Tuesday, March 28, 2017

PC'ism Has Not Killed My Spirits. "Schmuck" Schumer May Have Lost it Monday Evening.

At 83 and soon to be 84, I have learned a great deal and feel I have earned my right to say what is on my mind.  It is something PC'ism squelched and we are worse off because of that but there are still some around who do not follow the dictates of the correct crowd.

Click here: Who Killed the Liberal Arts? - YouTube
This from one of my dearest friends and most faithful memo readers:

Your blog mentioned the annoying liberal at the concert, Monday.

Translated  loosely from Latin: "ILLIGITIMATUS   NON CARBORUNDUM!!!! " 

Don't let the bastards grind you down! (See 1 below.)


Seems that "Schmuck" Schumer is the one who may have lost it. (See 1a below.)


This from another very dear friend and fellow memo reader who also reads Mauldin. (See 2 below.)

Maxine Waters to Elle Magazine: I’m ‘OUT TO GET’ Trump! Time For HER


It may be that she’s senile, after all she is 78 but she makes a lot of noise and the Democrats listen to every word.
The Elle magazine headline, published Monday, reads “Maxine Waters Explains it All…Including That Impeachment Tweet.”
Calling the California Democratic Congresswoman the “real deal,” the obviously liberal writers began the piece by letting their lefty audience know that Waters wants them to “stay woke” and that she’s “angling for impeachment.”

The fact is, crazy Maxine has been “angling for impeachment” since before Trump ever assumed office. At what point does her credibility get called into question by liberals?
The answer, of course, is never.


CHUCK SCHUMER LOSES IT! – GOES OFF on Trump Supporter at NYC Restaurant

Too Much Pressure—
Democratic leader Senator Chuck Schumer LOST IT TONIGHT and WENT OFF on a Trump supporter at a New York City restaurant.
Schumer started yelling at a former Jimmy Carter official for voting for Trump!
Joseph A. Califano Jr. voted for Donald Trump and not Crooked Hillary for President.
This triggered Schumer to go off in a restaurant.
FOX NEWS reported:
Sen. Chuck Schumer, D-N.Y., caused a scene at a Manhattan restaurant when he began yelling at a wealthy and well-connected Donald Trump supporter that the POTUS is “a liar.”
Schumer, the top Senate Democrat, lost his cool on Sunday night at Upper East Side restaurant Sette Mezzo, according to witnesses.
He was dining with friends when he encountered Joseph A. Califano Jr. — the former U.S. secretary of health, education and welfare under President Jimmy Carter and domestic policy adviser to President Lyndon B. Johnson — and his wife, Hilary, who were having a quiet dinner.
Onlookers said Schumer was incensed that Hilary — the daughter of William S. Paley, the founder and chairman of CBS — had voted for Trump, even though her husband, Joseph, is a well-known Democrat.
One witness said of the restaurant rant, “They are a highly respected couple, and Schumer made a scene, yelling, ‘She voted for Trump!’ The Califanos left the restaurant, but Schumer followed them outside.” On the sidewalk, Schumer carried on with his fantastical filibuster: “ ‘How could you vote for Trump? He’s a liar!’ He kept repeating, ‘He’s a liar!’ ”

