My apologies to Levitt and Dubner - two famed authors of Freakonomics that sold over four million copies worldwide. While their analysis of the hidden sides of everything was well researched, this sadly was not. But it does not mean that I had no ardent reasons to muse about everything too.
Near the medical center in Houston is a section known as the University Area. Rice University - the Harvard of the Southwest (I am not sure if this is self awarded or by popular acclimation) - is nearby and so is the City of Bellaire. And just like its counterpart in California and maybe other places so named, this one here in Houston is also a very affluent neighborhood where they seem to really enforce the posted speed limits; often about 35 miles per hour, 20 during school time.
Both areas are what we'd call old neighborhood. Meaning, they both got built up probably in the 1950's with bungalows and standard lot sizes that were appropriate for 2 to 4 bedrooms, 2 baths, often just one-car garage, a shallow front yard and a decent one at the back. At that time, households likely had one bread winner but the family enjoyed a fairly comfortable lifestyle.
Beginning in the 80's (remember, I'm just guessing here), or perhaps by the following decade, both areas were slowly transforming. Professionals and the ever increasing population of doctors and oil traders began moving closer in as the commute to the outer satellite cities and towns became less attractive for folks who didn't want to waste too much time driving. There are no subways like in New York and London so mass transit was a guaranteed time waster, if not barely tolerable or worse, inefficient. But the bungalows in Bellaire and the University area were not exactly the homes these high earners wanted.
Well, realtors are not known to not notice the trend as soon as even an inkling of one starts to percolate. By that time, the bungalow owners were either retiring, if not already retired, so those properties were slowly but surely becoming prime areas for development. Suddenly, the homes whose values by then were far less, much less, than the land they were sitting on were target acquisitions. Not to be lived in but to be demolished first as new contemporary ones were being drawn in drafting tables in modern architects' lavish offices. The "average" population who used to live in those homes slowly begun to migrate out. They just can't resist what they were offered for their 50's homes. One by one they succumbed to either the temptation or the pressure of having to keep up with the new Jonesses who were moving in with their BMWs and Jaguars. The old owners went suburbia or into retirement homes while the previous suburbanites moved in.
As subtle as the transformation became, this was by definition as described by those who complain, a case of income inequality displacement of population. This is happening in Seattle, in Vancouver and every place where the haves simply come in to buy up properties, increase the taxes and cost of living that only the new arrivals can afford.
This is not being discussed as an activist issue but clearly it is all about income inequality, isn't it? I don't particularly subscribe to the idea that this is a bad thing because in a free market system this is the only way the system can work. In downtown Tokyo today, shops - small, really tiny cubbyholes - that do business selling cigarettes or hot soup and fast food, the areas they occupy are priced close to 15,000 yen per square inch. For those who like it in US Dollars, it is almost $145/sq inch. That, like everywhere else the free market economy is practiced, is how values are assessed.
Somewhere else in the U.S. is a place beloved by boat owners and weekend seafarers. The population of boats of all sizes had gotten so high that places to park them had become premium luxuries. If one were a new boat owner waiting for these spots to open up could take years. Boats, regardless of condition, were tied to those spots and ownership or the rights to those spots were "grandfathered" into the whole "system". However, there is a loophole for new owners to get to those spots. Buy the boat that's tied, pun intended, to the spot and one owns the spot. So what happened? Some speculators started buying up those rust buckets and water logged boats no longer even sea worthy at values the owners were only willing to accept. Soon, of course, other grandfathered boat owners wised up. That further escalated the prices of those tired boats that perhaps even the U.S. Coast Guard would not have allowed to leave the harbor.
That's the same story as those bungalows in Houston's University area. Termite infested homes that were likely to have been abandoned were worth a quarter of a million dollars. That, of course, only meant that that was the price of the land plus the cost to exterminate the termites. Both the Houston real estate and the boat docks somewhere else in one U.S. coast simply went by this cliche'd principle: Location, location, location.
