February 19th, 2013 - 12:09 am
The Revolutions We Missed
Sometimes societies just plod along, oblivious that the world is being reinvented right under their noses. In 2000, one never saw pedestrians bumping into themselves as they glued their noses to iPhones. Thirteen years later, it is almost rare to see anyone on the street who is not stumbling about, networking or texting. Yet most of us are scarcely aware of the collective effect of that odd habit repeating itself millions of times over each day, of millions of books not read, of “hellos” not offered, of brains wired to screens rather than the physical world about them. When cars once drifted into your lane, you assumed a DUI; now their drivers are most likely texting.
Cars, of course, look about the same as they did thirty years ago. But we just assume now that they almost never break down. Up until 1980 I used to see them with hoods up by the side of the road almost every five miles or so. Today, entire notions such as points, plugs, tune-ups, and carburetors have simply quietly passed away for most motorists. The old jalopy with 100,000 miles on it was junk; the new Accord with 150,000 miles has another easy 250,000 to go. The world changes while we snore.
No wonder, then, most of us are still not quite aware of how vastly different the world of 2013 is from even 2008. Take interest: not long ago most Americans assumed that when they retired, their 5-7% interest rate on passbook savings would provide some sort of income. Not now. There is scarcely a 1% return. In fact, most accounts lose money. The interest is not even matching the rate of inflation. Will we soon be charged by the banks for “protecting” our deposits?
At some unspoken moment, we shrugged and silently accepted Ben Bernanke’s world, along with the thousands of ways that his Federal Reserve Board has radically changed our lives. Those at retirement age are not stepping down, not when they have a bad/worse choice of receiving no interest income or putting their life savings in the stock or bond market. Our fathers may have retired at 58; we will be lucky to quit at 70. Is there even such a thing as retirement anymore?
No wonder that unemployed young people are endlessly circling the airport with nowhere to land, given all of us old planes perpetually taxing around on the crowded runways below. To understand the effect of no, or very low, interest, think of the billions of dollars in cash that are silently transferred from those who have saved to those who have no cash. The former receive little or no interest from the banks. The latter take out mortgages or car loans at historically low interest rates.
Did the president ever mention this revolution, among his boilerplate of “millionaires and billionaires,” “pay your fair share,” and “fat cats”?
Does it really make all that much difference whether you are a doctor at 70 who religiously put away $1,000 a month for thirty years, compounded at the old interest, and planned to retire on the interest income, or a cashless state employee with a defined benefit pension plan? The one might have over $1 million in his savings account, but the other a bigger and less risky monthly payout. Suddenly the old adult advice to our children — “Save and put your money in the bank to receive interest” — is what? “Spend it now or borrow as much as you can at cheap interest”?
Them and Us
I think it was around 2009 when an entire new vocabulary entered the American popular lexicon. Where did the 1% versus the 99% come from? From where did the new financial Mason-Dixon line arise — good below $250,000 in annual family income, very bad above it? When did the 47% — or is it the 50%? — pay no federal income taxes?
At some magical point, the rich became not the successful, the skilled, the well-inherited, the lucky, or the hardworking, but “them”: the suspect, the damned even, even as the lifestyles of the rich and famous became ever more sought after.
There are not just the rich and poor any more, but now the “good rich” (e.g., athletes, rappers, Hollywood stars, Silicon Valley grandees, Democratic senators, liberal philanthropists, etc.) and the “bad rich” (e.g., oil companies, CEOs, doctors, the Koch brothers, etc.). The correct-thinking nomenklatura and the dutiful apparat versus the kulaks and enemies of the people.
The president in his State of the Union damns the “billionaires with high-powered accountants,” as a friendly Facebook pays no state or federal taxes, as a George Soros walks away with $1.2 in speculation profits (in three months, no less!) by betting against the Japanese yen, and as a Jesse Jackson, Jr. gets caught stealing from a campaign fund to buy a $43,000 Rolex (was not a $1,000 one enough?). I thought Soros at his age knew when he had made enough money?
We shrug at all this. A president who thunders to the nation that we must be on guard against the “well-off and well-connected” heads south to Palm Beach to meet his $1,000-an-hour golf pro, while Michelle and the family go west to hit the slopes at “downright mean” Aspen, where no one accepts that they’ve reached a point where they’ve made enough money, or that there was any time when it was not good to profit.