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"Family working in the Tifton Cotton Mill. Mrs. A.J. Young works in mill and at home. Nell (oldest girl) alternates in mill with mother. Mammy (next girl) runs 2 sides. Mary (next) runs 1,5 sides. Elic (oldest boy) works regularly. Eddie (next girl) helps in mill, sticks on bobbins. Four smallest children not working yet. Mother said she earns $4.50 a week and all the children earn $4.50 a week. Husband died and left her with 11 children. Two of them went off and got married. The family left the farm two years ago to work in the mill."
Lewis Wickes Hine, The Youngs January 22, 1909. Tifton, Georgia.
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We're supposed to be celebrating the birth and the life of the man whose
only ever act of aggression was he threw the money changers out of the temple,
right?
Just checking.
It's just that I can't seem to find much of anything that
reminds me of that.
Looks to me as if the money changers won after all, to be honest. Looks like they've made the man who threw them out of the temple just another pawn in their game. And his followers. All in good faith. Thirty pieces of silver for everyone.
So what do we see happening in 2012? I'm going to have to say that I see a lot of credit downgrades, sovereigns, banks, and precious few upgrades. One or more countries leaving the Eurozone, which will then become very hard to keep intact.
A lot of potential mayhem, and negatives, and tons of lies too. I know some will say that's what I see every year. Well, yes, I do. And it all gets worse every year. You just don't necessarily see it in your personal lives yet. Others do though.
It sneaks up on them when they least expect it. And then they find themselves out of a job, a home, a pension. It will sneak up on you too. Unless you can safely count yourself among the 1%. Then something else will sneak up on you. That may take us beyond 2012, but it will come to pass.
A series of articles in this week's Daily Telegraph provides a good take on the topic, and leads us quite fluently into the next, and bigger, set of problems. First: what already has been and is being lost, according to Paul Farrow:
Looks to me as if the money changers won after all, to be honest. Looks like they've made the man who threw them out of the temple just another pawn in their game. And his followers. All in good faith. Thirty pieces of silver for everyone.
So what do we see happening in 2012? I'm going to have to say that I see a lot of credit downgrades, sovereigns, banks, and precious few upgrades. One or more countries leaving the Eurozone, which will then become very hard to keep intact.
A lot of potential mayhem, and negatives, and tons of lies too. I know some will say that's what I see every year. Well, yes, I do. And it all gets worse every year. You just don't necessarily see it in your personal lives yet. Others do though.
It sneaks up on them when they least expect it. And then they find themselves out of a job, a home, a pension. It will sneak up on you too. Unless you can safely count yourself among the 1%. Then something else will sneak up on you. That may take us beyond 2012, but it will come to pass.
A series of articles in this week's Daily Telegraph provides a good take on the topic, and leads us quite fluently into the next, and bigger, set of problems. First: what already has been and is being lost, according to Paul Farrow:
The latest Asda Income Tracker has revealed that family spending power fell by £15 a week in November 2011, leaving the average UK family with £161 of weekly disposable income – 8.4 per cent down from this time last year.
If the average family(!) has
only $250 per week to feed and clothe itself, we may just have a slight
problem.
Austerity measures are only now starting to kick in for real in Britain, and lots of people have bought homes at prices that won't last much longer. Hence, millions that have just £161 in weekly disposable income today will be further squeezed, and mercilessly so. You buy a home in a bubble, you lose it in the bust.
Our societies are being increasingly gutted, cut to the bone. This is not something that will hit only some people, in some areas, it will affect everybody, and all over the western world. Japan, too, is on the verge of implosion. And China .. well, with home prices dropping dozens of percentage points in just one or two months, China may well be on the verge of an explosion.
2012 may be the year for increasing large-scale conflicts, such as another US attack in the Middle East. There's a lot of chest-thumping going on, and plenty of theaters to choose from. Iran, Syria, Egypt and more. I would be surprised though if it happens that soon, though I'm sure it will eventually.
War is simply too good a way to deflect attention from domestic mayhem, and solidly proven, for politicians to ignore. But I don't really see Obama invading any country yet in order to save his career or his campaign. Not yet.
Don't see it in Europe either. 2012 looks too early there too, though that may change if things get out of hand, too fast. We will see a further run-up to what we at TAE call the Balkanization of Europe: the re-surfacing of age-old conflicts and prejudices. As a truly deeper political union looks completely out of reach, a truly deeper division looks all but inevitable.
Europe doesn't have either the political nor the financial means to "save" its periphery. It can sweep Greece, Portugal, Ireland under the carpet for a while, but that's about it. Handing out half a trillion euros to 523 banks in exchange for already shredded paper assets will prove to be nothing but counterproductive.