This brings us to the $15 dollar per hour minimum wage demanded by activists for the fast food workers. Short of that amount is less than a "living wage". From the everyday locations in all of America where these fast food restaurants abound we go to North Dakota at the height of its economic boom due to the windfall brought by natural gas through fracking technology. The sudden fortune brought the unemployment numbers to the low negatives - if there is such a thing. Suffice it to say, the companies can't fill all the jobs at the oil field. What happened? People still need to eat but the fast food restaurants were abandoned by minimum wage earners for the natural gas jobs. It wasn't long when restaurant operators not only were willing to pay $35 an hour they were offering signing bonuses to kitchen workers who used to settle for $6.50 an hour in the pre-fracking era.
That's the free market system. Fast forward to today when the heated competition for workers cooled down after thousands of people descended upon the prairies of North Dakota from all across the country to get to those jobs and everything settled down calmly. Restaurant owners no longer pay $35 an hour but still substantially more than those in downtown Chicago or Akron, Ohio. Again, it was location and timing of events that dictated what the market can bear. That is the free market system.
Nurses and pharmacists are pulling down six figure annual salaries in Alaska and if they settle there for over a year they get oil bonus from the State. That annual windfall depends upon the price of oil. Again, the free market system operates flawlessly. Sometimes one only has to take advantage of that with a willingness to live where "warm weather" is a foreign phrase but "the land of the midnight sun" means exactly that. Or, put another way, there will be no sunsets for six months. Only a sun that seems to skip and peek over the horizon for half the year. If you're okay with that and you decided to make a living operating a fork lift, or such other menial job, you can own a boat and fish and hunt whenever you like, or can, but not have to pay for outrageous dock fees like those folks described above. Location, location, location.
Back to the 50's. My aunt who was a nurse came to the U.S. on a work program to work at a hospital in New Jersey. She and nurses like her lived in the hospital dormitory so their expenses were low and they saved as much as they could, knowing full well that in six years they will be heading home. She saved a lot, used some of the money to buy some properties back home while paying for college for two of my cousins. She came back after her contract expired and by that time I needed to go to college myself. She paid for my 5-year engineering education at a very good university. She told me a story about life in America. At the hospital worked a middle age African American as a janitor who was the sole earner for his wife and one child. One day he offered to take several nurses, my aunt included, to the nearby shopping area. When he came down to pick them up in front of the dorm, they didn't recognize him. He was in civilian clothes sans the hospital janitorial garment and was standing by a huge Cadillac of a car. As they were driving along my aunt felt then what it must have been like for those rich landowners, sugar barons, back home in the Philippines riding these big cars - an opportunity less than 2% of her countrymen then would have had the pleasure to experience. There she was in a Cadillac that one of their janitors drove to and from work. That was income inequality across twelve thousand miles of ocean. Again, location, location, location.
A generation later, fast forward to 1979, my family and I, with two sons 5 and 6, came to this country with newly minted green cards through the port of entry of Chicago. All our possessions were in three suit cases and one box and very little money. By the time I accepted a job that meant moving to Houston from staying temporarily in New York, the company did not even have to spend for our move, except for airline tickets, because all we had were in suitcases. We had to live in a furnished apartment because, well, we had no furniture, not even toys or personal effects like kid's bicycles or a barbecue grill that long haul drivers are familiar with when families moved. The apartment had to be by a bus stop because we had no car. We had no car because we cannot buy one since no car dealer will sell us on term because we had no credit history. I had a hard time understanding that at first because how can we have a credit history if we couldn't start buying things on credit. Fortunately, after three months (the minimum required) the company credit union vouched for my credit worthiness and we got a car.
We saved and saved so we can afford a down payment for a new home and did do that after a year working. The timing couldn't have been more perfect. One day, still in the apartment with two months to go, we came home to discover white specks of wall paint and debris of sheet rock by our bedroom wall. On the carpet next some of the specks was a slug that came to be from a 32 caliber hand gun. We called the apartment security to investigate and who later came by to tell me that next door a wife took a shot at her husband but missed. Not to worry because they were being evicted soon. That was the neighborhood, just so you know why I had to tell that story.
