Motley Moose – Archive

Since 2008 – Progress Through Politics

Do You Feel Safe?

I’ve been really out of it these last few days as my first round of exams begin.  I spent nearly the entire day consumed with sampling distributions of the mean, the factors that influence power, and the central limit theorem.  Yes, psychology can be that boring.

During a study break tonight, I opened my email and learned that the president would be addressing the nation this evening (you gotta love the Politico.com “breaking news alerts” that arrive an hour after everyone else knows).  I missed his address, but I managed to read a few stories about it.  These lines really stand out for me…

“…a long and painful recession.”

“America could slip into a financial panic.”

“We cannot risk an economic catastrophe.”

At 32, I have really only known good times in America.  I’m old enough to remember the burst of the dot.com bubble in the late 90’s, the economic meltdown in Asia just before, and the last painful American recession in ’91-’92.  My father is a retired steelworker, and my family weathered a few strikes, but an “economic catastrophe”?  That’s new territory for me.  

I’ve always lived in a world where if you work hard, spend your money wisely, live responsibly, and follow the rules, you will have a living wage, a roof over your head, and food on your plate.  Even now, although I am a “poor” graduate student, I still have health insurance, a stable salary, and a comfortable, albeit small, place to live.

What is an economic catastrophe for Americans?  We live in a country where the solution to a cash shortage has always been to whip out the credit card.  If the government doesn’t have enough money to pay for our two Middle East wars, we take the Bank of China MasterCard out of our wallets and cut taxes for the rich anyway.

But what happens when the ATM is empty?  Where do we go if the bank forecloses?  How will our lives change if we suddenly discover that we deluded ourselves into think we had it so good?

I’ve been depressed since I came back to the States.  How could I leave the love of my life?  Why did I give up a good-paying job?  Who walks away from such a comfortable life?  (Where can I find decent Chinese food?)  I’ve been telling myself that my education and my hard work will ultimately reward me with job security.  I’ll be able to find a good, stable job with my education, no matter what.

But what happens if we don’t bounce back this time?  What if our run at the top has finally come to a sudden end?

You can say, “Hey, this is America!  The bottom will never fall out.  We always find a way to keep going.”  How many times this week have you heard politicians say, “I don’t bet against the American worker or American ingenuity?”  

But how many people bet would have bet against September 11th on September 10th, 2001?

So what do you think?  Are you nervous?  Am I crazy?


Categories: Uncategorized.

/ 27 Comments

27 comments

  1. Peter Jukes

    I’m nervous, not about the American people, but about the financial markets that have dominated my life since the 1980s when I left college to become an impoverished writer, and most my friends (including my girlfriend at the time) joined the gravy train of stock brokers, investment bankers and management consultants.

    They all told me it was a wheeze. Until Black Monday, they happily bet other people’s pension money on the dodgy trades, and put their own on the safe inside bets. This resurged again during the dot com bubble boom, and then I saw a younger generation go into derivatives and hedge funds. It was a no lose situation. Nobody ever seemed to lose money, only cop out because the hours were too long

    Then about two years ago I met a woman who was selling on securitised debt for Barclays Bank. She tried to explain to me what I did, and when I raised the question – but what if the debtors can’t pay? – she looked at me like I was an idiot.

    Debt was just a repackaged derivative, something you bet on, downside and up. The risk was spread so wide, nobody would ever incur it. I wondered then, but never said it, what if the risk was spread so wide, nobody could ever deal with it?

    It’s a complete lesson to me how the smartest people in the room can be the most stupid when you get overspecialised, and conditioned by risk scenarios which actually don’t include the biggest risk – your scenarios are wrong

    I think this indebtedness, writ on a trillion dollar international scale, is our modern equivalent of the gold standard.

    And I’m ultimately fearful that the smartest guys and gals in the world have actually been extremely negligent and stupid.

  2. rfahey22

    my jackass college roommate was hired by Lehman’s right out of school.  He never took a single economics class (I was more qualified than him in that regard), but he had “the look” and the educational pedigree that the recruiters were seeking.  I’m not surprised that years of hiring such people had such disastrous effects – all they wanted were people who liked to gamble with money that they never earned.

    It’s hard for me to conceptualize the current situation.  I reflexively distrust Bush, and I doubt that something needs to be passed by Friday, but I also do not know how bad it could actually get.  I think that my current job would insulate me from most of the effects, but I am no expert on financial matters.  

  3. spacemanspiff

    But what happens when the ATM is empty?  Where do we go if the bank forecloses?  How will our lives change if we suddenly discover that we deluded ourselves into think we had it so good?

    Hey, it’s just Monopoly money!

