2013-07-16T19:53:08+00:00

A rough outline of the basic economics of owning a home in Boston’s urban core

July 16, 2013/stevereads/3 Comments

I think these are fairly reasonable assumptions on the sort of home you could buy in Boston / Cambridge / Somerville / Brookline:

* Home value: $600,000
* Downpayment: 20%
* Mortgage interest rate: 4.5%
* Mortgage term: 30-year, fixed-rate

(For the home price, see, e.g., the Census Bureau’s Cambridge QuickFacts. Boston’s median home price is lower, apparently. Somerville’s is higher than Boston’s but lower than Cambridge’s.)

Then the mortgage you take out will be $480,000, and the monthly payment will be $2,432.09. Add in property taxes, a low estimate of monthly repair costs, and an estimate of the water bill. Subtract the mortgage-interest deduction. What I end up with, in Somerville, is a total monthly out-of-pocket expense of about $2,800.

The standard guideline seems to say that you should spend 30% or less of your income on housing. So to afford $2,800 a month, you need to earn $9,300 or more every month, or about $112,000 per year. Only about 5% of all Somerville tax returns claimed adjusted gross income of more than $100,000 in 2008. (Check ZIP codes 02143, 02144, and 02145 in that spreadsheet.) Now, granted, if you and your spouse both file separate returns, and you each earn $100,000, you really should count — for the purposes of this exercise — as a household earning $200,000; that’s certainly the unit that would be buying the home together. In 2010 about 95.5% of all married-couple tax returns were filed jointly, so it may be reasonable to assume that the tax statistics aren’t hiding much income across multiple tax returns.

So is that it? Do you have to be in the top 5% of incomes to even afford a home around here?

__P.S.__: The illustrious mrz, in comments, mentions the other part of the math that I worked out: homes around here are much more affordable, on a month-by-month basis, if you buy a multi-family building and rent it out. Figuring that your standard 1,200-square-foot unit rents for a couple thousand dollars per month, a triple-decker gains you $4,000 in rent every month. You lose some of that in income taxes; assuming you’re in the 28% bracket, for instance, that’s $1,120 in income taxes every month. But then, a multi-family home usually costs more than a single-family home, which means a few things:

1. Larger downpayment. I assume that around here the price of admission for a triple-decker is about $800,000. Again assuming you put down 20%, that’s a $160,000 downpayment.
2. Since the home is worth more, you pay more in property taxes. In Somerville, for instance, a home assessed at $800,000 would cost $427.47 every month. (I haven’t looked into whether the two units that you’re not living in are eligible for the residential exemption, so don’t quote me on this. The actual property-tax amount may well be higher than $427.47/month, because you may not be eligible for the exemption.)
3. Those property taxes are deductible on your Federal income taxes.
4. Since the home is worth more, your mortgage payment is larger, and in particular your monthly interest payment is larger, which means that you can deduct more interest every month on your Federal income taxes.

All told, I work out that the net out-of-pocket monthly expense for an $800,000 triple-decker is about $1000. Which is a whole lot less than the $2,800 you’d spend every month on a single-family home. But of course a multi-family means you’re a landlord, with all the badness that that implies.

Taylor Larimore et al., The Bogleheads’ Guide to Retirement Planning

July 13, 2013/stevereads/3 Comments

This book is “okay”.

A year or so ago, I finally paid off my college loans, after 12 years of bearing that giant psychic weight. My employer is good to me, so now I’m at a point where I can think about saving. My first impression was — and still is — that everyone is out to screw me over. There are financial advisors, but their incentives are well-known; there are mutual funds, but all my reading tells me that they can’t be expected to beat the market consistently, and hence that your best bet is to just place your money in an index fund and be done with it. Or you come to the topic of buying a house, and you can’t help but feel that everyone *there* is also trying to pull a fast one on you: the realtors, the banks, the owners of the homes themselves.

So I asked around on Twitter, and Austin Frakt helpfully pointed me to The Bogleheads’ books. A Boglehead, if you’re unfamiliar, is a discipline of John Bogle, founder and former CEO of The Vanguard Group, a mutual-fund company now managing around $2 trillion in assets. If you didn’t know about the Vanguard Group before picking up this book, you soon will; much of the book reads like an advertisement for Vanguard.