It was a starter home but we ended up living there for 24 years. We saved and avoided the temptation to move up a scale or so. When it was time we moved to our present home at a time when home values were down, even for a nice neighborhood like the one we liked. After just a dozen years the same home has appreciated in value beyond our expectation. Again, professionals of doctors, dentists and lawyers and business people moved to this small city 17 miles from Houston. Ten years ago Money Magazine published this city as one of the, if not the top, livable city in the country and a name no other can claim more sweetness than Sugar Land, TX. Not far from the airport, the medical center or national sports stadiums, and has great public schools, and it was developing rather well as new medical offices, stores and hospitals opened up. The local government is being run well and crime is very low. Again, location, location, location.
Looking at the bigger picture as in way above from where the International Space Station is, America is again all about location, location, location. Beginning with the first settlers, long before Columbus, this land was a place to go as climate began to change in their original habitats, Yes, indeed it was true. NOVA, the TV show from the network not generally known as conservative - PBS Television - just last week aired a program on the "Great Human Odyssey". In that show it explained that early human populations went on to settle all the different parts of the world as a way to cope and adapt to changing climate conditions over thousands upon thousands of years. It is geologically well known by evidence in fossils and geology that earth had gone through several ice ages and alternating warming. It was those changes that compelled early humans to move into places unfamiliar to them but provided the conditions for them to survive and flourish. The same drive propelled early Europeans to re-settle here although mixed with those motivations were other factors like religion, political persecution and economic incentives and the promise to own their own land when much of it in Europe were owned by royalty and the powerful elite. The journey was far from easy then for every new comer and it is still not easy today.
As early as then people went where they thought to have a better life and opportunity to do well.
When they got to the place there was no notion of income equality as a way to better their lives. I never thought that coming here. All I knew was that there was opportunity for those who wanted it. What I earned was going to depend solely on what I put in to the best that I knew how and do it consistently and continually. When the first car salesman I encountered rejected my appeal for credit because I had just started to work for an oil company, thinking it was the ticket to mention in a state with an oil based economy, I felt bitter at first because his words stung. He said, "Yeah, you could be working there but, I don't know, you could be working there as janitor so until you can afford the down payment there is no car to be bought here".
I still remember that but instead of moping I felt it an obligation to prove to him that someday I will indeed buy a car despite his words of "encouragement". For years, thoughts infrequently entered my mind wishing we had kept in touch, wishfully perhaps, just so he'd know how I did relative to where he was at that point in our lives but I'm sure he would have complained about how unequal the opportunities were accorded me instead of him.
Income inequality to me is one of those "neither here nor there" nonsensical buzz words unencumbered by serious thinking. But this we can conclude. There is always and there will forever be inequality in how people pursued their dreams. Individuals will always put in unequal efforts, most will always see unequal results even when opportunities were the same. To get the very notion of "equality of income for all" deeply ingrained in our psyche defeats the very principle of the free economic system.
Socialism is the illusion created by those in power so all their subjects will feel as if indeed they are all getting equal shares provided by the state. When Mao prescribed that everyone wear the same jacket style that came to be known as the Mao jacket, little did the general populace know that while they were wearing the same style, theirs was from coarse cotton while Mao and his entourage had theirs made from the finest silk or linen.
Every would-be socialist must ask this question. Is income equality good for me as an individual? Is it so bad that I strive to have more income than the next person if I am capable of working harder to earn it? Will socialism be as inspiring to entrepreneurs and innovators in a country like the U.S. that was built solely on the belief that "if we try harder we can be better than anyone else".
We should ask these or we get ourselves into an even freakier world only Halloween-ers can imagine.
Somewhere else in the U.S. is a place beloved by boat owners and weekend seafarers. The population of boats of all sizes had gotten so high that places to park them had become premium luxuries. If one were a new boat owner waiting for these spots to open up could take years. Boats, regardless of condition, were tied to those spots and ownership or the rights to those spots were "grandfathered" into the whole "system". However, there is a loophole for new owners to get to those spots. Buy the boat that's tied, pun intended, to the spot and one owns the spot. So what happened? Some speculators started buying up those rust buckets and water logged boats no longer even sea worthy at values the owners were only willing to accept. Soon, of course, other grandfathered boat owners wised up. That further escalated the prices of those tired boats that perhaps even the U.S. Coast Guard would not have allowed to leave the harbor.