Men Without Work

By John Mauldin 

I have been promising a review of Nicholas Eberstadt’s very important book, 
Men Without Work: America’s Invisible Crisis. The book is relatively short at 216
pages, but it is packed with meaty facts and insights. One of the reasons I seldom
read an actual physical book anymore is because I can highlight text and make
notes in my Kindle app on my iPad and then find those notes and highlighted
sections on my Amazon page for later review. I actually highlighted 36 pages with
22,000 words from this book to go back and review. And while I will be using a lot
of quotes in this letter, I hope this simply spurs you to order the book and read it for
yourself. The “invisible crisis” that the author is writing about is at the very center of
our economic and political turmoil.
At its heart, the book is about the fact that there are some 10 million American men
of prime working age (25 to 54) who have simply dropped out of the workforce, and
the great majority of them have not only dropped out of the workforce, they have
also dropped out from any commitments or responsibilities to society. It is not just
the labor force they are not participating in; they are not participating in the normal
ebb and flow of community life.
This is not a recent phenomenon. I used the following graph last week, but it is
important to illustrate the point. Male participation in the civilian labor force has
been steadily dropping for 60 years, through boom and bust years, periods of
inflation and deflation, Republican and Democratic administrations and
congressional control; the trend seems to be relentless – except that it has been
accelerating since 2009.
The trend was in place long before automation began to really impact the
manufacturing workforce or jobs began to shift to China and other countries with
lower labor costs.
Further, this is not just about men not participating in the labor force. “Deaths of
despair” among middle-aged white men are increasing at an alarming rate. What I
find odd and even more disturbing is that this seems to be a uniquely American
trend. This week’s issue of The Economist highlighted this problem with a great
chart that compares the US and other developed countries. Quoting:
AMERICAN workers without college degrees have suffered financially for
decades – as has been known for decades. More recent is the discovery
that their woes might be deadly. In 2015 Anne Case and Angus Deaton, two
(married) scholars, reported that in the 20 years to 1998, the mortality rate of
middle-aged white Americans fell by about 2% a year. But between 1999 and
2013, deaths rose. The reversal was all the more striking because, in
Europe, overall middle-age mortality continued to fall at the same 2% pace.
By 2013 middle-aged white Americans were dying at twice the rate of
similarly aged Swedes of all races (see chart). Suicide, drug overdoses and
alcohol abuse were to blame.
You might think that rising mortality is the flipside of falling incomes. Recent
trends in median per-person income for households headed by white 50- to
54-year-olds mirror their mortality rate. Income rises in the 1990s and then
falls in the 2000s, ending up roughly where it started. But split people out by
education, and the reflection fades. The income of college graduates has
followed a similar pattern (most of the surge in the value of a college
education happened before 1990). But their mortality has steadily fallen. And
deaths of despair are much rarer among blacks and Hispanics, whose
incomes have been on similar paths.
Ms Case and Mr Deaton have now updated their work on these so-called
“deaths of despair”. The results, presented this week at the Brookings
Institution, a think-tank, are no happier. White middle-age mortality continued
to rise in 2014 and 2015, contributing to a fall in life expectancy among the
population as a whole. The trend transcends geography. It is found in almost
every state, and in both cities and rural areas. The problem seems to be
getting worse over time. Deaths from drugs, suicide and alcohol have risen in
every five-year cohort of whites born since the 1940s. And in each group,
ageing seems to have worse effects.
The authors suspect more amorphous, long-term forces are at work.
The fundamental cause is still a familiar tale of economic malaise:
trade and technological progress have snuffed out opportunities for
the low-skilled, especially in manufacturing. But social changes are
also in play. As economic life has become less secure, low-skilled
white men have tended towards unstable cohabiting relationships
rather than marriages. They have abandoned traditional communal
religion in favour of churches that emphasise personal identity. And
they have become more likely to stop working, or looking for work,
entirely. The breakdown of family, community and clear structures of
life, in favour of individual choice, has liberated many but left others
who fail blaming themselves and feeling helpless and desperate. 
(Emphasis mine.)
