How to Make Sense of the European Union Disaster (American Thinker)

Wednesday, November 30, 2011


By T.S. Weidler

(See also: Germany's Dream of Domination to Come True?)

Everything you need to know to understand the European Union can be discovered by simply glancing at the location of its headquarters. Brussels is in Belgium, which is not a real country, does not have a government, and does not have any money.

Belgium has not had a government for a year and half, yet the capital city (to the degree that a country without a government can have a capital) is host to one of the largest government organizations in the world. The ironies and paradoxes of the EU are clearly seen in the microcosm of Belgium.

Belgium was invented in 1839, when the powers of Europe decided to carve out sections of the Netherlands and Luxembourg and assigned what resulted the name "Belgium." This despite the fact that the bit of land was inhabited by Flemish, Walloons, Dutch, French, various Germans, and several other minority groups that had been hostile to each other for centuries. A group of unelected European leaders stepped in and said, "Let there be Belgium," and suddenly, there was Belgium -- but it was not a nation. Decrees do not make nations. Belgium is a haphazard collection of once-independent states with no interest in joining together and substantial reasons not to.

Over the years, Belgian governments have maintained majority rule by offering entitlements and subsidies to every niche group they can find. This is the only way to get a majority in a country with eleven major political parties divided on ethnic and linguistic lines. Naturally, it leads to dangerous deficits. It all came to a halt in the general election of June 2010. No coalition has been able to strike a deal to create a majority. Parties join together to form majorities only when there is a significant handout being offered, but with a crashing economy, nobody is willing to continue this charade. Last week the interest rate on Belgian debt jumped into crisis levels. Belgium's credit rating has been systematically cycling downward for the past two years. There is a strong secessionist movement to break into at least two independent nations, while others push for a stronger central authority to enforce unification. So Belgium hasn't had a government for seventeen months running.

Aside from debt, secession, and anarchy, there is also the matter of national defense. The powers that breathed Belgium into existence did so on the condition that it remain neutral in military affairs. Neutrality ensured that France, Germany, and Britain would have a low-lying, centrally located piece of land on which to fight wars, rather than having to deal with the unpleasantries on their own land. Belgium is whatever Europe needs it to be: a buffer zone when things are hostile, a highway for tanks when you want to go on offense, and a shooting range when the war starts. It was created for the purpose of hosting other countries' wars and is required to remain neutral so as not to spoil the fun. It has served this purpose quite well over the years. It doesn't matter that the various factions that happen to be stuck inside its borders have no desire to run a country of their own. They have to do it anyway because it is convenient for the rest of Europe. Belgium would be a joke if it weren't a tragedy.

So it goes for the EU. Germany would rather not bail out Greece and Italy, and Greece and Italy would rather not be swallowed up by the European leviathan. Doesn't matter -- they have to do it anyway because Europe is all roped together now.

The EU is not a real country. It is a collection of independent states that have no national interest in joining forces, and substantial reasons not to. It does not have a functional government, but it does have just enough of a government to make everyone's life worse, and to run up enormous deficits. Like Belgium, it has no national defense to speak of and numerous factions that are hostile to one another.

All historical evidence suggests that Europe is a fragmented and dangerous place, with constant wars covering its entire history. It is the only continent on which something called "The Hundred Years' War" ever happened. In the last century, some of these constant small battles were saved up and unleashed as the two biggest wars in world history. But even WWI and WWII were not enough to satisfy the bloodlust haunting Europe. There was also the small matter of a Soviet occupation of half the continent and countless feuds within feuds. Italy just completed its 61st change in government in 66 years. Spain was ruled by a dictator up until 1975 and had its first democratic election in 1977. Germany, of course, tried to take over the world twice, and always followed the advice of bumper stickers by thinking globally and invading locally. The effort to make these nations suddenly join together in happiness and love is one of the most foolish ventures ever conceived. It is unraveling now. It would be a joke if it weren't tragic.

The EU is Belgium writ large. A group of unelected officials from around Europe got together and dreamed up the EU, then arbitrarily made it happen. Now it is in the position of managing the countless factions of Europe. Constant bailouts and subsidies are the only things that keep everyone happy. There isn't enough money to keep up the charade, and there are considerable efforts to break it up. Each nation of the EU is held together by nothing more than the selfish decrees of others. It is crashing as you read.