It doesn't make any bank more solvent, it only puts more pressure on both the financial position of every European citizen, and on the ties that have bound their respective countries closer together for 50 years. Today, all major banks, and all countries too, are preparing scenarios for a Eurozone break-up.
What may be worse than all of this is a conflict that is brewing, slowly simmering, and that will tear our societies apart from within. It happens slow enough to perhaps not be much noticed next year, but that is not a good thing: it would be better to put out the fire before it spreads. Unfortunately, there is no way in sight to put it out. It looks like it will have to burn it course before it fades. This one will pit parents against their own children and grandchildren. That's how you tear a society apart.
Again from the Telegraph, this time Ian Cowie:
Baby boomers with 80% of UK wealth shouldn’t feel guilty about younger generations' problems
Austerity measures are only now starting to kick in for real in Britain, and lots of people have bought homes at prices that won't last much longer. Hence, millions that have just £161 in weekly disposable income today will be further squeezed, and mercilessly so. You buy a home in a bubble, you lose it in the bust.
Our societies are being increasingly gutted, cut to the bone. This is not something that will hit only some people, in some areas, it will affect everybody, and all over the western world. Japan, too, is on the verge of implosion. And China .. well, with home prices dropping dozens of percentage points in just one or two months, China may well be on the verge of an explosion.
2012 may be the year for increasing large-scale conflicts, such as another US attack in the Middle East. There's a lot of chest-thumping going on, and plenty of theaters to choose from. Iran, Syria, Egypt and more. I would be surprised though if it happens that soon, though I'm sure it will eventually.
War is simply too good a way to deflect attention from domestic mayhem, and solidly proven, for politicians to ignore. But I don't really see Obama invading any country yet in order to save his career or his campaign. Not yet.
Don't see it in Europe either. 2012 looks too early there too, though that may change if things get out of hand, too fast. We will see a further run-up to what we at TAE call the Balkanization of Europe: the re-surfacing of age-old conflicts and prejudices. As a truly deeper political union looks completely out of reach, a truly deeper division looks all but inevitable.
Europe doesn't have either the political nor the financial means to "save" its periphery. It can sweep Greece, Portugal, Ireland under the carpet for a while, but that's about it. Handing out half a trillion euros to 523 banks in exchange for already shredded paper assets will prove to be nothing but counterproductive.
It doesn't make any bank more solvent, it only puts more pressure on both the financial position of every European citizen, and on the ties that have bound their respective countries closer together for 50 years. Today, all major banks, and all countries too, are preparing scenarios for a Eurozone break-up.
What may be worse than all of this is a conflict that is brewing, slowly simmering, and that will tear our societies apart from within. It happens slow enough to perhaps not be much noticed next year, but that is not a good thing: it would be better to put out the fire before it spreads. Unfortunately, there is no way in sight to put it out. It looks like it will have to burn it course before it fades. This one will pit parents against their own children and grandchildren. That's how you tear a society apart.
Again from the Telegraph, this time Ian Cowie:
Baby boomers with 80% of UK wealth shouldn’t feel guilty about younger generations' problems
Baby boomers shouldn’t feel guilty about being better-off than younger generations, because people aged over 50 today saved harder and spent less when they were young than is the case today.
That’s the conclusion of analysis of more than 2,000 people by the Chartered Insurance Institute (CII). The study acknowledges that baby boomers – or those born within 20 years of the end of World War II – were fortunate to enjoy easy mortgage availability and decades of house price inflation plus final salary or defined benefit pensions denied to most young adults today.
As a result, about 80% of the Britain's net personal wealth of £6.7trn or £6,700bn is owned by people aged over 50 while younger folk often have no savings, substantial debts and little hope of becoming homeowners any time soon.
The average age of first-time buyers is now 37 or about 10 years later than two decades ago.
But the CII claims that 'generation rent' are partly to blame for their own misfortune because many fail to follow their elders’ example by starting to save early. They have come to expect regular foreign holidays, among other treats once regarded as luxuries, often funded by credit cards taken out earlier than their parents did.
A third of the people surveyed who are now in their thirties spent more than half their net income on leisure and entertainment when they were in their twenties, compared to a fifth of those who are now in their fifties and sixties.
Most of the younger generation now expect to holiday abroad an average of 2.5 times a year, whereas a quarter of baby boomers never travelled overseas in their twenties. [..]