I’m still a little confused, after reading it, what exact purpose it’s supposed to serve. Is it a beginner’s guide to retirement planning? If so, I think it was incorrectly structured. It contains a chapter on defined-benefit retirement plans (i.e., pensions), for instance, which only 29% of the population even has access to. That number drops to 17% if you exclude the public sector. Yet it’s one of the first chapters in the book. That is part of the testimony to this book’s odd structure.

So let’s imagine that the book were restructured into a more appropriate form. Honestly, I think the best form would be as a web app of some sort, à la TurboTax: ask you a series of questions, and let previous questions guide subsequent ones. “Do you have a defined-benefit retirement plan?” 7 out of 10 of your readers would answer “no”, and on you’d go. That would also allow most people to skip over the “are you in the middle of a divorce?” section, or the “are you in the middle of a financial crisis?” section, or the “here’s the order in which you should withdraw from your retirement savings when the time comes to withdraw from them” section. I submit that that last section isn’t really helpful to someone like me, who’s 35 years old and (hopefully) many years away from drawing down his retirement savings.

What I *do* want to know, and what I haven’t yet found the appropriate book for, is how to spread my money around across various buckets. Right now, I can choose to save money for a house, for retirement, for future children, for a rainy day, etc. How should I split things up? This retirement guide provides a bit of useful guidance in that direction, inasmuch as it taught me that profits on the sale of your primary home are non-taxable (at least for now). That’s fantastic news. It certainly suggests that your primary home should be considered a central part of your retirement strategy; maybe you should buy the largest home you can afford, and tax-shelter the appreciation in its value. Unfortunately, the Bogleheads’ book only approaches the home when retirement time comes; they suggest that you consider selling the home, downsizing, and pocketing the difference. That all sounds correct, but what do I do *now*? Suppose I have $1,000 lying around; do I put it in my 401(k), or put it in a house? And how about buying a triple-decker and using it for rental income; is that a thing I should do?

That’s one problem I’ve noticed with a good many books of this sort: they focus on one problem, like buying a home or saving for college or planning for retirement, but don’t necessarily treat those problems as parts of an integrated whole.

To the extent that it *does* treat them as part of an integrated whole, the Bogleheads’ book seems to have one bit of advice: all the various things you need to think about — which life insurance to buy, which mutual funds to invest in, how to write a pre-nup — require professional help. You and your partner should write your pre-nup with two lawyers; find an insurance broker you can trust; choose a financial planner who doesn’t live off commissions. (They illustrate this with a nice quote: where are the *customers’* yachts?)

Which just brings us back to where we started: the problem is finding people whom you can trust. Find trustworthy insurance brokers, trustworthy realtors, trustworthy lawyers, etc. How do you decide whether they’re trustworthy? Well, ask your friends, I suppose. But how do you know whether, for instance, your friends have been suckered into buying a life-insurance policy that will not actually help out their beneficiaries when your friends die? To paraphrase that famous story about the scientist explaining the origins of the universe, it’s trust all the way down.

What I conclude from reading this book, and from life more generally, is that I am too stupid to make above-market returns. I’m willing to go further and suggest that the vast bulk of Americans are also too stupid to make above-market returns. And if we *do* make above-market returns, they’re frittered away by fees from investment companies, who are the ones making all the money. So one conclusion is: invest stupidly. Put my 401(k) in a low-fee, passively managed mutual fund that invests in a broad market index.

This adds fuel, by the way, to the book I want to write. Americans are told that we can’t afford to provide the good life for our people, and specifically for our retirees; the best we can hope for is that Social Security will be cut less than Republicans would like. In fact we can afford the good life; it’s just that the story over the last 40 years or so has been that we 1) remove people’s safety net, 2) tell them to take care of themselves, and 3) turn the safety net over to private companies, thereby creating a rentier class that siphons the public’s money into the pockets of the already-wealthy. We can certainly afford the good life; it will just require that the rentiers be euthanized.

Food stamps

June 22, 2013/stevereads/2 Comments

If we’re not going to do anything to alleviate the causes of poverty, the least we can do is help reduce the damage it causes. Among the least controversial (or so I thought) things we could do is provide food to poor people. About one in every ten households has received food stamps, and they average about $120 per month for food. That’s The total SNAP budget is about $81 billion. To put that in perspective, it looks like we’re budgeted to spend $85.6 billion on Operation Enduring Freedom in Afghanistan this year. Yet the recently-rejected House farm bill included a $2-billion-a-year *cut* to SNAP. So apparently we owe it to soldiers to stay the course, even when the course was disastrously conceived and executed, but we owe the poor nothing even when their poverty is our fault (e.g., your skin color consigned you to an officially inferior station with limited voting rights until at least the 1960s; your father ended up in jail as part of the country’s catastrophic war on drugs; the Federal Reserve cares a lot about inflation but not so much about unemployment).

