NewsLab

Excerpts from the Michael Cox speech, Oct. 25, 2009

This is the second in a series of presentations about capitalism sponsored by the Alworth Center of Peace and Justice.

Michael Cox is the director of The O'Neil Center for Global Markets and Freedom at Southern Methodist University. The focus of this O'Neil Center is the study of the impact of competitive market forces on freedom and prosperity in the global economy.

"It's become popular to be a cynic today. Unfortunately it's even true in not just the news media but in American universities. You're not a serious scholar unless you think something is wrong, something seriously wrong from global warming or something else. That is not the way I think, and think things are getting better and I think they're going to get better largely speaking...."

"What you hear is that America is past the apex of its prosperity: our real wages are falling, both adults have to work these days in order to make a living for the family, this generation of kids is going to be the first in history to not live as long as their parents, our good jobs are going overseas being replaced with low-paid service sector jobs, we're becoming a nation of hamburger flippers, there's never enough time, we're increasingly overloaded with too much work, and the burdens of life are just killing us all...."

"Every day you wake up and see something in the newspaper or on the TV about terrorists, job losses, unemployment, deficits in trade, immigrants coming taking our jobs, stock market crashes, global warming, tidal waves, the bird flu, date-rape drugs, I've never heard all of this before: Prepare, prepare for the coming doom...."

"This book, 'The Great Depression of 1990,' was written right before the greatest expansion in US economic history. But it sold millions of copies, because it was about bad news, and bad news sells a lot. Bad news, bad news, bad news. That's media bias, and it's brainwashing you for their benefit. They make money selling you books that you pay attention to because human nature is to hunker down for the coming calamity, to protect yourself...."

"We're being programmed by a constant drumbeat of negativism, which definitely colors your feelings and your mood. Your feelings, at least in part, are affected by everything you hear in the news media everyday. It's funny if you ask people how they're doing people say, 'I'm doing pretty good.' Well, if you ask people how they think others are doing they say 'Oh, they're not doing so well. They're unemployed, ya know, they can't make a living. They're stretched too thin....' and so on. That's a conflict that should, theoretically, never arise. The sum total of how we feel individually should add up to how we really are and it should equal what we think about others, and the reason we think differently about others is because we learn about them from the news media, and we learn about us from our own experiences...."

"I want to dispense with feelings and personal experiences about how well off you really are. Personal experience and reality can differ. Here's an example: Suppose the best day of your life was, in fact, the day you were born and every day thereafter things just kept getting worse and worse. Moreover, let's suppose it was this way for everybody. Could it still be that people were getting better over time? Who would doubt that every generation is born with greater happiness than the generation before? You can still be making progress regardless of how you see the world.... Neither feelings nor personal experiences are a good way to judge the human condition and whether it's improved. You have to be a scientist about this...."

"If you don't feel better then you need to change your life and quit listening to the news because it's not the news, it's the bad news, or do something different. But I'm going to prove to you that things are getting better...."

"The good ol' days -- they were terrible. Everything was worse back then, whether it was pollution, or crime, or drug addiction, or loneliness or everything. The human condition was much worse back in the past when people think it was so good. The good ol' days were terrible...."

"So we throw this term around all the time: we call it living standards or standard of living. What does it mean? Has anyone ever thought about this? Well, basically, it's everything you want it to be, everything that goes into what you regard as an aspect of your living conditions. Most people would put in there consumption and wealth, leisure time and recreation. health, longevity, safety, security, variety and choices of new goods, and I'm going to add in there working conditions.... So I'm just going to do five here and show you what's happening with each one of the standards of living, beginning with consumption and wealth...."

"Capital bottled water consumption continues to rise. If we were really poor as a nation, you would think people would just start drinking tap water. Right? It's free. But no, people have enough money and continue to buy bottled water...."

"In 1901 food, clothing, and shelter -- just those three items -- consumed 76 percent of the American budget. Today those three items consume about a third of the budget and another third of the budget for things we want beyond food, clothing and shelter...."

"The currency is time, not money. We spend time at work that we in turn trade for goods and so the best way to measure prices in terms is the real terms -- work hours. Nine and a half hours of work for this basket of food in 1919, 1.4 hours of work for this basket of food as we turn the century -- that's about a 90 percent reduction...."

"People in 1870 worked about 61 percent of the time that they were awake, we work about 28 percent of the time we're awake. Adding up all the hours of our life, we have a longer retirement period, we start work later...."

"The recreation and leisure industry is booming. I think it's a great place for students to look to get jobs. The income elasticity of the demand for recreation is above, meaning that if income grows by 10 percent the demand for recreation and leisure services will grow by more than 10 percent...."

"Variety -- it's the spice of life. No matter what it is there is more of it in terms of choices. There were nine different sport unitilities in 1980. I stopped counting when it got up to about 100 different sports utilities, variety, available to me. There are 250 different software programs you can choose from -- how to dress yourself in the morning to how to do your taxes, there are more and more websites to visit all the time, magazine titles -- there are 790 different magazine titles. If you live in a trailer you can get a magazine called 'Trailer Life' for that...."

"We're told that work is bad, and that our bosses are all idiots. Work, if you look in Webster's dictionary, Webster's describes work as a strenuous activity marked by the presence of difficulty and the absence of pleasure. Yet today's kids can expect to actually self-actualize by finding a job they can enjoy. They want to enjoy work. Enjoy work? Today's generation of kids expects to enjoy work, and they can because the economy has made progress in that dimension...."

"We're giving braces to our dogs, buying them Christmas presents. People are getting liposuction, collagen injections, botox, all kinds of cosmetic stuff. It's not because they have to. It's because they have the money to...."

"Our ancestors were hunter-gatherers. We've evolved in browser purchasers. This is the way I shop at Christmas. I never get out of my chair. My kids send me a list if what they want. I just sit at the couch while I'm watching TV and order everything they want and have it shipped to their house. That's a lot different than being a hunter-gatherer...."

"In conclusion, I have a warning: If you're a pessimist or a cynic, you're going to do so or be so at your risk, your own health. There's no good case for being that way. Feel good. You have a right to feel good. And especially don't get involved; don't believe this stuff, when it comes to investment. When people are hunkering down for the coming calamity, they typically go to one of two places to invest their money. Gold or T-bills. When they're thinking things are going to turn well and they have faith in the economy that things are going to get better they put their money in equities, that's the stock market. Let's suppose that you had put $10,000 in each of one of these things back in January 1982. If you had done that, your gold would be worth $25,000, your T-bills would be worth $38,000, but your Dow stocks, even after the decline, this is going to be more like $225,000. Consider yourself deprogrammed."