Larry Summers did a review of Eberstadt’s book for the Financial Times. In a blog
post about his review, he offers this rather sobering prediction:
Job destruction caused by technology is not a futuristic concern. It is
something we have been living with for two generations. A simple linear
trend suggests that by mid century about ¼ of men in the US aged between
25 and 54 will not be working at any moment.
I think this is likely to be a substantial underestimate unless something is
done for a number of reasons. First, everything we hear and see regarding
technology suggests the rate of destruction will pick up. Think of the
elimination of drivers, and those who work behind cash registers. Second,
the gains in average education and health of the workforce over the last 50
years are unlikely to be repeated. Third, to the extent that non-work is
contagious, it is likely to grow exponentially rather than at a linear rate.
Fourth, declining marriage rates are likely to raise rates of labor force
withdrawal given that non-work is much more common for unmarried than
married men.
On the basis of these factors I would expect that more than one third of all
men in the US between 25 and 54 will be out of work at mid-century. Very
likely more than half of men will experience at least a year of non-work out
of every five. This would be in the range of the rate of non-work from high
school dropouts and exceed the rate of non-work for African-Americans
My only real quibble with this analysis is his suggestion that the gains in the health
of the workforce over the last 50 years will not be repeated. The technology that
I’ve been looking at lately (and much of it is not public) convinces me that younger
generations are going to live a great deal longer than they now dream possible. By
2040 and certainly by 2050, expectations of a lifespan and a productive healthspan
of over 100 years will be common. I am talking about a radical shift in the entire
human aging process. Of course, this trend doesn’t address the emotional and
sociological aspects that Summers, The Economist,and Nicholas Eberstadt are
referring to.
Where Will the Growth Come From?
I’ve made this point over the years but it is worth repeating again. There are only
two ways for an economy to grow. That’s it. If you don’t have these two elements
you’re not going to have economic growth.
One way is that the workforce increases, and the other is that you increase
productivity. If Summers is right that 1/3 of working age males are essentially going
to drop out of the workforce, then, when we couple that with Baby Boomers retiring
in the coming decades (or at least slowing down somewhat – well, except for me
and possibly you), we are simply not going to get the increase in GDP that normally
comes from growth in the workforce.
Further, it is really hard to increase productivity in much of the service sector. How
much more productive can a bartender or a cashier be? Or a taxi driver? Yes, we
can eliminate their jobs with technology, but that just reduces the workforce side of
the equation.
I know that many politicians indulge in the wishful thinking that we can somehow
recover the economic nirvana that we enjoyed from the ’50s through the ’90s
because both productivity and the workforce were growing. Even though the
participation rate of males was falling, the participation of women in the workforce
was rising far faster, so the overall workforce was increasing.
This whole workforce issue, as I deal with the truly difficult challenge of researching
and writing a chapter on the future of work for my upcoming book, is forcing me to
rethink a great deal about how the economy is likely to behave and how successful
investing will be conducted in the future. I cannot remind you strongly enough that
past performance is not indicative of future results.
I don’t see us turning the workforce situation around unless we somehow manage
to transform our negative imagery about immigrants and start to aggressively seek
out productive young, educated immigrants from around the world. I am not going
to hold my breath on that one.
Diving into Men Without Work
And now I’m going to do something that I don’t think I’ve ever done before. I am
going to fill the next few pages with quotes directly from Men Without Work. The
book is a masterful monograph that sorts through an amazing amount of data and
makes it readable. (My only frustration with the Kindle app is that it doesn’t copy
charts into my Amazon page.) I hope the next few pages tease your intellect and
make you want to hit a link and buy the book. (All emphasis is mine.)
The collapse of work for America’s men is arguably a crisis for our nation –
but it is a largely invisible crisis. It is almost never discussed in the public
square. Somehow, we as a nation have managed to ignore this problem for
decades, even as it has steadily worsened. There is perhaps no other
instance in the modern American experience of a social change of such
consequence receiving so little consideration by concerned citizens,