I’m reasonably happy that House Democrats opposed these cuts to SNAP; I’d be happier if anyone’s imagination extended to *expanding* the program. But no; the Senate, which *has* passed a SNAP bill, cuts the program by $3.9 billion. The best we can come up with is to cut this program — just like the best we can come up with when it comes to Social Security is to cut benefits by using an alternate measure of inflation, even though Social Security pays retirees only about $15,000 a year, and even though Social Security is the *sole* source of income for one in five people over 65.

I don’t know what we’ve lost: the imagination that allows us to think our society can achieve great things, our feelings of brotherhood toward our fellow-men, or our ability to experience outrage. Whatever it is, it is sad as hell.

We continue to act like a poor country — like we’re going broke and can’t afford to guarantee a minimally good life for our brothers and sisters. I continue to lament this; the more I think about it, the more I know that I need to write a book about it. We’re not poor. We’re the most prosperous nation that the world has ever known. We’ve just chosen to redirect much of the massive increase in real incomes since the 1960s into the wrong things. What’s even more worrisome than that, however, is that we’ve made the mistake of believing that our “poverty” is baked in, rather than the result of an explicit choice. But it was and is a choice. It’s a choice that we make anew every single day, when we decide that we don’t have a society filled with people who owe something to each other, and instead decide that we’re each on our own fending for ourselves.

I see this in myself, and have to fight it constantly. “Save until it hurts,” I tell myself, “because when the time comes, no one is going to be there for you.” Or I consider how much I’ll have to save for my notional future children, in the expectation that well-funded public universities won’t be there to help them.

So that’s the plan on my end: write up where we came from and how we ended up at this particular sordid state, make it clear to our society that our “poverty” *is* a choice, and try to recreate the social imagination that we so desperately need.

Evgeny Morozov on Tim O’Reilly

April 28, 2013/stevereads/2 Comments

I would like to commend to your favorable attention this Evgeny Morozov essay on Tim O’Reilly. If any essay ever owned the noun “takedown”, it is this one. O’Reilly, in this telling, is yet another popular Internet “philosopher” wearing his libertarian blinders. There’s no need for politics in this world — only more private actors’ economic bodies bouncing off one another inelastically like financial billiard balls. Once again (documenting this is a Baffler staple), what could have been a revolution in values and in the basic structure of our institutions (personified in this essay by Richard Stallman — and actually, the shoe fits) is transformed into this generation’s Tom Peters.

There’s a lot I could quote from in here. I’ll leave you with this:

> Sorting through the six thousand or so academic papers that cite OReillys essay on Web 2.0 is no easy feat. It seems that anyone who wanted to claim that a revolution was under way in their own field did so simply by invoking the idea of Web 2.0 in their work: Development 2.0, Nursing 2.0, Humanities 2.0, Protest 2.0, Music 2.0, Research 2.0, Library 2.0, Disasters 2.0, Road Safety 2.0, Identity 2.0, Stress Management 2.0, Archeology 2.0, Crime 2.0, Pornography 2.0, Love 2.0, Wittgenstein 2.0. What unites most of these papers is a shared background assumption that, thanks to the coming of Web 2.0, we are living through unique historical circumstances. Except that there was no coming of Web 2.0it was just a way to sell a technology conference to a public badly burned by the dotcom crash. Why anyone dealing with stress management or Wittgenstein would be moved by the logistics of conference organizing is a mystery.

(Thanks to an employee — an owner, I believe — at the Harvard Book Store for pointing me to the latest Baffler.)

Paul J. Nahin, Dr. Euler’s Fabulous Formula: Cures Many Mathematical Ills

April 27, 2013April 21, 2026/stevereads/Leave a comment

On the basis of its title and cover art, you might believe that Dr. Euler’s Fabulous Formula is a work of popular mathematics on the level of, say, How To Lie With Statistics or Innumeracy. Don’t get me wrong: both of those books are spectacular — must-reads, in fact. But you don’t read them in the expectation that they’ll contain interesting mathematical content. If you have a background in mathematics or statistics, you in fact don’t read them; you assume that you already know everything that’s in them. (Naked Statistics is like that for me, though the author’s recent appearance on Planet Money makes me think again about reading it.)

