Social Insecurity and the Unpleasant American Dream

I’m certain that I’m not alone. I have no retirement plan. There is no windfall waiting for me. No inheritance or IRA sits patiently waiting for my time of need. I have enough debt to keep me awake at night from time to time. No social safety net protects me or my family from a … Continue reading “Social Insecurity and the Unpleasant American Dream”

I’m certain that I’m not alone. I have no retirement plan. There is no windfall waiting for me. No inheritance or IRA sits patiently waiting for my time of need. I have enough debt to keep me awake at night from time to time. No social safety net protects me or my family from a very hard fall – a fall that could be triggered by an accident, an extreme weather event, or sudden political chaos – all of which could be imminent. I am sure that I’m not alone in my social insecurity and the dark pit of hopelessness that looms around each and every corner. This is the unpleasant American Dream realized – constant dread of financial disaster which is coming whether I like it or not.

Is it my own fault? Certainly I have made many of the decisions that have brought me here. I could have stayed in the Marines for twenty years. I could have gone to University right after graduating high school in 1990 instead of going in the Marines and deferring a degree until 2008. I could have stayed in a number of careers that didn’t bring me joy -I could have pursued a management career in hospitality, I could have remained an Air Traffic Controller, I could have stayed a stock broker or an insurance agent, I could have stayed in Hawaii after graduating and taken any job that might have been available at the height of the recession, I could have stayed in radio, I could have persevered in a tech career after the dot-com bust, and so on. I second guess my life decisions all the time. I made them, I live with the consequences – but there is no going back. At the time, I made the best decision that I could and did what I thought was best for my future. Usually, those decisions had very little to do with finance and much more to do with things like ethics, spiritual beliefs, and an awareness that life is transitory and if I didn’t take the time to live while I was young, I would someday be old and regret that I had not. My life is worthy, my experiences a joy and comfort, and my integrity mostly intact.

But this is the United States of America – the country I was raised in was a country formed by revolutionaries and shaped by organized labor. A country with laws to protect workers, the poor, the sick, the elderly, the insane and handicapped. We were supposed to have social security and peace of mind in our old age. I’m not old yet – mid-life at worst – but I don’t see any sort of retirement or ease of living in my American future. I see a nightmare. For two decades now, I’ve seen senior citizens filling the low wage workforce – working in jobs that in my youth belonged to high school students. Senior greeters at Walmart and Senior fry cooks at McDonalds. In the 1970s and 1980s – I remember people having retirement parties when they reached age 65 – When was the last time you heard about someone actually retiring? Yes, it happens in government and maybe in some other isolated fields – but not in my world. I have some friends who will retire – but not many. Most of us will have to scrabble until the day we die for enough to pay our insurance, buy prescriptions, pay heating bills, and buy food. That’s the fate of the majority of us in the United States.

I don’t know why, but I thought we were better than that. We’ve elected billionaires who have put millionaires and billionaires in charge of the public protections and we’ve gotten what we pay for. And when you elect billionaires, one thing you can be sure of is that they want everyone to pay. There is no public safety net. There is no protection for workers. There is no future for this country except for increasing oppression against the working class and the poverty class until the pressure becomes so extreme that it explodes. We are already seeing the vents of steam jetting from the cracks – and there is more of that to come.

At some point, the United States decided that taking care of business was the best way to take care of people. That point happened somewhere between the 1950s and the 1980s – it was a gradual erosion of the New Deal until suddenly, we found ourselves living in a society where there is no longer a deal at all except perhaps for The Art of the Deal – from nurturing to shystering and exploitation.

I find a strange comfort in beating myself up at not having made the right choices – but if I had made different choices, I could easily have found myself in worse conditions than those I live in now. The Marines and ATC could have led to an early death from alcoholism, radio has merged and consolidated until only the most talented are able to achieve careers, I could have been a dot-com has been, or a real estate tycoon who lost everything in the recession, the soul sucking work of selling stock (let’s make money from this war Bob!) could easily have led to suicide, and the list goes on. There’s really no reason or purpose in beating myself up over the past.