"While some of this can be baby boomers received undeniable financial advantages during their working lives, there's no doubt that their financial security today is also due to a more frugal mentality in their youth. Today's generation spends more and saves less when compared to the baby boomers, and while people should enjoy their youth and live for today they should not do so at the expense of planning for their tomorrow." [..]
People who start to save young are far more likely to achieve an acceptable outcome than those who wait until later because of compound interest. Pensions are not the only way to save for retirement but they do enjoy substantial tax reliefs. Youngsters who say savings and pensions are boring should ask themselves how exciting poverty in old age is likely to be.
I'd say the numbers, and the opinion offered,
speak for themselves.
Let's see here. A generation is normally seen as covering about 25 years. So if we say the youngest baby boomer is now about 50, then we have another generation aged 25-50, and yet another aged 0-25. I know that this is playing with the numbers a bit, but that's not all that important.
What is important is that these generations are set to blame each other for all manner of things. And I can't see how that will work out alright.
The baby boomers made one crucial and fatal mistake right from the start. They didn't have enough children. At least not to keep their pension systems going. The oldest are fine; but anyone now aged 50 has very little to no chance of ever getting a penny in pension money.
Pensions plans are Ponzi schemes, pyramid games. They need fresh blood all the time, and always more of that than there was before. Well, those days are long gone. Moreover, the younger generations, in general and on average, make less money than their parents. And they have to pay a lot more to go to college and university. Ponzi schemes don't collapse slowly. They're here one day and gone the next.
Stories about frugality are cute, but comparing our societies from 30 or 50 years ago with today is real tricky. How much richer did the baby boomer generation get by letting their kids spend? How much did, and still do, they profit from real estate prices so high younger generations can't afford to buy a home?
That is an endless and useless discussion. Useless because the young will take over political power at some point regardless of any external circumstances. What's disconcerting is that this transition may take too long in the face of a rapidly collapsing economy.
Wherever you look, unemployment amongst young people is far higher than the average. Still, the older generations think their children will pay to keep their pension money coming in anyway. With what, though?
The baby boomer generation, willingly or not, it makes no difference, have accumulated a large part of their wealth at the cost of the future. And perhaps, but only perhaps, we would be able to keep that mirage of borrowing from infinity going a little longer if we could keep the economy growing at 5-6-7% annually.
Thing is, we can't. We're stuck in the biggest and deepest credit crunch mankind has ever seen, and we haven't even started to see its true character. In fact, the only thing alleged to be a solution is more of the same: borrowing from the future. Which is what each and every bailout plan is. Nothing more, nothing less.
So we’re setting ourselves up for an epic fight that will tear our societies apart, rip them to shreds. Who's going to willingly give up their pension? Who’s going to volunteer to pay for other people's pensions when they can't even earn enough to feed their own kids? In the end, this will be decided by political power. Or rather, it would, provided we would be able to have our societies function more or less normally until then. What are the odds?
This is of course not all the whole coin, not all sides to it. Our major problems are seldom one- or even two-dimensional. E.S. Browning for the Wall Street Journal:
Oldest Baby Boomers Face Jobs Bust
Let's see here. A generation is normally seen as covering about 25 years. So if we say the youngest baby boomer is now about 50, then we have another generation aged 25-50, and yet another aged 0-25. I know that this is playing with the numbers a bit, but that's not all that important.
What is important is that these generations are set to blame each other for all manner of things. And I can't see how that will work out alright.
The baby boomers made one crucial and fatal mistake right from the start. They didn't have enough children. At least not to keep their pension systems going. The oldest are fine; but anyone now aged 50 has very little to no chance of ever getting a penny in pension money.
Pensions plans are Ponzi schemes, pyramid games. They need fresh blood all the time, and always more of that than there was before. Well, those days are long gone. Moreover, the younger generations, in general and on average, make less money than their parents. And they have to pay a lot more to go to college and university. Ponzi schemes don't collapse slowly. They're here one day and gone the next.
Stories about frugality are cute, but comparing our societies from 30 or 50 years ago with today is real tricky. How much richer did the baby boomer generation get by letting their kids spend? How much did, and still do, they profit from real estate prices so high younger generations can't afford to buy a home?
That is an endless and useless discussion. Useless because the young will take over political power at some point regardless of any external circumstances. What's disconcerting is that this transition may take too long in the face of a rapidly collapsing economy.
Wherever you look, unemployment amongst young people is far higher than the average. Still, the older generations think their children will pay to keep their pension money coming in anyway. With what, though?
The baby boomer generation, willingly or not, it makes no difference, have accumulated a large part of their wealth at the cost of the future. And perhaps, but only perhaps, we would be able to keep that mirage of borrowing from infinity going a little longer if we could keep the economy growing at 5-6-7% annually.