Europe has come full circle. The EU has taken over Italy and Greece and installed unelected puppet regimes there. Belgium, a puppet nation dreamed up by Europe with no history, no government, and no money, finds itself ruling puppet governments of the two foundational sources of European civilization because they have no money. In WWII Germany went through Belgium to take over France. Now Germany is going through Belgium to take over Italy and Greece.

This is all you need to know about the EU. It is a messy assortment of peoples haphazardly crammed together, with no functional government, saddled with extremely high debt. Belgium was created as a puppet nation with no historical roots. Now it's been converted into a base from which all of Europe is held together as a puppet nation with no historical roots. The EU, like Belgium, is not strong enough to govern its various factions, nor does any freedom-lover desire it to be. The cradles of European history, Athens and Rome, are swallowed up by a puppet newcomer. It would be tragic if it wasn't an outrage.

The next EU takeover will probably be Spain, and there will be more after that. At some point Europe will fall. The only question is the direction in which it falls. It may fall into totalitarianism, or it may dissolve back to its historical national divisions. There are mounting efforts in both of these directions already, and there will be tremendous instability either way. Do not be surprised if there is war. Watch what Belgium does.

T.S. Weidler is the editor of a $1.4-million line of research databases and the sole operator of He can be contacted at

Page Printed from: at November 30, 2011 - 07:06:06 AM CST

Virtue and Society with Bill Whittle

Sunday, November 27, 2011

Short but Sweet–This is the ultimate Rant (Nigel Farage at the European Parliament)

Scientists in Revolt against Global Warming (American Thinker)

November 27, 2011


By Karin McQuillan

Global warming became a cause to save life on earth before it had a chance to become good science. The belief that fossil fuel use is an emergency destroying our planet by CO2 emissions took over the media and political arena by storm. The issue was politicized so quickly that the normal scientific process was stunted. We have never had a full, honest national debate on either the science or government policy issues.

Everyone "knows" that global warming is true. The public has no idea of the number of scientists -- precisely one thousand at last count of a congressional committee -- who believe that global warming is benign and natural, and that it ended in 1998. We have not been informed of the costs to our economy of discouraging fossil fuel development and promoting alternatives. The public need to know the choices being made on their behalf, and to have a say in the matter. We are constantly told that the scientific and policy debate on global warming is over. It has just begun.

What is never discussed is this: the theory of global warming has catastrophic implications for our economy and national security. Case in point: Obama's recent decision to block the Keystone pipeline in order to placate global warming advocates. Key Democrat supporters fear the use of oil more than they care about losing jobs or our dangerous dependence on the Mideast for oil. The president delayed the pipeline by fiat, and the general public has had no say. (For the impact on our economy, see my article, "The Whole Country Can Be Rich.")

President Obama has spoken out passionately on the danger of developing oil and gas because of man-made global warming. "What we can be scientifically certain of is that our continued use of fossil fuels is pushing us to a point of no return. And unless we free ourselves from a dependence on these fossil fuels and chart a new course on energy in this country, we are condemning future generations to global catastrophe."

Obama calls for the debate to end. He cites hurricanes as proof: "dangerous weather patterns and devastating storms are abruptly putting an end to the long-running debate over whether or not climate change is real. Not only is it real -- it's here, and its effects are giving rise to a frighteningly new global phenomenon: the man-made natural disaster."

Happily, our president is wrong. The worst hurricanes were in 1926, the second-worst in 1900. The world's top hurricane experts say that there is no evidence that global warming affects storms. There is no such thing as a man-made hurricane. Storm cycles and long patterns of bad weather are entirely natural. Yet this good news is suppressed by our politicized media. We hear only one side.

More and more scientists are revolting against the global warming consensus enforced by government funding, the academic establishment, and media misrepresentation. They are saying that solar cycles and the complex systems of cloud formation have much more influence on our climate, and account for historical periods of warming and cooling much more accurately that a straight line graph of industrialization, CO2, and rising temperatures. They also point out that the rising temperatures that set off the global warming panic ended in 1998.

It takes a lot of courage. Scientists who report findings that contradict man-made global warming find their sources of funding cut, their jobs terminated, their careers stunted, and their reports blocked from important journals, and they are victimized by personal attacks. This is a consensus one associates with a Stalinist system, not science in the free world.

