McCain would have you believe it’s only in the "authentic, God-loving, hardworking, pro-America" small town community. I suppose that little burg is populated by people of the same ilk.
His thesis raises a nasty question.
What does that make the 80% of Americans who live in urban areas?
Phony. Un-Godly. No-good slackers. Un-patriotic. (Perhaps wealth-distributing liberals.)
What’s really going on here is that John McCain’s message is a thinly-veiled repugnant attack on his opponent’s supporters, not where they live.
In a previous era, Joe McCarthy simply labeled people Un-American for his slanderous vilification.
For another take on the McCain-Palin rhetoric read Rosa Brooks column (link below) in the Los Angeles Times.
Clearly, America is struggling and suffering. So goes the world.
The challenges of our personal campaigns for a decent and happy life are demanding. The citizens of all countries, whether they live in small towns or big cities, are feeling the fear and dislocation.
It is important to remember that our lifestyle is not inseparable from whom we elect to govern us.
Copyright 2008 William M. MacKay
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( 2.9 / 212 )“A quantum downward shift”… is the direction of consumer spending, according to Allen Sinai, Chief Economist at Decision Economics in New York. The victim will be any business tied to the consumer.
And this already “nasty recession” will possibly evolve into the ”worst downturn” since 1945, in the opinion of Michael Feroli of JP Morgan Chase, with any sharp drop in consumer spending (as reported by Rich Miller on Bloomberg.com Oct. 20).
Can’t you can just feel the raw power of every dollar you spend? But, in fact, it’s every dollar you save that’s the deal-breaker. And God help us if you do, seems to be the conclusion. Then what capitalism?
I’m confused. Does it feel to you that it’s assumed consumers have made some blood covenant with corporations everywhere to spend every penny they earn—some righteous expectation and moral obligation to keep quarterly profits and the economy afloat?
The tone of these and other comments by business spokespeople have a similar nasty innuendo.
While Halloween is just days away, most consumers are spooked enough already to actually consider saving. Some are downright scared without the credit to maintain their lifestyle, albeit unaffordable.
Fear of loss is a powerful motivator. With unemployment on the rise, home values falling, and our confidence at the lowest point in decades it seems prudent to rein in spending.
Lenders are helping to control our use of credit, if not forcing us to diet. So be it.
The subtext of this dilemma is most unsettling. There is something fragile about a global economic system that has a dependency on all of us spending all of the time more than we can afford.
P.T. Barnum got it right. You can’t fool all of the people all of the time. We will save.
Survival instinct trumps executive bonus.
Copyright 2008 William M. MacKay
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( 2.8 / 182 )That was the parting shot today, as reported on Bloomberg.com from Andrew Lahde, a successful hedge-fund manager who quit the business which he had come to hate.
The stupid people referred to by Lahde, head of Laude Capital Management LLC based in California, are the traders (inferred to be MBAs unworthy of their education and leadership roles) in the financial community who helped make him rich (an 870% gain last year).
It is these “idiots” who acted on the other side of his trades that he thanks in his farewell to clients. “God Bless America” is his apparent celebratory conclusion for finding people stupid enough to play the derivative game which he now finds too risky given the weakness of the banks he traded with.
What an indictment! And that’s not all.
When your expectations of the best, brightest, and to some extent, privileged few at the top of what Lahde labels the ‘Aristocracy’ fail the test, then what?
Look first for where you have the greatest control over your destiny. That’s real easy.
Your money. The dollars and cents you receive… from whatever source. That’s the income you use to support your lifestyle.
Now, how do you protect and maintain it?
The #1 choice; Create a budget or some facsimile of one that best suits your approach.
This is cash management. Control starts here. Spend less on what matters least.
Your 2nd choice; Do all you can to keep that income coming in by making yourself more valuable to your employer or your clients. And look for alternatives.
Your 3rd choice; Eliminate debt by aggressively directing whatever you can squeeze out of your budget to the elimination of high-interest credit card debt.
Multitask on this immediately as you’re dialing for professional help whether it be credit counseling or guidance on longer term issues such as pensions and mortgages.
Don’t be like the people stupid enough to create this mess.