Dr. Euler’s Fabulous Formula is not like that. It is accessible to anyone with a basic college calculus education, and its rewards are astonishing. Starting from the premise that the Euler formula “e^(i theta) = i sin theta + cos theta” is amazing — which is a correct premise — Nahin is off and running. He runs through Fourier series, Fourier transforms, proof that pi is irrational, how to design radio circuitry, whether a tailwind helps or harms a runner on a circular track, and a hundred other things besides.

But not only is the content remarkable; Nahin pulls off the trick — which is incredibly rare among mathematical writers — of being completely, 100%, crystal clear in his proofs. His book is filled with full-frontal integrals, but every step is spelled out so clearly, and so conversationally, that I never missed a single step in the argument. I love mathematics, but I’ve long wished that I were better at it. Nahin makes me wonder if the mathematicians are the problem, rather than me. (Though it doesn’t matter what the answer to that question is: if I want to learn more math, I need to learn to read mathematics as she is written [by people other than Nahin]. Sad but true.)

So Nahin’s book is both filled to the brim with extremely interesting mathematics, and written clearly enough that any college sophomore could understand it. It’s a trick that I’m not sure I’ve ever seen before. On this basis, I’m strongly inclined to read Nahin’s other work, starting with An Imaginary Tale: The Story of the Square Root of Minus One; apparently Nahin’s Euler book is best viewed as the second half of An Imaginary Tale.

Many thanks to Chris Young, of the long-defunct Explananda blog, for the pointer to this fabulous book.

Some thoughts on Adam Smith

April 19, 2013April 21, 2026/stevereads/1 Comment

My memory of The Major Transitions in Evolution is a little hazy, but I believe the thesis is that there have been several important jumps in the history of life on earth, wherein life took a jump from a simpler form to a complex form in such a way that a movement back to the simpler form was impossible. (Synopsis on the wiki.) I seem to recall, for instance, a story going like this: a single-celled organism one day became parasitic on another, until they fused into a multicellular organism, and from that day forward the two organisms could only function in the presence of the other. Each of these transitions, as I recall the story going, involved a new mode of information transmission, which made the transition stick. (This synopsis is likely wrong. My knowledge of biology is even weaker than my knowledge of, well, everything else. “Symbiosis” is the keyword here; it’s associated with the late Lynn Margulis.)

I wonder whether complex market economies are a new transition, in the sense that we have simply ceased being able to function without a division of labor. None of us in Western capitalist democracies could even consider living as economic hermits, tending our solitary farms or whatnot, because all the components necessary to even start that farm presuppose so much from the society around us: a government to maintain the roads that bring our products to market; a state with a monopoly on violence so that we don’t need to pay off the Mafia every time we want to get on those roads; industrial corporations to manufacture the steel tools that we use to plow the land; miners to dig up the iron that the corporations convert into steel; other corporations to build the pickaxes that even primitive miners would use to extract the iron ore from the ground; and so forth.

All of which is just to say: Boston is shut down right now, and I’m out of food, and the restaurants are closed, and I’d really like to eat dinner. Thanks.

“Job creators”

March 25, 2013/stevereads/1 Comment

Maybe this is paying too much attention to a mere rhetorical trope, but I really dislike the phrase “job creator” as a synonym for “businessman”. Businessmen may or may not create jobs; if they do, it seems to me, it’s very often purely accidental. Word processors, for instance, are a great benefit to mankind, but they also take jobs away from secretaries. Everyone loves their smartphone, but that love is seemingly taking jobs away from supermarket-tabloid writers. Google Search, maybe the most magical technology of my life so far, may well radically decrease demand for librarians.

That’s just what Schumpeter called “creative destruction” (“celebrated everywhere that capitalism is actually believed in”). So on the one side, it’s not at all clear that businessmen create jobs; they may well destroy existing industries.

Then, of course, there’s the fact that a successful business very often drives out the incumbents from its own industry. Google may have created some jobs, but I assume that it also eliminated some jobs at Alta Vista.

Finally, there’s the obvious point that it’s considered a good thing when businesses squeeze more revenue out of each individual employee. This is called “increased productivity”, and historically it’s how nations increase their GDP, and thereby how living standards rise. The fraction of Americans working in agriculture is 1/3 of what it was in 1970, yet total output is 91% above what it was then. Agriculture may be the foundation of a healthy people, but it’s not because farmers are job creators. Quite the opposite, in fact.