Here is how it has worked. The theory that entirely natural sun cycles best explain warming patterns emerged years ago, but the Danish scientists "soon found themselves vilified, marginalized and starved of funding, despite their impeccable scientific credentials." Physicists at Europe's most prestigious CERN laboratory tried to test the solar theory in 1996, and they, too, found their project blocked. This fall, the top scientific journal Nature published the first experimental proof -- by a team of 63 scientists at CERN -- that the largest factor in global warming is the sun, not humans. But the director of CERN forbade the implications of the experiment to be explained to the public: "I have asked the colleagues to present the results clearly, but not to interpret them. That would go immediately into the highly political arena of the climate change debate."

As more and more scientific evidence is published that debunks global warming, the enforced consensus is ending. The Royal Society, Britain's premier scientific institution -- whose previous president declared that "the debate on climate change is over" -- "is being forced to review its statements on climate change after a rebellion by members who question mankind's contribution to rising temperatures. ... The society has been accused by 43 of its Fellows of refusing to accept dissenting views on climate change and exaggerating the degree of certainty that man-made emissions are the main cause." Most of the rebels were retired, as one of them explained, "One of the reasons people like myself are willing to put our heads above the parapet is that our careers are not at risk from being labeled a denier or flat-Earther because we say the science is not settled. The bullying of people into silence has unfortunately been effective."

In America, Dr. Ivar Giaever, a Nobel Prize-winner in physics, resigned in protest from the American Physical Society this fall because of the Society's policy statement: "The evidence is incontrovertible: global warming is occurring." Dr. Giaver:

Incontrovertible is not a scientific word. Nothing is incontrovertible in science.

In the APS it is ok to discuss whether the mass of the proton changes over time and how a multi-universe behaves, but the evidence of global warming is incontrovertible?

The claim (how can you measure the average temperature of the whole earth for a whole year?) is that the temperature has changed from ~288.0 to ~288.8 degree Kelvin in about 150 years, which (if true) means to me is that the temperature has been amazingly stable, and both human health and happiness have definitely improved in this "warming" period.

In 2008, Prof. Giaever endorsed Barack Obama's candidacy, but he has since joined 100 scientists who wrote an open letter to Obama, declaring: "We maintain that the case for alarm regarding climate change is grossly overstated."

Do a Google search: you will find this letter reported in Britain and even India, but not in America.

Fifty-one thousand Canadian engineers, geologists, and geophysicists were recently polled by their professional organization. Sixty-eight percent of them disagree with the statement that "the debate on the scientific causes of recent climate change is settled." Only 26% attributed global warming to "human activity like burning fossil fuels." APEGGA's executive director Neil Windsor said, "We're not surprised at all. There is no clear consensus of scientists that we know of."

Dr. Joanne Simpson, one of the world's top weather scientists, expressed relief upon her retirement that she was finally free to speak "frankly" on global warming and announce that "as a scientist I remain skeptical." She says she remained silent for fear of personal attacks. Dr. Simpson was a pioneer in computer modeling and points out the obvious: computer models are not yet good enough to predict weather -- we cannot scientifically predict global climate trends.

Dr. Fred Singer, first director of the U.S. Weather Satellite Service, and physicist Dr. Seitz, past president of the APS, of Rockefeller University and of the National Academy of Science, argue that the computer models are fed questionable data and assumptions that determine the answers on global warming that the scientists expect to see.

Recently we've had a perfect example of the enforced global warming consensus falling apart. Berkeley Professor Muller did a media blitz with the findings of the latest analysis of all land temperature data, the BEST study, that he claimed once and for all proved that the planet is warming. Predictably, the Washington Post proclaimed that the BEST study had "settled the climate change debate" and showed that anyone who remained a skeptic was committing a "cynical fraud."

But within a week, Muller's lead co-author, Professor Curry, was interviewed in the British press (not reported in America), saying that the BEST data did the opposite: the global "temperature trend of the last decade is absolutely flat, with no increase at all - though the levels of carbon dioxide in the atmosphere have carried on rising relentlessly."

This is nowhere near what the climate models were predicting," Prof Curry said. "Whatever it is that's going on here, it doesn't look like it's being dominated by CO2." In fact, she added, in the wake of the unexpected global warming standstill, many climate scientists who had previously rejected sceptics' arguments were now taking them much more seriously. They were finally addressing questions such as the influence of clouds, natural temperature cycles and solar radiation - as they should have done, she said, a long time ago.