Copyright 2008 William M. MacKay
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( 2.9 / 182 )America’s grand plan—the pursuit of happiness—has always had money as its epicenter.
With the economic meltdown even the rich and what’s left of the middle class have had this resource savaged. No one is happy. That’s two strikes.
The Government’s spending splurge on your behalf (with tax dollars your kids have yet to pay) may help change that as they paper over the fault lines of the financial system. Let’s hope so but it looks like a 3/2 count to me.
In this scenario a new spending strategy is clearly prudent.
It is hard to imagine, though, after decades in a consumer culture conditioned to debt that what you actually earn will get you to the ‘promised land’. How can we all possibly get ahead of each other in the race to the good life? Even the Joneses’ are miserable.
This economic downdraft, however, demands that you learn to be content with less just to hang on to the lifestyle you have. While Lehman Brothers’ Chairman made $480 million since 2000 this exercise is not about fairness.
So how can you be content with half of the promised dream? (For the really poor half of nothing is still too little.) Managing with the financial taps turned off will be a challenge.
Put matters another way: You must get more of what matters most for less money.
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Here‘s the first step. It’s almost primeval.
The epicenter of all your spending is on the goods and services that survival demands. Nature requires that you have food, shelter, and clothing. This accounts in contemporary measures (same order) for about 15-30%, 20-35%, and 3-10% of your income.
[This assumes for this exercise you walk a lot, carry a club, and drink from a nearby stream. Your medical plan with the witch doctor is a barter system. Co-pays had yet to appear.]
In my approach, I label these as Body Basics…the natural and necessary. Think bread and milk. The percentage spread is a function of your income so treat the range carefully.
Spending on Body Basics should not be automatic. Here’s why.
- - - -
Much of the spending is not for your needs but for your wants. This is the issue. You don’t know what you need with the same degree of clarity as you think. In an affluent culture, everything you want becomes a need. Worse yet, needs (like wants) appear to be limitless as your expenses and debt level often indicates.
Yikes! That’s the entitlement dividend coming back to haunt us.
- - - -
This confusion over needs and wants, whether ignorant, innocent or rationalized, carries your spending to extremes (beyond the percentage range appropriate to your income).
To prove it, take a look at what you spend on your Body Basics. Are they nature’s requirements, a forced choice essential to survival? Or are they consistently more than what you really need? How much is enough is worth consideration.
Try this question for analysis: Would spending less threaten your survival?
My answer: Not likely but spending too much could if… (and this is the wild card)… this recession goes deeper and longer than anyone can guess.
Copyright 2008 William M. MacKay
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( 3 / 121 )That was my question to a shuttle bus driver in Chicago this past weekend.
I was curious because this articulate, well-dressed American was clearly past the point of retirement (which he strongly advised me to postpone forever). Like others, he had originally gone back to work part time out of boredom. Now it had become something else…financial salvation.
And this is a guy who also has a company pension, Veteran's benefits, and social security.
His portfolio value had dropped from $180,000 to $135,000 as fast as the trip between the Essex Motor Hotel and the McCormick Convention Center. But today prudence, edged with a little fear, keeps him behind the wheel.
No one expected this would be our lot in life, as late in life as it is for this man. At least, no one other than the scores of economists and pundits who have been warning us for years that greed was out-running fear.
Not so today. Fear exceeds our greed and we are running for cover. When you have to give second thoughts to how you will pay your mortgage, your rent, put food on the table, keep the lights on, and the gas tank full the future looks quite different.
The impact on your lifestyle is now. Continuing subprime consumption (on the trinkets and trash) endangers your way of life. This puts you in the same death spiral as the banking sector.
These short-term pleasures suck the life out of your dreams…the passions postponed that often cost so little but yield a disproportionate return on investment in the form of long term gratification and a meaningful life.
Declaring bankruptcy is even becoming a no win situation when the people who don’t even intend to pay stop buying.
“How do you live below your means?” is the question of the hour. Because that’s what it’s going to take to maintain the parts of your lifestyle worth saving.
There is hope. The scenario unfolding around the globe does not preclude you from enjoying what really makes you happy. If you have any control in life you can find it here. Take it now.
Copyright 2008 William M. MacKay
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