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Musings Report #17 4-22-16 The Pathologies of the Upper-Middle Class
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For those who are new to the Musings reports: they are basically a glimpse into my notebook, the unfiltered swamp where I organize future themes, sort through the dozens of stories submitted by readers, refine my own research and start connecting dots which appear later in the blog or in my books. As always, I hope the Musings spark new appraisals and insights. Thank you for supporting my work and for inviting me into your circle of correspondents.
The first Of Two Minds Essentials book is out!
I have long wanted to publish a series of short books (under 30,000 words) that encapsulate key ideas and analyses in a shorter (and lower cost) form.
At the suggestion of my longtime friend G.F.B., I've named this series the Of Two Minds Essentials (sm).
My goal here is to reach readers who might have been put off by the cost and length of my previous books, which are typically 70,000+ words.
Those of you who have read Why Things Are Falling Apart or A Radically Beneficial World will find the themes and concepts familiar; those who haven't read my previous books on the structural failure of the status quo may find value in this new book of 27,000 words.
Though the title may sound depressing, I am very optimistic, as the passing of failed systems allows for the rise of more sustainable, decentralized and democratic systems.
Why Our Status Quo Failed and Is Beyond Reform is available as a Kindle ebook for $2.99 through Sunday evening (5 pm PST) for subscribers, at which time the price reverts to the list price of $3.95.
I have three more short books in the works, each of which will be stand-alone books that augment the other titles in the series.
As always, thank you for your financial support of my work. Please accept my apologies for my poor email response this year--it's been an especially challenging time. January and half of February were devoted to family obligations, March was completely lost to illness and injury (chest cold/flu-like exhaustion) and April was devoted to finishing this new book.
Here is the table of contents of the new book:
CHAPTER ONE
Humanity’s Six Integrated Problems
Is the Status Quo Solving These Problems, Or Is It the Problem?
CHAPTER TWO
How Money Is Created and Distributed
The Way We Create Money Creates Inequality/Poverty
The Illusory Promise of the Gold Standard
The Limits of Blockchain Crypto-Currencies
The Moral Foundation of Money
CHAPTER THREE
The Eight Types of Capital
The Scarcest Capital Is the Most Valuable Capital
We Optimize What We Measure
CHAPTER FOUR
The Limitations of the Market and the State
Limitations of the State and Universal Basic Income
Limitations of the Market
The Market, State and Labor
The Limits of Profit as a Determinant of Value
The Unsustainability of State Social Welfare Spending
The Neoliberal/State Fantasy of Taxable Profits and Wages
The Destabilizing Consequences of Globalization
Ownership Capital and Shared Capital
The Tyranny of Price
The Fundamental Failure of the Market and State
CHAPTER FIVE
The Failure of Economic Orthodoxy
The Failure of the Either/Or Orthodoxies of Capitalism or Marxism
The Pathologies of the Market
Derealization and the Destruction of Authenticity
The Institutionalization and Internalization of Perverse Incentives
Institutionalized Powerlessness and the Crisis of the Individual
The Consumerist Destruction of the Authentic Self
The Structure of Collapse
Why the Status Quo Is Beyond Reform
The Way Forward
The Pathologies of the Upper-Middle Class
I read with great interest this long-form article The Secret Shame of Middle-Class Americans: Nearly half of Americans would have trouble finding $400 to pay for an emergency. I’m one of them.
We are naturally sympathetic to anyone describing themselves as middle-class who is in such dire financial straits that they don't even have $1,000 as an emergency fund.
But as we read further, we find the writer is hardly a typical middle-class worker-bee. He was a guest host on a national television program for a few years, received substantial advances for books he wrote (large enough for him to complain about the taxes due), got a Hollywood movie deal for another book he wrote, etc.
He was making enough money to enable his film-producer spouse (yet another not-a-middle-class job) to quit work, and to buy a house in the tony Hamptons (which he poo-poos as nothing special. When is a $1 million+ home nothing? The cheapest house I could find on Zillow in the area was still over $600,000.)
Why doesn't he solve his financial difficulties by selling his Hamptons home and moving to less tony digs? He could buy a house in a Midwest college town for less than $50,000 and live off the proceeds of his Hamptons house. (Homes in Columbus Ohio are going for less than $30,000.)
This guy was never middle-class--he was upper middle-class, with upper middle-class income, assets and aspirations.
Then come his complaints: he made too much money for his kids to get financial aid to Stanford (fire up the sad violins of sympathy), so his parents had to pony up the $150,000 for each kid to attend an Ivy league university--oh, and then go on to earn Masters degrees or higher.
His wife, out of the work force for the years he was raking in big bucks, couldn't find a job as a film producer (how awful!)--and then she vanishes from the narrative: did she lower herself to take a "normal" job, or is she still a Hamptons Housewife? Are we not being told because it doesn't fit the "poor me" narrative?
His 401K retirement was sacrificed to pay for one of his daughter's wedding--and how much did that extravganza cost? Was that a wise decision?
The writer confesses he's made poor financial decisions, but he lays the blame on economic ignorance rather than the real cause: his overwhelming sense of entitlement.
