29 July 2009

You call this a recovery?

Some interesting news floating around the Web lately---apparently the economy has started to grow again. Slowly, but it's growth, which means that technically speaking the recession is over. Trouble is, unemployment continues to rise, the value of labor continues to fall, and all this growth means is that the stock market is back over nine thousand (keep your Internet memes to yourself), my portfolio is no longer in free fall, and the sorts of people who measure their monetary worth in capital growth rather than wages deposited in bank accounts will begin again to grow rich. Much like the fallout from the 1991-92 recession (largely caused by defense contraction after the Cold War) and the 2001-02 recession (courtesy of the dot-com bust and 9/11), this fallout will be a case of the further concentration of wealth in the hands of two major classes. The very rich, who own the businesses and control the capital, will profit as they have since the nineteenth century; the highly educated professional classes, those who have skills that cannot be outsourced because nobody in the Third World has the training or the infrastructure to do it, will make out like bandits, especially if they diligently invest their money rather than spend it on mindless consumer baubles and keeping up with the Joneses.

The above may read like a bit of a socialist rant, as I point out the widening gap in income inequality, but the truth of the matter is that I don't think the poor have much of a base to complain from. Horatio Alger's been dead for over a hundred years, but his story is still very much alive. Work hard, live within your means, don't produce more children than you can afford to raise, instill in those kids an ethic of thrift and prudence, stick to your guns, invest your money wisely, and lo and behold it's still well within the realm of possibility that you could die rich, leaving your heirs in position (especially with an education) to elevate themselves to the moneyed classes and leaving you a pretty good legacy and an in to your religion's favored afterlife (or, if you're a complete atheist, at least letting you die in peace).

I know what some of you are thinking. "But there are so many obstacles in my way! You don't understand!" Don't I? I have a heart condition, real nasty one, probably gonna kill me someday. Spent some time in the hospital for it, even. Could've been bankrupted by it. Thankfully my wife had the good sense to talk me into making sure I had health insurance. Still cost me over a thousand bucks to pay all the deductibles and all the weasel costs the HMO wouldn't cover (for those wondering, I'm with the Blue Dog Democrats on health-care reform---no government "public option" but the system does need to be fixed.) After I coughed up the thousand, though, I'd only wiped out one month's household profit ("profit" defined as household income minus expenses, same as any business). How'd a guy with a combined household income under fifty grand (at its height, before my return to college in anticipation of greater returns later) manage to sock away that much every month? Easy. I don't own a television, I block ads on my Internet connection, therefore it's absolutely amazing how few things I think I need in order to have the basic "necessities" in life.

Next month the wife and I are moving into a much smaller apartment, a little one-bedroom about fifty yards distant from the large (too large) two-bedroom we're in now. Net monthly cost savings: $320 every single month. We're on one income and we're still going to manage to turn a profit, mostly because our monthly fixed expenses (rent, power, and Internet access) will amount to an average of about $725. We'll have the whole kit and caboodle just about paid off with one paycheck, leaving the other one to cover food, visits to the vet for the pets, and anything else under the sun you'd care to name. I've said this time and time again in other fora, but if I can figure this out, and I'm not that smart, anyone should be able to.

The real problem with how I live my life? If everybody did it, the economy would REALLY collapse! Imagine slashed consumer spending in today's America. So maybe I should be hoping that this blog never picks up any readers!

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