Wednesday, October 27, 2010

Entreprenueurship

"The first years of man must make provision for the last.” Samuel Johnson



Now, before you get out your hankie to have a cry-in with these people... I want to make some brutal observations.

The folks in the video have fallen on hard times, and one can always sympathize with that.  Were there no warnings on the way? Were there problems with their expectations? Were their savings really all that robust? Or were their savings merely the "6 months of cash available to pay bills in an emergency"?  You think 6 months is an emergency (that's a hiccup)?  At what age did these now folks-of-a-certain-age (like me) start working? What was their net-worth at 30? 35? 40? You mean they weren't counting?  Why not?

This video is just soooo f&^%$@ing slanted. Why are these people in this position?  Did it ever occur to the folks at 60 minutes to ask these people for their bank statements for the past 10 years?  Pay stubs?  Any chance that what killed them, made saving money impossible, was the outrageous state income and property taxes, social security and medicare taxes... and a good measure of overreaching?  I watch the part with the $200k year executive.... guy lives in a house with a kitchen bigger than my entire house - and I'm officially "rich" (but just barely).  I milk my own cow, change my own oil, and repair my own roof.  What's so special about him?

(I grew up "poor".  No kidding. No health insurance (well, not till I was 13 when my father, at the age of 50, caught on with the Teamsters; prior to that he was a laborer and drove an oil truck) . Never saw the inside of a restaurant till I was in College. No vacations. Hand-me-down clothes and peanut butter and jelly sandwiches EVERYDAY from K thru 8th grade.  And I had a very happy childhood. Little League, violin lessons, ice skating, even got to go to the county's summer camp one year... being "poor" in the U.S. ain't poor, and not by a long shot... And my parents were able to retire to a little condo (fully paid for) in Florida where my 87 year old mother still lives, 22 years after retiring.  (Of course, this is what's wrong with Social Security...)

My parents would have preferred to beat their toes off with a ball peen hammer than go into debt to buy something. My father carried a thermos for his coffee because he would rather hang himself than spend a quarter for a cup o' joe. They started working, and saving, at 18... and had a small business failure when they were 50 (best thing ever happened to them... but they owned their home outright that same year) and my dad caught on with the Teamsters at Local 553 in the Bronx where he made good money for a working man - and I could see the difference at home. And between 50 and 65 my parents saved enough to be comfortable in retirement because they knew how to live small.)

How many of these folks grew up in middle class families, went to college, hiked Europe, went to grad school, futzed around, and started to work at 28 or 30 (or later)?  Its awfully hard to build up any meaningful savings in 15 or 20 years, and if you don't start getting serious about making money until 30... well, 50 rolls around pretty quick - you better be a doctor, dentist, etc... to catch up... if you spent your prime working years on a PhD in literature...  I am sure they went to high school with some "shop kids", kids that couldn't navigate college, went to the military, came out at 21 and went right to work as a plumbing contractor, electrician, mechanic... forgoing the Europe backpack trip - but having real money in the bank and real equity in their home by THE AGE OF 30.

The folks in this video "expected" to work for the same company forever?  Didn't they say they went to college?  Educated people understand how markets work; they know businesses fail.  I NEVER had a job that paid a salary.  EVER. I always worked for myself, or when I worked on Wall Street I was on commission. Benefits? Never had them; or I should say they came out of my pocket directly.  WTF is so special about these people?  They had no responsibility to THINK? To QUESTION? To EVALUATE?

Nope.  Because they had EXPECTATIONS. (Me, too. I expected everything to take longer, cost more, be more difficult than I envisioned, and never come out according to plan... and, of course, for the government to come in and bother me with some absurd regulation.)  And that's the problem. EXPECTATIONS.

The Leftist media is out with stories about how to stop the "off-shoring of jobs"... are you guys in the media that arrogantly retarded?  The folks in China, India, and Viet Nam have dreams and aspirations, too.  They want a better life for themselves and their family... and you want to stop them from competing with American's... WHY?  I thought you folks rejected American Exceptionalism??!!  Labor WILL arbitrage just as sure as the sun WILL rise in the East tomorrow...

The answer for these folks is this: Yes, you might have to live in the walk-up attic of a friend - and in exchange cook and clean.  Seems like a pretty good life to me. That lady in the video has a warm place to sleep in winter, cool in summer, and dry, too. She get's to have some company; living alone isn't that great... she might actually be able to save some money! She might actually have some free time! Isn't that better for the environment, too? Isn't that how we are going to cure global warming and resource constraints?  By living small?  The same folks that want CO2 regulations want the people in the 60 minute video to live alone in a 2400 square foot heated and cooled house and drive a 3000 pound car back and forth to the mall.... I don't get it.  Wasn't this the lifestyle the Liberal elite WANTED?

