Here are some snippets of what was on friends’ minds at various Christmas and New Year’s gatherings….
A 65-year-old led off his good news summary from 2013 by pointing out that stocks had reached an all-time high. His cohorts were cheered by reflecting on this. I didn’t want to break their hearts by showing them this chart of the S&P 500 in real (inflation-adjusted) dollars. It turns out that the peak was actually in August 2000. We’re getting close to that high point from 13.5 years ago but we aren’t there yet (i.e., a person who is today 65 and put money away for his or her retirement back at age 52 would still be waiting for a positive return on that investment). Measured in barrels of oil, a good proxy for the kinds of things that a comfortable person might want to buy, e.g., gasoline or airline tickets, things are far worse. Oil in August 2000 was about $30 per barrel (source) whereas today it is about $110. So the S&P at 1565 in August 2000 would have purchased 52 barrels of oil. At today’s price of 1830, the S&P buys just 16 barrels of oil. What if you wanted to buy houses in the U.S.? The Case-Shiller index was about 100 in August 2000 and is now 150, so you could buy 15.6 houses back then with an S&P 500 position compared to 12.2 today. But people who have big S&P 500 positions don’t typically buy average houses. What about that condo in Manhattan? This source says the cost was $522 per square foot in 2000 and it is now $1,178. So the S&P 500 has gone from being worth 3 square feet of space in Manhattan to 1.55.
People talked about schools. A father talked about how Cambridge Public Schools (among the world’s most lavishly funded) had by accident managed to create a good Montessori school (Tobin). Children from Caucasian and Asian families, who could not take advantage of the city’s race-based preference system, had only about a 1 in 4 chance of being assigned to this school, according to this father. But recently the central bureaucrats had removed the principal, who had been beloved by both teachers and parents, and substituted a mediocre replacement. The school was now on a downward slide. A homeowner in Brookline talked about how it was unfair that people were crowding into the Brookline schools: “They used to be great. Now they’re just okay. These people are wrecking it for those of us who have been here for 20 years. There should be a 6-12 month waiting period before you can send a kid into our schools.” A passionate supporter of bigger government and higher taxes on “the rich” to pay for it, this owner of a $2 million home in Brookline spoke bitterly about his opposition to “the town considering a property tax override so that they can build a new school.” [Thus proving that most Americans can agree that the fairest tax system is a progressive one where rates are 0% up through whatever their income happened to be in any given year and then 100% above that!]
Despite the trepidation about schools nearly everyone seemed to be happy with how his or her children had turned out. And the kids who were present at these parties were all ones that any parent would be proud to call his/her own. Can our schools really be as bad as the statistics show if the children are turning out so well? [I do realize that this is a biased sample since the parents of these children generally have above-average educations, incomes, etc.]
My friends are mostly getting to the stage of life where they talk about health care for their aging parents. Despite the fact that Medicare was paying all of the bills and no expense or procedure was being spared, they were appalled at what they plainly perceived as disorganization, incompetence, and mismanagement at Boston’s top hospitals, e.g., Mass General. As these friends are mostly not doctors it is tough to know whether the problem is simply one of perception due to the large number of providers involved and the lack of clear communication to the patient and family.
A gathering of pilots and aircraft owners from Hanscom Field was notable for the enthusiasm that everyone displayed for helping young people (some of whom were present) progress towards personal and professional aviation goals. For example, all of the aircraft owners were offering the younger career-building pilots the opportunity to fly their airplanes. It is something that one doesn’t see as much in engineering and I’m not sure why.
[Another notable fact from the pilot dinner was that every man at one table who had been a father in Massachusetts had been sued for child support and, as part of the child support lawsuit, the plaintiff had ratted him out to the state's Department of Children and Families as a child molester. We learned that this is no longer the default level of pressure applied, however, from a soft-spoken even-tempered guy that we've known for years. He was currently going through hearings as a criminal defendant: "The prosecutors around Worcester got a grant from the federal government to prosecute violence against women," he noted [maybe this program?], “which means that they now go after every man who is accused because they get paid for it. So now all of the child support plaintiffs in Worcester are going to the police saying that they have been beaten up.” The mother of his 11-month-old son alleged that he had grabbed her wrist. “She has no evidence other than her own statement. She doesn’t have any witness to say that I ever yelled at her, threatened her, or touched her. She has no marks on her skin. But anyway my lawyers say that I will still have to go through at least four court appearances as an accused criminal. My plaintiff offered to drop the charges if I would pay her what she is demanding, but it works out to more than 100 percent of my after-tax income.”]
This is the time of year when I have the most contact with MIT Media Lab faculty. The lab seems to have settled into a moderately comfortable middle age (the lab, not the people!), with lots of fairly young faculty who are excited about the work that they are doing. I would say that the success proves the wisdom of Nicholas Negroponte, the founder, who invested heavily in a fancy building that seemed ridiculous at the time. Why did people still searching for a problem to solve deserve a better building than the drawers full of Nobel-prize winners in the Physics and Biology departments? At first glance it might seem that it would be more important to gather the best researchers doing the most important stuff. But it turns out that people are unreliable. Their ideas might not pan out. Their ideas might pan out so well that they get hired away by other institutions. What can be relied upon, however, is the persistence of a massive and deluxe building near the heart of the MIT campus. If you have a nice building at a good university you can always hire creative people to fill it.
Hardly anyone was worried about economic security. Each couple [couples with kids hardly ever seem to invite anyone who isn't part of a couple] had at least one person with a reasonably well-paid job and usually both adults in a household were doing well in a career. The folks who seemed to have the toughest time finding a rewarding new job when necessary were older (50+) software engineers with no management experience. Their technical skills were excellent but despite the shortage of capable programmers, employers were more interested in hiring managers that age, not individual programmers.
Some people talked about books that they were writing but I don’t remember anyone talking about a book that he or she was reading. People who had been passionate 25-year-old consumers and then discussers of books, movies, theater, concerts, etc. are either no longer reading or no longer bothering to talk about what they read. (Right now I am reading a biography of Calvin Coolidge so maybe it is a good thing that people my age apparently don’t talk about what they are reading!)
It was in shopping for bagels to serve to my own guests that I met my personal hero for 2014. The trim man of about 40 behind the counter at the Harvard Square Dunkin’ Donuts filled a bag with 18 bagels then asked “Is there anything else that you want?” I began mentally going through the list of all of the donuts on display, starting with “Boston Kreme”. This led to a conversation on the subject of temptation versus willpower and he mentioned that he had once weighed 300 lbs. If he can lose 150 lbs. and keep it off while standing right next to 20 baskets of donuts, shouldn’t it be possible for me to keep a single New Year’s resolution?
A belated Merry Christmas and Happy New Year to all of my readers!