If WE saw it, why did the millionaire "experts" not see it?

[SoCalDem]

SoCalDem Donating Member (1000+ posts) Fri Jun-20-08 12:29 PM

Original message

The 101-k IMPLOSION (not a typo) will the the next big shoe to drop..

Fret not!.. The plan will soon be fully implemented..

A whole generation... and maybe a whole country, will bear the brunt.

Boomers (not the "rich" ones) have spent their entire lives being an "experiment".


We were the perfect lab-rats. There were just so damned many of us. We were the first to get mass-inoculations with vaccines.

Madison Avenue boomed by marketing to us.

We were the first to test out new teaching theories..

We matured at just the perfect time in history for a real push to start destroying unions, and ushering in lowered-expectations in the workplace.

Lowered wages, meant that the opportunity existed for the "plastic-generation" to be born, as well. Less wages, combined with massive competition for jobs , while being exposed to the biggest dose of advertising for "the good life", made credit cards oh sooooo desirable...

Once hooked on credit, it was a logical step to encourage home-ownership, at any cost. Cities & towns had no interest in keeping a generation within their economic means.. America has always been about reaching for the stars..going for the gusto..taking more more more..

Home ownership had always been about paying OFF a home that you would live out your life in, but Boomers were a mobile bunch, and it did not take banks long to figure out that they could make more by creating a series of "transactions", and reaping profits on the transactions, not the long-term relationship between mortgagor-mortgagee..

It was very linear too.. Plastic cards piled on debt, and equity from homes periodically "paid down" those cards. Limits increased, and the spending resumed.

As more and more people saw their peers living the good life, they too wanted "in".

Long term planning for Boomers rarely included pensions, so a "new" product had to evolve.. The 401-k was a clever way to make MOST people "stockholders", and then keep them interested in things they had little knowledge of, but now had to start caring about..market-share..productivity.. market opens..market closes.. bond markets..money markets..

All that glorious wealth awaited them, and for only 4-8% out of their wages every paycheck.. A "raise" was met with an increased automatic deduction, and usually an increase in employee share of health insurance cost. So , for the lucky ones who got raises and had health insurance, they rarely ever saw any "real" extra money to spend. But that quarterly statement told them that they were getting "rich"..who needed a boring old pension that was 25 years away... and the equity in the house was always there to tap when the plastic spending got out of hand..

Companies did not "have" to raise our wages..we had equity & plastic available, to live the American Dream when wages could not deliver it.

We did what was expected of us.. We shopped until we dropped..and many, if not most of us have dropped.. We are approaching "retirement" age, with more obligations than we started with.

Our parents (and some younger boomers still have living grandparents) are relying on us for aid, our 30-something children have often been unable to get their "adult lives" started, due to crushing school debt and high living costs, and those pensions-buy-outs/switched to 401-ks are looking pretty anemic.

The job market that was inundated BY us when we matured, is now casting us off like used kleenex, so even if many WANTED to/NEEDED to work well past retirement ages, the jobs themselves are no longer around.. The jobs that may still exist for many, are the SAME jobs that the kids & grandkids are grabbing up as 2nd & 3rd jobs so THEY can buy food & gas up their cars.

For every person who praises the "go-getter" nature of a 60 or 70-something out there shagging grocery carts, there are many more who see this as a symptom of a nightmare scenario, unfolding before their very eyes.


For the Boomers who have managed to hold onto equity, and who have avoided the credit card trap, they will soon be trading in the house for medical care in their old age, since their own children may be unable to help them financially, so the circle is closing, folks..

People who spent a lifetime, paying off a house, so they could live out their years, and pass it on to their children, are now facing the harsh reality, that after "deductions" are taken from their Social Security, there is not enough left to live on, and that 101-K is not enough to make up the difference..and that $8 an hour job is not enough either..

They will downsize to make ends meet, but in the end, they may be penniless, and scrambling to find their next meal, and doing without medicine.

Magazines, tv shows & newspapers will always brag about the people who DID "get rich" from their astute management of their 401-ks, but those folks are NOT the norm.

A look at this ARTICLE
kind of spells out the problem. That "deferred" income, even WITH some participation from an employer will NOT ensure a comfy retirement..unless you only plan on living a few years after you stop working..and never get sick.

The money-whizzes tell us that the market is so HUGE and so MAGNIFICENT, and with globalization, when boomers start TAKING instead of contributing, the markets will be just fine..BUT..when have they been right lately?

It seems to me, that they have been dead wrong about just about everything they predicted..for at least 20 years or so.

