Why Are We Always Barely Getting By?
At first glance of this headline, you’re probably thinking, well that’s easy… it’s the recession. People have lost jobs and are potentially losing their homes. In short, they’re struggling. I would submit that it’s a much deeper issue than this, and is one worth exploring.
The reality is that the recession has revealed Americans’ weaknesses, not caused them. The recession has shown that Americans are incredibly vulnerable to any external disruption such as a shaky job market, a shaky stock market, etc. The recession has shown that Americans have way too much debt and no savings. The recession has shown that Americans have trusted in inflation of assets like homes and stocks versus actual savings and hard work. This American I’ve described here was created over many years and caused by a number of factors. Let’s look at some of these factors.
Let’s first turn to inflation. For decades now, prices of stuff have increased. This includes gas, your home (until a few years ago), your food, your electric bill, etc. The price inflation of everything is rooted deeply and solidly in the economic policies of our country (well documented throughout this blog). The problem here is that wages have not kept up with price increases. Essentially, we’re making less while things are costing more. This means that the margin between our income and our expenses is slimmer and slimmer – it’s tough to get by for many of us.
Next, I think it’s important to turn to our culture. We now have a culture of “Keeping up with the Joneses.” Consumer products like Apple’s awesome iPad, new cars, granite countertops, nice clothes, we all want this stuff. We see our neighbors with this stuff and we see celebrities in magazines with this stuff and it pushes us towards spending the few dollars we have on high-end brand name products rather than simply satisfying our real needs. Our culture is all about consumerism and it’s killing us.
Another important factor in this discussion is entitlement – this especially applies to my generation. We grew up in a very affluent age in America. Simply put, we expect success, we expect a nice income, and we expect things (consumerism). Few of us know what it’s like to literally work for food for our families. We work for nice things and complain when that work impacts our “work/life balance.” I would suggest that this entitlement attitude has contributed to the crappy fiscal state of so many Americans. It leads to a lower work ethic, it leads to buying things to make us feel better about our lives, and it leads to a lack of motivation to make things happen for ourselves.
Lastly, another contributing factor similar to entitlement, is our lack of self reliance. I’m going to talk about this concept further in some articles coming here in the next week or so, because I think it’s absolutely crucial to iron out together. We are incredibly lacking in self-reliance. Whether it is something that breaks in our house or a service we need done, we’re always paying somebody to do something for us. How many of you pay someone to cut your small suburban lawn each month while you watch several hours of television each night? The more self-reliant we are, the more our finances will improve.
To conclude, the recession has exposed our weaknesses not caused them. Americans, including myself, need to get back to taking care of ourselves. We need to get back to working hard and being productive. We need to stop buying into a consumerism culture and embrace financial responsibility and genuine creation of wealth. If millions of Americans would turn the corner in these areas, the macro-economy would be transformed from the ground up, and we could stop worrying about the insane “fixes” from the top-down: indefinite unemployment benefits, endless bailouts, endless stimulus, VAT taxes, printing money, etc.