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How $30,000 Can be More Than $300,000
Nate Hagens, The Oil Drum
… this post is a brief discussion piece on how those making little or no money may actually have a leg up on those who are employed/making alot of money.
…. Let me begin with some personal history. I am not a wealthy man, at least by US standards, but in the past I’ve made a great deal of money. Two years out of MBA school in 1994, I was making over $400,000 per year. However, irrespective of how much I earned, I was living paycheck to paycheck – not only did I spend all my after tax income but was psychologically dependent on the next check being at least as big. (The details behind this are another story entirely).
Today I live off of a graduate student stipend of $21,000 per annum and some income generated from savings. I now live in a 1200 square foot house, grow 40% of my own food and spend most of my spare cash on tools, books and gardening equipment. I am no saint, and due to travel still have a footprint many times that of the average person. I consume less not because I have to, but because it has made me much happier, and calmer. Perhaps I was lucky in my twenties to hang with billionaires who weren’t happy.
However, I still am connected to the financial markets, both due to interest and because more than half of my closest friends still work in the industry (though that number is declining, partially because some are losing their jobs and partially because I am losing some of them as friends.) I don’t have all the answers to the upcoming social puzzle, but having breathed the air near the top, as well as studied the unrelated sciences of habituation, finance and anthropology, and so feel qualified to make a few speculations.
With that backdrop here are some reasons why those of you making a lot of money ought to reassess your path, and those making little or no money, should perhaps have a brighter outlook.
1)There is a ‘monkey-trap’ that exists among people with high incomes, which makes them both unable to see they have ‘enough’ and slow to change their markers into real capital. Based on recent and real conversations with those making north of $1 million per year, it is COMMON among this crowd to feel great pressure to continue at or near this level. They ‘see’ the upcoming depression and energy crunch and feel that making more money is their best defense.
(8 March 2009)
Hanging On, or How to Get Through a Depression and Enjoy Life
M.B., oftwominds
Though there are many short accounts and (e.g., Studs Terkel’s Hard Times), novels (e.g., Grapes of Wrath), movies and historical analyses of how various populations (e.g., migrant workers, Okies, etc.), I’ve seen few interesting, in-depth accounts of how middle class and upper middle class Americans in particular experienced the 1930s depression.
So Edmond G. Love’s 1972 autobiographical novel, Hanging On, Or, How to Get Through a Depression and Enjoy Life was particularly intriguing to me when I found it at a local used bookstore, and his story struck me as an especially timely one given current events. Though the book certainly includes much more then just the depression, relating, for instance, the author’s college experience, it is in large part a discussion of how nation’s economic circumstances impacted the author and his friends and family and how they responded to these challenges.
… Denial
One of the undercurrents of this book, in my view, was how long it took the author and many others to realize just how drastically their circumstances had changed and that the depression was not going away anytime soon. Though Love notes that some historians later would divide the depression into different phases (depression, recovery), for him there was little to distinguish these years and when the depression finally did end, it did so fairly suddenly.
As the author explains, the depression, at least at its worst, did not happen overnight and the author was not greatly impacted in the early stages. For instance, in September 1929 between graduating high school and starting college the author attended a military school in Missouri for a year. He notes that between semesters some classmates could not afford to return. His father lost most of his money in the Oct 1929 crash, ended up in debt, had to mortgage the lumberyard and came close to bankruptcy (46). However, the author, away at military school was largely unaware of this. Several of the authors’ friends fathers also had lost big in the stock market and many people were worried about slow 1930 model car sales.
His family and others families started to cut spending (47). Still, though people were careful, they were still largely optimistic at that time hoping “[t]hings would be better in the spring when people started building houses again. The situation was only temporary” (48).
By June 1930, with the depression 8 months old, “[t]he panic had subsided and the wreckage had been cleared away. Most people could look about them and see just about where they stood.” Though the spring had passed “[t]here was an air of puzzlement but the optimism was there, too” with many still expressing the belief that ” ‘prosperity is just around the corner.’ “
As the author explains (48-49) this idea: “would be repeated and repeated. When the fall had some and gone, people talked about the upturn that would come the next spring. The next spring people would say that the upturn would come in the summer, and so on. The thing is that people really believed this. They had a blind faith in it, and because they did, they set up a pattern of living called ‘hanging on.’
(March 2009)
For many homeless students, schools substitute for homes
Steve Israel, Times Herald-Record (New York state)
Number of homeless kids shoots up 29% in 2 years
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More than 1,500 students in Orange, Sullivan and Ulster counties are homeless, according to the state. The numbers — up a startling 29 percent over the past two years because of a worsening economy and improved reporting — mean that kindergartners and high school seniors from Newburgh to Monroe are crammed in shelters and motel rooms, some crawling with roaches.
They crash on bare mattresses, couches or in the spare rooms of friends and relatives. They often don’t have enough food to eat, clothes to stay warm or soap and toothpaste to keep clean.
Some children even live in tents and cars. They come to school smelling of campfire smoke, exhaust fumes and worse.
… As the recession grows, so does the number of kids like Brittany, who now lives with her family in a warm apartment in Roscoe.
But the 1,561 homeless students accounted for in 2007-08 do not begin to paint a complete picture of the problem that one educator calls “so huge, it’s heartbreaking.”
It’s a problem that has its roots in the growing number of foreclosures, lost jobs and the lack of a safety net for things like apartment security deposits.
In short, so many people are living on thin ice, just one misstep, and the ice cracks.
(8 March 2009)
The upside of moving back into your parents’ basement
John D. Sutter, CNN
… When Root’s parents suggested Jeffrey Root and his wife of two years, Mandi, 22, move into a bedroom in their basement, the couple reluctantly decided to take the offer, said Mandi Root. It was the only way they thought they could make ends meet.
She has found unexpected happiness in her in-laws’ home.
“Now that we’re living there, it’s been really great,” Mandi Root said.
Jeffrey Root is one of 10 siblings. Only two others are living in their parents’ home now, but the others come by from time to time. That’s been a big change for Mandi Root, who married into the family after growing up in a less-crowded home.
Again, though, it’s a change she says is for the better.
“It’s different. It’s a lot different having so many siblings around all the time, but I like it, I like the company,” she said. “They’re like our best friends. We hang out with them all the time.”
Mandi Root said families are too hesitant about supporting each other during tough times.
(5 March 2009)