....edited to add...

and now the houses are practically worthless as Boomers start to think of downsizing. The lucky ones will have paid off their home, and might be able to take in friends & relatives to help with the sure-to-rise property taxes & cost of energy to heat & cool the place. the not so lucky ones who still owe money on their home, may be able to get out of it, but not with enough to buy that smaller place outright, so after a lifetime of keeping a place up, they end up as renters, in the twilight of their lives.


>>>>>>>>>>>>>>>>>>. and then there's this>>>>>>>>>
"...Of particular concern is what happens with the more than $2 trillion in consumer debt..."

[silverojo]

1. The Gen X'ers were part of that experiment, as well

As for mass inoculations, my mother is 74 (of the Silent Generation), and hers was the first to get immunization shots for polio, etc. She's still got the scar on her arm to prove it.

Just polishing up a few facts for an otherwise wonderful post. :)

[SoCalDem]

2. I think you meant smallpox.. I still have my scar too:)

My brilliant parents had them put it on my leg, so it would not show..but at 3 yrs of age, that scab ended up being the exact same height as every coffee table in the house, and I must have knocked that scab off a zillion times.. That damned scar it the size of a nickel..right where a swimsuit won't cover it up :grr: ( of course I wouldn't be caught DEAD in a swimsuit these days ):)

[glowing]

3. Well, there are a ton more shots, and less pie for us.

Time to revolt. I think its time for some worker demonstrations. Its time to show them we don't just want debt.. We want PIE.

[formercia]

9. I remember the Polio 'Shots'

They used our school as lab rats, lined us up like GI's. That was in the day before disposable needles. We then were lab rats for the oral vaccine.

[Champion Jack]

4. K&R Nice work

bookmarked

[Karenina]

5. Their salaries depended on their not seeing it...

;-)

[nichomachus]

6. Just a quibble

Most people are not "stockholders." Less than 50 percent of people hold stocks -- either directly or indirectly, despite what the wingnuts tell you. That's propaganda that most people have bought into.

Even those who do "own" stocks own them indirectly through mutual funds. They cannot vote at shareholder meetings in those companies. They cannot buy and sell those stocks on their own. At any given time, almost no one knows exactly what he/she owns. You may be able to get a list, but some stocks could be sold or bought before the list comes from them to you. So, there is no stock ownership in a traditional sense. It's an illusion.

It's still a fact that 90 percent of the stock in the country is held by 10 percent of stockholders.

[SoCalDem]

10. It was to the advantage of the scammers to "turn us into stockholders"

via those blasted 401-ks...and of course most of us are ill-equipped to "manage" much more than our own family finances..and many are not able to even do that..

Media, of course "ran" with their assumption and called us all "investors", and many believed the hype..Technically we are all "oil-men" too since we burn the stuff in our cars , but not many of us would know what to do with a barrel of oil, if one showed up on our front porch.

The whole "we are all stockholders" meme gave birth to the 9-10 new channels of money-honey & corporate Ken reporters who smile all day long as they tell us what 'the market" likes..

It's a clever mechanism to get us all to focus on the "shiny", while they fleece us..

[raccoon]

24. Well said! Please consider starting a thread about this.

"Most people are not "stockholders." "

[Greyhound]

7. Nice start, keep looking and you will find how deep the rabbit hole really goes.

One of the most insidious aspects of "credit" is the slow and subtle inflation it creates.

There was a time not to long ago when Doctors, for example, were just another member of the community working toward the benefit of the community for what the community could afford to pay. Along comes the insurance industry with an interesting offer, "accept and treat our policy holders and we will pay you more for your services than you are currently getting".

Soon 'more' becomes the set base fee and suddenly much of the community cannot afford the Doctor's services and so is forced to 'join' the insurance pool. Soon after that the insurance company, like any competent gangster, comes back around with the demand that the Doctor run her proposed treatment by us before delivering it "since we're paying for it". Now the Doctor no longer works for herself within the community, she is for all practical purposes, an employee of the insurance company making more money in exchange for denying treatment to those not under her bosses 'protection'.

Look at the relative costs of standard goods comparing that to earnings, that is how you go from an economy where anybody with a job can buy a house and raise a family to our current scenario wherein two people, working three jobs, still can't make ends meet.

Who benefits and who pays? Put another way, "follow the money".

[bertman]

8. Yes, I was forced at gunpoint to buy my boat and the other luxury items I possess. Yes, I was

forced by marketing geniuses to take out a 30-year mortgage instead of a 15-year mortgage, so I am still paying for my home when it could have been paid off had I been willing to be a bit more prudent in my spending habits and personal budgeting.