Most of these folks will find their way. No, "their way" will not include big houses and new cars and silly consumption for the self-described "shop-a-holic".  But life will go on (until it doesn't), they won't starve but they WILL have to work. The beer will still be cold, sunsets will be beautiful, and life will always be good.  They might have to bang nails on a roof, deliver pizza, collect empties from garbage... having done ALL of these things at some point in my life I can tell you that it wasn't all that bad. Chin's up.

Better days ahead.

25 comments:

bureaucrat said...

As I said previously, the answer to the question of life is cycles .. and in this case, generational cycles. Most parents born 1930-1945 (the Silent generation), like my parents, grew up to be cheap-asses, after watching the Great Depression wreck the adults in their lives. Their children (Generation X -- that's me) also tend to be cheapasses as much as possible. The baby boomers (born 1946-64) will be seen in the future to be the overstuffed, overbabied, overdone spendthrifts they became, and they deserve a lot of what they are gonna get. But their children likely will NOT be that way, after seeing what is happening to mommy and daddy.

It isn't about the taxes, Jeffers. The tax collections didn't get shipped to the moon. They were collected and then spent by the people who got the benefits -- in some cases allowing old people not to have to live with their damn baby boomer kids, and their kids, via awful Social Security.

I saw the 60 Minute piece last Sunday. I wish 60 Minutes would do more articles on this depression that no one wants to acknowledge, except to say everyone's plan appears to be to just wait for "better times." My Generation X sensibilities say they are cutting their own throats. Live Austerity, and learn to love it. :)

Bill said...

Bur,
(this is a continuation)

Those aren't actual numbers. Saying there is money and proving you can find the money to solve the issue are two different things.

What are the actual numbers and how long would it take to bring us out of debt, meet our unfunded liabilities and provide the services you say we can afford?

The $13T debt - how would you raise taxes and how long would it take to pay this off?

$100T unfunded liabilities - how would you raise taxes and how long would it take to bring these liabilities into the black?

Please don't say there's enough money. Show us. If it's there and it's so simple then show us the math. Otherwise, quit saying it. It's not as obvious to the rest of us.

Anonymous said...

Does global labor arbitrage depend to a large extent on cheap oil? Once transport becomes very costly or impossible on a large scale is labor arbitrage still possible?

Greg T. Jeffers said...

Bill:

The U.S. has no intention, and no ability, to pay for the unfunded liability. ZERO.

Don't worry about it. Not at all.

Bill said...

Greg,

My question to Bur is what is his plan. He keeps saying that the money is there to pay off the debt and fund a 'safety net' but he never produces actual figures.

I want to see the actual figures. If he can't produce them then he should quit talking about it.

Greg T. Jeffers said...

Bur SHOULD quit talking so much... good luck with that.

Anything that has NOT been funded will NOT be paid for - simple as that. The bad part is the money that was stolen from you to fund somebody ELSE'S old age in exchange for their vote. That system MUST change.

BTW, it will change... by mathematical necessity.

PioneerPreppy said...

I saw it the other night linked off another site.

I have also linked and watched several other tv clips about the 99ers and the same thing sticks out from each one. Most are either still thinking the unemployment will keep them in the high dollar house and should be extended and most even after 56, 60, 70 weeks still hold out for a certain job.

I cannot shed a tear for these people. I like to say I have the highest education of all fork lift drivers on earth. May or may not be true, but I bit the bullet and took a mundane job and it is time these guys and gals embraced the horror and live within their means and take one as well. It is not the public's place to pay for their past lifestyle.

Greg T. Jeffers said...

Pioneer:

And that's the way it is... it is what it is...

Greg T. Jeffers said...

Pioneer:

A better question would be:

Why should you have to work hard at a job you are over-qualified for in order to pay for THEIR UNEMPLOYMENT welfare. They might have to move and pull "chicken guts out of chicken asses" somewhere in Arkansas... (quote from Joe Baeget, I think).

How anybody can NOT GET THAT just sends me into orbit.

In my life, I have had times where is was so broke I couldn't PAY ATTENTION, let alone pay my bills. While rebuilding my disaster, I cut everything - and I mean EVERYTHING - and hustled at less than glamorous occupations to grub steak back up. I lived in a 3rd floor walk up in a neighborhood most folks I know today would not even consider. My toilet froze in winter and it SWELTERED in summer in that attic apartment (no A.C., crummy heat.) You deal... Or you live at the bus station... I found it far more motivational than a Tony Robins video.

PioneerPreppy said...

Exactly Greg

I will freely admit I have taken unemployment in the past. Yet I made the choice to pay off the mortgage on my small plot of land rather than live in some suburb because I knew nothing was written in stone as far as employment went and I was unwilling to take the risk. I also have only ever taken one car loan and that was almost 20 years ago for the same reason.