intellectuals, business leaders, and policymakers….
But the progressive detachment of so many adult American men from the
reality and routines of regular paid labor poses a threat to our nation’s future
prosperity. It can only result in lower living standards, greater economic
disparities, and slower economic growth than we might otherwise expect.
And the troubles posed by this male flight from work are by no means solely
economic. It is also a social crisis – and, I shall argue, a moral crisis. The
growing incapability of grown men to function as breadwinners cannot help
but undermine the American family. It casts those who nature designed to be
strong into the role of dependents – on their wives or girlfriends, on their
aging parents, or on government welfare. Among those who should be most
capable of shouldering the burdens of civic responsibilities, it instead
encourages sloth, idleness, and vices perhaps more insidious. Whether we
choose to recognize it or not, this feature of the American condition – the
new “men without work” normal – is inimical to the American tradition of self-
Note that elsewhere in the book Eberstadt adopts a somewhat softer stance in
talking about the circumstances that are bringing about the reduction in labor
participation, especially with regard to the some 20 million former felons who have
been relegated to second-class workforce status.
Here, then, is the underlying contradiction of economic life in America’s
second Gilded Age: A period of what might at best be described as
indifferent economic growth has somehow produced markedly more wealth
for its wealth-holders and markedly less work for its workers. This paradox
may help explain a number of otherwise perplexing features of our time,
such as the steep drop in popular satisfaction with the direction of the
country, the increasing attraction of extremist voices in electoral politics, and
why overwhelming majorities continue to tell public opinion pollsters, year
after year, that our ever-richer America is still stuck in a recession….
Expert opinions on U.S. labor market performance have been increasingly
sanguine over the past year or so. A few select media headlines and
quotations illustrate the emerging consensus:
• “The Jobless Numbers Aren’t Just Good, They’re Great” (August 2015,
• “The Jobs Report Is Even Better Than It Looks” (November 2015, Five
ThirtyEight) (He then goes on to list numerous other recent articles.
In addition, U.S. economists and policymakers who have served under
Republican and Democratic presidents maintain that today’s U.S. economy is
either near or at “full employment”:
• “It is encouraging to see that the U.S. economy is approaching full
employment with low inflation.” (Ben Bernanke, former chairman of the
Federal Reserve Board, October 2015)
• “The American economy is in good shape . . . we are essentially at full
employment . . . tight labor markets are leading to increases in hourly
earnings and in the producer prices of services.” (Martin Feldstein,
former chair of the President’s Council of Economic Advisers and
longtime director of the National Bureau of Economic Research, February
• “We are coming close to [the Federal Reserve’s] assigned congressional
goal of full employment. [Many measures of unemployment] really
suggest a labor market that is vastly improved.” (Janet Yellen, chairman
of the Federal Reserve, April 2016)
All of these assessments draw upon data on labor market dynamics: job
openings, new hires, “quit ratios,” unemployment filings and the like. And all
those data are informative – as far as they go. But they miss also something,
a big something: the deterioration of work rates for American men. Between
1948 and 2015, the work rate for U.S. men twenty and older fell from 85.8
percent to 68.2 percent. Thus the proportion of American men twenty and
older without paid work more than doubled, from 14 percent to almost 32
percent. Granted, the work rate for adult men in 2015 was over a percentage
point higher than 2010 (its all-time low). But purportedly “near full
employment” conditions notwithstanding, the work rate for the twenty-plus
male was more than a fifth lower in 2015 than in 1948.
Essentially, what all these economists are looking at is the headline unemployment
rate, the U-3 rate. The U-6 rate takes into account men who would like to work but
haven’t been looking for work (discouraged workers). Philippa Dunne tells us that
“Between 2007 and 2016, only 8 states reported declines in their U-6 rates. We’re
not exactly surprised by the number of states where U-6 rates remain elevated even
as the overall labor force tightens, but it does underscore how little attention we
give to such disengagement as a nation.”
Before World War II, the exclusive economic activity for the overwhelming
majority of U.S. women was unpaid labor at home. Today the overwhelming
majority of women – including women with young children – engage in at
least some remunerated employment outside the family. Needless to say,

