Tuesday, March 1, 2011

Post No. 159: Are You Tired of Your Bathroom?


© 2011, the Institute for Applied Common Sense

Potential college grads do not need experts to tell them that they have some difficult choices to make this spring. We Baby Boomers have pretty much screwed up things for them. We managed to give the rich, particularly the nouveau riche, virtually all of our marbles and a bunch of our lunch money just to get safe passage to school.

Several days ago, we ran across an article where the author subscribed to the notion that either the solution to, or the root of a, problem can be found in the asking of the question.

Just minutes ago, we heard a radio commercial for a bathroom remodeling company, which may provide a practical example of the concept. (Shortly after, we heard an economist say that consumer spending in the U.S. needs a spark, since it constitutes 70% of the nation’s economy.)

When we heard, “Are you tired of your bathroom,” we laughed out loud. That consumers would seek out the services of any company (or anyone) simply because they are tired of how something feels, looks, smells, tastes, or sounds grabbed us. (Are there such companies to find new spouses?) Our parents born in the Depression were comfortable with conspicuous subsistence, while storing cash in the coffee can planted in the back yard.

It occurred to us that this change in attitude amongst the Boomers might explain much about the American consumer, or even the American psyche, at this point in our economic evolution.

Back in the late 1970s, several of our Fellows worked for a large firm. All employees received one month’s pay as a Christmas bonus. Right in the middle of the double-dipped recession of 1980 - 1982, the most ambitious partners left, carrying a bunch of business (and accompanying staff members), to form a new firm, which had different ideas about the future.

But times were tough, and come Christmas talk was about whether we would get paid, not whether we would receive a bonus. Instead of looking for the icing on the cake, we wondered whether we would get any beans.

Recently, we heard a comment by a caller during a C-Span program. China was the topic, and the point at which it would overtake America as the dominant economic force was the issue. (Last month, China supplanted Japan as the No. 2 global power.) “1.4 billion people seeking what we have is a powerful force.” He further suggested that it can’t be stopped.

Hunger is a powerful force. So is the resultant increase in the ranks and spending power of the Chinese middle class.

Yesterday, a taxi cab driver remarked that the area where the Institute is located was just woods 50 years ago, although there was an occasional shack with an outhouse. Those of you who have never used an outhouse might find it odd that someone might get tired of one.

According to the Wikipedia:

“In 1929, consumer spending was 75% of the nation's economy. This grew to 83% in 1932, when business spending dropped. Consumer spending dropped to about 50% during World War II due to large expenditures by the government and lack of consumer products. It has risen since 1983 to about 70%, as the result of relaxed consumer credit. Spending dropped in 2008 as the result of consumer fears about the economy. Consumers saved instead of spending.”

So all we middle-class consumers need to do is start spending.

But what’s the source of income for ordinary consumers? Many are having difficulty finding jobs, and just putting food on the table.

Then it hit us. All of a sudden we understood why some contend that tax cuts to the rich will aid the economy. Someone recently sent us an economic chart reflecting how the economic status of the middle class has not improved over the last 25 years.

It also reflected a 33% increase for wealthy Americans.

Common Sense suggests, at this point in our economic evolution, that it’s the rich folks who aren’t spending, or investing, or hiring, or much of anything else to benefit those of us at the bottom of the heap. And that’s who we Baby Boomers are going to have to wait on.

But upcoming college graduates can learn from our mistakes, and not be so foolish about their personal economies.

Just the other day, we ran across a company, Get It Together, which describes itself as a leader in independent financial and legal education. They provide workshops and mentor programs on financial and legal planning, coupled with credit management. What group is their primary target audience?

College students.

Better late than never.

Now, are you tired of your bathroom?

P.S. The Logistician always contended, while working 3,000 hour years, that he could have realized more dollars on an hourly basis being a plumber.

20 comments:

  1. A good trade is worth more than a PhD, it seems. Plumbing is just one example. Welding is another. If you can actually make something or fix something, you can be successful. Or at least have something to trade for goods. Better than gold, I'd say.

    I am always amazed at how fragile an economy can be when it is as big as ours. The difference between Boom and Bust seems as small as 2 percentage points.

    Rich folks start and fund charities and run the companies from which we buy things. I try not to resent them. They buy the "new toys" first which helps to bring the price down to where we peons can afford them. When the economy is poor, it's easy to look at the guy with money and shout "Unfair!" but what stopped you from getting rich? It wasn't the rich folks, they don't even know you exist. I might envy their position, of course, but I don't want them destroyed or made into enemies. Never makes sense to make an enemy out of someone rich and powerful. And destroying them can only make the economy worse than it is.


    Like the new look, Inspector.