Other scientists jumped in, calling Muller's false claims to the media that BEST proved global warming "highly unethical." Professor Muller, confronted with dissent, caved and admitted that indeed, both ocean and land measurements show that global warming stopped increasing in 1998.

Media coverage on global warming has been criminally one-sided. The public doesn't know where the global warming theory came from in the first place. Answer: the U.N., not a scientific body. The threat of catastrophic warming was launched by the U.N. to promote international climate treaties that would transfer wealth from rich countries to developing countries. It was political from the beginning, with the conclusion assumed: the Intergovernmental Panel on Climate Change (U.N. IPCC) was funded to report on how man was changing climate. Its scientific reports have been repeatedly corrected for misrepresentation and outright fraud.

This is important. Global warming theory did not come from a breakthrough in scientific research that enabled us to understand our climate. We still don't understand global climate any more than we understand the human brain or how to cure cancer. The science of global climate is in its infancy.

Yet the U.N. IPCC reports drive American policy. The EPA broke federal law requiring independent analysis and used the U.N. IPCC reports in its "endangerment" finding that justifies extreme regulatory actions. Senator Inhofe is apoplectic:

Global warming regulations imposed by the Obama-EPA under the Clean Air Act will cost American consumers $300 to $400 billion a year, significantly raise energy prices, and destroy hundreds of thousands of jobs. This is not to mention the 'absurd result' that EPA will need to hire 230,000 additional employees and spend an additional $21 billion to implement its [greenhouse gas] regime.

Former top scientists at the U.N. IPCC are protesting publicly against falsification of global warming data and misleading media reports. Dr. John Everett, for example, was the lead researcher on Fisheries, Polar Regions, Oceans and Coastal Zones at the IPCC and a former National Oceanic and Atmospheric Administration (NOAA) senior manager, and he received an award while at NOAA for "accomplishments in assessing the impacts of climate change on global oceans and fisheries." Here is what he has to say on global warming:

It is time for a reality check. Warming is not a big deal and is not a bad thing. The oceans and coastal zones have been far warmer and colder than is projected in the present scenarios ... I would much rather have the present warm climate, and even further warming...No one knows whether the Earth is going to keep warming, or since reaching a peak in 1998, we are at the start of a cooling cycle that will last several decades or more.

That is why we must hear from all the best scientists, not only those who say fossil fuel use is dangerous. It is very important that we honestly discuss whether this theory is true and, if so, what reasonable steps we can afford to take to mitigate warming. If the theory is not based on solid science, we are free to develop our fossil fuel wealth responsibly and swiftly.

Instead, federal policies are based on global warming fears. Obama has adopted the California model. The Global Warming Solutions Act of 2006 has shed a million jobs in that state. California now has almost 12% unemployment, ranking 50th in the nation.

The country could be following North Dakota, where oil development has led to a 3.5% unemployment rate, or Texas, which has created 40% of the jobs nationwide since the 2009 economic crash thanks to its robust energy sector. These are good jobs. An entry-level job on an oil rig pays $70,000 a year. A roughneck with a high school diploma earns $100,000 a year in Wyoming's Jonah Fields. Brazil's new offshore oil discoveries are predicted to create 2 million jobs there. We have almost three times more oil than Brazil.

When we treat oil and gas companies like pariahs, we threaten America's economic viability. For global warming alarmists who believe that man-made CO2 threatens life on earth, no cost is too high to fight it. They avert their eyes from the human suffering of people without jobs, with diminished life savings, limited future prospects, and looming national bankruptcy.

This is not all about idealism. There are crasser reasons of money and power for wanting to close the debate. Billions of dollars in federal grants and subsidies are spent to fight global warming. The cover of fighting to save the planet gives the government unlimited powers to intrude into private business and our individual homes. The government can reach its long arm right into your shower and control how much hot water you are allowed to use. In the words of MIT atmospheric scientist Dr. Lindzen, "[c]ontrolling carbon is kind of a bureaucrat's dream. If you control carbon, you control life."

Warming advocates persistently argue that we cannot afford to pause for a reality check; we must not ignore the possibility that global warming theory might be true. Limiting fossil fuels and promoting green energy are presented as a benign, a "why not be on the safe side," commonsense approach.