This is not simply hubris; it is a pathology that characterizes America's upper middle-class, and those who aspire to membership in that class.
The entire article can be summarized thusly: I deserve to make more money every year until I decide to retire. Then I deserve a well-funded retirement in an upper middle-class neighborhood with all the usual upper middle-class trimmings.
His list of entitlements is extensive: my wife shouldn't have to work, even though writers' incomes are notoriously uneven; my daughters deserve to attend Ivy league colleges without taking on $100,000+ in student loan debt; they deserve lavish weddings that they don't have to pay for; I deserve a recent-vintage auto, numerous nights out for movies and dinner, annual vacations (we can assume overseas vacations, of course; how gauche to travel only in the U.S.), and so on--an endless profusion of entitlements that are completely unmoored from the realities of their chosen careers in writing (insecure) and film production (insecure).
Memo to the author: did you somehow not notice that the money to pay writers is drying up, along with print advert revenues? Did you conveniently not notice that book advances are vanishing like rain in Death Valley? How clueless does a writer have to be not to be aware of the structural changes in his industry?
The writer sets out to illuminate the precariousness of middle-class life, using himself as an example: a high-end New York writer/author and his equally high-end New York film producer spouse, who made tons more money than the average $50,000-per-year middle class household and managed to buy a home in one of the premier/most desirable suburbs in America.
The writer is aware of the disconnect, and he attempts to mask this by downplaying his previous (high) income and the value of his Hamptons home. (I got the feeling he didn't even want to disclose he owned a home in the Hamptons, and he hastened to downplay it.)
Hamptons Average Home Price Hits Record on Luxury Surge.
Given prices in the area, the writer is sitting on hundreds of thousands of dollars in equity--and if he had drained the equity, we can be sure he would have disclosed this poor-me factoid. Is this a household that is flat-broke, or a house-rich, cash-poor household that spent far beyond its means for years in the belief that the upper middle-class were magically entitled to a high income, regardless of economic realities?
As we look at the economic landscape, we find this class of fantastically entitled bourgeois dominating the technocrat/ managerial/ professional layers of our economy--the people who pen the editorials and edit the news reports, the people with tenure or high-paying government jobs--the people who claim the mantle of knowing what's what.
Perhaps the reality is this class of entitled bourgeois are entirely self-deluded and utterly clueless about the financial realities that are about to hit the global economy like a tidal wave. They aren't prepared to weather a mild storm, much less survive a tsunami.
With this class in positions of leadership, where does that leave the nation? Poorly prepared for anything but the impossible fulfillment of an out-of-touch sense of supreme entitlement.
Summary of the Blog This Past Week
How Can Older Workers Compete in an Economy That Values Youth? 4/21/16
How Systems Break: First They Slow Down 4/20/16
Which Narrative Will Win Out: Bulls or Bears? 4/19/16
The Lesson of Empires: Once Privilege Limits Social Mobility, Collapse Is Inevitable 4/18/16
Best Thing That Happened To Me This Week
Got the new book up on Amazon with an excellent cover design by my longtime friend G.F.B.
Market Musings: Volatility and Complacency
One of the favored ways to manipulate the stock market is to sell volatility (the VIX-related securities), which pushes the VIX et al. down and boosts equities.
But when fear takes hold, the VIX rises despite this suppression and stocks fall as complacency/confidence in higher stocks gives way.
Here is a chart of the VIX, which shows very high levels of complacency and confidence that (due to central bank intervention) stocks will continue drifting higher.
When the VIX rose in late 2015 and early 2016, stocks fell hard.
This analog chart suggests that stocks may be ready to fall hard again--if 2008 is the precursor. (No guarantee that it is.)
For stocks to decline for months, the VIX must be elevated for the same time period.
If VIX is kept below 18, there is little chance for an extended market decline. If VIX can't be pushed below 20, odds of a serious stock market decline increase accordingly.
From Left Field
Prince, Tom Petty, Steve Winwood, Jeff Lynne and others -- "While My Guitar Gently Weeps" solo by Prince
A Future Without Jobs? Two Views of the Changing Work Force
What It’s Like to ‘Wake Up’ From Autism After Magnetic Stimulation
Critical Things Ridiculously Successful People Do Every Day -- time management, no distractions, no meetings....
The Danger of the Universal Basic Income -- which is fast becoming everybody's favorite fix for automation...
There’s one major perk of globalization that only applies to rich people (via Maoxian)
Why Luck Matters More Than You Might Think -- rich people attribute their success to hard work rather than luck...
The Wages of Sin: A desperate population, fearing change, clamors for greater and greater illusion.
You Can't Have Higher Wages, Steady Inflation And High Profits At The Same Time
Can Artificial Intelligence Be Ethical? -- let's hope so...
What if Uber did health, housing and social care? -- decentralized solutions...
Octopus slips out of aquarium tank, crawls across floor, escapes down pipe to ocean -- yes!
slow train coming (5:58) Bob Dylan
“The secret of success is honesty and fair dealing. If you can fake those, you’ve got it made.” Groucho Marx (via Lew G.)
Thanks for reading--
charles |
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