People are living longer, and it’s shaking up the world of money. A Wall Street Journal piece shows that as we age, we stack up more cash. But, with longer lives come bigger economic questions.
“You will have a long life on the earth.” This promise which accompanies the fifth commandment about honoring your father and mother is becoming more true all the time. AND, there are economic implications.
Richard McKenzie, writing in the Wall Street Journal recently, made the point that, as folks live longer, they accumulate more money. That kind of makes sense. The title of Mr. McKenzie’s article is Americans are Living Longer and Prospering, and the subtitle “Longer Lifespans are an underappreciated cause of the increase in wealth concentration” really gets under the skin of the Thomas Piketty crowd. He’s the French economist who has pointed out economic inequalities in his books The Economics of Inequality and his latest Time for Socialism. Like our current President Joe Biden, Piketty likes to complain about the concentration of wealth among a smaller population.
Certainly, you WANT people to live longer, don’t you? Who would ever be FOR shorter lifespans? The death crowd, I guess. More on that later. Oh, there is something of a statistical anomaly going on here. In 2019, lifespans became shorter, but that was probably a one-time consequence of Covid. The trend line of longer life spans is expected to continue, after the dip.
Older workers are making a greater contribution to the economy, compared to previous generations. Firms have begun to offer “grand-turnity” leave to retain grandparents in the workforce.
The Poor Are Getting Richer Through Economics
Here’s what the Socialists really dislike, and it’s where McKenzie explains that the wealth of the bottom half of the US population increased in real dollars between 1989 and 2022. He goes on to explain that the bottom half’s share of total wealth decreased from 3.8% to 3.1% during those years. You see, Christians care about the poor, not the distance between the rich and the poor. Those who care about distance are violating the tenth commandment, about avoiding covetousness. Let me repeat the first half of Mr. McKenzie’s explanation about the wealth of the bottom half increasing in real dollars. My sophomores at Dallas Baptist University know that “real” means after inflation. So, even though the current administration has thrown an inflation party that has harmed them, the poor have still managed to get richer. Christians celebrate that.
But Socialists concentrate on the second half explanation from the WSJ article, about the share of wealth of the poor declining from 3.8% to 3.1%. Mr. McKenzie notes in his article, “Sen. Bernie Sanders denounces today’s wealth-concentration as “morally obscene.” President Biden seeks to temper the growing wealth accumulation by imposing a “billionaires’ tax.”
Of course, the rich are getting richer at a faster rate. That’s just the rules of the road. If a rich guy starts with $1 million and the poor guy starts with $1 thousand, as the economy lifts all boats, it’s going to lift the big boat further. The only time I can find when the poor got rich at a faster rate than the wealthy was during the Trump administration, and that’s because his economic policies aligned with growth in the lower classes.
And, Marian Tupy and Gale Pooley point out in the book Superabundance, that, when measured by “time price” that is: How long a person has to work to buy products and services, today’s poor are getting richer all the time.
Socialists are good at demand, but terrible at supply. They start at the point where a person has money and proceed from there. They want the government to get that money, with no consideration for the supply that produced it. In economics, we call it “consumer surplus.” In a competitive environment, every time you buy something, you get richer.
I joke with my DBU students, “Don’t tell my wife Ginger about this.” But each time Ginger buys something in a competitive free market, she gets richer. That’s because she makes the FREE WILL CHOICE to exchange money for goods or services. Think about it: If she’s a self-interested economic consumer, she would choose to get richer with every exchange, instead of poorer. When there are competitive suppliers, she can do that. When there is a lack of free markets, meaning industry concentration, which can lead to a monopoly, then she gets poorer with every purchase.
This is why, by the way, a Christian Economist favors a middle point between pure capitalism and pure socialism. At the pure capitalism end, companies produce monopolies. At the pure socialist end, the government does it.
Back to our rich old guy: He earned that money by making others richer. Seems like the government should encourage, rather than discourage that. Ginger and I often share a line from the book Extreme Leadership by Willink and Babbin which says, “You get the behavior you tolerate.” That’s exactly right: Our government has the power to encourage positive economic behaviors and discourage negative behaviors. Allowing people to keep the producer surplus they created, by serving their fellow neighbors, should be encouraged, not discouraged.
Socialists have set their sights on inheritance as a way to redistribute wealth and fund the government. Until recently, the laws of Louisiana forbade passing wealth onto only one of several children. It had to be divided equally. The Old Testament tradition held that it was all passed to the oldest son. But we’re supposed to live in a free society, so shouldn’t people be free to pass along their inheritance as they wish?
Ok, let’s use an example of, “the big guy” in the family, who Hunter Biden calls his Dad. Let’s say he accumulates some wealth and is near death. The liberals want his inheritance to fund the leviathan government, because the kids didn’t earn it, and have no just right to it. But where did the government get the right? Their right is not greater than the kids. And, the government didn’t earn it either.
There’s quite a lot of data showing that wealth is not effectively transferred between multiple generations, but I don’t have time to unpack that today. Suffice it to say, there is a lot of movement in and out of the top quintile of income earners. Ten percent of us will be there, at some point in our lives.
L’ Chaim, to life! As Tevya sang in Fiddler on the Roof. Which the Democrat party has changed in recent years to read: L’Mitah, which means to death, of the unborn, and the aged. President Obama spoke for the death crowd when he said, “Maybe you’re better off not having the surgery, but taking the painkiller.”
From 1940 to 2019, Americans’ life expectancy rose by almost 16 years, that’s good news for old guys like me.
So, let’s think about this: If people are living longer and thus aggregating a larger corpus of wealth, that would encourage their heirs to perform euthanasia on pops, so they can inherit the wealth…If they can get away with it. Yes, that seems like a really morose view, but Christians understand that people have a fallen nature, so we favor making rules that encourage positive, not negative behavior. I’m not ready to take on the evils of euthanasia today, but let’s just assume that it’s economically advantageous for the folks who inherit the money, but it’s a form of evil for the person who loses his life. The Netherlands is running a devious experiment with “the right to death,” as it is called.
My grandson asked my age last week, and when I answered, 69, he responded, “Wow, that’s really old.” I informed him that grandpas are old. It’s a blessing to live to an older age. In the song titled “The Older I get,” Alan Jackson sings, “If they found a fountain of youth/I wouldn’t drink a drop” And, that’s generally true of older people. I heard a presentation by an economist a few years ago, about the extension of life in developed economies. He pointed out that his college-age daughter had a meaningful relationship with her great-grandmother. Think about it: Only two of my four grandparents were alive when I was growing up. Both died when I was in college. The economist was pointing out that his daughter not only has all four grandparents, but she also has a great-grandparent who is cognizant enough to have lunch with her great-granddaughter.
We truly do live in a blessed age, where medical researchers have used their Image-of-God creativity to discover ways to enrich and lengthen our lives. It’s good for the economy too.
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