…and we are starting the new.
What has changed?
- Many of those who previously lived a relatively stable life, have lost it – forever.
- That includes the many small business owners, wiped out of cash, deeply in debt, too old to start over.
- Some of them had, optimistically and reasonably, taken on car/home/life debt, as they had stable jobs, and some savings. Gone. Not only unlikely to return in the near future, but they are less able to move, thanks to the anchor of a home.
- Over 65, retired, and depending on that investment account to supplement Social Security, and possibly a pension (most workers don’t have them). Some may have few alternatives but to move in with relatives. Others, to work for the rest of their lives – IF they can find a job.
- Those graduating – you are well and truly screwed. You won’t get much of a job for a long time, unless you are fortunate enough to have some experience in one of those fields that is still booming. Can’t think of too many at this time. Plus, you have debt – a LOT of debt. Unlike car loans, house loans, credit card debt, and the like, student loans are NOT dischargeable in bankruptcy. May you should have put all that debt on the VISA, eh?
Well that’s the bad news.
There are some bright spots. Many have learned to get along with what they have coming in as income. Some have taken up those old-time homey crafts – sewing, knitting, canning, home repair, gardening. All of which might stretch out what money does head their way.
Many families found extended time with family rewarding. Time to play with the kids, teach them some useful skills, assist with learning academic subjects, and just have family fun – card games, puzzles, Nerf gun fights, home theatrical play, taking up musical instruments.
Many stepped to community needs, volunteering at food banks, running errand for elderly/ill neighbors, finding ways to cheer up others, and making masks – a LOT of masks. All of which they shared, prompting others to do likewise. Sometimes, peer pressure is a GOOD thing.
Many learned to appreciate the average guys and girls – the nurses, cleaners, truckers, store clerks – all of those people who weren’t sitting around while the shutdown was on. Whether or not that appreciation lasts, it was nice – and long overdue.
Many, seeing their available cash dwindle, vowed to climb out of the Pit of Debt. If you have an interest in that, try the Dave Ramsey site – I have friends who swear by his ideas.
But, the rest of the world is in much worse circumstances. They are even deeper in debt, with less chance of getting out. And, for some (Yes, China, I’m TALKING about YOU!), the great efforts they made to hide their problems have led them to be widely distrusted. The speed at which countries are moving to detach them from dependency on supplies from China may well bring down Red China.
The main bright spot? Both that Trump is still hanging in there, despite the valiant efforts of the Anti- and Never-Trumps to bring him down. I’ve no doubt that the Failing Left (trademark pending) will whip their Media-boys into another frenzy – well, as soon as they can drum up another Fake Scandal to bring the Bad Orange Man down. It’s just that the Left is both obvious, and so damned bad at that conspiracy thingy. Their lies are beginning to surface, and they haven’t a clue how to bury them again, other than the willful blindness of the determinedly Anti-Trump.
Keep in mind, I’m not a Trump-bot, who can’t see his many flaws. It’s just that I don’t have infinite choices – I have to go with someone who, though carrying some baggage, is still heading to the station, and willing to board the train, to the right destination.
I’ve been connecting with several people on social media, who are good-hearted people who oppose Trump because he isn’t hitting their soft spot – they like to think of themselves as caring and selfless. They operate on an emotional level, and cannot be reached by reason or hard sense.
So, I’ve been working on a new approach for communications. I’m trying to introduce topics from an emotional standpoint.
It’s tough. I’m not generally a touchy-feely kind of person. I have to go against my preferred method of relying on logical reasons to support my views. Ultimately, I’m getting better response to what I write/post than if I used all the Spockian logic in the universe.
Just a thought – others will likely be better suited for that approach than I. I’d love to hear about your experiences with that mode.
What most people don’t understand is when the economy picks back up these people aren’t going back to work. In ancient days (60s-70s) there were factories to get jobs at so you could save a floundering small business. Not any more they’re all in CHi’na. With few exceptions as the US disentangles itself from China those jobs will go to some other third world country. Steel will switch to Japan or South Korea as will heavy equipment mfg. Clothing could go to Vietnam which is actually an improvement since the Vietnamese make cloths American sized. Pharma will come home because it is essential to national security even if Congress has to pass a law.
Social workers now will have greater job security. As the lockdowns continue expect greater unrest and if the go on long enough violence.
Strong agree from me on using Dave Ramsey and avoiding debt/getting out of debt. It’s something that attracted me to Francis’s place (I think it was Eternity Road back then) way back when. Debt leverage in business is one thing. You can make your risk calculations, figure out your ROI, and decide if leverage is worth it in business.
But in your personal life, leverage is still risk, but the return is mostly just lifestyle shit. Newer/nicer car. Better furniture. More consumer kitsch. The risk is dangerous, and the return… well, you’re always going to want “more”. Best to set a reasonable standard of living and go with that.
I don’t even necessarily make an exception for a mortgage. A mortgage is LESS BAD than the other consumer debt forms, but it’s still leveraged risk, and doesn’t fall into “good”. Get one if you must, but go 15 or 20 year if you can, and pay it off as soon as is reasonable. And have a substantial down payment > 20% to protect against market downturns. And know that it’s still a huge risk.
Some will say “but I could take the mortgage/car loan/whatever and use the cash to make more money doing {some investment}.” Perhaps that is true. If you have the liquid net worth, strategic use of debt can be worthwhile, provided you retain enough to cover the balance and really are earning more with the money somewhere else. Similarly, having a credit card to use as an extra layer of fraud protection for online purchases can be worthwhile, provided you always pay it off immediately and never carry a balance.
But most people who use those excuses don’t have the cash and are just justifying their consumer debt.
I’ve also heard the maxim that folks ‘who know how to manage money’ never, ever buy with cash when they can borrow, so they can keep cash available to invest.
I call bullshit. Deliberately maximizing one’s personal leverage is an ego trip for posers. I have known a few genuinely wealthy people. In business, they borrowed carefully and shrewdly; in their personal lives, they avoided it assiduously.
I remember once having lunch with a couple of casual friends in Silicon Valley about 20 years ago. One of them was a newly promoted VP. He had just bought himself a new BMW 500, all tricked out. He saw when I drove up to the restaurant that I was still driving the same Nissan I’d bought 8 years ago.
“Why are you still driving that piece of shit???” He was actually angry about it.
“Hey – it still runs and it’s a great, reliable car.”
“I thought you were doing well!”
“Yeah, things are good.”
“Well why do you still have that piece of shit car then? Just take out a loan and get a real car!” He was really contemptuous at this point.
“No.”
Astonished, he said “Why not?!?!???”
“I’ll only buy with cash. If I have to borrow, it means I can’t genuinely afford it.”
He looked thunderstruck.
Call me old fashioned. Or just old at this point. My parents grew up during the Great Depression and WW2 (mom was actually a tween in Italy during the war and very nearly died.) Their values were instilled in me from birth.
Question to everyone:
Who else as a kid was ever told at the dinner table “Clean your plate! Don’t you know their are children starving in africa?”
😉
TSW, I was pathological about wasting food when I my kids were little. My wife who had to little would give adult size portions to the kids who obviously at 2-7 yrs old couldn’t finish so I finished for them. One kid that’s ok but we had five in that range. Needless to say I ended up gaining weight.
Report on FOX saying the rioters there seem to have organized groups as more than one individual was seen directing rioters.
Read about the same type of situation in Jerry Pournelle’s Go Tell The Spartans. Willing to bet these aren’t just protests and simple riots.