The Causes and Cures for Gen Z's Economic Illness | Dr. Jeffrey Degner
Summary
Inflation Culture: Extensive discussion on how persistent inflation affects marriage markets, delays family formation, and raises entry costs to adulthood like weddings and homeownership.
Macro Policy Context: Critique of fiat money and the Federal Reserve’s inflation targeting, arguing it creates inflation-specific institutions, habits, and broader social consequences.
Welfare State & Politics: Claims inflation contributes to welfare dependence and political polarization, driving centralization of power and higher stakes in policy outcomes.
Financial Behavior: Warns against chasing yield and debt-fueled speculation, urging sound savings and value creation through entrepreneurship instead.
Cultural Sentiment: Notes rising cynicism and distrust, “doom” narratives, and materialist dating preferences as outcomes of inflationary pressures.
Proposed Responses: Advocates courageous independence, early prudent risk-taking, policy rollback and decentralization, and considering currency competition conceptually without specific instruments.
No Specific Investments: No public companies, tickers, GICS sectors, or concrete investment vehicles were pitched or recommended.
Overall Perspective: A socio-economic framework rather than an investment thesis, emphasizing personal prudence and policy reform over market picks.
Transcript
And so, uh, today I'm going to spin off a little bit on my dissertation topic. And those of you who've had me in class, a few of you here, this might have a familiar ring to it, but I want to kick off with a little different approach this morning. So, my lovely wife Rachel is here with me today. So glad she's here. And we had the opportunity to travel to Madrid last weekend and present at the Austrian Economics Conference there. And on our way back, she insisted that on the flight home, we should watch a film. And this is one of the great points of disagreement among us uh in our marriage, we have a hard time figuring out what films we like and enjoy together. But this one hit the nail on the head. And uh it touches on these issues of culture, economics, and what's happening in marriage markets, if you will. And it's a a challenge. It's a growing challenge and we have some evidence that points to the difficulty of moving into married life and the question has been raised by a sociologist by the name of Cherlyn and he raises the question about what he calls a fancy term here but he calls it the deinstitutionalization of family life that has occurred in the western world and especially since the close of World War II, what has gone on here? And he has more specifically looked at this question of marriage and family life. Is it the cornerstone of adulthood, community, and society? Unfortunately, in our day and age, it seems that marriage and family life has become a capstone institution, something that young people, particularly in Gen Z and and for millennials, have a long list of to-dos in life before even approaching the question of marriage and family. And we are seeing the consequences of this in our culture more broadly. And so the questions that we're addressing here today are not merely about the finer points of of economic technicalities. That's not merely what we're here to talk about today, but we're we're here to talk about institutional and indeed civilizational issues that confront our society today. And so speaking of movies and and this difficulty that we have, this was the film that my wife recommended to me called The Materialists. And in it, you have the three main characters. In the center, you have a a young woman by the name of Lucy. And her character plays the role of a professional matchmaker in New York City. And towards the beginning of the film, she is lamenting to one of her friends on a stoop outside smoking a cigarette saying, "You know, I do this great work for everyone else. I'm one of the best matchmakers in the city, but I know that I'm going to die alone." Not a very positive, uplifting start to the film. Well, as the film unfolds, and I don't want to be the spoiler guy here, but you should check this one out. But I don't I don't normally recommend films these days. Uh there haven't been any good ones since the mid1 1990s anyways. So uh I'm dating myself there of course. But on the right hand side uh you see the dashingly devilishly handsome Pedro Pasqual playing the role of a client. He comes to Lucy and says he is looking for a match and indeed he is a catch. Mr. Pascal's character uh makes the proverbial not seven but eight figures income and it's revealed later in the story that he has become over six feet tall through let's say an alternative method. He actually takes on a surgery to elevate the length of his femur to become more marketable in the marriage market. We'll talk about the specifics of that later. So he is the ultimate match in economic terms. As the story unfolds, Pascal's character is in fact one of the beneficiaries of what economists call the Canton effect. He is one of the winners in an inflationary society and indeed he is a catch in the marriage market. Well, the guy on the left, he's no slouch. That is Chris Evans. But in the role in the film, he is playing the proverbial starving artist looking to become a uh stage actor working restaurant jobs. And the introduction of the three at the beginning is Chris serving some champagne at a at a high flutin affair. And here Lucy is confronted with Mr. Wright, Mr. Big Bucks, or her old flame Chris Evans. And earlier in the film, or rather later in the film, there's a flashback to their breakup scene. The breakup scene to me captured the moment for Gen Z and people entering the marriage market. And they're in New York City looking to go to a nice restaurant where they had to make a paid