My brother Phil is an economist. I’d never taken a class in economics, so one day on a three-hour drive, I asked him to give me Econ 101 — and he did.
That was 45 years ago, and since then there have been several updates. One long-standing discussion has been about the nature of “luck.” Phil once wrote a paper describing the impact of making choice A or B — maybe by the flip of a coin — about which college to go to or what job to take and how that random choice impacts the rest of a life and that of many others.
He recently told me that several new studies discuss the role of luck in economics and that they generally conclude that luck has its impacts, and that rich people have more of it than poor people do. As Alec Baldwin, playing President Trump on “Saturday Night Live,” says to his son-in-law, “You’ve shown everybody that if you’re born rich and marry my daughter, you can do anything you want.”
When I took the Extension Service job in Wallowa County 46 years ago, I took a small pay cut — I’d been making $11,000 a year on Peace Corps staff, and the OSU job paid $10,400. One of my Washington, D.C., friends told me that I would never be able to afford the city again — that this discrepancy would get multiplied by percentages, meaning smaller raises and that “coming back” to an urban job, I would get pegged lower.
I’ve never wanted to go back to an urban job, but the idea makes me think about the tremendous dollar differentials in hip, urban places and most rural places in the country. On our spring break trip to Sacramento, we learned that modest houses in decent neighborhoods there sell for almost a million dollars.
Rents in the Bay Area hover at $4,000 per month. A high school classmate who keeps us current on goings-on in Oceanside, in Southern California, says that houses in South Oceanside — now the toniest part of town, average $600,000.
My dad, bless his soul, happened to pass away in Oceanside while California was going through one of its periodic housing slumps. The house he had paid $35,000 for 40 years earlier sold for a modest $100,000. I and my three siblings each received $25,000 — a wonderful gift, but one that might have been double or triple that had he lived a few more years, or even, dare I say it, died sooner.
There is much discussion of the increasing blue and red divisions across the country, of how people with similar values tend to congregate, and thus some counties and states are becoming predominantly Republican or Democrat. Other migration trackers site Sun and South as attractions; still others technology centers and youth.
But a recent radio news blast — I admit I can’t locate the source right now — said that a decade or two ago three percent of us, 3 in 100, moved from one state to another in a given year, and that the percentage is now half that.
Among other things, they cited the cost of housing. It makes sense: someone who bought a Wallowa County home for $50,000 a decade ago cannot easily sell — for $100,000 or $150,000 — and move to Portland, where the average home price is more than $400,000. Unless, of course, they have rich parents or in-laws or have made a pile of money in some previous high-end occupation.
Speaking of occupations, it is true that doctors make a lot of money but true also that medical school is very expensive — estimates now hover at $400,000. Brain surgeons and cardiologists make more than family practitioners, so the post-med-school pull is toward the specialties.
And rural areas like ours must subsidize new docs in one way or another — help with loans, build and lease clinics, etc.
And here we go back to economic principles. An influential book, “Capital in the Twenty-first Century,” argues that “markets,” left to themselves, exacerbate income differences .., the rich get richer ...
And that occasionally a great leveling happens. It happens with big wars, in which rich and poor lose lives and loved ones and some people distinguish themselves and earn post-war praise and careers.
And it happens with government interventions. The most prominent in this country: the New Deal of the ‘30s; the G.I. Bill in the ‘40s and ‘50s (which many say created the modern middle class); California’s free education programs ‘40s-’60s; and Medicare in the ‘60s.
Our fine local public hospital, halting state and national moves toward universal health care, and moves in many states to make college affordable — e.g., Oregon’s free community college program –– are small efforts aimed at tilting the economic table back towards even.
Rich Wandschneider lives in Joseph and writes a monthly column.