Tuesday, September 8, 2009

Musings: Laborings

The moon was a faint patch of white floating in a celestial sea of darkness when Koko and I went walking this morning. On our return, the wind contained a touch of rain that quickly transformed into a shower, but I fended off the wetness, holding my umbrella in front of me like a shield as streaks of orange and scarlet illuminated a pale band of sky between the cloud bank and the ocean.

The days are shortening dramatically — we’ll lose 27 minutes of light by month’s end — and the light has that decidedly autumn feel as we head back to work after a holiday devoted to our laborings.

The Labor Day weekend made me think of a comment that lifelong westsider Kealii Aguiar made when I interviewed him about his new position as Waimea High School’s head football coach. He said the young men on the team had been diligent about their training, which he likened to the blue collar ethic of westsiders: show up, punch in, work hard, do what needs to be done.

Each day I see the evidence of that ethic all around me, as people in so many different occupations show up and do what needs to be done to keep things functioning, for the benefit of the whole. When viewed in that context, it seems bizarre that there’s such a pay disparity between workers.

I mean, does the CEO making $10 million a year really work that much harder, or contribute that much more, than the guy earning $30,000? As the AFL-CIO observed:

CEO perks alone grew in 2008 to an average of $336,248—or nine times the median salary of a full-time worker. Meanwhile, the economy tanked for working people while many companies were bailed out with more than $700 billion in taxpayer money, as well as low-interest loans and guarantees.

And as a friend noted last night, “yeah, and those guys are the ones that destroyed the economy.”

It’s true. Folks might want to blame union workers — be they on the state payroll or GM’s — for dragging the economy down, but I think the oil companies, which were raking in record-breaking profits as the world’s economy staggered under the burden of high oil prices, had just a little bit more of an impact.

Meanwhile, a friend who never carries a balance on his credit cards was recently informed his interest rate would be increased from 12.9 percent to 23 percent. That’s just one way that many banks stuck it to consumers before the new law intended to curb some of the banks’ more vicious lending practices went into effect.

He’s got good credit, so he probably will be able to find cards with lower interest rates. But what about all those millions of Americans who are currently unemployed, or maxed out, and so can’t make the switch? They’re going to be stuck with interest rates that will ensure they remain in perpetual debt.

The same friend informed me that the retirement account he had faithfully contributed to for 30 years has lost a third of its value since the financial market meltdown. What’s the likelihood that he’ll ever recoup those losses? And do you really think that the suffering was shared by investors across the board, including those who manipulate that legal racket known as the stock market?

Then there’s the “Making Home Affordable” program. It was intended to provide relief to homeowners on the verge of foreclosure, but due to meddling by the banks, it hasn’t quite lived up to that promise. As an investigation by CNN discovered:

Housing counselors, homeowners and consumer advocates tell endless stories of banks giving homeowners the runaround: declining apparently eligible applicants; pressuring them into loans they can't afford; placing homes in foreclosure while the owners are being considered for a modified loan; lenders telling homeowners to waive their legal rights, even though the program prohibits it; or banks telling homeowners that they have to be in default to qualify, which isn't true.

According to the Treasury Department's most recent report, only 230,000 of the up to 4 million eligible homeowners have new mortgages under the program.

We’ve all been sold this bill of goods about the good life we can achieve through our laborings. Yet in reality, it eludes most people. While some live exceedingly high on the hog, others struggle, while still holding on to the dream that if they just work hard enough, or make the right investment, somebody they’ll be elevated to those coveted higher echelons.

It’s pervasive, and even in the midst of this economic crunch, it’s still alive and well and infecting the next generation.

Yesterday I was listening to three of the little boys in my neighborhood talking about what they want to do when they grow up. Their conversation went something like this:

“I’m gonna go in the Air Force. Are you?”

”No, I’m not gonna go in the Air Force, because I don’t feel like dying.”

“I just want to be a regular guy and have a regular job and buy people all kinds of things and live on the mainland because they have way more stuff there.”

“That’s all you want to do?”

