By : Jim Pinto,
By : Jim Pinto,
Previously, the "bell curve" defined normal statistical distribution, and it became a fundamental law of natural science, a cornerstone of statistics. Recently, several economic and social phenomena seem to be following a different pattern. Instead of being high in the center and low on the sides, this new distribution is "bi-modal", low in the center and high on the sides. So, it's called "the well curve".
San Diego Mensan, August 2003
With the turbulence of this new century, a lot of things are turning upside down. The old bedrock is being shaken; accepted rules are starting to be broken; fundamentals are now paradoxes; the obvious is becoming subtle.
A century and a half ago mathematicians noticed that when large samples of different things were measured, results tended to cluster around an average. When plotted on a chart, the data took the shape of a bell. This "bell curve" defined normal statistical distribution, and it became a fundamental law of natural science, a cornerstone of statistics.
Recently, several economic and social phenomena seem to be following a different pattern. Instead of being high in the center and low on the sides, this new distribution is "bi-modal", low in the center and high on the sides. So, it's called "the well curve". And it seems to be popping up everywhere recently. There are lots of examples.
Theorists believe that conditions deviate from the bell curve only during periods of transition. The chaos of the new age, the realization of Alvin Toffler's Future Shock, may be reflected by the inversion of all the old logic. The statistician’s "standard deviation" may not be standard after all.
The effects of the well curve are becoming more evident in everyday life. The two ends of the spectrum are gaining steadily, while the mid-level deteriorates.
The push for cheap is providing more and more benefits for the low end of society: 99c hamburgers and tacos, low-cost polyester clothes, pay-less shoes, big-lot stores, dollar watches and calculators, the list is endless.
At the same time, the middle class is under attack, their values being abandoned. Once respectable mid-level jobs are transferred offshore to save cost. As breadwinners become jobless, their middle-class homes become run down and dilapidated. The bell curve implies that the majority, the middle segment, is somewhat satisfied. But the well curve means that this is inverted completely for the majority. And this is bringing social unrest, and a lot of middle-class dissatisfaction.
At the same time, with the decline of interest rates, the still-employed middle-class pushes inexorably upwards. With low interest rates, home construction and remodeling is growing to record levels. Drive anywhere around San Diego to witness the mushrooming of half-million-dollar homes, the supposedly “low-end”. And drive a little more to note the proliferation of palaces. This year’s San Diego Tour d’Elegance was in Chula Vista, demonstrating the attainable luxury of 6,000 sq. ft., $3 million lakeside residences. And those were nested midst the ever-expanding new home construction, mostly million-dollar packages on postage-stamp lots. In the midst of a struggling economy, is this the middle-class?
And the high end continues to thrive with bigger salaries, multi-million dollar bonuses, golden parachutes and princely pension packages. If you think Enron and WorldCom palaces were attained only by shady accounting in a few isolated instances, take a drive to Rancho Santa Fe to count the overflowing community of 15,000 sq. ft. homes, built next to crowded golf courses with $ 100,000 membership fees. The high end is thriving, and getting even higher.
Hey, see if this passes your own acid test by applying it to the daily news. The "well curve" starts to make sense."
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