The future though – it is that which worries me. I cannot see a future that I want to be a part of in the United States. I cannot see a future that I want my child to be a part of in the United States. When I attempt to see the future here, I see tragedy and hardship. I wanted to come back to my country and succeed. I wanted to come back to my country and find a future I could believe in. I am trying. I am really trying to see past the storm on the horizon. From my perspective though – it just looks like it will get worse and worse and worse with no prospect for a sunny day.

A Shameful Society

What kind of world do we live in when a slime ball like Bill O’Reilly not only doesn’t get fired for sexual harassment but also gets a huge payoff when the company he works for (FOX) realizes that people are upset that he got away with sexually harassing multiple women – who were also paid off by Fox to keep them from pursuing charges? Certainly I’m no fan of the politics of Fox news, but this takes the cake – essentially, O’Reilly just got a huge payoff for being a dirtbag – it’s almost as bad as electing a man accused of sexually assaulting an underage girl to the office of the President – which, come to think of it, actually happened and so this shouldn’t be a surprise at all. Decency does not matter any more in the United States – only money.As long as existing home sales rise (they have), marketshare, and the Dow Jones Industrial Average rises – all is forgiven.

I have spent a fair amount of time trying to figure out what is propping up our economy and I’ve failed to discover anything – which is not a surprise – no one seems to have the answers as to why the economy in general should be rising but the fundamentals of the economy remain gloomy. I’ve got a few guesses 1) there is a lot more US Currency being printed than we are being told – the economy is still being fluffed 2) student debt is somehow being packaged and resold despite an average default of once every minute 3) capital doesn’t have a safehaven or a strong negative bet and is bouncing around while it waits for a shoe to drop.

As a retailer, I know one thing for sure, people are not spending recklessly on material goods. I don’t know where their money is going – but they are being tight with it when it comes to spending in brick and mortar shops. My suspicion is they are spending credit on online retail, spending cash on food and experiences like travel, and investing equity in their properties which they use for AirBnB rentals – which drives the cost of rent up and the cost of buying a property up as well.

And all of that leaves the great majority of us – scratching our heads and wondering where all the prosperity we were promised as kids has disappeared to. And the answer is, it doesn’t matter. Go buy a lottery ticket or do some serious sexual harassment because that is the surest path to riches in the USA of today.

What I’m Reading: The Ascent of Money by Niall Ferguson

My quest to understand the world we live in continues to focus on capital and finance with The Ascent of Money by Niall Ferguson, like another book I recently read and reviewed, Money – this was written on the eve of a major financial catastrophe – though Ferguson, to his credit, is much more aware of the systemic instability he is writing in than Robertson was. And, unlike the Great Depression, the onset of the Great Recession had already begun at the time of Ferguson’s writing and by the time he wrote the revised conclusion of the paperback version – the major effects had already been felt and dealt with and the recovery efforts were well underway.

This was a good book and offered a wealth of information about the transition of money from hard currency to fancifully re-packaged imaginary money based on money that was loaned but which never actually existed and then even to the most chimeric form of capital yet – the hedge fund. Ferguson’s telling of the birth of banks, stock companies, paper currency, debt markets, and derivatives was both entertaining and informative. I’d recommend this book to anyone who wants to understand capitalism and money.

That being said, Ferguson is a cheerleader of capitalism and an enthusiastic supporter of the positive benefits of money. For Ferguson, there seems to be no possibility of imagining a world in which unfettered capitalism, collecting interest, and central governmental oversight of monetary instruments could possibly exist. There is a palpable admiration present in his tales of swindlers, con-men, and thieves enriching themselves at the expense of honest workers and virtually no empathy present as he ignores the human toll that the financial escapades of men and governments wreak upon five centuries of humanity. He is a gifted storyteller and a talented teacher of economic principles and history – but ultimately, it is clear that he is a capitalist and not a humanitarian.