The conceptual trouble may come from businessmen’s desire to be associated with people whom we universally admire, and whom we rightly view as advancing society — people like inventors. Not all businessmen are inventors; nor are all businessmen job creators. Today, for instance, I saw Rick Steves describe himself as “a hardworking business owner who creates jobs”. He may employ people; but if he wants to claim that he created jobs by writing travel guides, he needs to show that he didn’t take away jobs from other travel guides (Lonely Planet, say). If he’s just taking jobs away from other businesses, then he’s not a job creator. He may be an *employer*, but he’s not a job creator.

This was the trouble that Mitt Romney got into during the 2012 campaign. He wanted us to think that he knew something about how to run a country because he was a businessman. (Set aside everyone’s intuition that there’s a difference between a financier and an inventor, and that Romney was a financier.) But as a businessman, he would be happiest when his companies drove all of their competitors out of business and managed to produce the same output with half the workers. But inasmuch as his competitors were also American companies, the net effect on American employment is … well, it’s not obviously zero, but neither is the effect obviously to add American jobs. (Paul Krugman made the point more eloquently back in 1996, in “A Country Is Not a Company”.)

To the extent that businessmen know which policies encourage inventors to thrive, they may know how to create jobs; but even here, I think it’s really only safe to say that creating a fertile climate for inventors aids in increasing productivity; it doesn’t say anything about guaranteeing full employment, which is what “creating jobs” has to mean. It has to mean that there are more people working today than there were before you took charge.

Actually creating jobs may be the role of the Federal Reserve. The Fed is charged with maintaining stable prices consistent with maximum employment. There’s a story according to which allowing unemployment to drop too low means that inflation will start spiraling upward; that threshold level is called the Non-Accelerating-Inflation Rate of Unemployment, or NAIRU for short, and I’ve been convinced that the concept is bunk. But in any case, the question is how to ensure that everyone who wants a job has one. It’s romantic to think that a proud fellow called a “job creator” knows how to make this happen, but the true story may be that mechanically adjusting interest rates, and occasionally pushing stimulus when all else fails, is all that we need. Not surprising that the Romneys of the world would yearn for a more heroic story. Unfortunately, that story doesn’t withstand any scrutiny.

Richard Feynman, The Character of Physical Law

March 3, 2013April 21, 2026/stevereads/Leave a comment

Lest I develop a reputation as a Negative Nancy, I should note that I also recently read Feynman’s The Character of Physical Law, which has been sitting on my shelf for certainly more than a decade. Just a delightful book; I had forgotten how remarkable a teacher Feynman is. The whole book has the tone of Feynman’s little bit on uncertainty:

which is to say a certain extremely rehearsed casualness. The book’s casualness is in the teaching of things that are actually extremely complicated: symmetry laws (i.e., laws stating that certain quantities are unchanged when certain actions are performed), conservation laws (that the total amount of some quantity in the universe is constant), the relationship of mathematics to physics, etc. Just a delightful little gem, which ought to be read just before or just after Wilczek’s Longing for the Harmonies.

Two books to dis-recommend

February 23, 2013April 21, 2026/stevereads/Leave a comment

Siobhan Roberts, King of Infinite Space: Donald Coxeter, the Man Who Saved Geometry. The problem with this genre — biographers of scientists, or maybe more broadly “science literature for everyone” — is that it needs to please two masters at once: those who know the subject reasonably well and want to know about the men and women behind it, and the general public that is concerned with quirky people first and the subject matter second. This is a very, very fine line to walk, and the number of books I’ve read that do manage to walk it can be counted on one hand. Or maybe zero hands.

Roberts, sadly, is not the person we want reporting on Donald Coxeter. She wants to convince us that he singlehandedly saved geometry, and she wants us to know a bit about the man. Coxeter’s whole life was geometry, though, so Roberts had better know the subject decently well. And if she knows it, she’d better present it to a nontechnical or semi-technical audience fairly well. It’s not at all clear to me that she knew the subject well. She tries her best to make Coxeter sound interesting on his own, but he sounds either extremely boring or just not a very nice person outside of mathematics; in particular, he seems to have lived a fairly loveless marriage, and to have been not very good to his kids.

So we end up not really liking the man, finding him desperately boring, and not understanding much of what makes him a great mathematician. Roberts protests too much about his greatness, telling us over and over again how important he was without really being able to prove it. It’s too bad, because he probably was a first-rate mathematician. I picked up Coxeter’s famous Introduction to Geometry while I was reading Roberts. Hopefully I’ll like Coxeter’s book more than I liked Roberts’s book about him.

