The Addiction To Fake Wealth
-by NYCityBoy
As the economy continues to wind, and unwind, a lot of predictions get made. Some are dire. Others are nothing more than sweetness and light. Most have as much chance of coming true as I do of being voted Miss New Jersey in 2010. Thinking of the future can be fun, exciting, nerve racking and downright scary. It is also practical. Many times in the past few years I have thought about what the future holds for this great, but imperfect, country of ours. I believe I can see our future somewhere in our past.
Many times in my life I have heard words to the effect, “it is the dawning of a new era”. Oftentimes this has been sheer overstatement or exaggeration. On several occasions it has been accurate. I think back to the events during my life that have led to a dawning of a new era. There was the election of Ronald Reagan in 1980. There was the crumbling of the Berlin Wall in 1989. There were the events of September 11, 2001. Those are just a few of the events that ushered in a change to the world in which we live. Whether we knew it or not a new era was being born when these events took place.
I remember when Ronald Reagan was running for president. I was a kid then and we discussed politicians the way kids do. We repeated the statements that we heard at home from our parents. I remember I didn’t say much of anything. I listened to the kids around me. My parents very seldom discussed politics. I heard some of the kids talk about how we needed to get Reagan into office to get our hostages out of Iran. We needed to show those people who was in charge. I heard other kids talk about unions and jobs. After all that was during a very bad economic time in U.S. history. I am sure there were many frightened parents at that time. But mostly I heard kids talk about how Reagan would get us into war. He was a war monger and just wanted to go to war. I guess that is what most parents were saying that were going to vote for Mr. Carter.
I do not recall any of the kids parroting any thoughts from their parents that Mr. Reagan would kickoff the largest artificial economic boom in world history. Nobody discussed how he would rework the system to increase payroll taxes, promising never to raid the kitty and then immediately setting out to raid the kitty. When I look back now, after seeing the colossal mess that now encompasses us, I can only think “if only we had known”.
I do not think people knew what was in store for the U.S. economy. There may have been some men crouched in leather chairs, smoking cigars and drinking martinis, that had long dreamed of the “Supply Side” system that would sweep across the land. I do not think the average joe had any idea what was about to come, the unleashing of a monstrous culture of debt that would sweep across the land for 25 years. It would be a trickle down world for them.
In hindsight I don’t think most people I know would have changed the past 25 years. They received maximum benefit for minimum effort. If they believe we are already coming out of the messy cleanup then they are probably pretty happy with the result. Those of us that see much cleanup work ahead are not so satisfied.
I am not a professor. I am not trying to present a comprehensive lesson on history and economics. I am stating my opinion that the deeds of 1980 were a history changing event. Few people understood the impact this would have on our lives more than a generation later. George Bush called it “voodoo economics” but I think we have seen the Bush family play with more than its fair share of shrunken heads. The false prosperity of the past 25 years has been embraced by the population of the United States with a vigor that is usually reserved for popular military actions.
Standing in the rubble of the actions of the early 1980s I have to stop and wonder what the next 25 years will hold for this nation of ours. I do not think it will be a repeat of the past 25 years. I believe this is especially true of the past 5 to 10 years in our history. At no other time in our history could somebody achieve “prosperity” without education, hard work, creativity, honesty and integrity. Usually the dishonest, or stupid, must at the very least must do a little work to make their fortunes. During the past decade all anybody needed to do to be prosperous was to splash their name across some mortgage documents. Every pen stroke was akin to filling in the numbers on a winning lottery ticket. To me that is not the sign of an efficient system but the sign of a monstrous abomination of a system. To me that is not America, not in the slightest.
When I try to think what the future holds for this nation I look to my past. I look to the days of my youth and all of the experiences that came with growing up during the last tumultuous decade in American history, the 1970s.
My experience in life is definitely one that no longer exists in this country. I was born at the very tale end of the era of large families. The oil crisis of the early 70s killed that era. I came along as the last of seven kids. I grew up in what was a very middle-class neighborhood. Families around us had three kids, four kids, five kids. It was rare for families to have less than three kids. A few families in town had ten or more children. It was still a very Catholic place at that time.
By today’s standards I doubt that we would be considered middle-class. We did not have enough stuff to qualify for today’s definition of middle-class. Our houses were small, especially for the size of the families in the neighborhood. The layouts of the houses in my part of the neighborhood were all similar. They were about twelve hundred square feet. There were three bedrooms and one bathroom. The basements could be converted into another bedroom, and a second bathroom but that did not always happen. I think most of us grew up knowing what it was like to wait anxiously for the bathroom to be freed up.
It was not until about 1984 that big houses started to be built in our neighborhood. Some land had been cleared to the south of our neighborhood. It was sad to see the ponds and hills of our youth get plowed under. Those natural treasures were replaced by houses the likes of which we had never seen. The term “McMansion” had not yet been developed. It seemed to us that people with a lot of money had just taken over our little corner of the world. Looking back I wonder how many of these newly minted “rich people” could actually afford those houses. The savers of the world were being replaced by the debtors of the world, but who knew?
Designer clothes for kids had not come into fashion in the 1970s. The Nike Revolution had not hit. We grew up wearing hand-me-downs and clothes that were bought at a reasonable price. Style for the seven year olds was not a primary concern for the parents. Keeping them from freezing in the harsh winters of the Midwest was the number one fashion consideration of the time.
