Sunday, February 7, 2010

'economic' rant

It's just my opinion, but I have a feeling that others may share it, probably in better-articulated forms. And if there are enough who share it, I wonder what it portends for the United States I live in:

Yesterday, I went to the bank. I am retired and had saved a up a little over the years in the 401k plan at the newspaper where I worked. That sum took a 27% loss when the economy collapsed ... and I was forced to say I was grateful it wasn't a bigger loss. A woman at the bank I visited yesterday told me her 401k had gone down 40% and she had put her retirement on hold.

Anyway, I visited the bank because I wanted to take my 401k savings and put them somewhere that was both conservative and insured. I have to say that I am no genius about money, but given the banking and brokerage excesses of the past several years -- excesses abetted by the government and its agencies -- I guess my ignorance is not much to brag about.

I had spoken with the brokerage that handled the 401k and they were willing to realign the funds, but the more I thought about it, the more I felt that having to rely on the telephone when seeking assistance was a poor idea. Ergo, my trip to the bank: Could they accomplish what I wanted? -- a truly chicken approach to the savings I had. The answer was, they could. And because they are five minutes away and I can put a face with the information I receive, I will put my money there.

But while I was talking with the woman at the bank, I tried to make clear both my ignorance and my desire to protect whatever savings I could on behalf of my family, I also said, with a force that surprised even me, that I didn't trust the government reassurances worth a damn. The recession might be lifting, but there was still 17% unemployment when you made an honest reckoning; the impact of the industrial real estate market (deeply in debt) has yet to be felt; and television advertising suggesting people ought to get back into the stock market strikes me as egregiously optimistic and pretty much based on the old saying, "There's a sucker born every minute." The president says that there is a lack of trust abroad in the land and I think he's right.

But why SHOULD anyone trust a government that refuses to address the mechanisms that put the country into a 'recession' in the first place? In order to regain that trust -- and 60-70% of the economy rests on consumer spending -- the politicians would have to say 'no' to some of their biggest contributors (banks, brokerages, oil companies, pharmaceutical firms, etc.) Since politicians want to get re-elected, I for one do not plan to hold my breath about any consequential regulatory change -- the kind of change that might inspire my trust.

How dumb do these people with buffed fingernails and finely-pressed suits think people are. Pretty dumb is the answer and they are largely right. Greed is not limited to Wall Street or Washington. But Wall Street and Washington do not bear a commensurate burden when it comes to admitting mistakes and feeling ashamed of themselves. Not to mention feeling the financial bite.

All of this amorphous and not very well-sequenced whining I found myself spitting out as I talked to the woman in the bank. My mouth ranneth over. And somewhere along my ranting path, she looked at me and said, "I agree with you. There is worse yet to come."

I guess "caveat emptor" is a rule worth applying. Let the buyer beware ... of those who sell sequins but fail to sell the clothing on which to sew them. And beware of those who feel no shame, who cannot admit their mistakes, and whose reactions to mistakes is simply to paper them over and get back to business as usual, suckers as usual.

If my crankiness is any indicator, I wonder where the country is headed.


  1. Interested in what did you decide do with the money.

    The situation does make one wish for a real life banker like George Bailey. <'s_a_Wonderful_Life#Plot >

    The current financial situation also make me think I was justified when some 15 years ago I wanted to throttle my financial advisor when she asked "What is your acceptable level of risk?"

    For a little more information on why the current situation IS going to get worse and why the government cannot and will not be a source of help see

    For a slightly different take approaching the George Bailey ideal, have you investigated: ?

    Finally, for some fun with capitalism see

  2. Thanks Anonymous for all the links, which I will get around to at some point.

    As a financial doofus and someone who really doesn't like messing with money any more than I have to, I am in the process of having it shipped to a local bank (I value face-to-face discussions) where I have told them I want it in some piggy bank that is insured against the next downward slide. Very conservative. Very chicken. And very much hoping my family will get some use out of it. Certificates of deposit seem to fill the bill relatively well ... and if not, perhaps we will all be selling apples on the street corner.

  3. The central bank is an institution of the most deadly hostility existing against the Principles and form of our Constitution. I am an Enemy to all banks discounting bills or notes for anything but Coin. If the American People allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the People of all their Property until their Children will wake up homeless on the continent their Fathers conquered.
    Thomas Jefferson

  4. olcharlie,

    By coin, do you mean that we should convert substantial amounts of our money into gold.

    I just check CD rates and it seems that 5 year CDs are about 3.3%. Yeow!

    Compare that to some banks are charing 29..99% interest on credit cards.

    No wonder oldcharlie is an enemy of the banks!

  5. Charlie -- I am not nearly so versed or smart as Thomas Jefferson, but the kind of screwing he seems to be referring to is the kind of screwing the country seems to be receiving.

  6. I have worked in Finance for some 35 years, and have come to understand that the entire Capitalist system has been designed as a legal structure for the tranfer of money from those that don't know, to those that want it.

    This is not a new situation, as a little digging into Roman history reveals that they experienced the same. Plato commented on the historical experience of his own time, and noted the human propensity to take from the weaker or less informed, resulting ultimately in civil war, as the deprived finally lost all trust in the system and decided to take some back.

    This same trend in modern society has been commented on, increasingly, since the 80's

  7. I once heard on a TV documentary that President Franklin Delano Roosevelt had expressed surprise that those most directly affected by the Depression did not rise up or revolt. No doubt there are plenty of reasons why they didn't, but the fact that FDR would say such a thing suggests that he acknowledged the institutionalized pilfering that was in place.