Thing is, we can't. We're stuck in the biggest and deepest credit crunch mankind has ever seen, and we haven't even started to see its true character. In fact, the only thing alleged to be a solution is more of the same: borrowing from the future. Which is what each and every bailout plan is. Nothing more, nothing less.
So we’re setting ourselves up for an epic fight that will tear our societies apart, rip them to shreds. Who's going to willingly give up their pension? Who’s going to volunteer to pay for other people's pensions when they can't even earn enough to feed their own kids? In the end, this will be decided by political power. Or rather, it would, provided we would be able to have our societies function more or less normally until then. What are the odds?
This is of course not all the whole coin, not all sides to it. Our major problems are seldom one- or even two-dimensional. E.S. Browning for the Wall Street Journal:
Oldest Baby Boomers Face Jobs Bust
Many older Americans fear they will be working well into their 60s because they didn't save enough to retire. Millions more wish they were that lucky: Without full-time jobs, they are short of money and afraid of what lies ahead. [..]
Older Baby Boomers are trying to postpone retirement, as many find their spending habits far outpaced their thrift. With U.S. unemployment at 8.6%, and much higher among people in their teens and 20s, younger members of the labor pool accuse Boomers of refusing to gracefully exit the workplace.
But their long-held grip is slipping, as employers look past older Americans to younger, cheaper workers. The Labor Department counts people as unemployed only if they have looked for a job in the previous month. By that definition, 6.5% of workers aged 55 to 64 were unemployed in October, below the national average but more than twice the jobless rate for the group five years earlier.
Taking into account the number of older people who want full-time work but are unemployed, working part-time or need a job but have quit looking, the percentage jumps to 17.4%, or 4.3 million Americans ages 55 to 64, according to the government data. The number has grown from 2.4 million in October 2006. This group without full-time work now accounts for more than one in six older Americans seeking positions. [..]
Older people have more trouble finding new jobs. Among unemployed workers older than 55, more than half have been looking for more than two years, compared with 31% of younger workers, according to the Heldrich Center. Among older workers who found a new job, 72% took a pay cut, often a big one, the Rutgers data show.
The problem has been building for decades: Inflation-adjusted, middle-class incomes have stagnated in parallel with a free-spending culture of indebtedness that has left many Americans with too little saved. Over the same time, many U.S. companies cut pensions and shifted to less-generous retirement-savings plans such as 401(k) accounts that have stagnated or diminished in the market tumult of past years.
Older families aren't just failing to save, they are increasingly draining accounts that were supposed to help finance retirement.
The median household headed by someone aged 55 to 64 has $87,200 in retirement accounts and other financial assets, according to Strategic Business Insights' Macro Monitor database. If each of the 4.3 million unemployed or underemployed people in this age group runs through half the family savings, that will, in theory, total $188 billion in lost retirement money. [..]
The trouble spreads across generations. Older people hang on to jobs or, out of desperation, take lower-level jobs for which they are over-qualified. Either way, they displace younger workers. [..]
At an age when they should be generating peak incomes and savings, many unemployed and underemployed Americans are applying for early Social Security benefits and spending what's left in their retirement accounts.
Yes, it's not just generation versus generation,
not just parents against their children. The problem is much more perverted. We
no longer have a functioning financial system, a functioning banking system, or
a functioning political system for that matter. All these systems died on the
same battlefield. Credit.
When Richard Nixon threw out the gold standard in 1971, the younger baby boomers were getting their first jobs and buying their first homes. Happy Days! It took an entire generation, actually a bit more than 25 years, for the inevitable outcome of that decision to reach the high point of its devastating glory.
But here we are now. We've all been had. All but 1% of the people. When it's no longer the fruits of his labor that determine a man's wealth, but the fruits of his wagers, when our leaders are those who are best connected to the moneylenders in the temple, instead of those that throw them out, there is no way we could not have ended up where we have.
Still, pitted against each other we will be. Whether in our own countries, or in skirmishes between countries -Europe-, or a WWIII over energy resources that keep the cattle at home docile, we will fall for it all again. We haven't learned much. But then again, maybe it isn't about learning after all.
We are ready and willing to destroy our societies, and eventually our planet, over a few scraps falling off the big table, like a Mac Mansion, an iPod, an SUV, because that is who we really are. Because we can make ourselves believe those are not scraps, that we are indeed kings now, seated at the table, and heaven knows we have lived better than ancient kings of any age over the past decades.
