’s notice.  That presumes that (a) the kid wants our help and asks for it, and (b) that we have the willingness to help them should they ask.  If I want my kids to be productive and moral adults, capable of standing on their own two feet, then I have to accept that both (a) and (b) have corollaries.  The corollary to (a) would be that things might not turn out optimally because the kid chose to attempt management on her own without my input and if that’s the case, then my job is to monitor my own mouth and perhaps offer a quiet post-mortem at a later time.  The corollary to (b) would be that there might come a time when I opt not to assist but instead stand back and let them deal with the issue themselves with whatever subsequent consequences might arise.  It could be a highly valuable object lesson but one that’s painful for the immediate relationship and something that I’d have to decide was worth the pain. 

Understand that the question will come at one point or another.  Being a parent means that we have to gradually cede ground on autonomy and independence as the kids age and the true gift is to ascertain when and how much to cede; to say that it’s an imprecise process is an understatement.  Take the time now to consider what your guidelines with the kids might be and understand that you and your mate might very well have different expectations on what those might be; my wife is in closer contact to the kids via text than I am while I might go for weeks between texts or phone calls.  My own comments have been that I’ll be happy to speak with you whenever you so choose and will answer any questions that you might have…but don’t blindside me with bad news unless it’s truly unexpected.  There will be miscommunications and there will be the occasional hard feelings but if you take some time to think about your expectations and go over them in advance, the potential damage can be minimized and you can move on to a newer, more well-defined adult relationship.

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So…What is This Middle Class?

There’s been an ongoing flow of ink and discussion about the decline and potential demise of the American Middle Class, that economic entity in which many Americans were raised.  The data over the past seven years has shown material damage to the entity with a drop in median family income as well as a loss in median family assets.  A record number of Americans are receiving food assistance, more than 93 million are no longer in the workforce and the discrepancy in wealth distribution is now at a point not seen since the Gilded Age of more than a century ago.  My own thinking in the more recent past has been about the questions, what precisely is the American Middle Class and how did it come to exist?  When did it become a real thing and what factors led to its rise?  I don’t believe that you can remedy a situation until you manage to understand it and frankly, focusing on only the economic data is akin to saying that the patient died of massive hemorrhaging when that hemorrhaging was actually caused by multiple gunshots from a Sonny Corleone-style gangland shooting.  And yes, that is a purposefully pointed analogy.

What we’re watching now is just a bleeding out from a wounded mass of people, but that hemorrhaging is the result of both purposeful and inadvertant policy decisions that have occurred over the course of decades.  This American Middle Class didn’t just arise because a gaggle of World War Two veterans returned home and said Woot! We survived, so let’s start buying!  It arose from the culmination of four principal factors that coalesced together after more than a half-century of oft-times painful development.  Had any of these factors not occurred, my belief is that what we’ve come to appreciate and mourn would probably never have existed in the first place and we’d have been no different as a nation than any other developing nation with an intransigent oligarchy.

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Civics versus Reality:  Trans-Pacific Partnership and the Kids

Part of my job as a father – a parent – is to raise the kids to take their place in the world as moral and productive adults.  The conversations continue beyond the birds and the bees, which is good since they’re all old enough that if I were now discussing birds and bees with them, I’d probably have multiple grandchildren.  But a significant part of those conversations go to what’s occurring in the world around them and how reality frequently conflicts with what they’ve learned in school.  Such is the case with a conversation about the June 12 vote on HR 1314, in which the House of Representatives denied the President the right to “fast-track” approval of the Trans-Pacific Partnership trade treaty.

The conversation happened twice, the first with Middle and again later that evening with Eldest, Youngest and my wife.  In each case, it was generally composed of three segments.  The first was a general description of what little was known the TPP treaty and that led to the other two segments.  Why was so little known about it and how in the hell could the President get away with making open disclosure of such contents prosecutable.  In the case of the former, little is known about it and purposefully so.  Perhaps the most glaring is that supranational rights would be given to corporations, i.e. that if a foreign corporation objected to a local law, be it state or federal, it could appeal that law to an international court and if upheld, could have said law overturned.  The example that I used with each was if a Chinese corporation wanted to build a plant in a neighboring township and didn’t like the environmental regulations, they could take their case to an international court and have those regulations overturned so that they could proceed with their plant.  Incendiary perhaps, but still a legitimate example and one that’s pertinent since there’s been an ongoing local controversy about an American firm running a gas pipeline through the area despite significant public opposition.  It’s bad enough that we’re becoming part of a domestic corporate fascism with those organizations gaining increasing power over the individual; to be additionally at the mercy of the wishes of a foreign corporation – be it Chinese, German or English – is intolerable.