this shift has opened up new prospects for prosperity, as well as new
horizons of economic independence and autonomy. The tremendous
expansion of economic opportunities for U.S. women created a massive new
supply of workers in the postwar economy. The share of women with paid
work skyrocketed in every age group and doubled for women between
twenty-five and sixty-four.
For women twenty-five-to-fifty-four, the work rate was 34 percent in 1948; in
2015, it topped 70 percent. In arithmetic terms, this enormous influx of new

workers completely offset the decline in work rates for prime-age men – and
then some). Thanks to the progressive entry of ever-greater proportions of
women into the workforce, overall work rates for every grouping of Americans
between the ages of twenty and sixty-four also increased substantially
between the late 1940s and the late 1990s. Around the late 1990s, however,
the escalation of work rates for U.S. women stalled and, over the past
decade and a half, fell from their all-time highs. Only then did the overall
work rate for U.S. adults begin to register a decline….
Accordingly, more than eight times as many prime-age men were
economically inactive and not pursuing education in 2014 than in 1965. One
final aspect of the U.S. postwar male flight from work merits mention here:
its relentless intergenerational momentum. It is not just that LFPRs (Labor
Force Participation Rate) have deteriorated for certain age groups or
specific periods. Rather, the process has progressively depressed every
successive rising cohort’s LFPRs over the course of the prime working
As Nobel Economics Laureate Robert William Fogel has observed, “Over
the course of the twentieth century, annual hours of work [in Western Europe
and America] have fallen by nearly half, so much so that the household head
in a rich country now usually works only about seventeen hundred hours per
year in the marketplace. Indeed, on the average day, he spends more hours
at leisure than at work.”…
With rising incomes and attendant gains in personal wealth, older American
men were no longer consigned to laboring until death. The convention of
“retirement” arose well before the New Deal or Social Security. By 1930,
Costa noted, over 40 percent of American men sixty-five and older were no
longer working or looking for work – nearly twice the fraction in 1880. With
prosperity rising, a small but growing fraction of men in their early sixties and
late fifties also began to retire early….
And so the puzzle: America has a more robust economy, a more flexible and
dynamic labor market, and a more limited welfare state than any of these six
countries. But it has failed to keep its younger men in the workforce at the 
level that these struggling nations (with the arguable exception of Italy) have
achieved. Why?
Consider the annual hours worked and per capita output over the past
generation in the G-7 countries (the world’s major affluent democratic
societies: the United States, Japan, Germany, France, Britain, Italy, and
Canada;). No G-7 economy today produces as much value added per citizen
as the United States and none have a workforce where employees spend as
much of the year on the job.
Employed Canadians and Britons now work at least one hundred hours per
year (over two full workweeks) less than working Yanks. The gap between
the United States and France, according to the OECD, is now nearly three
hundred hours (over eight full workweeks). More than four hundred annual
hours (over ten full workweeks) separate workers in America and Germany….
Marital status and family structure/living arrangements likewise prove
powerful predictors. Married men accounted for three-fifths of prime-age job
holders but only about one-third of NILFs (Not in Labor Force). in 2015. On
the other hand, men who have never married were underrepresented among
the employed and overrepresented among NILFs.
Finally, foreign-born men in 2015 were more likely to be job holders and
decidedly less likely to be NILFs than the prime-age male population as a
whole. In sum, an American man ages twenty-five-to-fifty-four was more
likely to be an un-worker in 2015 if he (1) had no more than a high school
diploma; (2) was not married and had no children or children who lived
elsewhere; (3) was not an immigrant; or (4) was African American….
No matter their race or educational status, married men raising a family work
more, and never-married men without children or children in their home work
less. No matter their ethnicity or race, prime-age men who come to this
country work more than those here by birth. Neither a wedding ring nor a
green card confers innate advantage in the competition for jobs. Rather,
marriage and migration decisions point to motivations, aspirations, priorities,
values, and other intangibles that do so much to explain real-world human
The legacy of prejudice might seem to explain why prime-age male work
rates and workforce participation rates are lower for blacks than whites
today. But they cannot explain why work rates and LFPRs for white men
today are decidedly lower than they were for black men in 1965. And they
surely cannot explain why prime-age male LFPRs today are higher for
Latinos than non-Hispanic whites (see figure 5.1). Nor can they explain why
labor participation rates of married black men twenty-five to fifty-four are
higher than for never-married white men in that same age group (see figure
5.2). ….
Released felons and ex-prisoners form a far larger fraction of the working-
age male population than any other population group. These men with
criminal records are disproportionately people of color and/or those with low
educational attainment. Amazingly, however, the U.S. government does not
today bother to collect information on their employment patterns.
As we shall see, a single variable – having a criminal record – is a key
missing piece in explaining why work rates and LFPRs have collapsed
much more dramatically in America than other affluent Western
societies over the past two generations. This single variable also helps
explain why the collapse has been so much greater for American men
than women and why it has been so much more dramatic for African
American men and men with low educational attainment than for other
prime-age men in the United States.
Although crime statistics in America were arguably primitive half a century
ago, such data as were available suggested crime levels had been more or
less stable over the postwar era. Public perception also essentially tracked
with those crime statistics. Starting in the mid-1960s, though, crime
skyrocketed, and popular perceptions about crime followed. Public safety
was generally believed to be worsening, perhaps dramatically. In the 1970s,
Americans responded by enacting and enforcing more stringent measures
against crime at the federal, state, and local levels. Vastly more convicts
were sent to prison, and even more felons were processed through the
criminal system via probation and “community supervision.”
After two decades, reported U.S. crime rates for all major types of crime
finally declined. Crime rates in America today are thought to be more or less
back to levels of the early 1960s. Incarceration rates, on the other hand, are
roughly five times as high today as they were in the late 1960s.
As a direct consequence of crime and punishment trends since the 1960s,
American society now contains a truly vast, if generally invisible, army of
non-institutionalized felons and ex-prisoners. These are overwhelmingly adult
men convicted of serious criminal offenses who have been punished with
prison time or probation, but who are now part of our general population.
Most well-informed readers know that the number of U.S. convicts behind
bars has soared in America in recent decades and that the United States
currently has a higher share of its populace in jail or prison than almost any
other country. But only a tiny fraction of all Americans ever convicted of a

