Cultural failure

Lemme esplain a few things to those who toss accusations when they know nothing…

 

After the terrorist attacks of September 11, 2001, President George W. Bush told the American people to go out and buy stuff, go to Disney Land, and spend, spend, spend.

 

For the last several years, a looming crisis of liquidity has been fast approaching because Americans don’t save anything, rely on low interest rates to buy stuff, and consider the amount they have to spend equivalent to the amount of prosperity they can afford.  Investment banks were only too willing to take us up on the offer, and we were only too willing to buy in to their new financial tools. 

 

We, collectively as Americans, bitch and moan about prices when they go up and demand that the government do something about it, yet bitch and moan when jobs are allegedly “shipped overseas” in the constant push to save a nickel so that we, as Americans, can buy one more useless piece of crap to put on a shelf, in a closet, or out in a garage.

We, as Americans, would rather go out and buy a $10 aluminum pressed pan made in China every 4 months rather than pay $60 for a good, solid pan, once every 3 years.  Why?  Because $10 is less than $60, so it costs less.  Meanwhile wealth is being drained from our mindless, consumption based culture to elsewhere in the world in the race to save, save, save so that we can spend, spend, spend and continue on the financial hamster wheel.

 

Ours is a consumption based economy.  People “feel” wealthy by buying more and more stuff, even if they can’t pay for it—ESPECIALLY if they can’t pay for it.  That’s why we had a housing bubble.  Home prices were not driven by newfound wealth.  Home prices were driven by newfound low interest payments and financing options that allowed people to make lower and lower payments in order to afford higher and higher priced homes.

When the rate reset, BAM!!  The bottom dropped out.  People don’t buy cars, they buy loans.  People don’t buy houses, they buy mortgage payments.

 

Just as an example, people complain about the price of gas and whine that Exxon makes too much money and we should take that money away and give it to others.  Congress drags the CEOs in for questioning and grills them on whether or not they think what they make is unfair (as if a Congressman will ever admit that he’s paid too much).

That’s a pathetic, defeatist point of view.

 

There is NOTHING fair about taking away money from one, to give to another.  Nothing is fair about that.

 

Just about every large capital mutual fund owns Exxon Mobil stock.  Just about every pension fund owns Exxon Mobil stock.  Just about every insurance company and bank owns Exxon Mobil stock either directly or indirectly.

 

More than half of all Americans own Exxon Mobil stock either directly or indirectly.

 

The defeatist cultural failure is the inability to recognize that by cutting off the nose of Exxon, we’re spiting our own face.

 

A culture of ownership and a wealth building society is one that looks toward the long term viability of estates, rather than focusing on “keeping up with the Jonses”.  A wealth building society realizes that even though the Jonses can have more now, we still have more than enough to get buy and give to the next generation, and eventually we’ll catch up with the Jonses.

 

But no, we don’t have a wealth building society.  We have a consumer society.  We have a consumption based society that gobbles up resources and shits them out into landfills.  We don’t need to preserve clean air, we’ll just wait for wind to blow fresh air in.  We don’t need to preserve land, we’ll just go develop the next patch of infinite grass.  We don’t need to save money, we’ll just borrow more tomorrow.  We don’t need to invest in our future, the present is ours.  We’d rather bitch about not having enough money (and Exxon having too much) while running to the payday loan store to get a loan at 350% interest so that we can pay the cable bill that we can’t afford and shouldn’t have.

 

So, we look to today and others look to tomorrow.  The consumers among us buy interest only loans and the wealth builders among us buy houses.  The consumers among us bitch and whine about gas prices (which have dropped precipitously) and the wealth builders among us already conserved gas and drive paid off cars.  The consumers among us spend money and seek to save the nickel at all costs (even the cost of off-shored jobs) and the wealth builders among us acquire durable goods and save over the long run in order to hand wealth down to the next generation—wealth that the defeatists would have seized with an estate tax.

 

A cultural failure has led us to where we are.  The credit crunch and looming financial meltdown is a mess of our own making.  When you match greedy (companies) and stupid (consumers) you get ripped off consumers and a financial mess and everyone puts their hand out to the government to fix the problem.  Here’s a newsflash:  the Government didn’t get us into this mess, we did.  The Government won’t permanently fix this mess, only a cultural shift will fix it.  We experienced a massive cultural shift away from reckless spending and credit based consumption once…  I doubt it will happen again.  Too many people are looking toward the government to stave off having to make hard choices for a mass cultural shift to occur again.

 

There will be pockets of cultural change, though.  A small, meek minority who are credit poor and shunned by those who speak with no knowledge.  That meek minority shall inherit the financial world that is to come.  Those credit poor will be asset wealthy.  Those who are the least, shall be the first.  And while the storm rages, the chosen ones who chose not to participate in that foolishness will weather it the best.