Posted on Apr 12, 2008 - 9:28pm by Everitt Mickey in Economy
From the Washington Post we find that:
Offering the gloomiest assessment of economic well-being in close to half a century, a new survey has found that most Americans say they have not made progress over the past five years as their incomes have stagnated and they have increasingly borrowed money to finance their lifestyles.
Sounds bad doesn’t it? Horrible horrible. The economy must be in ruins for them to have to borrow money to splurge, er, to live a decent life. Those poor people. AS you read further down into the body of the Article we find that: :
Even as they struggle, however, nearly two-thirds of Americans say they are better off than their parents were when they were their age.
Wow…better off than their parents. Furthermore we find that:
Median household income increased 41 percent from 1970 to 2006
That’s pretty Bad isn’t it. Only a forty one percent pay raise. Such a shame.
At the same time, more Americans have managed to move up the income ladder, particularly as they approach middle age.
Wow, That’s tough. As they get Older, they get more financially secure, and better off. Must be hard on a person to know that they’re not only better off than their parents were at their present age but that they’re better of than THEY were at an earlier age, having had a steady increase in income over the years. This is horrible…furthermore we find that:
Americans are also wealthier than ever, with the median net worth of middle-income families peaking at $98,286 in 2004, up from $77,031 in 1992.
Yeah, I can see why having a NET worth of only a hundred thousand would bother you. They not only had steady increase in their income, they also managed to KEEP a fairly large amount of it. How can this depressing state of affairs happen? Outrageous!!
Among the groups to substantially improve their economic standing since 1970 are senior citizens, native-born Hispanics, African Americans and married couples
Well yeah. Almost all minority groups in the US are exploited, downtrodden and generally have a hard time of it. That’s bad. Will the bad news never end? Who can be the blame for this horrible state of affairs?
About one-quarter blame the government, 15 percent blame the rising price of oil, 11 percent blame themselves and 8 percent blame foreign competition.
Gloomy Picture of the Economy indeed.
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I sometimes get the feeling, and I’m not entirely sure I can eloquently convey it, that an awful lot of Americans display an attitude not unlike that of children whose parents built a successful business from the ground up; scraping and sacrificing all the way to the top but, instead of requiring that earning experience for their kids, they instead instill within them a sense of entitlement.
The fact that Americans will borrow to finance a certain lifestyle, rather than live within their means until they’ve earned real success, is an indication of that attitude. “I want it, I want it all, I want it now, and I’m not gonna worry about paying or even how much I owe.”
The housing finance calamity we now face is a direct result of an entitlement attitude facilitated by a government willing to manipulate markets in the short-term, putting people into houses they couldn’t afford but to which they felt entitled, while ignoring the potential for catastrophic consequences in the long-term.
“Send money, guns and lawyers. Dad get me out of this!”
How many times have you heard.
“It was a good business. Then the old man, who built it from scratch, died and his “kids” took over running it. Now it’s. (bad, going, gone)….and all the employees are out of work.”
Just off hand I can think of several, fairly large, trucking companies that fit that description. Some are gone now, some are going.
How many multi generational businesses do you see? Not many I bet.
Could this phenomenon be caused by the same attitude as that which fueled the housing fiasco?
I actually worked for just such a company. It once provided direct employment for nearly one thousand people and, through its production (mainly meat packing, export and commodities trading; trucking was a handy sideline), provided indirect employment for many others. It took the kids less than ten years to run it into the ground. And then they sued their dad.
I also had a good friend whose father, a 3M executive, purchased a small manufacturing company being sold by his employer. When my friend and his brothers got old enough, they took jobs at that company. Executive positions? I think not. Janitorial positions.
They then worked their way through a machinist’s apprenticeship, etc., etc., until they’d attained a full knowledge of what was entailed in the day to day operation of dad’s company. When their father decided to retire from both 3M and the little manufacturing company; did he just hand over the reins to his sons? Nope.
He sold ‘em the business. Further, he required them to come up with a business plan and acceptable corporate structure (so he could feel fairly certain that they could successfully make payments) before he would agree to sell it to his sons rather than any of the other companies and individuals interested in the business. In other words, they had to compete for the right to purchase the business from their dad.
That company is still in business. Because of the brothers training, they’ve been able to diversify their manufacturing business and ride out a complete and total loss of demand, due to obsolescence, for the products they originally manufactured.
The correlations are myriad. The generation of which my parents were a part handed the generation, of which I am a part, a successful country; a country for which they sacrificed greatly. Having earned and sacrificed nothing for this inheritance it seems that many of us, among other things, feel a certain level of entitlement.
There’s also a certain level, among some, of loathing, ridicule and unwarranted arrogance. Again, attitudes not uncommon, among inheritors, toward those from whom the inheritance originates; and in regard to themselves, as well.
I see a good portion of my generation, and much of our offspring, as little more than spoiled brats; given much, earning little, and sacrificing next to nothing.
The sub-prime lending debacle is directly related. Spurred on by an administration seeking to offer the “pride” of home ownership (I don’t know how you own anything for which you pay nothing down and never gain equity because your mortgage is “interest only”) to everyone, whether they’d saved (sacrificed) anything or not, mortgage lending regulations were adjusted accordingly.
There was no regard for long-term consequences because the consequences of bad choices are unacceptable. Government bailouts, on the other hand, are not.
I could go on and on about this but, to the good fortune of everyone, I will not.
I heard an interesting statistic on the radio that I haven’t verified. They said that gasoline sales were UP a few percentage points from last year. Forgive me for not getting the exact statistic and who it’s from, but from looking out my windshield every day, I do not notice any decrease in traffic. Why would we be driving more if the prices were just to high?
If fuel prices are truly so outrageous that we are heading towards social mayhem, then why are there so many people traveling so much. I don’t even see much carpooling, just a bunch SUV’s with 1 person in them. If my family were starving because all of my money went in the tank, I would at least carpool.
I think a bunch of things are election year hype. We’re headed towards problems, but I don’t consider having sell a gargantuan house and live in an apartment until you can buy something within your means a disaster. Carpooling and busses are not the end of the American way of life.
This post is very correct in it’s observations. I think we have had things so good for so long that are level of expectations very high. The press is having a field day with all of this.
I still have everything I had a few years ago. The grocery bill is going up quite a bit and I take my motorcycle more often more than my car. Wait, that would be more fun than a hardship? Could all of these “hardships” actually help some of us poor downtrodden Americans and make us appreciate a leaner lifestyle?