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  2. Yes Inspector, I am tired of my bathroom. I started building it more than 4 years ago, and only last year changed a temporary solution to the shower area to a large concrete tray, now awaiting tiles. (hot water this year for sure). The knowledge that the bathroom will get better, that the design and construction has needed no outside interference, that I can't borrow money to expedite progress, that a tiny UK pension of 90 pounds a week will not get smaller (probably), has ensured that I keep singing therein despite the poor acoustics. (Walls this year for sure also).

    The point I would like to make, in support of this excellent post, is that while any individual or couple can decide to make do with less, and spend more time creating their own environment, they cannot expect the rich, and the media they control, to laud this kind of life-style.

    Let the bathroom builders fix basic ones for much less money for those unable to learn the simple skills involved. The rich will still need washers changing and gold taps replacing.

    Working long hours under increasing pressure just to consume things other people want you to have is not the only option. Let us hope college students can learn to accept that material consumption does not equal happiness.

    It went against the grain, Douglas, to try not resenting them. And I failed. However, it is up to the middle class to find meaning in a life with less consumption, and effectively shun the greedy without anger - just by needing them less. The rich who do not want to improve the life of the poor are inferior humans - not that they care - but this medium can promote human values, and not getting tired of the bathroom.

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  3. CorfuBob:

    Earlier this morning, after reading your comment, we simply responded, "Beautiful; simply beautiful."

    For some unexplained reason, our response has not shown up yet. Since then, we have read your comment three additional times.

    We finally figured out why we considered it so special. It reflects perspective that works. Not anger, not resentment, not demonization.

    YOU should feel fortunate that you are in such an intellectual space.

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  4. CorfuBob, does it bother you more that the rich don't even know about your resentment or that so many resent them that they no longer acknowledge it? I am not sure it is their responsibility to improve the lives of the poor. They often do, you know, as I mentioned about the charities. But charity, in my view, is best if it is voluntary and not demanded or coerced. It just seems so much "purer."
    I am not rich. I never had the drive or energy to become rich and I was not fortunate enough to be born rich. But, just as I do not resent those who are smarter than me, I do not resent those who have more. It's not about them, I think, it's about me.

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  5. Very Interesting site Inspector I'll be dropping by. And thanks for the comment on "Obamacare is fatally flawed..."
    My best regards
    Alaphiah

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  6. Thanks much Alaphiah for checking us out. Do drop by often.

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  7. Douglas, it does bother me that the rich don't care about resentment against them, and to know that they can control the expression of resentment if it ever poses a threat.

    The rich have not earned the riches they command - the hardest work has been done by the poor, and they have to remain poor otherwise they will refuse to do the work.

    The rich enable the creation of wealth it is true, but through the media they also define wealth, and their definition does not include the wealth of contentment with simple needs, of the kind my parents gave me.

    Therefore the rich DO owe free education and healthcare to the poor. The poor supply them with their holiday homes, private jets etc. and are expected to believe that being paid just enough or a little less to survive, is fair.

    Charity is voluntary by definition - it's what the word means. But the amount given to those really in need by the rich is a disgracefully small percentage of their wealth, compared to the coins given by the relatively poor among us.

    I do not resent people who earn huge sums - they were usually born with a lot more talent and application than me, but if 'greed' means anything bad what sort of person would I be not to voice resentment when I see it?

    I wish you well Douglas, and if you like to mail me your id picture I will fix it free of charge! That tells you why I 'deserve' to remain poor.

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  8. Thank you Inspector for your very kind words. You continue to bless the blogosphere with healthy common sense. I hope long comments do do not discourage others from popping in.

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  9. Sorry folks. We are a little behind in responding to your comments.

    Douglas:

    You wrote: "A good trade is worth more than a PhD, it seems."

    To some extent, you and the Logistician's paternal grandfather had similar views. He taught his sons to always have something which they could do with their hands. On the other hand (no pun intended), the Jews believe in the development of the mind, contending that when someone or some force destroys their corporeal bodies, the mind is the last thing to go.

    Douglas, you wrote: "I am always amazed how fragile an economy can be when it is as big as ours. The difference between Boom and Bust seems as small as 2 percentage points."

    A very astute observation Douglas. It always reflects the complexity of economic theory and policy. Who really knows what to do which will work? If it were really that simple....

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  10. Douglas:

    We wanted to address your response regarding "rich folks" separately from your other comments.

    We agree with you that little is gained by directing anger or emotion toward the rich, who do not even know that we peons exist.

    However, there is some more complexity to the subject. You wrote: "When the economy is poor, it's easy to look at the guy with money and shout, 'Unfair!' but what stopped you from getting rich?"

    The answer Douglas is "Stuff." Certain conditions dramatically reduce the probability of certain people being rich, and dramatically increase the probability of being poor.

    Check out the mother in Post No. 160, for example.

    Roughly a year ago, we saw a study which suggested that the relatively few families which controlled the bulk of economic wealth over the past 200 or so years still control it, and not much has changed. Why would they logically give up a significant portion or share a large share of it with others?