That's the same story as those bungalows in Houston's University area. Termite infested homes that were likely to have been abandoned were worth a quarter of a million dollars. That, of course, only meant that that was the price of the land plus the cost to exterminate the termites. Both the Houston real estate and the boat docks somewhere else in one U.S. coast simply went by this cliche'd principle: Location, location, location.
This brings us to the $15 dollar per hour minimum wage demanded by activists for the fast food workers. Short of that amount is less than a "living wage". From the everyday locations in all of America where these fast food restaurants abound we go to North Dakota at the height of its economic boom due to the windfall brought by natural gas through fracking technology. The sudden fortune brought the unemployment numbers to the low negatives - if there is such a thing. Suffice it to say, the companies can't fill all the jobs at the oil field. What happened? People still need to eat but the fast food restaurants were abandoned by minimum wage earners for the natural gas jobs. It wasn't long when restaurant operators not only were willing to pay $35 an hour they were offering signing bonuses to kitchen workers who used to settle for $6.50 an hour in the pre-fracking era.
That's the free market system. Fast forward to today when the heated competition for workers cooled down after thousands of people descended upon the prairies of North Dakota from all across the country to get to those jobs and everything settled down calmly. Restaurant owners no longer pay $35 an hour but still substantially more than those in downtown Chicago or Akron, Ohio. Again, it was location and timing of events that dictated what the market can bear. That is the free market system.
Nurses and pharmacists are pulling down six figure annual salaries in Alaska and if they settle there for over a year they get oil bonus from the State. That annual windfall depends upon the price of oil. Again, the free market system operates flawlessly. Sometimes one only has to take advantage of that with a willingness to live where "warm weather" is a foreign phrase but "the land of the midnight sun" means exactly that. Or, put another way, there will be no sunsets for six months. Only a sun that seems to skip and peek over the horizon for half the year. If you're okay with that and you decided to make a living operating a fork lift, or such other menial job, you can own a boat and fish and hunt whenever you like, or can, but not have to pay for outrageous dock fees like those folks described above. Location, location, location.
Back to the 50's. My aunt who was a nurse came to the U.S. on a work program to work at a hospital in New Jersey. She and nurses like her lived in the hospital dormitory so their expenses were low and they saved as much as they could, knowing full well that in six years they will be heading home. She saved a lot, used some of the money to buy some properties back home while paying for college for two of my cousins. She came back after her contract expired and by that time I needed to go to college myself. She paid for my 5-year engineering education at a very good university. She told me a story about life in America. At the hospital worked a middle age African American as a janitor who was the sole earner for his wife and one child. One day he offered to take several nurses, my aunt included, to the nearby shopping area. When he came down to pick them up in front of the dorm, they didn't recognize him. He was in civilian clothes sans the hospital janitorial garment and was standing by a huge Cadillac of a car. As they were driving along my aunt felt then what it must have been like for those rich landowners, sugar barons, back home in the Philippines riding these big cars - an opportunity less than 2% of her countrymen then would have had the pleasure to experience. There she was in a Cadillac that one of their janitors drove to and from work. That was income inequality across twelve thousand miles of ocean. Again, location, location, location.
A generation later, fast forward to 1979, my family and I, with two sons 5 and 6, came to this country with newly minted green cards through the port of entry of Chicago. All our possessions were in three suit cases and one box and very little money. By the time I accepted a job that meant moving to Houston from staying temporarily in New York, the company did not even have to spend for our move, except for airline tickets, because all we had were in suitcases. We had to live in a furnished apartment because, well, we had no furniture, not even toys or personal effects like kid's bicycles or a barbecue grill that long haul drivers are familiar with when families moved. The apartment had to be by a bus stop because we had no car. We had no car because we cannot buy one since no car dealer will sell us on term because we had no credit history. I had a hard time understanding that at first because how can we have a credit history if we couldn't start buying things on credit. Fortunately, after three months (the minimum required) the company credit union vouched for my credit worthiness and we got a car.