reservation. They will lose the reservation if they're late. They are stuck in traffic. They cannot find a place to park. Evans does not want to make a right-hand turn into a parking garage where it's $25 an hour. And Lucy storms out of the car and says, "I'm tired of fighting over money. I hate myself. Not you, but I hate myself because I'm poor." What a contrast when it comes to this infusion of our material situation into matters of love, life, family, and these choices. We are indeed living in an inflation culture. The picture itself gives us a depiction of the winners and the losers. And so this is a tough spot. This is where we're at. And so to illustrate this, yesterday in chapel, I pointed to this statistic and wanted to bring it to bear for you. But when it comes to marriage, we see over time that delays in marriage are the norm. And this has continued up until today where the average age of a young man at marriage uh he's not so young anymore, 30.2 years of age in 2023. uh I've argued in my in my book that one of the reasons for ongoing marriage delays both for men and women is because of this inflation culture. Now that's the average right and then similarly for young women you can see a a little bit of a gap here 28 years of age that's the average that's the average but as uh one of our presenters uh Dr. Pollock will has written in the past. Um these these marriage delays are often because we have that checklist of things in an inflation culture that we've got to get done first. Things like home ownership. Well, we see and I cited this yesterday as well that the average age of a firsttime home buyer has now reached 38 years of age. So, if your life plan, your checklist goes something like finish the undergrad, go grad that graduate degree just to make sure we get a a highly paying job to outpace the inflation, but then we'll go ahead and make sure that we've established ourselves as a homeowner. You're going to be on average waiting until you're 38. But, as Dr. Pollock has pointed out, marriage is the foundation of home ownership, not the other way around. And as we look at alternative pathways to uh essentially uh to put it in biblical phrases here uh at a university like Cornerstone, we have the goal here of making you as wise as a serpent but also innocent as a dove to navigate a difficult economic environment as you move into adulthood. So I take a lot of my research cues from uh my dear professor Gita Hollesman and I want to bring a a brief quote here from his book the ethics of money production and he has a wonderful way of putting these things making the connection between a fiat monetary system and cultural or indeed moral impact in our lives. And here he says that the government's fiat money makes inflation perennial ongoing and in fact our Federal Reserve is in the habit of targeting so-called stable prices meaning stable and predictable increases in prices around 2% give or take unless it's 2021 and it's around 7 8 9% All right, but we're we're aiming for a target and oops, sorry if we missed the bullseye. All right, so what's the result? Well, we observe the formation of inflationspecific institutions and habits. And over the past several years, this has been the focus of my uh my work and my intellectual journey is to discover and to unveil what are those institutions, what are those habits that are formed in us and more broadly in society and culture as a result of that inflation culture. So I want to bring a few ideas that I haven't articulated yet. These are new uh new thoughts on the social consequences of inflationism. The first is an increased dependency but specifically dependency for young people. Uh you might say a prolonged dependency and so I'll address that as its own slide in a moment. But we have an alternative. And I would like to propose that the alternative is a courageous independence. a courageous independence, not reckless, not throwing caution to the wind, but a courageous independence that moves us towards successful adulthood. A second area is financial speculation. It's not merely the case that we are advised to save some money and put it into a uh a mutual fund early. That's uh that's sort of standard advice. Start building up that retirement from the time you start working. But this is a different kind of financial speculation. What economists sometimes call seeking or chasing yield. And this is something that I want to address versus sound savings patterns. The inflation culture pushes us towards the former. But is there a way is there a path for us to lean into the latter? Sound savings. I believe there is. And I think some of the other talks today will will touch on those possibilities to those alternatives as well. Uh but then another one that I think uh really is highlighted in the film that I mentioned is cynicism and distrust. A cynical, distrustful or what sociologists call a lowrust society that emerges in an inflation culture. Now again at a university like Cornerstone we actually can point to biblical revelation and there are specific places where we can see this cultural phenomenon unfolding uh through the prophets declarations and I'll refer to one of those where we see cynicism and distrust grow in an inflationary world. But what's the contrast? Well, the contrast I believe is rational hope. uh you might say a relentless uh or reasonable optimism that this is something that can be adopted but to follow that path again I want to encourage us towards wisdom and innocence doing the right thing and when it comes to that path of wisdom and innocence it would be the opposite of what Thorston polites a uh an Austrian economist in Germany he's uh helps lead the mises institute in Germany uh what he has called collective corruption where an inflation culture actually encourages us in risky behaviors, encourages us in