There is a lot of emotion and little common sense in this argument. If a diagnosis is based on a shaky and partly fraudulent theory, ignores much more convincing evidence, and has terrible negative side effects, you don't perform major surgery. We do not have to run around like Chicken Little on the off-chance that the sky may be falling.

There has been a high economic cost to limiting our oil and gas wealth, with much human anguish because of government-imposed economic contraction. Responsible government policy requires honest media coverage, unfettered scientific inquiry, and robust political debate. Our country cannot afford the costs of foolish energy policy based on politicized science and fear.

Read more:

Spending Wars (American Thinker)

Friday, November 25, 2011


By Randall Hoven

The ideas that federal spending exploded under George W. Bush, that "Bush's wars" account for our spending explosion, that Reaganism died with Reagan, and that we are on a spending binge that started decades ago are all nonsense.

Our current spending binge is a very recent phenomenon with a very specific starting point: the year Democrats started writing budgets (or continuing resolutions), compounded by Barack Obama's inauguration.

Look at the chart below. If you were to cover up the last four years on the right, 2008-11, would you say spending was getting out of hand? In 2007, total spending was 19.6% of GDP, a level nearly matching that of 1996, and comfortably below the average level of spending from 1960 through 2000: 20.3% of GDP.

Sources: OMB and CBO.

And that relatively low level of spending in 2007 included War-on-Terror spending. Without the WOT, a reaction to being attacked on our soil, federal spending in 2007 was just 18.4% of GDP -- a level not experienced at any time between 1967 and 1999, and nearly matching the post-1966 low of 18.1% in 2001.

There is something else special about 2007. That was the last fiscal year in which the federal budget was written by a Republican=controlled Congress. As you look at the chart above, recall that the U.S. House of Representatives was Republican-controlled corresponding to the budgets of 1996 through 2007 -- the years of the lowest federal spending since Lyndon Baines Johnson was president.

The trend in government spending prior to 1983 was upward. In fact, it was growing 2% of GDP every decade. (I wrote of this previously here.) That upward trend was reversed in 1983, the year Ronald Reagan's tax cuts went into full effect. Reagan's downward trend in spending did not stop with Reagan; it continued through 2001. The 17-year result was to cut federal spending from over 23% of GDP to almost 18%. (Imagine a 230-pound man losing 50 pounds.)

If by "Reaganism" you mean a struggle to keep federal spending below 20% of GDP, it was alive and kicking through 2007.

George Bush's "compassionate conservatism" did not kill Reaganism. See the chart below. Take away WOT spending, itself rather modest, and federal spending barely budged from 2000 to 2007. In 2000 it was 18.2% of GDP; in 2007 it was 18.4%. There was no spending explosion under Bush.

Sources: OMB and CBO.

The "bad" things started happening almost the minute voters turned over both the House and the Senate to Democrats. The FY 2008 budget was written by a Democrat Congress and signed by a weakened, lame-duck President Bush. In 2009, Barack Obama was inaugurated. Within weeks of his inauguration, he and his fellow Democrats increased the baseline FY 2009 budget and passed the $825-billion Stimulus. Look at what happened to spending just from 2007 to 2009.

And the spending never stops under Democrats. The step up in spending was both immediate and permanent. The CBO estimates that spending under President Obama's proposals will remain above 24% of GDP through 2019 and 2020. That is above even the post-World-War peak of 1983! There is nothing "temporary and targeted" about Obama's spending. Democrats are doing everything in their power to make Obama's "stimulus" level of spending the new normal.

Do not buy the lie that federal spending is some kind of inanimate object that must inevitably grow. Federal spending is not a result of the laws of physics, but of laws written by men who are voted into office by you and me. Spending was under control as recently as 2007. It all went south only when today's Democrats took control of budgeting.

(A note on data sources used in the graphs. Total spending numbers came from the White House Office of Management and Budget (OMB), specifically Table 1.3. The most recent OMB data has estimates for FY 2011; all previous years are actual. War-on-Terror (WOT) spending numbers came from the Congressional Budget Office (CBO). See Table A-1 from CBO's congressional testimony of October 26, 2011. Calculations to convert CBO's WOT current-year spending numbers to percentages of GDP were done by the author. Also, each 1% of GDP is about $150 billion in today's dollars, in round numbers.)

