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October 2005

Lowenstein on "The End of Pensions"

Roger Lowenstein in the New York Times presents a valuable analysis of the current state of our private and governmental pension system. Among the article's many useful points, I would emphasize these three:

1. As I preach to high school and college students whenever I get the chance, it's important to save a lot, and to start saving early. The article states that "In 1980, about 40 percent of the jobs in the private sector offered pensions; now only 20 percent do."

2. Mr. Lowenstein asserts that the government's pension insurance could well have made the situation worse. It is, he claims, a fine example of what economists call "moral hazard".

3. Another way poor governmental choices contributed to the problem: wage controls and high tax rates during World War II gave private companies incentives to create pensions. These are the same frozen wages and high tax rates that helped give us employer-provided health insurance, which is also a major problem today. As always, the bad effects of price controls are huge.

As at least the regular readers of this blog know, I am not the Craig Newmark who founded craigslist. And while I'm not as famous and important and generous and as much of a mensch as the Main Craig, I used to think I had a pretty good life.

But occasionally I get e-mails from people looking for him. (On Friday I got two.) Understand, these are people who've at least temporarily been really stupid: it's easy to find out that I'm not the Primary Craig. (One way: the e-mails come to a BellSouth address and List Craig is not in the South, y'all.) But the proposals I get from the temporarily stupid--probably in the lower half of the many proposals the True Craig receives--are sufficiently amazing, that I'm starting to get jealous and bitter. Here's one of the two that came on Friday. I've edited out the names so as not to embarrass the sender.

Dear Craig:

My name is ---------.  I am a writer living in LA.  I currently produce a show on NBC called --------.  I also write humor books with my husband, --------- (former editor of the -------- and columnist for  -------).  Our first book, --------------- is a best seller and we're about to turn in the sequel, ----------.

I owe my life to Craigslist.  I found our house on Craigslist, I got my job, furnished my house, etc. all off Craigslist.  ------------ calls Craigslist my porn site.  The reason I'm writing is to ask if you'd consider letting us and the production company, -----------------, develop a show based on Craigslist.  At first I wanted it to be a decorating show but ------------- suggested we open it up to all the different possibilities: vacations, apartments, weddings, personals, etc.  Kinda like Life on Craigslist. I know, sucky title but we'll come up with something better.

I'm hoping you're open to this or at least discussing it further. I can be reached at:

----------- office

----------- cell

----------- home

Thanks and I hope to hear from you soon.

I replied that I was just an associate professor of economics in Raleigh, NC, but that I'd love to do a development deal. Really cheap, too. I thought we could call it "Life at Big State U" or for short, "Life at BS U".

Not a nibble. Nada.

In the words of John Lennon: "They never told me there'd be days like this."

Last week there was evidence the housing market in L.A. was a bit soft. This week there's even stronger evidence that the Boston housing market has slowed.

I wouldn't use the term "bubble" to describe housing prices in Boston/NYC/DC/Florida/LA/SF these last few years. But Stein's Law could well apply: If something can't go on forever, it must eventually stop.