Sunday, July 25, 2010

The Democratic Dismantling of The American Dream


"It's called The 'American Dream' because you have to be asleep to believe it." -- George Carlin

I am sorry to have to post on this but it in unconscionable for me not to communicate my feelings on the loss of the American Dream. Though there were some like Madoff who broke the law, mostly Americans gave it away through the democratic process. Leaders were elected, allowed to be corrupted by ego, power and greed and then manipulated public opinion through carefully constructed media messaging.

Summary
I believe Americans have not felt enough pain (like in the Great Depression) to regulate the fundamental structure of financial services and bring back the middle class. 

The best we can hope for is Elizabeth Warren and others with the integrity the brains or both to interpret enacted reforms to the most extreme. That appears unlikely; given the stack of lawsuits and lawyers that will be thrown at them by investment banks.

Our situation will not improve until taxes are raised on the super-rich, entitlements are cut, people feel the pain and the middle-class returns. If the super-rich threaten to leave the country; make em prove it. And maybe somewhere along the way we re-learn how to produce things and not consume.

The History

  • 1929 The Crash of 1929
    At first people blamed the government for that crash too (are you listening Tea Partiers?). But now we know better it was manipulation of buying on margin (equivalent of credit)
  • As Joe Kennedy said, he "knew it was time to get out when he received stock tips from a shoe-shine boy." The implication of this is that every sucker that could be taken for their money however small the amount, had it sucked out of them. 
  • 1933 Glass-Steagall Act - kept the economic growth in check through separation.
Jimmy Carter
  • 1979 "In a nation that was proud of hard work, strong families, close-knit communities, and our faith in God, too many of us now tend to worship self-indulgence and consumption. Human identity is no longer defined by what one does, but by what one owns. But we've discovered that owning things and consuming things does not satisfy our longing for meaning. We've learned that piling up material goods cannot fill the emptiness of lives which have no confidence or purpose." --Jimmy Carter. -7/15/79 
Ronald Reagan and George H Bush
  • 1987 Wall Street The Classic Rationalization of Greed
  • People were promised all things from Reagan if we jest believed in supply side economics ("trickle down" or "tinkle on" depending on your perspective)
  • Instead the super rich (top 1%) grew until they could not stuff their pockets anymore; the "shoe shine boy" had bought a $500K home . The super-rich bolted and the middle-class fell apart. Source here 
Bill Clinton
1999 S. 900: Gramm-Leach-Bliley Act - Open up the gates of greed.

George W. Bush
Under Obama
As for me….

Through some bizarre twist of fait I am a part of and benefitting from financial services work. Thankfully Milliman is intensely focused on business ethics and doing the "right thing" not the what makes the most money; those are not always the same thing.

I appreciate and work very hard in my job and give money and time to as many causes as possible. Of all the lines on my taxes, Line 17 (charitable giving) is most special; far more important than Tina and I's AGI.

My future is to demonstrate to my kids how to:
  1. Reduce consumption
  2. Maintain a skeptical awareness of their ego
  3. Recognize media messages fueling consumerism
  4. Travel internationally
  5. Live frugally, simply and in peace (God willing)

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