Americans Have Become Lazy, Argues Economist Tyler Cowen

TriRock Triathlon and Chicago Marathon 112Americans have become lazy, argues economist Tyler Cowen.

They don’t start businesses as much as they once did. They don’t move as often as they used to. And they live in neighborhoods that are about as segregated as they were in the 1960s.

All of this is causing the U.S. to stagnate economically and politically, Cowen says in his new book: “The Complacent Class: The Self-Defeating Quest for the American Dream.” Growth is far slower than it was in the 1960s, 70s and 80s and productivity growth is way down, despite everyone claiming they are working so hard.

Ok, let’s peel the onion and better understand what’s going on in the Heartland. First, that productivity growth is way down. First, I may subjectively claim to be working hard which may or may not be true. That’s my self-assessment subject to review and challenge by objective reviewers. Indeed, I may be working hard but doesn’t mean necessarily mean I’m effective on my job. Perhaps I’m not good at time management or focusing on key goals so I could be more effective at my work and at the same time could be accurate when I say I’m working hard. Let’s not confuse activity with accomplishment.

Second, that Mr. Cowan argues that Americans have become lazy. Maybe it’s smart that homeowners are more accepting of their neighborhoods or they’re less likely to move because maybe companies and corporations are not as loyal as they once were so why move across country when you could lose your job in 2 years? Said differently, loyalty should be a two-way street. There are many working class and lower-middle class working two or three jobs to make ends meet. Lazy? That’s dangerous to paint with a wide brush when describing many Americans. I’d suggest Mr. Cowen leave the university campus and objectively look to see if indeed Americans are lazy.

Staying on the subject, I would not use the adjective lazy, many Americans are cautious about a number of things. One key reason people don’t move jobs is health care. If they want to move around but are confronted with an employer who doesn’t provide health care, they may be deterred from taking the job. I’d like to see an experiment where all Americans were part of single payer health care system, and then the effects of looking for a new job? Would the guarantee of having health care regardless of your job or company improve the economic mobility of Americans? I’m betting employees would be much more risk oriented if health insurance was not an issue. I’m betting that Mr. Cowen is provided good benefits and health insurance at George Mason University. Perhaps his academia bubble prohibits him from seeing one of the key reasons why some Americans don’t switch jobs very often or aren’t as mobile as they used to be.

When it comes to higher education, decisions made by younger people are often determined by the expenses in college, student loans can never be forgiven so some young people so this impacts where they go. Some leave college with a $30,000 debit and accept a job that pays $35,000. With that salary, how do they go out on their own when they can’t afford to? It’s not always being risk averse, it’s common sense. If I’m ever asked by an economist why the housing sectors are struggling or sluggish, one thing I’m pointing to student loans. Students may find work after college, however, many of them are paying back loans whether or not they live with their parents. Many just can’t afford to buy a home or townhouse for several years as these loans act as an anchor and impacting America’s economic picture.

“Innovation is painful. That’s why we don’t do more of it,” Cowen, a professor of economics at George Mason University, told CNNMoney. His book makes the case that all of the upheaval of the 1960s and 70s caused people to strive for safety and the status quo in the decades after that.

“Just look at how people bring up children today. Often they won’t even let children go outside,” he says.

Even technology, the one area that has seen some innovation in recent years, has been mostly aimed at making us want to stay home and relax.

“Tech’s great. It’s fun. I’ve got four Amazon packages outside my door. But we have a problem with this precisely because it’s enjoyable and comfortable,” he says. “All this tech innovation encourages leisure and staying at home.”

In my situation, tech innovation doesn’t always mean I’m staying at home and enjoying leisure as much as possible. Tech innovation has allowed me to read more online articles, engage in more critical thinking, improve my writing, write articles for my blog and including my own pictures, and build my blog around evaluating services and products. I don’t get any financial support from anyone, I don’t get any technical support too which makes it challenging as my focus has been on content for the last 8 years. Is this taking a chance? Is this what he refers to as the status quo?

Innovation doesn’t always apply to public investment in infrastructure. For example, I get so pissed off living in the Midwest where it takes so long to improve our transportation system and bridges. It might take 11 months to build a 10-story condo but 3 years to widen a highway in the Chicago area. Chicago wanted the 2016 Olympics but I bet when the Olympic Committee rode the rickety old L system, they had second thoughts. You can sometimes pay $45 to park in downtown Chicago but see sometimes see littered streets that are often bumpy with potholes. I often pay for some of these services but how do I control if the revenue is spent wisely in the City of Chicago?

Trump is the ‘great reset’

June Pics & Retail Stufff 020Cowen believes we’ve gone too far in trying to create perfect, insulated lives for ourselves and our kids. Without realizing it, we’ve created bubble worlds that we’re afraid to change. Segregation is rampant, he argues, both by race and by class. In the south, the percentage of black students in majority-white schools peaked in 1988 at 43.5%. Today it’s just 23.2%, a level similar to the 1960s.