“Well, maybe be a billionaire, or a millionaire.”


Bob Keller said...

There is only one true freedom left in America and that is don't own anything!
Own a house, your free to pay property tax, mortgage, insurance, and maintenance.
Own a car, tax, insurance, and so on.

Where is the insurance for our jobs? Yes you can get a short period of unemployment,
and there is insurance for payments, but where is the insurance for the "american dream"'?

Truth is there is none. So we take stock on what we have. We find we have some of the best
soil on he face of the earth, use it. grow a garden, stay out of safeway.

If you want to watch tv and be like the joneses get ready for stress diseases.We've already found
out the simple rule.- nothing is forever. When, not if, a communication breakdown occurs, what
guarantee do you have that you'll even be able to get your money? None!

If you send money away for an investment, that's where it is, gone!

We need to set up a local investment fund, for our housing, farming, and infrastructure. We could
be cutting edge on this.We could be an example for other communities.

It could be an example that "mainland mentalities" could embrace and contribute.

I now open the floor to the "anounymous" naysayers


Bob Keller

Anonymous said...

I worked my whole life, saving for retirement and putting my money into mutual funds. " Lost half of it.

Then I took what was left and bought a safe investment, a little piece of property on Kauai I would rent to tourists. The next year the County made it illegal. I had to sell the house for half of what I paid.

Now I'm old and broke. Hey at least I've got government health insurance. Oh wait, not here in the U.S.

Anonymous said...

"union workers [...] dragging the economy down [...] oil companies, [...] more of an impact

-- the union "problem" is overblown. the oil companies are a weak and tired red herring. under-regulated financial groups and stupid citizens walked together down the isle of hidden risk, over-extension, and greed

but hey, at least the personal savings rate is up..

"Where is the insurance for our jobs? [...] where is the insurance for the "american dream"'?

-- governmental and social welfare net systems aside, there is no law against making your own "insurance." i believe the term is "self reliance" (see jamestown, the transcendentalists, entrepreneurs, and most new immigrants to the US...it is a long and well understood and practiced concept)


Anonymous said...

Very good column.

Per the old USA, at least we still have a "middle class." Granted, it's not what it was before but check out other countries around the world...

Anonymous said...

They said he died without a penny to his name, I'd say he timed it just right.

You came into this world with nothing, and you go out with nothing, what have you lost? Nothing! -old Irish saying

Anonymous said...

Insurance for the American Dream???

The Constitution gives us the right to pursue happiness...not necessarily to find it. The country does not owe anybody a living. Owning a home, health care, higher education, etc. are privileges, not rights.

I didn't inherit anything ever...started marriage in debt...but 24 years later (10 years ago) we retired debt free in an expansive home on the Kona Coast.

Entering our 11th year of blissful retirement in the paradise we made with our own hard work (we just turned 60, as well) I laugh at the people crying out for a handout.

Anyone can succeed with enough motivation. For the years one may spend as an employee versus an employer or entrepreneur, consider this: a "job" is merely an "employment contract" that is fulfilled over and over each paycheck cycle. Once you get your paycheck, you and the company owe each other nothing. You've traded your time for their money.

Assuming an employer will "take care of you" is a sucker's game in this generation.

Control your own investments. We did. We did not turn over money to some mutual fund investor. We made our own choices based on learning how the market and how to assess different companies. We made a killing.

If you want to remain a sheep, don't be surprised when you get shorn.

Anonymous said...

The Constitution isn't the be all and end all of life. It's just the blueprint of our political system, not a device for limiting our opportunities.

Should we demand corporate titans actually earn salaries 100X the average workers? Hell yes. Just explain how following the herd over the cliff was worth $50 million/year+?

It's so inspirational to hear tales of how someone who's currently riding high on the wheel of life did it all without any help from the rest of us and how anyone could have done it. Hope those Greek warnings about hubris don't bite you in some incurable way. Who'd be laughing then?

Anonymous said...

Anon said: "I didn't inherit anything ever...started marriage in debt...but 24 years later (10 years ago) we retired debt free in an expansive home on the Kona Coast."