Yes, I was forced to drive a full-size pickup to haul my tools and materials to and from my jobsite, instead of driving a Subara wagon with a roof rack.

Yes, my wife and I were coerced by thugs from Merrill-Lynch to spend thousands of dollars on family vacations involving rented beach cottages, dinners out with family and friends, and lots of spending on souvenirs and cool stuff.

Yes, my business partner held me down and made me sign on to the 401-K plan at our company despite the fact that I am a grown man who can read and do research on the history of the stock market and who has always felt that the stock market values short-term gain over thoughtful long-term investment.

Yes, I was kidnapped and held for weeks by Republican operatives who brainwashed me into buying meals from local businesses during my work day instead of packing a bag lunch and saving money like my friend does.

NO!! None of that is in fact true. I did all of those things of my own volition. I chose to do them because I wanted an easier and more enjoyable life and I was willing to go into debt to have it, despite the fact that my parents tried to teach me to be frugal like they were. I CHOSE to be a consumer rather than a saver.

My rationale was that I worked hard for my money so I and my family could have the better things in life--even if many of them were bought on credit. But I don't view my lifestyle choices as being the result of some experiment by corporate America. I knew that I was spending more than I earned. I knew that I SHOULD be saving more and spending less. But I was too short-sighted and personally undisciplined to change my habits.

I cannot blame anyone but myself for my status as a debtor. I cannot blame anyone other than myself for my failure to realize that active involvement in the political process is THE DUTY of every American who wants to ensure that the principals in our Constitution are upheld.

Instead of blaming others for my shortcomings, I can recognize it is not too late to change how I do things and become a more enlightened and restrained consumer.

Instead of blaming others for the political mess our country is in, I can admit that I chose to be involved in other "more fun" things instead of getting involved in the not so fun nitty gritty of grassroots political work.

Instead of blaming others, I can resolve to become a more thoughtful, careful, and resourceful human being.

And, if I am successful, maybe I will be an example to others.

[SoCalDem]

11. There are many like "you"..and many who are not

Advertising is insidious..Look at all the things that are now "necessities", that were not even around a generation ago.

While we do make many choices on our own, most workers were not given the choice to have their companies dump their pensions or their unions, or to move the company abroad..Most employees have NO control over their boss's choice of medical coverage offered, or even when they get raises or not..

Once you "get it", you have some control over "it", but there are many forces at work to see that most of us never "get it "..

Call it "blame" or "cause & effect".. whatever it's "called", it's wreaked havoc on millions of people's one and only life..

[pitohui]

12. a nitpick

you say --

The lucky ones will have paid off their home, and might be able to take in friends & relatives to help with the sure-to-rise property taxes & cost of energy to heat & cool the place.

careful with that word "lucky" -- i have never seen a situation involving older people where taking in friends and relatives "helped" anything, it invariably results in the older person being robbed and ripped off

pay off your home by all means but do not plan on "taking in" people, you will not save money that way, you will lose a great deal of money, the adult who can't be independent is a VERY expensive addition to any household, anyone you have to "take in" out of the goodness of your heart will be an extra drain on the budget, they sure as shit won't help out with your property tax, that must be the joke of all time, and they will cause HUGE increases in your energy and food bills

or, as i said in another thread a couple of weeks ago, i have never NEVER seen a situation where taking in a roommate didn't make things worse

there is a reason that, as soon as people could afford to, they tried to buy their OWN house

people counting on "i'll take in boarders" are going to have a miserable and impoverished old age, because one of those persons they take in WILL take advantage

[SoCalDem]

13. very true in most cases, but there are surely people who are "helping"

an aged parent to stay in their own home, when what needs to happen is for them to combine households.. My best friend had done this with her elderly brother.. he gets on her last nerve, but his measly $900 a month check barely supported him, and by her taking him in, it's a great help to both of them..

I don't advocate "taking in boarders"..:rofl:.. That almost always ends badly :)

[Atman]

14. Brilliant essay. I've never been so happy to own nothing.

My wife and I do quite well...but in 2000, I took a brutal beating on a dot-com startup and lost everything. Literally, everything, including my home and my BMW. Well, not everything. My wife stuck by my side (married 26 years now!) and our kids are doing well...I used the experience to teach them to be careful.