Some point fingers at the poor or the Rust Belt as the “complacent class,” but Cowen argues just about everyone in America is part of this class. He points to America’s “traffic problems and crummy infrastructure.”

It’s an issue almost everywhere in the country, yet despite years of complaints, massive change hasn’t happened. He believes the same is true in U.S. education with so many students still not meeting basic standards.

029Even in the high tech cities of Silicon Valley, people have shut themselves off from other Americans who don’t have the same education and income levels. It’s why so many were shocked by the election of Donald Trump.

Cowen calls Trump’s election an attempt at a “great reset.” His book points out those white males earned less in 2015 than they did in 1969, once you adjust for inflation. He dubs it “one of the most stunning facts about contemporary America.”

“I think those people [in the Rust Belt] are smarter than the coastal elites have been. They actually see the problem pretty clearly,” he argues.

But he thinks Trump is going to be a big disappointment.

“I sometimes call Trump the ‘placebo president,'” Cowen says. “For all the talk about change, so far he’s shown he can’t get anything done.”

This might be one of the only things I agree with what Mr. Cowen says is that Trump so far he’s not gotten many things done.

Seriously, you don’t have to live in the Rust Belt to realize that change impacts most people. In other words, if you lose your job due to downsizing, you need to figure out where the jobs are and what are the required skills to adapt to change. This phenomenon isn’t specific to a given area; rather, it impacts jobs and people in all regions.

Prediction for the future

So how can America get out of this complacent funk? Cowen warns that looking back at history shows it usually requires a major trauma such as a war or huge natural disaster.

013aBut he also says the U.S. does have an amazing ability to regenerate itself, so it’s possible it won’t take something so extreme to reawaken America’s risk-taking mojo.

His prediction for the next two years is: “Trump is seen as an ineffective president. He’s checked by Congress and the courts. Slowly but surely, the nation wakes up and we acquire a greater sense of urgency.”

His advice to people is to take more risk in their own lives, whether it’s in their careers or personal lives.

“If you’re thinking of changing your job, maybe we should do it,” he says. “The people who make change, end up significantly happier than those who didn’t.”

Again, if you can get similar health care benefits by switching jobs, many in the States will that chance. However, if the new job doesn’t provide decent benefits for an employee, there may be less job changes. I’d love to see a study of those who have changed jobs over the last 5-10 years and what percentage of those who changed jobs had comparable benefits as opposed to inferior benefits. I’d reckon that most job changes were made on their own chose a new job with similar benefits. So, the question of health care at a new position may be the primary determinant if someone is willing to take a chance on a new job.

IMG_1470He points to new research from economist Steven Levitt, the author of the widely popular book “Freakonomics.” Levitt did a big experiment where he took people who were having trouble making a life decision and had them flip a coin to determine what they should do.

“Those who make a change (regardless of the outcome of the coin toss) report being substantially happier two months and six months later,” Levitt found.

To help jumpstart more risk taking, Cowen is calling on Trump and Congress to spend more money on research (so called R&D). He thinks we need another man on the moon moment or, better yet, a major medical breakthrough. He also thinks immigration reform is key.

“Immigrants are the greatest risk takers of all. They are the least complacent class,” he says.

I’ll be the first to nominate Mr. Clown as Captain Obvious. He said that immigrants are the greatest risk takers of all. Of course that’s true. They may have to take a risk and pay someone $5,000 to get them smuggled into a westernized democracy. They have to leave their homeland and learn a language and figure out how to survive. Immigrants often have another advantage, there’s a tight ethic group within their sub-culture that helps them assimimiate into the country, work hard and become successful.

The fact that rails are in bad shape, roads and bridges and airports need rebuilding means our politicians have failed us. Perhaps Mr. Cowan is partially right if he includes politicians in the argument that Americans are lazy. The system has failed us as most money (besides Medicare and Social Security) is spent on defense spending. How is this the responsibility of me to get things fixed? I may write about it in the paper or complain to my congressional representative and vote regularly and stay current on the issues, but besides that, it’s ultimately up to my representatives to see the need and do something about it.

In summary, yes, sometimes Americans can be lazy or complacent as an alert observer sees from time to time. However, there are many valid reasons why Americans are not as mobile as they once were or are more careful about switching jobs. In this article, Mr. Cowen doesn’t provide much context about some of the underlying reasons why Americans are more careful about being more innovative or starting a new business than years ago. Instead of labeling Americans as ‘lazy,’ perhaps the title could paint a more accurate picture about Americans being more risk averse due to current economic, social and political conditions. Said differently, real life stories provides more context and examples on why many Americans are risk averse — the phenomenon that Mr. Cowens claims is laziness.