The next part of the conversation went to the fact that the document itself is heavily guarded and protected as to contents.  It can only be read by members of Congress in a particular basement, guarded, and any notes must be destroyed.  If anyone is caught publicizing details of the proposed treaty, they can be criminally prosecuted.  Still, aspects of the treaty have made it to light and that includes the supranational status given to corporations.  Another aspect that’s come out via leaks and analysis by the New York Times is that the pharmaceutical industry has lobbied heavily on its behalf, most notably for increased intellectual property protection.  While that’s certainly a legitimate concern that goes to pharmaceuticals as well as any other number of industries and products, there is also a push for increased control of patents so that generic drugs would take longer to come to market and keep the cost of medications higher for longer than it is now.  In a society that’s seeing more medical costs being borne by the consumer as deductibles move higher, this is an additional burden on stretched family budgets in the event of medical difficulty.

The vote itself, which was defeated by a large Democratic House contingent joining with some Republicans, was to approve a “fast track” vote on the bill, whose Senate corollary had already been approved.  This fast tracking would’ve forced a straight yes or no vote on the treaty with no debate and with no allowance for any changes whatsoever.  Indeed, Representative Paul Ryan (R) echoed Nancy Pelosi (D) when she spoke the Obamacare vote: you’ll find out what’s in it after you vote for it.  This simple comment was as astounding coming around the second time as it was coming around the first and equally appalling.

The response from all of the kids – Youngest is quite capable of playing up to his elder siblings – was simple disbelief.  None of this was what they’d learned about in their Civics classes – or in Youngest’s case, from talking with me – and it was difficult to reconcile with the theory that they’d learned about the fabled American democracy with it’s freedom of speech and constitutional system of checks and balances.  And honestly, apart from multiple comments as to unconstitutional, the one word that caught my attention was tyranny. 

Tyranny, indeed.  And this came from the mouth of a teenager.

So what’s the upshot of all of this?  There are several…the first is that the kids are absolutely capable in their teen years of learning and understanding what’s going on in their nation and the world, provided that you’re willing to take the time to talk with them.  It’s fine if you tell them to turn off their electronics for a few minutes of discussion, although the first time or two that you do it will seem more like a monologue than a dialogue.  It’s important that you get your salient facts straight and present them with as little rancor as possible, even if you should be wrapping your head with duct tape to keep it from exploding, so that you don’t come off as the foaming-at-the-mouth old man.  And the last is that you have an obligation as a parent, like it or not, to stay apprised of what’s going on in the world around you.  It isn’t enough anymore to feed and clothe them anymore.  There are events and movements within this country that will require our greater attention and activism – yes, I said it – if we’re going to give them a nation worthy of them.

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When Real-Time Economics Hits Home

I live for teachable moments and the unfortunate reality is that larger macroeconomic issues do hit here within the household.  Such is the case with Eldest, who’s forking away as much into savings as possible for the coming year.

The larger issue is obviously the transition from a sustainable living wage economy to one of predominantly part-time jobs.  According to the government statistics – and I’ll admit to believing that a fair portion of the government reporting structure is rigged – there have been millions of jobs created within the past several years yet the majority of them are only part-time, sans the benefits which many of the previous generations received.  The scenario simply beggars the imagination and I recently asked Middle, the AP economics student, to explain how we could a record number of Americans both on food assistance as well as out of the workforce yet have what some economists might consider as full employment with a rate of – at that time – 5.4%.  To his credit, he did identify ask whether the jobs were full-time and that led to some conversation and explanation about employment statistics…most especially that once a person had any kind of job, even a part-time job at 15 hours weekly, they were no longer considered as unemployed and therefore out of the unemployment rate calculation.  And this is where the problem lies: that we’re now reaping the globalization policy effects as sustainable living jobs for the typical person have been outsourced to other nations.