Randall Hoven can be followed on Twitter. His bio and previous writings can be found at

Page Printed from: at November 25, 2011 - 07:15:12 AM CST

Judge Andrew Napolitano (The US Constitution!)

Thursday, November 24, 2011

What if the whole purpose of the Constitution was to limit the government? What if Congress' enumerated powers in the Constitution no longer limited Congress, but were actually used as justification to extend Congress' authority over every realm of human life? What if the president, meant to be an equal to Congress, has become a democratically elected, term-limited monarch? What if the president assumed everything he did was legal, just because he's the president? What if he could interrupt your regularly scheduled radio and TV programming for a special message from him? What if he could declare war on his own? What if he could read your emails and texts without a search warrant? What if he could kill you without warning?

What if the rights and principles guaranteed in the Constitution have been so distorted in the past 200 years as to be unrecognizable by the Founders? What if the states were mere provinces of a totally nationalized and fully centralized government? What if the Constitution was amended stealthily, not by constitutional amendments duly passed by the states, but by the constant and persistent expansion of the federal government's role in our lives? What if the federal government decided whether its own powers were proper and constitutional?

What if you needed a license from the government to speak, to assemble or to protest the government? What if the right to keep and bear arms only applied to the government? What if posse comitatus -- the law that prohibits our military from our streets -- were no longer in effect? What if the government considered the military an adequate dispenser of domestic law enforcement? What if cops looked and acted like troops and you couldn't distinguish the military from the police? What if federal agents could write their own search warrants in defiance of the Constitution? What if the government could decide when you weren't entitled to a jury trial?

What if the government could take your property whenever it wanted it? What if the government could continue prosecuting you until it got the verdict it wanted? What if the government could force you to testify against yourself simply by labeling you a domestic terrorist? What if the government could torture you until you said what the government wanted to hear? What if people running for president actually supported torture? What if the government tortured your children to get to you? What if the government could send you to your death and your innocence meant nothing so long as the government's procedures were followed? What if America's prison population, the largest in the world, was the result of a cruel and unusual way for a country to be free? What if half the prison population never harmed anyone but themselves?

What if the people had no rights except those the government chose to let them have? What if the states had no rights except to do as the federal government commanded? What if our elected officials didn't really live among us, but all instead had their hearts and their homes in Washington, D.C.? What if the government could strip you of your rights because of where your mother was when you were born? What if the income tax was unconstitutional? What if the states were convinced to give up their representation in Congress? What if the government tried to ban you from using a substance older than the government itself? What if voting didn't mean anything anymore because both political parties stand for Big Government?

What if the government could write any law, regulate any behavior and tax any event, the Constitution be damned? What if the government was the reason we don't have a Constitution anymore? What if you could love your country but hate what the government has done to it? What if sometimes to love your country, you had to alter or abolish the government? What if Jefferson was right? What if that government is best which governs least? What if I'm right? What if the government is wrong? What if it is dangerous to be right when the government is wrong? What if it is better to perish fighting for freedom than to live as a slave? What if freedom's greatest hour of danger is now?

William Black Was The Man Who Prosecuted The Savings And Loan Fiasco!


This is amazing!

Generational Wealth Gap (American Thinker)

Tuesday, November 15, 2011


By Jeffrey Folks

A recent census report disclosed that the wealth gap between seniors and younger Americans is at an all-time high. Those over 65 have accumulated $170,494 in total assets, while those between 25-34 had a net worth of $3,662 -- a difference of 47-to-1. Media commentators floated a variety of reasons for this supposed inequity: globalization, bad timing, and government retirement programs that supposedly transfer wealth from young to old. The real reason, I believe, has more to do with the choices that the young have made.

One of the most important generational differences has to do with home ownership. Those over 65 typically purchased homes at a time when prices were low and saw the value of their homes increase. Even with recent declines, these homeowners are way ahead on their investment. On the other hand, those who bought in at the height of the market in the mid-2000s have seen the value of their homes decline by an average of 30%. It's not their fault, the liberal media tells us, that they're underwater and behind on their mortgages. They are the victims of the worst housing market in 50 years.

That is an argument that many would like to believe because it absolves delinquent homeowners of responsibility and helps make the case for government-mandated principle forgiveness. Unfortunately, that argument is also largely bogus.