We saved and saved so we can afford a down payment for a new home and did do that after a year working. The timing couldn't have been more perfect. One day, still in the apartment with two months to go, we came home to discover white specks of wall paint and debris of sheet rock by our bedroom wall. On the carpet next some of the specks was a slug that came to be from a 32 caliber hand gun. We called the apartment security to investigate and who later came by to tell me that next door a wife took a shot at her husband but missed. Not to worry because they were being evicted soon. That was the neighborhood, just so you know why I had to tell that story.
It was a starter home but we ended up living there for 24 years. We saved and avoided the temptation to move up a scale or so. When it was time we moved to our present home at a time when home values were down, even for a nice neighborhood like the one we liked. After just a dozen years the same home has appreciated in value beyond our expectation. Again, professionals of doctors, dentists and lawyers and business people moved to this small city 17 miles from Houston. Ten years ago Money Magazine published this city as one of the, if not the top, livable city in the country and a name no other can claim more sweetness than Sugar Land, TX. Not far from the airport, the medical center or national sports stadiums, and has great public schools, and it was developing rather well as new medical offices, stores and hospitals opened up. The local government is being run well and crime is very low. Again, location, location, location.
Looking at the bigger picture as in way above from where the International Space Station is, America is again all about location, location, location. Beginning with the first settlers, long before Columbus, this land was a place to go as climate began to change in their original habitats, Yes, indeed it was true. NOVA, the TV show from the network not generally known as conservative - PBS Television - just last week aired a program on the "Great Human Odyssey". In that show it explained that early human populations went on to settle all the different parts of the world as a way to cope and adapt to changing climate conditions over thousands upon thousands of years. It is geologically well known by evidence in fossils and geology that earth had gone through several ice ages and alternating warming. It was those changes that compelled early humans to move into places unfamiliar to them but provided the conditions for them to survive and flourish. The same drive propelled early Europeans to re-settle here although mixed with those motivations were other factors like religion, political persecution and economic incentives and the promise to own their own land when much of it in Europe were owned by royalty and the powerful elite. The journey was far from easy then for every new comer and it is still not easy today.
As early as then people went where they thought to have a better life and opportunity to do well.
When they got to the place there was no notion of income equality as a way to better their lives. I never thought that coming here. All I knew was that there was opportunity for those who wanted it. What I earned was going to depend solely on what I put in to the best that I knew how and do it consistently and continually. When the first car salesman I encountered rejected my appeal for credit because I had just started to work for an oil company, thinking it was the ticket to mention in a state with an oil based economy, I felt bitter at first because his words stung. He said, "Yeah, you could be working there but, I don't know, you could be working there as janitor so until you can afford the down payment there is no car to be bought here".
I still remember that but instead of moping I felt it an obligation to prove to him that someday I will indeed buy a car despite his words of "encouragement". For years, thoughts infrequently entered my mind wishing we had kept in touch, wishfully perhaps, just so he'd know how I did relative to where he was at that point in our lives but I'm sure he would have complained about how unequal the opportunities were accorded me instead of him.
Income inequality to me is one of those "neither here nor there" nonsensical buzz words unencumbered by serious thinking. But this we can conclude. There is always and there will forever be inequality in how people pursued their dreams. Individuals will always put in unequal efforts, most will always see unequal results even when opportunities were the same. To get the very notion of "equality of income for all" deeply ingrained in our psyche defeats the very principle of the free economic system.
Socialism is the illusion created by those in power so all their subjects will feel as if indeed they are all getting equal shares provided by the state. When Mao prescribed that everyone wear the same jacket style that came to be known as the Mao jacket, little did the general populace know that while they were wearing the same style, theirs was from coarse cotton while Mao and his entourage had theirs made from the finest silk or linen.
Every would-be socialist must ask this question. Is income equality good for me as an individual? Is it so bad that I strive to have more income than the next person if I am capable of working harder to earn it? Will socialism be as inspiring to entrepreneurs and innovators in a country like the U.S. that was built solely on the belief that "if we try harder we can be better than anyone else".
We should ask these or we get ourselves into an even freakier world only Halloween-ers can imagine.
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