Why should people who refused debt and never over extended themselves have to continuously fund the ones who did now?

I guess I look like middle age joe average in my 01 pickup or 99 tracer beater car (paid cash for both). While they still pimp it up at the local food pantry in their 09 BMW SUV. Heh!!!

Greg T. Jeffers said...

I drive an '01 F150... bet I get another 10 years out of it... mostly I drive a bike, the truck has 78,000 miles and 20k of that was back and forth to TN over the years...

Dan said...

Gregg,
Your prudent man is 30 year old carpenter who went to work at 18 so by the time he was 20 he had saved up 30K and put it down on his house, say 150K so he took out a 120K loan. In the since then his house value went to 262K then collapsed back down to 205K. His property taxes took the trip up then stayed there so he is still getting hosed there. He is a carpenter and has not been building many houses lately so while he is still paying the note and hoping it things will improve. Mr. Prudence still owes 103K on his house and is burning through his savings. His house is not part of the MERS mess so its value will not collapse as fast those that are, however it is still collapsing. Soon enough he will be out of savings and at par on value. How the hell is he better off?

Major factors here are age, listening to the experts, job opportunities. If he was a decade older he would probably be ok. If he listened to our self serving experts he got hosed many times over. It’s worth noting most “prudent” people, who didn’t work in finance, listened to experts prior to 2008. Factories have been closing through the decade and the only blue collar game was construction, difficult to offshore. I applied for that job "pulling chicken guts out of chicken asses" in NE Arkansas many years ago. It then paid $14.00/hr. However, other opportunities turned up before I moved. Back then meat packing was performed by Americans, safe and well paying. Today it is performed by undocumented guest workers for low pay and has an abysmal safety record.

I can’t tell you how many times I did someone’s taxes where they retired early. Pulled the money out of their 401K, paid off their house or bought a new house to retire in- lake houses were popular. Then paid half of their life savings in taxes because someone whom is used to making 40K-75K was rich for one year + early withdrawal penalty. This shouldn’t be a minefield. What is the point in being “prudent” it’s all bull #$@%!

bureaucrat said...

Never said we would pay off the $13.67 trillion U.S. debt. Too late for that now. But we can address the Federal deficit, which is somewhere between $400 billion and $1.6 trillion, depending on what you add in. It would take both tax increases and spending cuts.

I'm not foolish enough to believe that there isn't LOTS of taxable income out there amongst the top 20% of income earners. Being rich in America still means exactly that. They ain't hurting. I can get you an article saying the gulf between rich and poor hasn't been this wide since the 1920s. Can;t have a gulf without the "rich."

We also have allowed the Federal corporate income tax collected to nearly drop to zero. Everyone pleading poverty have every interest in continuing to do just that. Otherwise, they wouldn't have so many lobbyists in Washington working towards the one goal: making the rich even richer.

Bill said...

Bur,

If we don't pay off the debt and solve the $100T unfunded liabilities issue then your arguments about having enough money for a safety net are moot points.

You can't spend money you don't have. We owe money. That has to be solved somehow.

Again, saying you can show me the gap between rich and poor doesn't solve the problem. What are the numbers? I'll grant you that the rich could pay more...how much more? What's out there? How long will it take to solve the issue?

Even you admit we can't pay off the debt. If not, how can we do anything else without ultimately crashing our economy when the debt is so big we can't even pay the interest?

usdebtclock.org estimates that right now each citizen owes $43K toward the debt. Average assets per citizen are $225K. So you would need to take almost 25% of all assets in the country just to take care of the debt.

That doesn't even touch on the $1M/citizen of unfunded liabilities. That is 4x the current amount of average assets per citizen. We don't have enough money in all of the US to meet this.

Real numbers don't lie.

Anonymous said...

Bill,

Bur takes the Doxology approach to the economy: as it was in the beginning, is now and ever shall be, world without end. Amen.

He believes that because today is the same as yesterday, tomorrow will be the same too. He has complete faith in the government to hold it together, no matter what. He doesn't permit facts to interfere with his opinion.

Regards,

Coal Guy

bureaucrat said...

1) Lots of people like Carbon and Jeffers have been predicting that the world would end in a flash of glory. The reality is, today, people are getting their social security payments, and they are getting Medicare health care, and gasoline is widely available, and the grocery stores are all full. When, Oh Lord, will America finally blow up?!?! When, when, when??? :) I gots me guns and gold ready!!!!!

2) Unfunded liabilities can be adjusted downward with changes in the Social Security and Medicare/Medicaid formulas. Everyone knows we cannot spend as we have, and everyone will understand (hahaha) if we can't keep Grandma alive forever. 1/3rd of Medicare expenses is on the last 2 months of a person's life, which is a waste. $60 billion of Medicare money is lost to vendors cheating the system cause we pay bills immediately instead of verifying them first. Don't worry about unfunded liabilities. We can cut those easily when the time comes, assuming we have a little common sense.

