jbooma Posted April 3, 2009 Share Posted April 3, 2009 Excellent article http://www.time.com/time/nation/article/0,8599,1887728,00.html Don't pretend we didn't see this coming for a long, long time. In the early 1980s, around the time Ronald Reagan became President and Wall Street's great modern bull market began, we started gambling (and winning!) and thinking magically. From 1980 to 2007, the median price of a new American home quadrupled. The Dow Jones industrial average climbed from 803 in the summer of 1982 to 14,165 in the fall of 2007. From the beginning of the '80s through 2007, the share of disposable income that each household spent servicing its mortgage and consumer debt increased 35%. Back in 1982, the average household saved 11% of its disposable income. By 2007 that number was less than 1%. (See TIME's top 25 people to blame for the financial crisis.) The same zeitgeist made gambling ubiquitous: until the late '80s, only Nevada and New Jersey had casinos, but now 12 states do, and 48 have some form of legalized betting. It's as if we decided that Mardi Gras and Christmas are so much fun, we ought to make them a year-round way of life. And we started living large literally as well as figuratively. From the beginning to the end of the long boom, the size of the average new house increased by about half. Meanwhile, the average American gained about a pound a year, so that an adult of a given age is now at least 20 lb. heavier than someone the same age back then. In the late '70s, 15% of Americans were obese; now a third are. (Read "What's the Best Diet? Eating Less Food.") We saw what was happening for years, for decades, but we ignored it or shrugged it off, preferring to imagine that we weren't really headed over the falls. The U.S. auto industry has been in deep trouble for more than a quarter-century. The median household income has been steadily declining this century ... but, but, but our houses and our 401(k)s were ballooning in value, right? Even smart, proudly rational people engaged in magical thinking, acting as if the new power of the Internet and its New Economy would miraculously make everything copacetic again. We all clapped our hands and believed in fairies. The popular culture tried to warn us. For 20 years, we've had Homer Simpson's spot-on caricature of the quintessential American: childish, irresponsible, willfully oblivious, fat and happy. And more recently we winced at the ultra-Homerized former earthlings of WALL•E. click on link for more Link to comment Share on other sites More sharing options...
Ken Posted April 3, 2009 Share Posted April 3, 2009 Yes, we deserve serfdom. WE are the reason for this, not the greedy bankers or the incompetent government. Its all our fault. Link to comment Share on other sites More sharing options...
DCsportsfan53 Posted April 3, 2009 Share Posted April 3, 2009 ^^^^ Talk about missing the point. Most people probably won't bother to read this article and actually consider it but I thought it was spot on, thanks for posting it. Link to comment Share on other sites More sharing options...
NattyLight Posted April 3, 2009 Share Posted April 3, 2009 An economist I'm not, but a debt based society just doesn't seem like it will work. Call me crazy. I have this article in print, I'll likely read it and pretty much agree with it. Link to comment Share on other sites More sharing options...
HogNose Posted April 3, 2009 Share Posted April 3, 2009 I get TIME and that was a great article and a wakeup call. Thanks for posting it. Link to comment Share on other sites More sharing options...
RedlightG20 Posted April 3, 2009 Share Posted April 3, 2009 I can see Americans start acting more humble because of this crisis. And I agree, overall it will be good for us, and bring us back down to earth. I see us saving more, working harder, and overall being happier with living well within our means. That said, I don't see too many Americans getting slimmer because this. After all, it is a "disease", right? :doh: Link to comment Share on other sites More sharing options...
Larry Posted April 3, 2009 Share Posted April 3, 2009 Like it a lot. Really optimistic. He should have sent it to Obama, for use as a speech. Link to comment Share on other sites More sharing options...
twa Posted April 3, 2009 Share Posted April 3, 2009 Don't see people changing much myself. I embraced the simpler pleasures long ago,but as evidenced by the extreme measures being used to prop up the house of cards...Change ain't coming. Link to comment Share on other sites More sharing options...