Joshua Ferris, Then We Came To The End. I’m really disappointed to be dis-recommending Joshua Ferris’s first novel, given how much I loved his second. So the thing to say here is: go read the second and absolutely skip the first. Then We Came To The End is a boring story from a boring advertising office in Chicago toward the end of the dot-com boom, when everyone is getting laid off and the economy is in slow-motion deflation. People fill their empty lives spreading rumors about one another … and that alone would offer space for a little moral about the insanity of rumors, if it didn’t turn out that all the rumors are basically true.

I know what boring office jobs are like; I’ve worked in them. I don’t need to read a book about them, unless that book shines some sort of interesting light on the plight of office workers. It doesn’t, really at all. The office workers are either contemptible, pitiable, or noble, and I would gladly read a novel about the two noble characters. In the novel I actually read, though, there are 400 pages about bored, despicable people. There’s a bit of a redemptive love fest at the end for no good reason. The final sentence of this 400-page atrocity could have resolved a big question mark that the reader will have carried with himself or herself throughout. But that resolution would involve turning back a few pages and methodically checking off who’s at the love fest, so that we can see who’s not there; and By The Time I Came To The End, I was so desperate to put it down and do something enjoyable that I didn’t even care about a resolution.

So please, go read Ferris’s The Unnamed. It’s great. Let’s just pretend that that was his first novel, and speak no more about his real first one.

Alicia H. Munnell and Steven A. Sass, Working Longer: The Solution to the Retirement Income Challenge

January 21, 2013April 21, 2026/stevereads/1 Comment

Here’s a quick bit about a book I despised. Munnell and Sass’s thesis is that since people are living longer, they logically have just 3 options: live on less per year of retirement, save more for every year they’re employed, or retire later. No problems up to here.

Living on less would be dangerous, say Munnell and Sass, and people aren’t saving enough (no arguments here, either); ergo, the only option (flashing DANGER lights) is working longer. So their first sin is one of omission: a better book would have looked at how to, e.g., shift more of society’s resources into providing a better retirement for everyone.

Their next sin is in acknowledging that life expectancies have risen the least for the poorest and least educated among us, and for African-Americans, without then proposing any solution that would actually solve their problem and while sticking to their retire-later guns. If you’re the sort of person whose basic moral alignment says to help the neediest first, this book will anger you. Indeed, I often thought that it should be retitled, Throwing It Against The Wall: The Solution To This Book.

The solutions that they do come to are small-ball ones, like beefing up little job-retraining programs that they admit don’t really work. And they leave the reader with no confidence that employers will actually want to employ older workers. (Even larger solutions, like committing on G.I. Bill scale to college education, aren’t obviously going to solve the problem: give everyone a college degree, and you’ll still find that some people are better educated than others. It’s not clear that a college degree for everyone will solve a macroeconomic problem like retirement security.)

Munnell and Sass rule most of the interesting parts of the problem out of scope, for reasons that elude me. The basic problem, it seems to me, is that employers have no incentive to do what society acknowledges needs to be done, namely provide for the well-being of those who’ve spent their lives toiling. Employers aren’t charities, naturally, so this isn’t necessarily a knock on them. It is, however, a knock on a society that has structured much of worker security (401(k)s, before them pensions, and health insurance for current workers) around employers whose incentives push in exactly the opposite direction. We know that companies won’t do what we need them to do; other societies have taken the next logical step here and looked to government to provide what companies will not. Yet Munnell and Sass rule this out of bounds early on: literally their only question is how to get workers to work longer.

Workers don’t want to work longer. They end up retiring at 62, even though they say they want to work to 65. Here Munnell and Sass have a point: changes in the provision of Social Security benefits have caused people to lower their retirement age from 66 to 62; policy changes could just as easily return the retirement age to where it would have “naturally” landed on its own.

That said, real per-capita GDP has more than tripled since 1950, back when the U.S. economy was the envy of the world; if Americans were prosperous then, we must be really prosperous now. When people earn more money, they naturally decide to convert some of that money into increased leisure. And if they had greater income security (through Social Security, say), they’d likely convert more of that income into leisure. Munnell and Sass ask, essentially, how to convince people who are wealthier than ever to work longer. It’s bizarre tunnel vision.

I anti-recommend this book wholeheartedly.