financial steps that we wouldn't otherwise take and we might even ourselves be a little uncomfortable about it. We ourselves might say, "Ah, maybe this is a questionable perhaps borderline unethical behavior with the use of my money. But what are the consequences if I don't? If I don't take that path or take more questionable steps in financial matters, I'll fall farther and farther behind." And so Polite calls this a collective corruption where we know the good thing to do. We know the sensible reasonable thing to do but because of the consequences if we all take the right steps in the right direction towards wisdom and sound financial practices then we will suffer. That's quite a dilemma. And again, Polite calls that collective corruption, where we stick to our ill-advised guns, chasing yields, getting into debt early, and so on. And so, I've previewed the slides a little bit for you here, but I want to talk a little bit more about this dependency consequence. And I'll have to move somewhat briefly, but I've already alluded to extended adolescence in the inflation culture where sort of the markers of adulthood, whether it is marriage. Uh I I uh my wife and I had the great fortune of being in a church that frankly gifted us our wedding. Um most of us aren't in that position. And if you take the take a look at the cost of a wedding venue or any of the things surrounding this rarer and rarer event, that's that's a cost measure that either is going to lean hard on you as the person hoping to be married or on your parents. And this is a part of that ongoing dependency. A part of that ongoing dependency. Now extended adolescence, this could have many manifestations. In the European context, uh this is most uh highly pronounced where you have a heavily subsidized higher education system uh at a very very low cost and this is extending youth uh even into the 30s. Now you might say we have the opposite problem in the US. Indeed that's the case. We do have a higher price tag but of course the costs through the student loan program are delayed. And so in either case, the costs for education are artificially lowered, allowing us to extend our adolescence. It looks a little different in the European context than it does here, but nonetheless, this is one of the consequences of the inflation culture and its consequences in the higher education markets. But there's furthermore uh speaking of dependence in a more broad context not just for young people but the welfare state itself I would argue is a consequence of inflationism. Now this would be a finer point of debate perhaps among economists. But if we trace the roots of inflation culture to the creation of the Federal Reserve back in 1913 and if we start there and observe what happens in home prices, the general cost of living and so forth that life has tended to get a little harder. And the the statistic that for me captures this uh I I put this into my dissertation, but if you take a look at the median, right, the average household income for four people in 1950 and you fast forward that median average today that it now takes 2,000 additional working hours at the median wage to obtain that same median household income over a 70-year period. Well, what does 2,000 hours translate to? A second full-time job in the household. So the phenomenon of an increasing cost of living has meant that either the standard for a married couple today will be dual incomes or you can have a woman only making some income and where does the second income come from? It comes from welfare state. It comes from welfare state. There is uh what I in somewhat provocative terms have called the ultimate polygamist, the welfare state. But I think there's some truth to that. Think of the number of women and children in inflation culture who have become dependent on the welfare state as a father, as a providing husband. That's a stark reality in the inflation culture. Well, in that in that sort of environment, we see now with the shutdown of government and the uh potential revocation of SNAP and EBT benefits, one of the main vehicles through which the welfare state operates, once those are peeled away, there are some tremendous political consequences because if the the bulk of your income is based upon political decision-making uh to make ends meet, then you have political activism, rise to the four. It it rises to become a high priority for those households that depend on politicized income. And so when we have complaints about sort of our culture and the the deep divisions and polarization and politicization of our of our world and our economy, I am here to tell you that uh a great contributor to that situation has been our inflation culture. So how do you act counterculturally? How do you act in a wise and um a wise and innocent way? Well, I would call for early courage development. And what I mean by this is taking small but wise risks as a young person. This is for a number of our business students. This might be a call to step into reasonable risks as entrepreneurs to truly develop value for others and not to think how we might gain wealth via more risky avenues. So this is one one area of encouragement for you on the policy front. this is not going to be a call and and Connor later is going to uh encourage us in this direction that this situation is not a call for us to ask for more intervention. Okay, this is a call for roll back and repeal of the policy choices that have gotten us into this mess, not only in a financial mess but also a cultural mess. And then again in the policy front is to look at ways that power can be stripped away from the centralized uh a centralized government where we can move towards more localized decisions and by uh lessening the amount of centralized power in society we lower the political heat. It's not just we don't have a lot of