    Here's an interesting question. Let's take the Kennedys, the Rockefellers, the Rothschilds, or the Queen of England's family. What percentage of family wealth should they be allowed to transfer to their descendants when someone dies? Doesn't keeping that wealth within the family go a long way to increasing the probability of the descendants being rich? What would you say to a limitation, say 10 million or so, and the rest escheats to the state or to the general populace?

    Should all children be given as level a playing field as is bureaucratically possible, from whence to start their lives?

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  11. Douglas:

    Thanks for the compliment on the new look. However, we can't take much credit. You will recall that we lost all of our posts at one time and managed to retain the "look."

    Then once we were able to get our posts back, we lost the "look" and a lot of our semi-permanent content regarding our mission and purpose.

    However, once we simply "upgraded" our template, we got our old look back with some changes, and retained our posts.

    We haven't touched it since. We're scared to do anything at this point to modify the "look."

    ReplyDelete
  12. CorfuBob wrote: "Working long hours under increasing pressure just to consume things other people want you to have is not the only option. Let us hope college students can learn to accept that material consumption does not equal happiness."

    Pithy CorfuBob. So few understand the difference between needs and wants. Some confuse quality of life with quantity of life.

    There are serious consequences associated with going in debt to maintain or aspire to a particular lifestyle beyond what is necessary or needed.

    We all need to recognize that the economy is like a roller coaster; sometimes going up, and sometimes going down. The development of an expectation that we will at a minimum travel at the same level and most of the time head up, without any accompanying down trips is pure science fiction.

    At some point, if one keeps going up and up, the air / atmosphere becomes too thin to support the space ship using the same propulsion mechanisms.

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  13. CorfuBob and others: Do NOT worry about the length of your comments. Based on the past three years experience, lengthy comments do not discourage others from contributing.

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  14. CorfuBob and Douglas: The two of you had an interesting exchange about the rich, and whether the masses should somehow resent them, and whether they owe anything to the poor masses.

    We'd be curious to know whether the rich ever do anything (similar to corporations) which does not in some way advance their long-term economic interests?

    What about the recent philanthropic endeavors of Warren Buffett and Bill Gates?

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  15. "What about the recent philanthropic endeavors of Warren Buffett and Bill Gates?" Two exceptional people perhaps, but let us see if they will ever support in a PRACTICAL way the notion that a simpler, less materialistic way of life is better and healthier per se.

    Let them start by paying the cleaners a lot more, and their executives somewhat less.

    Let them openly reward the less ambitious, less able, and less strong for their EFFORT rather than for their actual contribution to the company's wealth. The effort made by the less able is by definition greater than that made by someone more able who finds the same work easy.

    If this is shown to encourage laziness, then we will know things are going in the right direction, and more people will have more time to play with their children, and read blogs like the Inspector's. That's quality of life!

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  16. CorfuBob wrote, as to Messrs. Gates and Buffett:

    "Let them openly reward the less ambitious, less able, and less strong for their EFFORT [emphasis in original] rather than for their actual contribution to the company's wealth."

    While we can appreciate an argument that the less able and less strong should perhaps be rewarded differently, the rewarding of the less ambitious poses many potential problems. Seems to us that the less than ambitious and the lazy take care of themselves in terms of determining their destiny.

    Here's one for you: should the children of the poor, less able, and less strong have to suffer the consequences of their parents' actions? Should the children of the wealthy be allowed to collect wealth from their parents without having contributed to its generation?

    We definitely agree with you that an improved quality of life for all citizens would include more time to read our blog.

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  17. Thanks for the easy questions.

    1. Yes.

    2. No.

    The consequences of having poor (etc.) parents need not entail suffering, but can provide perspective.

    Inherited wealth has caused most of the problems your society now faces. The banks caused the rest. I think you agree Inspector.

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  18. You Americans have been living over the top and beyond your means for years, and it has finally caught up with you.

    You deserve all that comes with being greedy and selfish.

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  19. CorfuBob:

    Earlier this morning, after reading your comment, we simply responded, "Beautiful; simply beautiful."

    For some unexplained reason, our response has not shown up yet. Since then, we have read your comment three additional times.

    We finally figured out why we considered it so special. It reflects perspective that works. Not anger, not resentment, not demonization.

    YOU should feel fortunate that you are in such an intellectual space.

    ReplyDelete
  20. Douglas:

    Thanks for the compliment on the new look. However, we can't take much credit. You will recall that we lost all of our posts at one time and managed to retain the "look."

    Then once we were able to get our posts back, we lost the "look" and a lot of our semi-permanent content regarding our mission and purpose.

    However, once we simply "upgraded" our template, we got our old look back with some changes, and retained our posts.

    We haven't touched it since. We're scared to do anything at this point to modify the "look."

    ReplyDelete

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