It was a short conversation with Eldest the other morning about when she was working over the next two days, since the body count is always a factor in dinner plans.  She updated me on her hours and expressed frustration with one of her employers.  I have to give her credit since she’s willing to work and puts in time at two separate jobs, one within the restaurant business and the other within retail.  She successfully schedules her hours and is able to routinely work more than 45 hours weekly and on some weeks has surpassed 55 hours of work; it was the same last summer when she put in similar hours albeit only with the restaurant.  The difference that she’s finding however, is that as a non-server employee at the restaurant, she was paid hourly instead of wait-staff rates and the hours that she garnered – because she routinely picked up every other employee’s shift request – meant that she made significant overtime.  So significant that when the management finally reviewed their records late last August, they found that labor costs had risen beyond budgeted because of all of her overtime pay.  Their conversation with her was actually gentle since they recognized that they had a keeper as a hostess but the message was clear – no overtime for you!.  That carried over into their hiring for this current summer as they hired sufficient numbers for hosts and hostesses that the ability to garner overtime would be simply impossible.  It’s crazy, Eldest commented, since there are hosts who might only work for one or two shifts each week…I mean, it’s stupid.  I went to the question of why they might do that and once she got past the irritability of it’s perceived stupidity, we got to the meat of labor costs.  They have a budget within which they have to keep and the unfortunate reality is that it’s presently a fully-blown employer’s market with a surplus of available labor to meet needs; that it’s not at all uncommon for employers to now have an excess number of employees available so that fewer shifts can be given to many and any possible overtime avoided.  That paid benefits might only go to those few who actually work more than 40 hours weekly makes it a two-fer as almost nobody hits that mark and that aspect of labor costs is dropped from the bottom line.  Her bottom line is that she’s seeing how the same number of hours worked at two jobs leads to less money because the overtime differential is gone.  The conversation petered out as she prepared to leave to meet with a friend but she did take the commentary in and I suspect that she’s processed it.

There’s been a recurrent point that bothers me.  We live in a society that’s been parsed and segmented and all of the various news media play to their own fan base.  MSNBC, Fox and CNN all have their various segments and much of the commentary goes to the notion of them, that others are either the cause or the effect of one policy or another.  But the simple truth is that what’s occurring around us isn’t happening to them, it’s happening to us and in many cases, the us is our children since they have to live with the effects of the various corporate policies as they play out.  It’s not your kids or my kids, it’s our kids.  The more that we can recognize the larger issues within our own daily lives, the more that we can teach them and help them learn to navigate this system of ours.  And hopefully create the template for change that’s more positive because it’s sometimes the little things that cumulatively make a larger difference.

Like a college kid’s willingness to work overtime.

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A View From the Ridge,  Part 6

As I’ve said before, parenting is a forest for the trees experience.  Toddlers become children and grow, become active and engaged in the world around them, and the plethora of life can narrow your view to the immediate moments of this day and the next, akin to the trees in a thick wood.  But there are moments when the foliage opens and you recognize that you’re on a ridge with a view that spans for miles; you’re now allowed to get a glimpse of the wider vista and can see both forward and back.

Such a moment was the other night when Middle donned cap and gown to receive his high school diploma.  The event was held at a local college’s sporting complex to accommodate the graduates and their thousands of parents, family and friends.  Having to help with an elderly relative, Eldest was dispatched with her boyfriend to the venue as soon as doors opened in order to claim seats that would require minimal walking.  Middle went to the high school around dinnertime to join his peers on the school buses that would carry them to the ceremony and his girlfriend arrived shortly after that to join us for the graduation.  Youngest – decked out in suit and bow tie – was tasked with assisting his elders while I spent an undue amount of time finding parking after dropping everybody off at the site.

But once I was finally in and seated, able to cut across to my seat about 40 yards ahead of the processing seniors, I took a deep breath and in a few moments was able to enjoy the trailhead and distant scenery.  Turning around on the ridge, I looked behind to see how our family’s trail had narrowed somewhat when Eldest graduated and went off to college herself.  I could see how older trails were meandering along from a distance until they more closely paralleled ours and far closer, how Eldest’s trail had once again returned to ours for a short period.  When I swung my view forward, I could see the older trails still paralleling ours for the indeterminate period and how our own path was narrowing yet again as Middle left in one direction for college and Eldest returned to her own college.  These separate paths wouldn’t necessarily be far away but they would at times be hidden from our view and we could only hope that the kids were sufficiently well-raised and prepared that they’d successfully forge ahead without undue mishap.  As I surveyed our terrain ahead, the two parallel paths – ours and our elders – once again led into the woods although it’s certain that the forest isn’t as thick as it had been in the past twenty-one years.