political heat in the kitchen just because people are revved up and dislike the other side. it's that there are massive political consequences for the other side winning. That that is a key thing to understand here. And inflation, as many of our Austrian scholars have pointed out through the years, inflation drives politics toward centralization. And so by stripping back inflationism, I think like two rails on a uh on a railroad track, we will also peel back the centralization of power. And so that is another thing on the policy front to be uh to be thinking about how we might make a contribution that way. All right. Uh now the financial speculation again I'll be uh try to be brief here. uh the pursuit of financial titles. And it's remarkable to me how when I was 17 or 18 years old, I was thinking about how I was going to be a rock star and how was I how I was going to preserve my uh football playing days and what kind of pretty girl I could chase. This was, you know, kind of at the forefront of my mind. But now I hear 17, 18 year olds talking about, gosh, it's going to be great when I turn 18 because I can open up my first credit card. And what's the purpose? To pump your credit score. And what's the purpose of that? To rush into debt. Now, most folks your age have not really done a stepbystep causal analysis to understand what's going on here. It's just sort of in the air. It's marketed to you. But in an inflation culture, sadly, this is sort of the rational step to take. If the way forward to build your wealth is to leverage debt into your education and into a home, this is the path forward rather than what we were always told, right? as as young people, maybe you had your your grandma or your grandpa, you're sitting on their knee. They're bouncing you around and saying, you know, Johnny, Susie, you're going to work hard. You're going to do great things, and you're going to build a nice life by working hard, showing up on time, and doing well for others. That's the path to the good life. But it seems the inflation culture has tutored us in a little different direction, hasn't it? So, what do we do? What do we do? Well, some ways to think about this. Think of your labor as service. And particularly for our business people, our entrepreneurs, think of your labor as service. And essentially it is. Uh Austrian economics teaches us that profits are earned when we serve others well. When the values that we deliver are higher than the price we're asking. And just for you accountants out there, yes, the price you charge must be above your costs. All right? But to earn profits through delivering value to others rather than through financial speculation is one thing that I would encourage you to drive towards and I think we'll be touching on this a little bit on the policy front. I want to give you a practical and a policy piece, right? Uh something personal and again something at the policy level. And our book over here, uh chapter 7 from the Hayek collection there points towards currency competition. And we have some some emerging alternatives to the dollars, the Federal Reserve notes that are created these days. Well, on the cynicism and distrust front, again, I need to be quick here. I'm a little over time. Uh what do we see? We see a again air quotes here uh but a doom porn sort of culture, right? Where the most sensational uh disastrous outcomes are the things that we gravitate gravitate towards when it comes to family formation and fertility choice. We know uh researchers have let us know that young people are are delaying or choosing not to have children at all because after all the world is going to burn the green hysteria. And this um this again is a is a part of that sort of doom culture and almost inescapable pessimism about the future. And indeed, when you look at an ongoing rise of prices for nearly everything except your big screen TVs, that just does not paint a very positive picture for us. So, this is a consequence of the inflation habit. And then to be more specific on this question of marriage and family, uh it it goes around uh Tik Tok and some of these places that young women have now developed a 66 rule for who they will date or potentially marry. that is I already alluded to this a little earlier at least 6 feet tall and at least six figures otherwise take a hike swipe left or right whichever way the rejected pile goes right these kinds of uh materialist consumerrist sort of mindsets are bred in the inflation culture and so again I want to encourage us towards a practical uh and policybased alternative So through wise planning, uh this speaks to our folks here on the Cornerstone campus. Get yourself in with one of the groundwork financial adviserss. All right, take some time to begin wisely planning for the future, but also altering your what I call it your conscious preference development. Again, another great thing that Austrian economics teaches us is that our actions are a reflection of what we truly prioritize in life. Our demonstrated preferences are synonymous with action and choice. So whatever you're doing demonstrates what you prefer the most. And so I would argue here for thinking about marriage and family life and moving that up the list a little bit. A conscious development because from an economic standpoint again referring to Dr. Pollock's early earlier work it is the foundation. It is the cornerstone of adult life and it has been for decades and even centuries. And so I would encourage you to put those matters a step or two before some of those financial goals because marriage and family life are actually the pathway to meeting those goals. And so finally uh I deployed a little technology here. I asked uh chat GPT to sort of summarize in in a piffy statement a bumper sticker kind of approach and this is what uh chat GPT did summarizing some of my work in today's lecture. So let's see what it has for us. It says that meaning cannot be printed. That's okay. All right. Chat GPT I'm listening. I'm listening. And love cannot be leveraged. I like the alliteration here. This is very nice. Thank you chat GPT. But to rebuild civilization, we must deflate illusion, restoring value in both money and life. So ah maybe a little imprecise, maybe a little squishy, but chat GBT closes us out here. So let's steer clear of the mental framework and pathway that we see in the materialists and take steps towards a world with less inflation and more prosperity and civilized life. Thank you so much. >> [applause]