I was forced to learn to live a CASH existence for years as we, little by little, worked our way back up. Now, we own two new cars and a slightly used one, and live in a very nice lakeside home...which we rent. I'm NEVER buying a home again. Why? The tax benefits didn't seem to help out much, and now my yard is raked in the fall, mowed in the summer, and my driveway is plowed in the winter. And I don't have to lift a finger.

After talking to friends, I swear they pay as much to lawn and plowing services as I do in taxes for not being a homeowner. What's the benefit? I dig renting, I've come back from financial disaster, and we're much better prepared to survive this latest crisis because we're not heavily indebted to anyone except. Our summer place -- small but functional -- is covered, too.

We don't owe to plastic. We learned. Cash is good. Plastic is for emergencies or special circumstances.

Live by the plastic, die by the plastic.

.

[kentuck]

15. Bingo!

You have identified the culprit.

[magellan]

16. For the same reason they didn't foresee the crash of 1929

...and the desperate times that followed. Greed blinded them. It blinded almost everyone, except for a few naysayers who were ignored, just as it's done this time.

Last night someone posted a link to the PBS documentary about what led to the Great Depression. The similarities between then and now re easy credit and what was done and said to bolster the market as it decoupled from reality were stunning. WS was telling everyone back then that the market was huge and magnificent too, and we'd never see the end of prosperity.

But what kept me awake most of the night was knowing how much worse a situation we're in now. Not that it hadn't occurred to me before. But that documentary drove home the stark differences between those times and today. IMHO we're facing a crisis that will make the Great Depression look like the good old days.

[SoCalDem]

17. I saw that too.. and I agreee. we are in worse doo-doo

because back then we were still pretty self-sufficient as a society, and the rest of the world actually liked us...and we were a more cohesive society...and we had no 24-7 propaganda hate radio/tv..

Most of the population still worked with their hands and we actually made stuff ...

[Atman]

18. I've posted about this for years on DU.

Check my journal. I was ridiculed and eventually kicked of the Crazy Uneducated ultra-freep site in part because I told them this regularly. And their response was always that I hated America or actually wanted a financial collapse, or some such usual bullshit.

This so-called financial collapse is the end to a justifiable means as far as BushCo and his adherents are concerned. They'll reap untold billions in disaster capitalism profits. It was all part of the game from the very beginning, buried deep in the sub-sub-paragraphs.

One way or another, BushCo was walking away with this, and whomever is behind it (it sure ain't W) should be commended. It's fucking brilliant.

It's Oceans Fourteen.

.

[SoCalDem]

19. I was called a "Nervous Nellie" and a "doomsayer" too

but those of us who think linearly (is that even a word) could see all the pieces of the puzzle..not just the one being held up in the spotlight..

It's all connected, and I agree..George W succeeded.. with HIS plan.. It didn;t mesh with what's good for the country or for us, but it sure was successful for the people who have been bankrolling him and his family for decades..

[girl gone mad]

20. Boomers also need to take responsibility for some of the choices they made.

They weren't all unwilling victims of the consumerist revolution. As a generation, they often made selfish and reckless choices, starting with the drug and free love culture, which resulted in a lot of broken homes. Then materialism subjugated self-exploration and they voted for Reagan's era of corporatism and greed. More recently, Boomers brought us Bush's brand of shallow Christian redemption/American exceptionalism.

I was encouraged by the polls that showed 2/3rds of young people voted for Obama. I hope that they are attracted to his message of working together for positive change, and they aren't just hearing what they want to hear. Unfortunately, Boomers were unwilling as a whole to elect politicians who asked for any kind of sacrifice and now we're all paying the price.

[SoCalDem]

21. Um... we had parents & grandparents who probably voted for those republicans

you mentioned..in WAAAY bigger numbers than we ever did :)

and who are still with us in many cases.. The "greatest generation" were the ones who benefitted most from what's good about our country, and many of them are STILL wielding their influence:(..


Every generation looks back and sees the good stuff they missed out on, and looks forward to the good stuff their kids will have,.. It's just that it's become painfully apparent to many of us, that the days ahead for our youngsters is going to pretty much suck..:(

Deciding "who broke it", depends on how old you are and how well off you are, I guess...but I'm pretty sure we ahev all been "pplayed" by the ones who have all the money :(

[arcadian]

22. Is it so far fetched to think that 9/11 was also a part of this plan?

9/11 was the catalyst. With out 9/11 NONE of this would have been possible.

[MattSh]

23. Upton Sinclair said it well.

It is difficult to get a man to understand something when his salary depends upon his not understanding it. - Upton Sinclair