To Get Rich Is Glorious

I remember in 2003 calling for the bursting of the housing bubble. I couldn't have been more wrong. The inertia of our collective hubris, of our intentional, willful ignorance of the avarice and folly of a housing market rising 20% per year ad infinitium blinded us as our retirement funds were goosed higher by a rising stock market, our lives were made more comfortable with the purchasing of new 3,200 sq ft housal units on historic volumes of abundant, cheap credit, when local, state, and federal governmental services were adequate and flush with tax revenues, when gasoline was about as cheap as it was in 1989. We began a war in Iraq that year? Really? Ho-hum.

I have often commented here on The Franklin Monologues that all this wealth was hallucinated; all our prosperity, our economic growth, our wealth, all an illusion. Housal unit prices have fallen closer to their norms (well, I'd really argue that they would have fallen to the norm if not for the trillions in government intervention). They are still above the historic norm yet we ache for a return to the valuations of 2003...even though it was all fake.

What I find interesting is that the prosperity we felt between 1995 and 2006 was fantasy, yet the pain of this last recession and current jobless recovery is quite real.

Here's a nice, real statistic for you -- our productivity has statistically increased 2.6% in the last quarter, but real hourly compensation dropped 0.6%. There is no doubt that, on balance, we are earning less than what we used to, even though:

• Medical premiums are higher than a year ago;
• Gasoline is higher than a year ago;
• Public utility bills are higher than a year ago;
• Eggs are more expensive than a year ago;
• Housal unit prices are higher than a year ago;
• Government debt is substantially higher than a year ago.

As I understand things -- if productivity is increasing faster than wages, then the gains from such endeavors aren't flowing to the worker. I surmise that they are instead flowing to the multinational corporate/political machinery. This makes sense, when you realize that the inequality in wealth has only widened over time, is wider than at any other time in history.

I post this like I've a dog in the fight. Nope, far from it. Outside of the loss of two bus routes and slightly higher fares, I've remained completely insulated from the actions of these bubbles growing and bursting. I like to think that a modicum of my own preparation has led to this condition, along with holding the contrarian vision that our economy is as unsustainable as is suburban sprawl and dependence on foreign energy. To this end, I've:

• Remained employed in a recession proof industry, electrical power generation, that has zero chance of being outsourced;
• Not once cash out re-fi'ed my housal unit, even though I've refinanced multiple times;
• Not engaged in speculative flipping, not getting stuck with an inflated property at the crash;
• Not transferred all that hallucinated wealth into goods that demand real repayment, like waverunners or dot-matrix printers;
• Held on to cash and cash equivalents, not subjecting all my assets to stock market bubbling;
• Ridden a bicycle to work in the wind, rain, snow and ice.
• OK, not really snow and ice, that's just hyperbole to see if you are really reading this shit;
• Lived within my means, lived with single-zero Federal and State withholding, my non-interest bearing winter accounts;
• Not developed $10,000 in credit card debt, at which bankruptcy is a probable option;
• Lived in the same housal unit for fifteen years, paying property taxes at a lower rate than all my neighbors;
• Remained more valuable to my employer than what I am being paid;
• Held little to no revolving debt, and paying down my mortgage;
• Held physical assets that offset losses in equities;

These are things than many of us could do, but we choose not to...because they aren't sexy. Riding a bicycle to work is work, and among the most un-sexy things one can engage in. Wearing a helmet, padded shorts, with panniers and fenders...god, I look downright awful on two wheels. But I digress...the slow, methodical method of gasp! saving to create future wealth pales compared to flipping a unit for re-sale, to winning the mega-jackpot at Red Hawk (kree-ee-ahhhh) Casino, along with countless other methods for deriving unearned riches.

This all has bearing on an energy blog because the way we squander our personal energies is similar to the way we squander physical energy. We've been left with an impressive panorama of devalued towns filled with demoralized people because we chose to save $30 on a dishwasher by outsourcing its manufacture to Asia and not having to pay an American worker a bloated living-wage to manufacture it. We've been left with miles of asphalt leading to defunct communities where the consumer lives in one place and consumes in another, requiring heroic volumes of energy to function. We have a Finance, Insurance and Real Estate (FIRE) economy that produces nothing of real value -- it's simply a large, cyclonic vacuum sucking up an endless supply of loose nickles earned by the dwindling number people who still produce things of value in this nation.

To get rich quick is glorious in our society. However, this isn't new, nor is it much different in other societies:

The difference between the U.S. consumer and the Chinaman, however, is that we pin our economic hopes not on the slow, gradual accumulation of assets as he does, but on bubbles, on fiscal stimulati, on the privitatization of fast gains (think high-frequency stock trading) and the socialization of even faster losses.

I like to think that the difference between financial speculation/unearned riches and the slow, gradual development of riches will only become more apparent in the coming years as our economy, built upon the sands of services and financial avarice, falls apart.