And most of all because we are no good at all at planning long-term. We can pay into a pension plan, that seems long-term, but at the very same time we can't figure out that if at some point there's less new contributors than older ones, that plan must and will implode.
We all will swear we love our children above anything in the world, and most would give their lives for their kids. And we honestly mean it when we say it.
The reality, however, is that we leave our children with a world that is polluted beyond recognition, in which species disappear at a rate 1000 times faster than before, and in which everything we’ve trained our kids for is vanishing right before their eyes.
Our "leaders" are psychopath lackeys of a long bankrupt financial system that uses its servants to gobble up the yet to be earned wealth of our progeny, and we just sit by and watch it happen.
We never noticed what happened to our financial systems when Nixon pulled his trick in '71, after all, we got richer, right, so who's to complain? We never noticed how the increasing fake wealth drove our societies and families apart, we wanted more space, more individualism, more things to buy and possess. We never noticed how our energy supplies started to run out; hey, we're driving more than ever, so there must be more oil than ever...
We have done exactly the same that any primitive life form would do when faced with a surplus, of food, energy, and in our case credit, cheap money. We spent it all as fast as we can. Lest less abundant times arrive. It's an instinct, it comes from our more primitive brain segments, not our more "rational" frontal cortex.
It's not that we're in principle, or talent, more devious or malicious than more primitive life forms. It's that we use our more advanced brains to help us execute the same devastation our primitive brain drives us to, but much much worse.
That's what makes us the most tragic species imaginable. We’ll fight each other, even our children, over the last few scraps falling off the table, and kill off everything in our path to get there. And when we're done, we’ll find a way to rationalize to ourselves why we were right to do so.
We can be aware of watching ourselves do what we do, but we can't help ourselves from doing it.
Most. Tragic. Species. Ever.
When Richard Nixon threw out the gold standard in 1971, the younger baby boomers were getting their first jobs and buying their first homes. Happy Days! It took an entire generation, actually a bit more than 25 years, for the inevitable outcome of that decision to reach the high point of its devastating glory.
But here we are now. We've all been had. All but 1% of the people. When it's no longer the fruits of his labor that determine a man's wealth, but the fruits of his wagers, when our leaders are those who are best connected to the moneylenders in the temple, instead of those that throw them out, there is no way we could not have ended up where we have.
Still, pitted against each other we will be. Whether in our own countries, or in skirmishes between countries -Europe-, or a WWIII over energy resources that keep the cattle at home docile, we will fall for it all again. We haven't learned much. But then again, maybe it isn't about learning after all.
We are ready and willing to destroy our societies, and eventually our planet, over a few scraps falling off the big table, like a Mac Mansion, an iPod, an SUV, because that is who we really are. Because we can make ourselves believe those are not scraps, that we are indeed kings now, seated at the table, and heaven knows we have lived better than ancient kings of any age over the past decades.
And most of all because we are no good at all at planning long-term. We can pay into a pension plan, that seems long-term, but at the very same time we can't figure out that if at some point there's less new contributors than older ones, that plan must and will implode.
We all will swear we love our children above anything in the world, and most would give their lives for their kids. And we honestly mean it when we say it.
The reality, however, is that we leave our children with a world that is polluted beyond recognition, in which species disappear at a rate 1000 times faster than before, and in which everything we’ve trained our kids for is vanishing right before their eyes.
Our "leaders" are psychopath lackeys of a long bankrupt financial system that uses its servants to gobble up the yet to be earned wealth of our progeny, and we just sit by and watch it happen.
We never noticed what happened to our financial systems when Nixon pulled his trick in '71, after all, we got richer, right, so who's to complain? We never noticed how the increasing fake wealth drove our societies and families apart, we wanted more space, more individualism, more things to buy and possess. We never noticed how our energy supplies started to run out; hey, we're driving more than ever, so there must be more oil than ever...
We have done exactly the same that any primitive life form would do when faced with a surplus, of food, energy, and in our case credit, cheap money. We spent it all as fast as we can. Lest less abundant times arrive. It's an instinct, it comes from our more primitive brain segments, not our more "rational" frontal cortex.
It's not that we're in principle, or talent, more devious or malicious than more primitive life forms. It's that we use our more advanced brains to help us execute the same devastation our primitive brain drives us to, but much much worse.
That's what makes us the most tragic species imaginable. We’ll fight each other, even our children, over the last few scraps falling off the table, and kill off everything in our path to get there. And when we're done, we’ll find a way to rationalize to ourselves why we were right to do so.
We can be aware of watching ourselves do what we do, but we can't help ourselves from doing it.
Most. Tragic. Species. Ever.
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