America in Dire of a Mental Paradigm Shift Towards a Simpler Life - “A New Mission”
Politics / US Politics Jun 10, 2011 - 08:54 AM GMTA sabbatical is usually a good thing as it gives a nice opportunity to take a step back, assess, reassess, and potentially relax. I’ve enjoyed the past few months away as I took time to do the above and also to try to impart a little common sense and perhaps some wisdom on the up and coming generation regarding economics, the study thereof, and more importantly, the dire consequences of failing to recognize and follow basic economic laws.
So I return, and in many ways, things are not much different than when I took leave back in February. There have been some recurring themes, and in a sad way, it is nice to have been right about so many things, particularly the fraudulent nature of the recovery that was pronounced by the govermedia back in early 2009. Believe me though, for all the people who have had their jobs outsourced, offshored, or eliminated, I’d have much rather been wrong. The same goes for those who are now struggling to support families on a fraction of their prior earnings. I would much rather have had to slink away in disgrace because of a voracious (and healthy) economic recovery than see the suffering endured by so many.
I remember vividly a conversation I had with author Jim Kunstler a few years ago about these matters and we hammered on the need for people to scale down. Sure, we were having that conversation through the lens of the reality of peak oil, but it really applied in the financial sense as well. Perhaps the reality that has struck me the most over the past few weeks is the impact that McDonalds is able to have on the labor market. Who would have ever thought that a fast-food joint would be responsible for half the jobs created in a single month? And that is if you have any reason at all to believe the BLS jobs numbers. I don’t. But that is another story that has been told many times before and we’ll not do it again.
Getting back to my conversation with Kunstler, we talked about the mental paradigm shift necessary to deal with peak oil. The days of the hour-long commute are limited. Driving more than 100 miles a day is going to be a thing of the past soon. Many are now telecommuting a couple of days a week in jobs where that is suitable and that helps. Gas prices were much lower when Jim and I talked than they are now, that is for sure. For the guy who drives 100 miles each day to work, his commuting bill has gone up dramatically while his wages have stagnated. He is pummeled again at the grocery store with increasing prices for quality and quantity of foods that are continuously decreasing. The media and government are doing Joe America a huge disservice by making it sound like these situations are transient in nature, rather than here for the long term. Again, the point of this commentary is not to flesh out the reasons behind what is going on; that’s already been done. The point is that people need to adjust and most simply won’t. It isn’t that they can’t; they just refuse.
Our entitlement society is heading for a brick wall. The major underpinnings of our gimme society are insolvent. Our debt is skyrocketing. Our bonds are junk. Our currency is a joke. Our ‘free’ press is in the pockets of the same people who have brought all of this economic despair to Main Street. Joe America nearly shut down this corrupt system in 2008-09 simply by curtailing his expansion of borrowing. Nobody wants to talk about that. The proof is irrefutable and the connections are clear. America stops borrowing and the fiat system is dead on arrival at the Fed’s triage center: the FOMC. We hear dire warnings about the government’s debt and the statutory debt limit. Threats are made, promises of doomsday echo from the same ratings agencies who saw fit to apply AAA ratings to junk mortgage bonds and will mercilessly downgrade the PIIGS for problems that are several orders of magnitude less than what we face.
Joe America is largely unfazed, however. Sure, there are pockets of hurt, and there are many, many people who have re-evaluated their personal situations and have embraced individual austerity. Yet in the aggregate, we’re back on the credit card. It is hard to discern at this point whether the uptick in borrowing is for essentials or discretionary goods. Based on the anecdotal evidence, it is likely both. People have been trained to borrow, make minimum payments, and to live as a servant to the creditor. When you think about it, the ‘money’ that has been used to create this servitude has been created from nothing, yet must be repaid with something very real – the sweat of one’s brow. Hardly seems like a fair deal to me, yet we not only accept it, we demand it. Have we really spent any time thinking about these matters? It is almost funny when I look at the latest opinion polls regarding the national debt. The vast majority of Americans think that Congress needs to put the country’s fiscal house in order, yet most of those same people refuse to do it in their own backyard.
Yes, America is in dire need of a mental paradigm shift towards a simpler life, with less emphasis on accumulation of toys and materialism and more of an emphasis on stewardship and restoring the economic environment that allowed this country to become what it was. That should be our mandate. However, I am a realist and I know deep down that most will not heed this or any other call for a change of thinking. Unfortunately, history is firmly on the side of this pessimistic disposition. I have decided in my time off to focus at the micro level instead of the macro level. My days of open letters to Congress and calls to economic action are over. My days of open letters to individuals have begun. These commentaries and my firm’s newsletter will be geared more towards helping individuals who recognize our changing world to adjust, cope, and prepare for what is inevitable rather than attempting to convince those who will continue to deny the obvious until the time for meaningful action has long passed.
These words are not meant to be harsh, but have come over months of reflection as I’ve had some time to ruminate over the human condition and its predilection to lemming-like behavior. The one silver lining in all this is that if people live more responsibly and in a simpler manner from a financial perspective, they will be taking many of the steps that will be necessary for the preparation of the effects of peak oil. Yes, peak oil is real. Even the big banks are now talking about ‘resource constraints’ in the energy space and figuring it into their forecasts. Oil companies are hammering like crazy in the Marcellus shales to bring natural gas to market that hasn’t sold for over $5.50 a thousand in what seems to be a dog’s life.
If you are one of those people who understand these matters, then this column and anything else I can do to help are here for you to utilize. From here forward this work will be dedicated to the awakened rather than to the process of awakening. If you’re not there yet, there are plenty of mainstream media outlets that will gladly satiate your desire for information.
This month’s Centsible Investor Keynote will focus on the debt ceiling, government debt in general, and most importantly, some steps you can take on an individual basis to assist you in mitigating the effects of continued runaway borrowing. In addition, we’ll provide our traditional analysis of energy, precious metals, and the major financial markets. For more information, click here.
By Andy Sutton
http://www.my2centsonline.com
Andy Sutton holds a MBA with Honors in Economics from Moravian College and is a member of Omicron Delta Epsilon International Honor Society in Economics. His firm, Sutton & Associates, LLC currently provides financial planning services to a growing book of clients using a conservative approach aimed at accumulating high quality, income producing assets while providing protection against a falling dollar. For more information visit www.suttonfinance.net
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