The Causes and Cures for Gen Z's Economic Illness | Dr. Jeffrey Degner
Summary
Transcript
And so, uh, today I'm going to spin off a little bit on my dissertation topic. And those of you who've had me in class, a few of you here, this might have a familiar ring to it, but I want to kick off with a little different approach this morning. So, my lovely wife Rachel is here with me today. So glad she's here. And we had the opportunity to travel to Madrid last weekend and present at the Austrian Economics Conference there. And on our way back, she insisted that on the flight home, we should watch a film. And this is one of the great points of disagreement among us uh in our marriage, we have a hard time figuring out what films we like and enjoy together. But this one hit the nail on the head. And uh it touches on these issues of culture, economics, and what's happening in marriage markets, if you will. And it's a a challenge. It's a growing challenge and we have some evidence that points to the difficulty of moving into married life and the question has been raised by a sociologist by the name of Cherlyn and he raises the question about what he calls a fancy term here but he calls it the deinstitutionalization of family life that has occurred in the western world and especially since the close of World War II, what has gone on here? And he has more specifically looked at this question of marriage and family life. Is it the cornerstone of adulthood, community, and society? Unfortunately, in our day and age, it seems that marriage and family life has become a capstone institution, something that young people, particularly in Gen Z and and for millennials, have a long list of to-dos in life before even approaching the question of marriage and family. And we are seeing the consequences of this in our culture more broadly. And so the questions that we're addressing here today are not merely about the finer points of of economic technicalities. That's not merely what we're here to talk about today, but we're we're here to talk about institutional and indeed civilizational issues that confront our society today. And so speaking of movies and and this difficulty that we have, this was the film that my wife recommended to me called The Materialists. And in it, you have the three main characters. In the center, you have a a young woman by the name of Lucy. And her character plays the role of a professional matchmaker in New York City. And towards the beginning of the film, she is lamenting to one of her friends on a stoop outside smoking a cigarette saying, "You know, I do this great work for everyone else. I'm one of the best matchmakers in the city, but I know that I'm going to die alone." Not a very positive, uplifting start to the film. Well, as the film unfolds, and I don't want to be the spoiler guy here, but you should check this one out. But I don't I don't normally recommend films these days. Uh there haven't been any good ones since the mid1 1990s anyways. So uh I'm dating myself there of course. But on the right hand side uh you see the dashingly devilishly handsome Pedro Pasqual playing the role of a client. He comes to Lucy and says he is looking for a match and indeed he is a catch. Mr. Pascal's character uh makes the proverbial not seven but eight figures income and it's revealed later in the story that he has become over six feet tall through let's say an alternative method. He actually takes on a surgery to elevate the length of his femur to become more marketable in the marriage market. We'll talk about the specifics of that later. So he is the ultimate match in economic terms. As the story unfolds, Pascal's character is in fact one of the beneficiaries of what economists call the Canton effect. He is one of the winners in an inflationary society and indeed he is a catch in the marriage market. Well, the guy on the left, he's no slouch. That is Chris Evans. But in the role in the film, he is playing the proverbial starving artist looking to become a uh stage actor working restaurant jobs. And the introduction of the three at the beginning is Chris serving some champagne at a at a high flutin affair. And here Lucy is confronted with Mr. Wright, Mr. Big Bucks, or her old flame Chris Evans. And earlier in the film, or rather later in the film, there's a flashback to their breakup scene. The breakup scene to me captured the moment for Gen Z and people entering the marriage market. And they're in New York City looking to go to a nice restaurant where they had to make a paid reservation. They will lose the reservation if they're late. They are stuck in traffic. They cannot find a place to park. Evans does not want to make a right-hand turn into a parking garage where it's $25 an hour. And Lucy storms out of the car and says, "I'm tired of fighting over money. I hate myself. Not you, but I hate myself because I'm poor." What a contrast when it comes to this infusion of our material situation into matters of love, life, family, and these choices. We are indeed living in an inflation culture. The picture itself gives us a depiction of the winners and the losers. And so this is a tough spot. This is where we're at. And so to