The ceremony ended within two hours and another 264 adults-in-training took their place.  Apart from my own son’s appearance in cap and gown, what struck me was the ovation given to the 13 graduates who were moving on to military service.  I could only utter a silent prayer on their behalf as they took their place in the armed forces, serving where sent.  They entered for various reasons, ranging from the desire to travel, gain specialized education or just serve their country and yet my fear is that the civilian leadership is incapable of using them wisely and stretching them to a point at which they break, either individually or en masse.  Their own landscape will be more fraught with pitfalls and potentially darker than that of their peers.

We’re now back into the woods as the older kids come and go with jobs and friends while Youngest enjoys the final summers before he will also begin his journey into the work experience.  But take the opportunity to step back whenever you can to see where you are and what’s around you…the view can be magnificent.

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PracticalDad Price Index – June 2015:  Crashing

Let’s divorce ourselves from the notion that the PracticalDad Price Index monitors the pricing activity of a fairly typical family marketbasket from a grocery store – or three separate and unrelated stores as in the case of the Index.  Let’s say that the figures represent an unknown something that could just as easily be good as bad.  Now assume that the figures have risen from a baseline of 100 to a high of 115.33 over a period of 49 months, a rise carved with ups and downs but generally following an upwards trend.  If you were to find that this increase over a 49 month period was eliminated by more than one half – 57% to be exact – in just six months, how would you describe it?  A drop?  A decline?  A fall?  A collapse?  A crash?  The wording can be argued but my gut response is that it would be akin to a crash, a sudden crunching of the upwards slope in such a way as to suggest that said curve ran headlong into a concrete abutment and folded in upon itself.

Such is the case with the June 2015 edition of the PracticalDad Price Index as the Total Index fell yet again to 107.11 in June from May’s previous reading of 107.56 (November 2010 = 100).  This is the fourth decline in six months from the December 2014 level of 111.18.  But whereas the Total Index covers all 47 items in the marketbasket, what has grabbed my attention is the simple collapse of the Food-Only Sub-index, which consists of the 37 foodstuff items within the larger 47 item marketbasket.  It’s this sub-index (again, November 2010 = 100) which has historically shown the effects of price increases and decreases, while the non-food items have, for the most part, been generally controlled.  The Food-Only Sub-index reached it’s zenith in December 2014 at 115.33; yet it subsequently began a steepening slide that led to June’s Sub-Index reading of 106.46.  This is the crash to which I’m referring in the title – that fully 57% of prices increasing over four and a half years has been wiped away in six months.  Yes, a pound of 80% ground beef is still high and the rising price of a dozen large eggs is starting to show the effect of the spreading Avian influenza through the national poultry flocks but these supply and demand issues are being played out against price declines in other foodstuffs as deflationary pressures come into play in a complex and dynamic process.

So what is this deflationary pressure and how is it playing out in the stores?

Understand that the price changes in inflation (upward) and deflation (downward) are symptomatic of other underlying issues and in the case of deflation, the biggest underlying issue is the amount of money flowing through the economy; in the case of most, that flow would come from the family income.  The Fed, and other central banks, are terrified of deflation and want inflation.  Their premise is that rising prices mean that producers and manufacturers can charge more for their products and then in turn pass that along to their employees via higher wages or hiring of more people – in the ideal world, both would happen – and these happy employees would feel wealthier and more comfortable.  That would then lead to greater spending by the employees and their families, meaning that more would then flow back to the producers and manufacturers and the cycle would continue.  The policy response of the central banks is framed by their predecessors’ experience during the Great Depression of 1929 in which deflation ruled the day.  Businesses lost complete control of their capacity to maintain pricing as consumers lost their money and cut back on spending; as spending was curbed, less was bought and businesses were forced to lower their prices to compete with the result that the employees weren’t receiving higher pay.  As they didn’t see wage increases and saw other businesses slowly shutter, they in turn cut back on spending further to protect themselves and businesses saw even fewer sales, meaning even more downward pressures.  The result was a highly negative reinforcing cycle that culminated in a quarter of the American workforce unemployed and thousands of businesses and banks shuttered forever.  So the ability to control pricing is key and that in turn depends upon the ability of people to spend and that ultimately depends upon people having something to spend in the first place.

