it could happen…

For lack of anything better to do, I have been thinking about some changes that could happen in the foreseeable future. Reading Taleb’s The Black Swan may have had something to do with this.

NNT tells the story about the well-fed turkey. The turkey is “surprised” by the sudden change in his world view a few days before Thanksgiving – the Black Swan event. However, the farmer fattening up the turkey, and butcher, who all along was anticipating dispatching the turkey, were not surprised – they were prepared. For them, it was business as usual, not a Black Swan event. The point being, what is a Black Swan for some, may not be one for everyone.

  • If there is a crash / recession / depression, how will the general population react? Will the very wealth be the target of anger? Will there be a backlash against the people who made a lot of money stealing from pension funds?
  • Will this lead to political changes? Changes in education? Health-care?
  • What work / sources of income will there be for those willing to work? What businesses thrive in this environment? Will outsourcing and off-shoring impact US employment?
  • What changes will come about if gas is so expensive that people can not afford to commute from the suburbs? What will happen to all the suburban McMansions that people can no longer afford?

Some thoughts…

Down with the rich. Hard working, frugal, ordinary folks are getting pretty fed up with the rich who not only are getting richer, but are viewed as undeserving of their wealth. Think Paris Hilton’s recent display. On a blog I read, there was a question – why are rich people so obnoxious? Reader comments agreed but some pointed out that the most obnoxious weren’t actually rich, just living high on debt. Interestingly, nobody addressed the notion that this could end and these boors would get their come-upance. Other than grumble, would “they” – these ordinary folks, do anything about the vast and widening financial inequity as they see it? What might they do if they got really pissed off and did something about it? What would it take to get something going? Who would benefit if ordinary folks decided that the rich shouldn’t be rich anymore? Who would be the target of their anger?

Neither of the above. With two parties as entrenched as they are, the United States as a demonstration of the power of democracy is pathetic. Power, yes. Democracy, no. Until voters have real choices, things are not going to get any better. Sure, some of the fringe get some press, but they held to the margins by the system. Best government money can buy. Is this going to change anytime soon? What would it take for voters to really think about the consequences of their actions – choosing the red or the blue republicrat, thus perpetuating a system that denies them the democracy they think they are entitled to. Letter writing to encourage disenfranchised minority women in poor neighborhoods to get out and vote, makes the middle class white women feel good about participating in the system (read – getting more Democratic voters out). Where are the suffragettes when you need them? Those ladies really understood the significance of participation and representation required in democratic system and kicked some butt to make it happen.

All the children are above average. Education, health-care, nutrition, media focus, taxes – huge issues that are not being addressed effectively, and the future of the United States as a world-power is not looking good. First and second generation kids from all the third world countries are motived to work really hard for to get what Americans think their kids are entitled to. Work hard in high school, get into the most prestigious higher-ed program in the US – UCLA Theater Arts. Math is too hard, even for boys. Unless, the option was living in some vermin-infested, over-crowded, backwater in an enormous city in China or India – now that is motivating. Will American kids get competitive, inspired or what?

Don’t let your babies grow up to be cowboys. Or message therapists, personal trainers, manicurists, high-end kitchen remodeling contractors, stock brokers, or expensive shoe sales clerks. Doing one-another’s laundry? Who will buy…? Service industries are going down. Everyone will have more time than money. What will be the real innovation and exciting new occupations rising from the ashes? Lots of companies that are still around today were incorporated in the 1930s when people had time on their hands and real needs for practical products came to light.

I’m hopeful that things will not be as bleak as SO envisions. I am concerned that the government will step in and attempt to “make things better” which will allow those who were part of the problem living high and loose on “borrowed” (read stolen) money, to to get off the hook. That covers a pretty broad spectrum of the population – private equity brokers getting a billion or so for engineering a “deal” that will rob stock holders and folks with their money locked up in pension funds of billions more. Pretty much everyone with a huge quantity of debit is part of the problem along with lenders, brokers, sales people, real estate speculation promoters, credit card companies, advertisers, and anyone else “responsible” for inducing these poor “innocents” into the situation.

Will all these end with millions turned out into the street? Probably not. The McMansions are bricks and mortar, regardless of ownership or who is occupying them. Former owners paying rent, lenders with foreclosed property, landlords with income property purchased for pennies on the dollar, government subsidies for owners in financial trouble, squatters – we shall see. But it will be interesting to see who ends up with the shortest straw.

I’m even more concerned that those of us who watched from the sidelines doing the “right things” – living within our means, and, yes, saving, will be forced to bail out the troublemakers.

This is the American way, that the rest of the world aspires to. Sigh…