illustrate this, yesterday in chapel, I pointed to this statistic and wanted to bring it to bear for you. But when it comes to marriage, we see over time that delays in marriage are the norm. And this has continued up until today where the average age of a young man at marriage uh he's not so young anymore, 30.2 years of age in 2023. uh I've argued in my in my book that one of the reasons for ongoing marriage delays both for men and women is because of this inflation culture. Now that's the average right and then similarly for young women you can see a a little bit of a gap here 28 years of age that's the average that's the average but as uh one of our presenters uh Dr. Pollock will has written in the past. Um these these marriage delays are often because we have that checklist of things in an inflation culture that we've got to get done first. Things like home ownership. Well, we see and I cited this yesterday as well that the average age of a firsttime home buyer has now reached 38 years of age. So, if your life plan, your checklist goes something like finish the undergrad, go grad that graduate degree just to make sure we get a a highly paying job to outpace the inflation, but then we'll go ahead and make sure that we've established ourselves as a homeowner. You're going to be on average waiting until you're 38. But, as Dr. Pollock has pointed out, marriage is the foundation of home ownership, not the other way around. And as we look at alternative pathways to uh essentially uh to put it in biblical phrases here uh at a university like Cornerstone, we have the goal here of making you as wise as a serpent but also innocent as a dove to navigate a difficult economic environment as you move into adulthood. So I take a lot of my research cues from uh my dear professor Gita Hollesman and I want to bring a a brief quote here from his book the ethics of money production and he has a wonderful way of putting these things making the connection between a fiat monetary system and cultural or indeed moral impact in our lives. And here he says that the government's fiat money makes inflation perennial ongoing and in fact our Federal Reserve is in the habit of targeting so-called stable prices meaning stable and predictable increases in prices around 2% give or take unless it's 2021 and it's around 7 8 9% All right, but we're we're aiming for a target and oops, sorry if we missed the bullseye. All right, so what's the result? Well, we observe the formation of inflationspecific institutions and habits. And over the past several years, this has been the focus of my uh my work and my intellectual journey is to discover and to unveil what are those institutions, what are those habits that are formed in us and more broadly in society and culture as a result of that inflation culture. So I want to bring a few ideas that I haven't articulated yet. These are new uh new thoughts on the social consequences of inflationism. The first is an increased dependency but specifically dependency for young people. Uh you might say a prolonged dependency and so I'll address that as its own slide in a moment. But we have an alternative. And I would like to propose that the alternative is a courageous independence. a courageous independence, not reckless, not throwing caution to the wind, but a courageous independence that moves us towards successful adulthood. A second area is financial speculation. It's not merely the case that we are advised to save some money and put it into a uh a mutual fund early. That's uh that's sort of standard advice. Start building up that retirement from the time you start working. But this is a different kind of financial speculation. What economists sometimes call seeking or chasing yield. And this is something that I want to address versus sound savings patterns. The inflation culture pushes us towards the former. But is there a way is there a path for us to lean into the latter? Sound savings. I believe there is. And I think some of the other talks today will will touch on those possibilities to those alternatives as well. Uh but then another one that I think uh really is highlighted in the film that I mentioned is cynicism and distrust. A cynical, distrustful or what sociologists call a lowrust society that emerges in an inflation culture. Now again at a university like Cornerstone we actually can point to biblical revelation and there are specific places where we can see this cultural phenomenon unfolding uh through the prophets declarations and I'll refer to one of those where we see cynicism and distrust grow in an inflationary world. But what's the contrast? Well, the contrast I believe is rational hope. uh you might say a relentless uh or reasonable optimism that this is something that can be adopted but to follow that path again I want to encourage us towards wisdom and innocence doing the right thing and when it comes to that path of wisdom and innocence it would be the opposite of what Thorston polites a uh an Austrian economist in Germany he's uh helps lead the mises institute in Germany uh what he has called collective corruption where an inflation culture actually encourages us in risky behaviors, encourages us in financial steps that we wouldn't otherwise take and we might even ourselves be a little uncomfortable about it. We ourselves might say, "Ah, maybe this is a questionable perhaps borderline unethical behavior with the use of my money. But what are the consequences if I don't? If I don't take that path or take more questionable steps in financial matters, I'll fall farther and farther behind." And so Polite calls this a collective corruption where we know the good thing to do. We know the sensible reasonable thing to do but because of the consequences if we all take the right steps in the right direction towards wisdom and sound financial practices then we