3) How much each person owes is a number used to show everyone how awful things are, but it really means nothing in practical terms.

4) What we really have to watch is the interest rates -- that is true. That relates directly to paying the Federal debt interest bill. But in a deflation, as we are now in, rates collapse, which they have. The 10-year yield is hovering around 2.6%. And since no one trusts the stock market anymore (Jeffers' people cut their own throats with their game-playing), people will be buying Treasuries instead, and that pushes down the yields, and the cost of borrowing.

Greg T. Jeffers said...

Dan:

Back to the prudent Carpenter:

If he bought his 150k house to live in with 30k down, his 120k, 15 year mortgage would be paid off when he was very young. If when times were bad he did odd jobs, and when times were good worked in construction, he would have a good life and a clean conscience, and, provided he lived modestly he would have money in the bank, time with his kids, and enough time to actually have a relationship with his wife.

Life is not perfect, nor fair... folks with average intelligence and average abilities are not often well served by wading into the shark tank to compete with folks with a great deal of horsepower under the cranium hood. That does not mean average Joe can't have a peaceful, happy, and productive life.
Fact is, it was industrialization that enabled the sharks to leverage that extra horsepower, horsepower that might not have lent much an edge on a farm or at a saw mill.... having met a great many sharks, our fictional carpenter has a much better shot at a life of merit and peace.

Bill said...

Bur,

I'm not a doomer. I just want to see your numbers.

How much would we have to tax and for how long to pay off $13T?

How much do we have to cut/raise age limits/etc to get rid of $100T in unfunded liabilities?

Just because you say it's easy doesn't make it so.

bureaucrat said...

I only deal in specific numbers if I read them somewhere and they support (or cut down) my arguments. :) The Medicare numbers I got from "60 Minutes" and an article somewhere.

I deal with grand themes, not specifics. Cause in the end, specific predictions of any kind are pointless.

And by the way, we don't want to "pay off the "$13 trillion national debt" anyway. A lot of those dollars are in the Social Security "trust fund," and Treasuries are used as guaranteed investments worldwide. My condo association used to have our entire reserves in Treasuries.

Things can be done with Federal spending. If the science says people can work till 70 with modest assistance, SS at 70 all the way! :)

Greg T. Jeffers said...

Bur:

Is that what you say? "SS at 70 all the way"?

Do you have ANY capacity think? Is the age the real issue I have been pointing out?

The government lied and stole because they COULD. They STOLE money from me and my children to buy votes from seniors. WTF DOES 70 HAVE TO DO WITH ANYTHING??!! The government is NOT taking this measure because its the right thing to do... they are taking the measure because this is the terminal point in the Ponzi scheme - and F**K the people like me that, like me, paid in BIG over the years.

It then follows, BUREAUCRAT, that the government cannot be trusted with money WHATSOEVER. THAT is the f**king point.

bureaucrat said...

1) If your money was stolen, I would suggest that you file a police report. And please make a copy of it for the blog, right after you are laughed out of the police station.

2) I myself know some 70 year olds, and while they do lumber along a little, maybe they could work a bit longer (not sure if I believe that). We are indeed living longer.

3) Every one gets one vote. And seniors' votes are just as important as yours.

Quick facts ...

60 million SS recipients, average payment $1072, SS is the primary source of income in 64% of cases, 1/3rd of recipients rely on SS for 90% of their income, 2/3rds of elderly Americans count on SS for at least one-half of their income.

(Sounds like they really, REALLY need that money)

Bill said...

Bur,

There is no money in SS either. It's empty as well so how can you say the money's there?

It's all fine and well to claim that you deal in the big picture but the reality is that the money isn't there and without serious cuts we can't get to the black.

bureaucrat said...

Bill,

It depends on your point of view. The Social Security system "Trust Fund" has trillions in Treasuries in a filing cabinet somewhere saved. But, as you know :), when the SS system goes to the U.S. Treasury to cash in their "special bonds" in a few years, will the Treasury come up with the money to pay those bonds off? That's why most people know the SS trust fund is a farce, but it does still exist. And, SS is still paying out. My parents will loudly declare to me when they aren't getting their payments anymore, since I'm the family Federal bureaucrat. :)

Greg T. Jeffers said...

Bur:

You are so terribly uninformed that it is a waste of breath discussing this with you.

Save your breath, Bill.

bureaucrat said...

You say I'm uninformed yet you have nothing concrete to say about my arguments. Sorry, but I'm not bowing to your greatness. I think you have points to make on the energy thing, but when you go off reservation into other topics, I'm going to say I disagree with you when I do. The readers can decide for themselves who makes better arguments.

(Betting against the U.S. govt. is betting against 235 years of reasonably open government and society.)