felony are actually incarcerated at this moment. Maybe 90 percent of all
sentenced felons today are out of confinement and living more or less
among us.
As we close this letter, I want to highlight that one bolded paragraph again:
As we shall see, a single variable – having a criminal record – is a key
missing piece in explaining why work rates and LFPRs have collapsed
much more dramatically in America than other affluent Western
societies over the past two generations. This single variable also helps
explain why the collapse has been so much greater for American men
than women and why it has been so much more dramatic for African
American men and men with low educational attainment than for other
prime-age men in the United States.
If we want to see things began to change, we going to have to deal with this
“variable.” Perhaps we should rethink our concept of incarcerating everyone found
guilty of using currently illegal drugs. Maybe we need to rethink about how long
felony convictions stay attached to personal records. When you can’t even rent an
apartment in many states because you were a felon, and in some cases simply
because you were charged with a felony at some time in the past, is it any wonder
that we have large numbers of people not participating in the labor force? With 20
million former felons in America, we have attached a large anchor to our economic
growth rate, and we have unfairly burdened these men and women. Just saying…
Eberstadt has written a brilliant book highlighting some painful problems. If I could,
I would make it required reading for anyone holding public office above the level of
dogcatcher. As I said, I highlighted some 36 pages in his book. This letter would
have been a lot longer if I had used everything I wanted to. I guess you will just
need to read the book for yourself.
As we take Eberstadt’s data and absorb it into our economic models, we find that it
doesn’t bode well for future growth. And growth is what we need to make our
portfolios rise and shine.
In two weeks I will be bringing you a letter in which I will talk about exactly how I
would go about designing a portfolio for the coming decade. I think it is one of the
most important letters that I will write for a long time to come. I just wanted to give

you a heads-up so you can make sure to read it.---

OK, time to hit the send button. You have a great week.
Your thinking a lot about the future analyst,
John Mauldin

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