will suffer. That's quite a dilemma. And again, Polite calls that collective corruption, where we stick to our ill-advised guns, chasing yields, getting into debt early, and so on. And so, I've previewed the slides a little bit for you here, but I want to talk a little bit more about this dependency consequence. And I'll have to move somewhat briefly, but I've already alluded to extended adolescence in the inflation culture where sort of the markers of adulthood, whether it is marriage. Uh I I uh my wife and I had the great fortune of being in a church that frankly gifted us our wedding. Um most of us aren't in that position. And if you take the take a look at the cost of a wedding venue or any of the things surrounding this rarer and rarer event, that's that's a cost measure that either is going to lean hard on you as the person hoping to be married or on your parents. And this is a part of that ongoing dependency. A part of that ongoing dependency. Now extended adolescence, this could have many manifestations. In the European context, uh this is most uh highly pronounced where you have a heavily subsidized higher education system uh at a very very low cost and this is extending youth uh even into the 30s. Now you might say we have the opposite problem in the US. Indeed that's the case. We do have a higher price tag but of course the costs through the student loan program are delayed. And so in either case, the costs for education are artificially lowered, allowing us to extend our adolescence. It looks a little different in the European context than it does here, but nonetheless, this is one of the consequences of the inflation culture and its consequences in the higher education markets. But there's furthermore uh speaking of dependence in a more broad context not just for young people but the welfare state itself I would argue is a consequence of inflationism. Now this would be a finer point of debate perhaps among economists. But if we trace the roots of inflation culture to the creation of the Federal Reserve back in 1913 and if we start there and observe what happens in home prices, the general cost of living and so forth that life has tended to get a little harder. And the the statistic that for me captures this uh I I put this into my dissertation, but if you take a look at the median, right, the average household income for four people in 1950 and you fast forward that median average today that it now takes 2,000 additional working hours at the median wage to obtain that same median household income over a 70-year period. Well, what does 2,000 hours translate to? A second full-time job in the household. So the phenomenon of an increasing cost of living has meant that either the standard for a married couple today will be dual incomes or you can have a woman only making some income and where does the second income come from? It comes from welfare state. It comes from welfare state. There is uh what I in somewhat provocative terms have called the ultimate polygamist, the welfare state. But I think there's some truth to that. Think of the number of women and children in inflation culture who have become dependent on the welfare state as a father, as a providing husband. That's a stark reality in the inflation culture. Well, in that in that sort of environment, we see now with the shutdown of government and the uh potential revocation of SNAP and EBT benefits, one of the main vehicles through which the welfare state operates, once those are peeled away, there are some tremendous political consequences because if the the bulk of your income is based upon political decision-making uh to make ends meet, then you have political activism, rise to the four. It it rises to become a high priority for those households that depend on politicized income. And so when we have complaints about sort of our culture and the the deep divisions and polarization and politicization of our of our world and our economy, I am here to tell you that uh a great contributor to that situation has been our inflation culture. So how do you act counterculturally? How do you act in a wise and um a wise and innocent way? Well, I would call for early courage development. And what I mean by this is taking small but wise risks as a young person. This is for a number of our business students. This might be a call to step into reasonable risks as entrepreneurs to truly develop value for others and not to think how we might gain wealth via more risky avenues. So this is one one area of encouragement for you on the policy front. this is not going to be a call and and Connor later is going to uh encourage us in this direction that this situation is not a call for us to ask for more intervention. Okay, this is a call for roll back and repeal of the policy choices that have gotten us into this mess, not only in a financial mess but also a cultural mess. And then again in the policy front is to look at ways that power can be stripped away from the centralized uh a centralized government where we can move towards more localized decisions and by uh lessening the amount of centralized power in society we lower the political heat. It's not just we don't have a lot of political heat in the kitchen just because people are revved up and dislike the other side. it's that there are massive political consequences for the other side winning. That that is a key thing to understand here. And inflation, as many of our Austrian scholars have pointed out through the years, inflation drives politics toward centralization. And so by stripping back inflationism, I think like two rails on a uh on a railroad track, we will also peel back the centralization of power. And so that is another thing on the policy front to be uh to be thinking about how we might make a contribution that way. All right. Uh now the financial speculation again