That’s lovely…but how does that theory seem to be playing out in the grocery stores?  What I’ve seen over the past several months appears to be significant changes in pricing strategy.  The backdrop to all of this is that the median family income is dropping across the country and that’s compounded by the burgeoning number of Americans now receiving food assistance, so the money flow simply isn’t there as it was several years ago.  There was a period within the past decade in which grocery stores upgraded themselves with coffee kiosks and delis, enlarging and appealing to a more upscale clientele.  As the money flows out of the general economy however, people feel less inclined to spend and the cosmetic changes matter less and the stores’ ability to compete is increasingly reduced to bareknuckle price competition.  During the first quarter, one grocery store in the survey, owned by an international chain, instituted an “Everyday Low Pricing” policy with a lower price on multiple common foodstuff items.  Meat, a supply-and-demand affected item, was still expensive but from one month to the next, items such as bananas and potatos, canned vegetables, and other foodstuffs underwent significant price decreases.  Approximately two months later, another grocer – an independent but one which whose generic brand is produced by a national chain on behalf of independents – began a wholesale switch to another generic brand producer and the prices on multiple foodstuff items underwent a corresponding decline.  This particular change is still playing out in the store as they still sell the discontinued generic brand and will do so until their inventory is exhausted, at which point I anticipate that they’ll offer only the new generic label; it’s happened before and I expect it to happen again.  The remaining grocer is a regional grocery chain and has had difficulty maintaining prices relative to the two competitors and until this month, I hadn’t seen much different in terms of their pricing.  What I observed the other day during the pricing however, was a number of lower priced items in the marketbasket and in those cases, there was also signage indicating a new “everyday low pricing” policy.  This was particularly the case with lunchmeat, deli cheese and bananas as the minimum drop amongst the three items was 20%.  In the case of this third grocery chain, I know from first hand experience that they’ve had profitability issues and have dealt with it by closing stores and reducing hours at other locations.  The evidence suggests to me that despite these issues, they’re having to compete with the others now on the price front.

So the evidence suggests that amongst the falling income/money flow through the general economy, the three grocers are now competing on a price front – much as their Depressionary forebears did 75 years ago.  If this income situation isn’t somehow rectified in the relatively near future, the prospect is that the grocers will lose control of their pricing in a deflationary spiral and one or more will fail and the first will be that one which doesn’t have the sufficient buying power that comes from larger entities.  For example, which would you consider to fail first – Walmart or Joe’s corner grocery?  Because people aren’t spending and making money course through the economy, the prospect exists that one or more of these grocers will fail – and this fear of more failing businesses is the rationale behind the policies of the central banks.  It is also the fear behind Wall Street Journal reporter Jon Hilsenrath’s likely to be infamous letter to American consumers.

One final note when you look at the Indices results from December 2014 through June 2015.  The column entitled “Spread” pertains to the differential between the Total Index reading and the reading for the Food-Only Sub-Index.  I began to use it some time ago since I found it helpful to indicate the level of activity on the part of the Sub-Index versus the entire Index.  You’ll note that as of December 2014, the spread between the two readings was 3.95 basis points and was positive because the Food-Only Sub-Index had risen that much higher in comparison to it’s Total Index companion.  But over the past six months, this spread has declined significantly and consistently until June 2015 when the spread was actually (.65), meaning that the Total Index was now actually higher than the Sub-Index…something that hasn’t happened before in the four and a half year history of the PracticalDad Price Index.  Yes folks, food prices – as measured on a marketbasket basis – are now dropping.

 

PracticalDad Price Index – June 2015
Month Total Index Food-Only Index Spread
12/14 111.18 115.13 3.95
1/15 111.32 114.00 2.68
2/15 109.42 112.08 2.66
3/15 107.89 109.50 1.61
4/15 108.21 110.20 1.99
5/15 107.56 107.74 .18
6/15 107.11 106.46 (.65)