For one thing, most of those now underwater did not buy precisely at the market top. They bought before or after the top, saw their home prices rise or decline, and now sit on an investment that may be somewhat above or below what they actually paid for the property. On average, the current value of homes purchased in 2002 or 2003 is about the same as the purchase price. Many homeowners now find themselves underwater not because they bought at the market peak, but because they purchased a more expensive home than they could afford, and because they borrowed against its value as home prices increased.

In other words, they made no allowance for risk. They bought beyond their means, often after submitting fraudulent loan applications, and then they borrowed more as the value of the property peaked. They were the victims not of bad timing but of their own bad judgment.

Compare this behavior with that of Americans over 65 -- those with a net worth of $170,494. This generation purchased "starter homes" in the 1950s and 1960s, normally with a down payment of 5% to 20% on a fixed 30-year loan. These homes were modestly priced in relation to their buyers' incomes. (The median home price in 1950 was $7,354 compared to $172,800 in 2008.) As their incomes grew, those now over 65 moved up to larger homes, but their ambition was always to pay off their loans before retirement. Except in a real emergency, they did not take out home equity lines of credit.

In too many cases, younger Americans attempted to game the system by purchasing expensive homes, borrowing against the value of those homes, and hoping that home prices would continue to rise. But it was not just housing where they were gaming the system. They were doing much the same thing in regard to the job market.

Typically, Americans over 65 sought the best education they could afford, obtained stable employment, and worked for decades with the same employer. Even those who completed only a high school degree were well-educated -- more so than high school graduates today. The evidence of college entrance scores is telling: SATs scores peaked in 1963 and have declined ever since -- so much so that testing agencies have felt compelled to adjust the difficulty of exams and recalibrate scores in response to declining aptitudes. For whatever reasons, young people today are poorly educated in comparison with those over 65.

As to why graduates are poorly prepared, it is not that they are less intelligent: they have simply not worked as hard as previous generations. Large numbers of college students have chosen "soft majors" over more demanding fields in science, math, and engineering. And among all students, there has been a declining commitment to study. Among current college students, time devoted to homework has declined by half as compared to the baby-boomer generation. The loss of 13 hours per week, over a four-year period, means that today's college graduate has studied some 2,000 hours less than a 1965 graduate. No wonder he seems poorly prepared; he is.

This failure to obtain an education translates into lower earnings. CEOs and human resources managers often complain that younger workers are not well-prepared. A Business Roundtable report stressed the "overall inadequate level of education" among graduates entering the workforce. In a workplace that increasingly requires more than a high school education (63% of new jobs will require at least some college and 45% a college degree), less than 30% are college graduates.

In the same vein, a report issued by the Conference Board noted that younger workers lack "basic knowledge and skills." But it is not just preparation. Managers complain that the "generational characteristics" of millennials include the need for instant gratification, unwillingness to work long hours, and a lack of respect for rules and authority. As a group, younger workers are just not as disciplined or hardworking as their elders.

The whole argument that the young are the unfortunate victims of bad timing, unfair trade practices, or generational wealth transfers does not hold up. Every generation has faced challenges (the Great Depression, World War II, the Vietnam War, the severe recession and inflation of the 1970s and early 1980s), but earlier generations prepared for hard times by studying and working hard, obtaining stable employment, avoiding debt, and saving for retirement.

What separates the young today from earlier generations is their choices, not their luck. Among past generations, taking on debt was accompanied by a sense of moral hazard. The possibility of bankruptcy was frightening not only for economic reasons, but for moral ones as well. Bankruptcy was considered a lifelong stain on one's reputation. Today it is seen as a temporary hit to one's credit rating.

It's no mystery as to why younger Americans have an average net worth of only $3,662. So far, as a group, they have made all the wrong choices. Bad choices have consequences, and for the Millennials, the consequences will be reduced lifetime earnings, a lower standard of living, and a less comfortable retirement. This is not the fault of their elders, and it is not a situation that can or should be addressed with a government bailout. As a generation, those under 35 will never recoup what they have lost as a result of their poor choices. The best they can do is to redouble their efforts, focus on saving and paying off their homes, and trust that they will be rewarded with at least an acceptable if not a prosperous retirement.

Jeffrey Folks is the author of many books on American culture, most recently Heartland of the Imagination (2011).

Page Printed from: at November 15, 2011 - 07:12:45 AM CST