Thursday, June 14, 2012

There's something missing somewhere.

It seems to be a common attitude for older generations to complain that things aren't as good as they used to be. My grandparents were always complaining that society was falling apart, that crime wasn't nearly as bad when they were young. I'm not sure that this is true, there is the argument that negative things are just reported more now than they used to be, but certainly society has changed a lot in the past century, and not all of it for the better. One thing that has changed from the Baby Boomer generation to Generation X is the seeming cost of living. As a "Gen-Xer", most of my peers had only one parent that worked while the other one (usually the mother) stayed home. Single income families were the norm, and somehow people managed to afford a mortgage (at double or triple the current interest rate), groceries, household bills, and vacations. Yet, most Gen-Xers themselves seem to be in a situation where they are married to a spouse that works, and yet with a double income household are still finding it challenging to make ends meet in terms of all those same expenses. Part of the problem is all the crap people buy these days that they never used to. Cutting out consumer electronics alone would probably solve many people's budget problems. But, there seems no doubt that money is tighter than in the previous generation.

The other thing that seems different in my generation compared to my parents' is the reduction in service. Things that my parents took for granted, like mail and milk being delivered to the front door are long gone now. Usually when you check in at an airport these days, you have to do the work yourself and you typically have to pay extra if you take more than one small bag, something my parents' generation would have rebeled at, and refused to fly. Why are things getting more and more expensive and yet the service is getting cut further and further back?

When it comes to private corporations, I think the answer is quite simple: increased profit. Corporations have figured out that they can spend much less on service than they did 40 years ago and still manage to sell the same amount of product. I suspect there has been some collusion between corporations in this regard. In a truly compettive market, no one would fly on an airline that made you do all their work if there were other airlines who offered better service for only a marginally higher price. (Also, notice that the price never decreases when service is dropped, indicating that the claim by corporations that the reduction in service is a cost-saving measure is false - it is simply a profit maximizing measure). I don't like this trend, but it is part of the capitalist way, and you can't really blame a corporation for maximizing their profit, even if it means they are essentially often selling you little more than an expensive dream. But, what about when this happens in government run services?

Governments are not in business to make money, or at least they shouldn't be. They take their citizens money to provide services for those citizens that the citizens themselves cannot afford unless purchased en masse. Yet services seem to be cut regularly without any financial return to the citizens. Take the example above of mail delivery. Almost no new neighbourhood in Canada offers delivery of mail to the front door. Virtually every new sub-division of houses has a centrally located set of mailboxes to which people have to walk or drive to pick up their mail from a de facto local post office box. This is a reduction in service in comparison to the previous generation in which all mail was delivered to the front door. So, one has to assume that this cut back in service has happened to reduce cost. Yet, where has the money gone that was saved by reducing that cost? Do I pay less tax than my parents' generation? No. I probably pay more when you include all taxes including sales taxes. So, how has government revenue (tax) gone up while expenditures have gone down?

Where did the money go?

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