Larry Posted April 3, 2009 Share Posted April 3, 2009 I can see the argument that the people are too hooked to kick their addictions, too. We had $4/gallon gasoline. Did it change anybody's behaviors, much? I don't think it did, mostly because the prices came back down. The economy will get better. When it does, does anybody really want to bet that people won't go back to their old ways? ----- Possible spin-off topic: What do you think the government should do, to encourage the country to come out of this "reboot" moving in a better direction? My problem is that a lot of the things I can think of, that I think would be better for the country in the long run, would be terrible in the short run. We all talk about how it's a problem that America has become a nation that runs on debt. So much so that whenever there's a hint that there might be a short-term bump in the economy, the standard reaction is always to lower interest rates and encourage people to borrow their way past it. To me, if you want to encourage more saving and less borrowing, you raise interest rates. But doing so would be a disaster in today's economy. Not least of which because of the effect that higher interest rates would have on the federal budget/deficit. Similarly, I think raising taxes on oil would be a good way to encourage a migration that we should have done 40 years ago. But seriously, raising the price of gasoline during an economy that's threatening to collapse? It's be suicide. OTOH, the alternative seems to be "do even more of the things that got us here, and promise that we'll do something about it, later". "I'll quit drinking tomorrow morning, I swear." Link to comment Share on other sites More sharing options...
endzone_dave Posted April 3, 2009 Share Posted April 3, 2009 Back in 1980, people didn't HAVE to have a laptop computer with high speed internet, iPod, cable or dish tv, car with automatic this or automatic that, big house with big closets, high tech medicine, gps systems in their cars... We're all spoiled by technology and conveniences and feel like we can't live without them. People are so compelled to have these things that they are willing to go into debt just to keep that lifestyle. Link to comment Share on other sites More sharing options...
dwbiggs Posted April 3, 2009 Share Posted April 3, 2009 My wife has been pestering me about getting he "dream house" for several years now. Glad I didn't cave...I like my small (1350 sq ft) house and my 1080.00 house payment. Link to comment Share on other sites More sharing options...
MattFancy Posted April 3, 2009 Share Posted April 3, 2009 Back in 1980, people didn't HAVE to have a laptop computer with high speed internet, iPod, cable or dish tv, car with automatic this or automatic that, big house with big closets, high tech medicine, gps systems in their cars...We're all spoiled by technology and conveniences and feel like we can't live without them. People are so compelled to have these things that they are willing to go into debt just to keep that lifestyle. I agree with that. How many families have multiple computers in their house, have a tv in every room, multiple video game systems, all the premium channels through cable/satellite, etc. I'm not saying that I don't have some of these things, but I think that's the problem. People feel like they have to have all these things to be relavent in society. If people could live within their means we wouldn't have all these problems. I blame MTV Cribs! Link to comment Share on other sites More sharing options...
zoony Posted April 3, 2009 Share Posted April 3, 2009 I can remember just 20 years or so ago, having a credit card was sort of a big deal. And if you had a platinum or gold card, you were the man. New cars were a really big deal, even in upper-middle class neighborhoods. If someone on your block got a new car, everyone went over to check it out and get a whiff of that new car scent. Nowadays the waiter at Ihop has a platinum card and drives a new car. Whats wrong with this picture? Link to comment Share on other sites More sharing options...
deejaydana Posted April 3, 2009 Share Posted April 3, 2009 It's generally not within many Americans' willpower to live within their means. Link to comment Share on other sites More sharing options...
Bliz Posted April 3, 2009 Share Posted April 3, 2009 Great article. I thought the statistic on savings was particularly enlightening. Link to comment Share on other sites More sharing options...
MrMarcus1914 Posted April 3, 2009 Share Posted April 3, 2009 It was inevitable the gap between the haves and have not would shrink, just not in this fashion. Link to comment Share on other sites More sharing options...
jbooma Posted April 4, 2009 Author Share Posted April 4, 2009 I can remember just 20 years or so ago, having a credit card was sort of a big deal. And if you had a platinum or gold card, you were the man. New cars were a really big deal, even in upper-middle class neighborhoods. If someone on your block got a new car, everyone went over to check it out and get a whiff of that new car scent.Nowadays the waiter at Ihop has a platinum card and drives a new car. Whats wrong with this picture? bingo!!!! For those that can have all the tech gadgets and tvs they want as long as they are buying it with their money there is nothing wrong with that. I have to thank my wife because before her I was one of those guys that just said if i pay the payment then I am fine. Now if I want to buy it I either pay it all off or pay in cash, its that simple. Now what this article should tell people you can live a good life, but you also have to make sure you can handle not working for x amount of months without living on credit, then you are doing well. Link to comment Share on other sites More sharing options...
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