Still, the book is a must-read as these several notable passages illustrate:

..there were few mourners when the last meaningful vestige of it {the gold standard} were removed on August 15, 1971, the day that President Nixon closed the so called ‘gold window’ through which, under certain restricted circumstances, dollars could still be exchanged for gold. From that day onward, the centuries old link between money and precious metal was broken.

In his chapter about financial bubbles, Ferguson tells the colorful tale of John Law, a murderer fleeing justice in his native Scotland, who managed to take complete control of the French Royal Bank and essentially destroyed the treasury of France (and her citizens) through selling shares in the Mississippi company which was responsible for leaving France bankrupt and in need of the capital that selling the Louisiana Purchase to the fledgling United States brought. According to Ferguson, Law was single-handedly responsible for the founding of New Orleans and the ascent of Britain over France. I would love to see a movie about Law, but I’m glad to have not been one of his direct victims.

And finally, this quote struck me as incredibly powerful. It’s worth holding onto and thinking about deeply.

Longer life is good news for individuals, but it is bad news for the welfare state and the politicians who have to persuade voters to reform it.

And that, is perhaps the most powerful, though unintended message of this book – what is good for the individual is not necessarily good for the capitalist or the capitalist state. Buyer beware indeed.

The Capitalist Conundrum

Capitalism is relatively new and still evolving on the human timeline – going back no further than the Medici of Florence and then modernizing in the Netherlands of the 18th century before reaching full early bloom in London and then in the 19th and 20th centuries in New York – the mantra of capitalism has always been a combination of higher productivity + lower material and labor costs + increased demand = greater profits. It’s no coincidence that material and labor go together. Our work is lumped in with the raw materials because human labor is a raw material. You (or me) are of value to the capitalist in one of three ways – a raw material, a consumer, or a lender. The third may come as a surprise, but the debt that we incur is actually an asset to the lender. Let’s assume that robots suddenly provide all the labor including extraction, manufacture, delivery, and retrieval (trash collection, recycling, etc). Artificial intelligence is also handing marketing, merchandising, stocking, and quality control. The robot/AI work also includes making robots and new A.I. – Okay, so all of us are out of a job. Does that stop capitalism? No way. We are still consumers and at this point, in order to consume the productt produced by the AI/Robot factories – we will need to be borrowers (consumers of loans) and lenders (purchasers of debt to companies and nations through stocks which are loans to corporations and bonds which are loans to governments. Since we will be bored – we will probably be consuming more – just like when you sit in front of your computer for too long, you sometimes end up buying something – usually on credit. So, in the robot/AI society the capitalist gets higher productivity + lower material and labor costs + increased demand which as I mentioned before lead to higher profits which are doled out to the corporate shareholders who buy more shares and presumably diversify their investments with holdings in government bonds which allow the government to dole out to welfare programs which would seem likely to be the largest consumer (as a sort of collective patron of the needy), meanwhile the corporations are consolidated into larger corporations which eventually are all owned by the largest banks which leads to the conundrum which I can’t get my head around – I need help with this. At some point, there starts to exist a closed feedback loop between the banks and the government. The government buys from the banks with money the banks have lent to the government and the government pays the banks with money borrowed from the citizens, the citizens borrow from the banks to purchase the products the banks produce, the banks would seem to eventually swallow the government and the citizen so that we have corporate citizen banks which determine who eats and who starves, who lives in peace and who suffers war, and as we’ve seen in the philosophy and writings of others – at some point – the majority of citizen consumers are no longer a valuable resource but instead become a drain on the scaled up economy – at that point – it would seem – the banks are left with the option of 1) transforming into an altruistic welfare state or 2) genocide machine – It seems to me that a perfect capitalist machine looks a lot like genocide in its final days. As I look at our society undergoing rapid transformation – I can’t help but think that genocide on a global scale is not very far away.