  4. GrassrootsOrganizer

    I’ve always lived in a world where if you work hard, spend your money wisely, live responsibly, and follow the rules, you will have a living wage, a roof over your head, and food on your plate.  Even now, although I am a “poor” graduate student, I still have health insurance, a stable salary, and a comfortable, albeit small, place to live.

    No offense meant, but a significant number of Americans have never lived in the same world that you have.  They have never have  shot at a living wage no matter how hard they work and there are no guarantees for them or their families of a roof over thier head or food when they are hungry.  They’ve never had health insurance or they somehow manage on the nightmare that is Medicaid.  

    the economy stopped working for them decades ago.  They’ve never been able to secure credit except at usury rates where you have unfortunate accidents if you can’t make your payments.  They don’t use ATMs because they can’t get checking accounts.  They won’t miss the banks because the banks will have nothing to do with them.

    I’ve just described the lives of millions of Americans who are homeless, trapped in crumbling inner cities like Detroit, those who must care for disabled loved ones alone, those who came into life with chronic physical or mental illnesses they counldn’t overcome, many veterans and most undocumented workers.  

    Just yesterday I spent some time in a Detroit Hispanic community literally resurrected by it’s residents many of whom are undocumented who are building a decent life for themselves against all odds without the help of banks a living wage or the the government.  They must still contend every day with gang violence, no city services, poor access to healthcare, no grocery stores, unsafe schools, crappy public transportation and abandoned properties.  All they have is each other and the power of their working together.  And even as they make small gains within their struggling community, all around them their neighbors are slipping through the cracks.

    Folks have been dying in this country long before this for poor nutrition, from simple health problems, from violence and dispair.  Their kids can’t even fathom grad school.  They have been invisible to their government and most of the rest of us.  Soon they may be showing all the rest of us how to survive.

    It’s not that economic hardship is new to America — it’s that now the threat of it is far more widespread.  A part of me almost cheers this economic disaster as it might give so many more folks a taste of what it is to go without.    

  6. Jjc2008

    I was until I went to college.  

    I am a lot older than you.  I was a child in the 1950s.   There were a lot of poor people……..so the myth of the simplicity of the 1950s was strange to me.   That is the myth of the television 1950s, where mothers stayed home and were there to greet you with cookies and milk when school was over.

    In my neighborhood, almost all the Moms worked in factories…mostly textile mills.  Most were either immigrants or first generation.  But we were not unhappy because we were better off than they or their parents had been in countries where poverty was the norm, fascism was taking over.

    When I went to college, I was one of the few whose mother had worked.  And my parents were the only ones who had not graduated high school.  My mother was always quiet and rarely friendly when she came with my dad to visit at the dorm.  It took me years to understand it all.  She was embarrassed by her broken English, uncomfortable around the moms who all looked like the ones on television.

    I did not know what a credit card was until I was in my twenties.  I lived with my parents when I graduated, saving money for two years before buying my own car.  

    Now, my nephew who is your age, has described himself as growing up poor.  And it sort of makes me laugh.  They lived well, vacationing yearly with their parents.  Their house had five bedrooms…..a full basement, large yard for five people.  The kids got their own (used) cars by 18….and none of them wanted to leave home after college.  But they did.  All are doing as well as can be expected in this economy.  

    I get scared because as a retiree I wonder what will happen if my pension is gone.  I worry about how much longer I can work.  I don’t want to be a burden but there is no way I can afford the facilities going up for the elderly now.  I saw what it costs my friends to care for their parents.  My parents both died suddenly and relatively young. I was sorting counting on that…….what if I don’t.  Yikes.

  7. dtox

    I guess this sort of insecurity isn’t as new to me as it is to people who have always lived in developed economies.

    As someone who grew up in the third world, to me the most amazing thing about living in a developed economy is the ability to take personal risks. The choice of giving up a full time job to go back to school. The ability to change careers if you realise you’ve made a mistake.  

  8. GrassrootsOrganizer

    Do I feel safe?  No, not at all.  Actually? I’m scared completely shitless.

    I’m afraid this mess is going to shudder through the economy enough to cost me my job or force me to relocate to keep it.  I’ve got major repairs that need to be done to my home and I know I won’t be able to get financing to do them.  

    More than that I expect the people I care about to be pounded by this and I have no idea how long this could last or how deep it could get.  I’ve been through a few recessions and those felt nothing like this.  

    In my lifetime I don’t remember discussions about whether your money was safe or if the dollar could tumble in value.  I’ve never seen housing values fall.  I’m afraid businesses are not going to be able to make payroll.  

    I have no idea what happens after this except to know we’ll all get by somehow, we just might not enjoy the ride.  Bottom line it feels like all the cards are being reshuffled and who the hell knows what the game looks like after they are.  All bets are off.  

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