I'll be uh try to be brief here. uh the pursuit of financial titles. And it's remarkable to me how when I was 17 or 18 years old, I was thinking about how I was going to be a rock star and how was I how I was going to preserve my uh football playing days and what kind of pretty girl I could chase. This was, you know, kind of at the forefront of my mind. But now I hear 17, 18 year olds talking about, gosh, it's going to be great when I turn 18 because I can open up my first credit card. And what's the purpose? To pump your credit score. And what's the purpose of that? To rush into debt. Now, most folks your age have not really done a stepbystep causal analysis to understand what's going on here. It's just sort of in the air. It's marketed to you. But in an inflation culture, sadly, this is sort of the rational step to take. If the way forward to build your wealth is to leverage debt into your education and into a home, this is the path forward rather than what we were always told, right? as as young people, maybe you had your your grandma or your grandpa, you're sitting on their knee. They're bouncing you around and saying, you know, Johnny, Susie, you're going to work hard. You're going to do great things, and you're going to build a nice life by working hard, showing up on time, and doing well for others. That's the path to the good life. But it seems the inflation culture has tutored us in a little different direction, hasn't it? So, what do we do? What do we do? Well, some ways to think about this. Think of your labor as service. And particularly for our business people, our entrepreneurs, think of your labor as service. And essentially it is. Uh Austrian economics teaches us that profits are earned when we serve others well. When the values that we deliver are higher than the price we're asking. And just for you accountants out there, yes, the price you charge must be above your costs. All right? But to earn profits through delivering value to others rather than through financial speculation is one thing that I would encourage you to drive towards and I think we'll be touching on this a little bit on the policy front. I want to give you a practical and a policy piece, right? Uh something personal and again something at the policy level. And our book over here, uh chapter 7 from the Hayek collection there points towards currency competition. And we have some some emerging alternatives to the dollars, the Federal Reserve notes that are created these days. Well, on the cynicism and distrust front, again, I need to be quick here. I'm a little over time. Uh what do we see? We see a again air quotes here uh but a doom porn sort of culture, right? Where the most sensational uh disastrous outcomes are the things that we gravitate gravitate towards when it comes to family formation and fertility choice. We know uh researchers have let us know that young people are are delaying or choosing not to have children at all because after all the world is going to burn the green hysteria. And this um this again is a is a part of that sort of doom culture and almost inescapable pessimism about the future. And indeed, when you look at an ongoing rise of prices for nearly everything except your big screen TVs, that just does not paint a very positive picture for us. So, this is a consequence of the inflation habit. And then to be more specific on this question of marriage and family, uh it it goes around uh Tik Tok and some of these places that young women have now developed a 66 rule for who they will date or potentially marry. that is I already alluded to this a little earlier at least 6 feet tall and at least six figures otherwise take a hike swipe left or right whichever way the rejected pile goes right these kinds of uh materialist consumerrist sort of mindsets are bred in the inflation culture and so again I want to encourage us towards a practical uh and policybased alternative So through wise planning, uh this speaks to our folks here on the Cornerstone campus. Get yourself in with one of the groundwork financial adviserss. All right, take some time to begin wisely planning for the future, but also altering your what I call it your conscious preference development. Again, another great thing that Austrian economics teaches us is that our actions are a reflection of what we truly prioritize in life. Our demonstrated preferences are synonymous with action and choice. So whatever you're doing demonstrates what you prefer the most. And so I would argue here for thinking about marriage and family life and moving that up the list a little bit. A conscious development because from an economic standpoint again referring to Dr. Pollock's early earlier work it is the foundation. It is the cornerstone of adult life and it has been for decades and even centuries. And so I would encourage you to put those matters a step or two before some of those financial goals because marriage and family life are actually the pathway to meeting those goals. And so finally uh I deployed a little technology here. I asked uh chat GPT to sort of summarize in in a piffy statement a bumper sticker kind of approach and this is what uh chat GPT did summarizing some of my work in today's lecture. So let's see what it has for us. It says that meaning cannot be printed. That's okay. All right. Chat GPT I'm listening. I'm listening. And love cannot be leveraged. I like the alliteration here. This is very nice. Thank you chat GPT. But to rebuild civilization, we must deflate illusion, restoring value in both money and life. So ah maybe a little imprecise, maybe a little squishy, but chat GBT closes us out here. So let's steer clear of the mental framework and pathway that we see in the materialists and take steps towards a world with less inflation and more prosperity and civilized life. Thank you so much. >> [applause]