I grew up at the tail end of the one income era. The fathers would go off to work each morning. Moms would stay at home and take care of the house and kids. The mothers would form a safety net for each other’s sanity. They would congregate in the late morning or early afternoon. They would drink coffee and talk in one room while the kids played and wailed on each other in some other part of the house. There were no factory-like daycare centers at the time. If there were, we didn’t know about them.
We owned one car. It was run until it was dead. Since mom did not work it was not the worst thing in the world but life was anything but convenient. Living in the suburbs with only one car can be very difficult indeed, especially with a big family. Life was simple but hardly convenient. A medical emergency could put quite a crimp on the family.
The common necessities of today were the luxuries of yesterday. Some of today’s necessities did not exist yet. We had one television set. I believe we ended up having that set for more than 20 years. This was before cable. We received 5 channels with our roof mounted antenna. There were no microwaves yet. I think our first microwave came along right around 1980. There were no VCRs. That came along in the early 80s. We had one phone and rented that from the phone company like every other family.
Our house was not a scene from a HGTV episode. The carpets were worn and even had holes in them. The furniture was old. When it became too dingy it did not get replaced. It got reupholstered. I cannot remember hearing anybody mention reupholstering a piece of furniture in the past 20 years. The kitchen countertops were laminate. The appliances were the run of the mill Sears variety. The floors were vinyl. The cabinets were wood and would get stripped and repainted. That was a remodeling in those days. Stripping out perfectly working cabinets and appliances and throwing them away would have been seen as nothing less than criminal.
Dinner time was not a time of lobster and filet mignon. Our meals would always include meat but not an unlimited supply. There were often arguments and fights over how much meat each child got. My sister that did not like meat was always courted well before dinner to see who could trade her for her share. Not liking meat was definitely an asset. I can’t remember but I bet she got her bed made, or her dishes done, for her on many occasions. We ate many “hotdishes”. You might call it a casserole or a covered dish. Anything with some kind of noodle and meat in it was called a hotdish. I found many of them to be heinous. I often begged for peanut butter and jelly, in lieu of the nightly hotdish.
We rarely ate food that was not prepared at home. McDonalds or White Castle was a great treat. A trip to Ponderosa Steakhouse was a huge bonus for us. Ponderosa was more like a Sizzler than a Bobby Vans. We did not go to restaurants that were run by the 1970s versions of Bobby Flay and Wolfgang Puck. We focused on the restaurants that offered value for the family. Once a year the whole family would pack up and go to a “nice” restaurant. By today’s standards that would have been a middle of the road dining experience.
When I was a kid the idea of a fancy vacation never seemed realistic. I took my first plane ride at age 18. I had never been outside the 5 state area (Minnesota, Wisconsin, Iowa, North Dakota & South Dakota) before my first airplane ride. I knew there was a Disneyland and Disneyworld but I had no idea where they were located. I don’t remember caring, either.
As the kids grew up and left the house the moms of the neighborhood went back to work. The families’ fortunes started to improve. Money was squirreled away into savings accounts. A few luxuries were added to day to day life. Being at the end of the line I got to share the easier lifestyle that the older kids had missed. By that time the house was paid off so there was definitely more disposable income and life began to reflect this fact. Second mortgages were looked upon the same way that a rattlesnake bite was looked upon. They were to be avoided at all costs. They were a sign of carelessness.
Even on one teacher’s salary, and with seven kids, money was always saved. It probably wasn’t much but it was enough to have a rainy day fund. The future was always considered. Pennies were counted and luxuries were deferred to the future. There was no “gotta have it now” attitude. You could want it now but you did not have to have it now.
As you can see I did not grow up in a glamorous world. There were richer people. There were richer areas. There were many people that had different, more exotic, experiences than I did.
I think my experience was more similar to the vast majority of Americans at that time. I also know one thing about my experience growing up. It was sustainable. That is what makes it so different from what is going on today. It was the time before massive swamps of credit allowed people to act like millionaires. It was before the time when everything was a status symbol. It preceded the instant gratification of the Reagan years when easy debt made everything look so attainable.
The experience of the 1970s does not seem strange to me. That does not mean everybody will welcome such an experience. I think it will be an awful awakening for the mindless consumer culture we have embraced. I think the vast majority of Americans will see such a lifestyle as a slap in the face and a huge step back. For good or bad I think we are heading back to such an existence. Dick Cheney might say “the American way of life is not negotiable” but sometimes negotiations take place while some of the affected parties are not welcomed to the table. The McMansion, HELOC, easy credit way of life will have to disappear, whether we approve or not.
I have stood on the mountaintop, trying to see the future and that is the future I see for The United States. That is why I have written about my own experience. We are fighting it tooth and nail, trying to spend the next generation’s lifestyle to avoid the last generation’s lifestyle. It is an awful waste of resources. I do not think that the lifestyle I knew as a kid will be reserved for families with seven children. I think it will more closely resemble the lifestyle of the family with two children. That will be the result of this thing we call “globalization”. The humble existence I knew will be known by many more families in the future.
The addiction to fake wealth will not be voluntarily kicked. It will be wrenched from our hands, like a gun being taken from a burglar. For some it will be welcome. For many it will be seen as a huge failure. I think the dawning of this new era is going to bring us back to a past era. It will be up to all of us to decide how we live our lives in this new era. The people that deal with it the best will be the people that have best prepared, financially and emotionally.