This guy from the Kona Coast constantly posts and has a pathological need to tell everyone how good he has it and how stupid everyone else is. Guess he's not happy unless others know it. Worked until you were sixty? My God man what in heaven name took you so long!

Anonymous said...

Should we demand corporate titans actually earn salaries 100X the average workers? Hell yes.

It's none of your business how much a corporate titan earns unless you happen to be a shareholder in the company. The shareholders own the company. They elect a board of directors who hire a chief executive. They can pay the chief executive anything they please and, fortunately, no one with social engineering designs or any other "big ideas" has the right to interfere with their decision. If you don't like it, then don't buy stock in the company.

Anonymous said...

Chanting talking points in the face of reality may be comforting to some. Most of us have lost faith in the CNBC book of cliches.

Directors of companies are typically cronies of management. They sit on each other's boards and jack up pay since every CEO needs to be paid at least the average. Lake Woebegon gone wild.

Small shareholders have little to no say on corporate governance. If you think otherwise, you're living in Kudlow world where the fairy tale of trickle down economics is accepted as religious fact.

Funny how those corporate titans/shareholders didn't have a problem taking my tax money to bail their asses out. If I have to back stop them, I get some say.

Anonymous said...

Directors of companies are typically cronies of management.

Speaking of cliches. Give us a break with your social deconstruction "wisdom." "Typically" my *ss. SOMETIMES directors are cronies of management. SOMETIMES directors and management are in bitter conflict.

And if you really believe Kudlow, or "trickle down" means a belief that an owner of a small number of shares has or even ought to have an equal vote with an owner of a vast number of shares, then you're doubly ignorant.

You do have a good point about companies who take government money. If they took a bail out, screw em. Of course, its bad for the country for the government to be running business. Those businesses should have been allowed to fail.

Anonymous said...

I retired at 50, not 60 which I currently am. If I had really applied myself, I suppose I could have retired at 45. Just a slacker, I suppose.

In the world that exists now, as opposed to the world most of you wish it were, I am very happy to be me.

Anonymous said...

Anon said - "I am very happy to be me."

Apparently your happiness depends upon constantly telling others how satisfied you are with yourself.

Evidently Marx was correct in his observation that "The rich will do anything for the poor but get off their backs."

Anonymous said...

If you've got it, flaunt it.

Hey...if I stand on one more poor person, I will be able to see my yacht from here!! Or the end of my driveway.

Anonymous said...

"If you've got it, flaunt it."
spoken like a true gadfly.

Anonymous said...

"You will know the truth, and the truth will set my fee."

"Blessed are the meek, for we shall inherit them."

"I've been rich and I've been poor - rich is better."

"Money can't buy happiness, but it lets you look for it in many more places."

"Poverty isn't dishonorable - it's just inconvenient."

Anonymous said...

You can't eat the rich there are not enough of them. So just liberate their assets whenever possible (to the fullest extent allowed by law in your jurisdiction, if its not allowed operate from a jurisdiction where it is -- that what the truly rich do).

Anonymous said...

just liberate their assets whenever possible (to the fullest extent allowed by law in your jurisdiction, if its not allowed operate from a jurisdiction where it is -- that what the truly rich do).

Nah. The truly rich either own stuff that pays compound interest or they create compound interest by owning stuff that pays, and using the money from that stuff to buy other stuff that pays, and using the money from that stuff to buy still more stuff that pays, and on and on. It's really not inherently unethical in any way.

Anonymous said...

Ah...compound interest...the most powerful financial principle that exists.

Anonymous said...

I've never been one to fool with the IRS. After all, that is the only branch of the legal system where you are guilty until proven innocent.

We always paid all our legal taxes after exhausting every loophole there was that didn't incur a significant chance of audit.

My wife's brother worked for the IRS and told us of the 15 levels of audit that can occur, only the last few levels actually involving meetings with the taxpayer.

Certain avenues of tax reduction, like a home office, raise the probability of audit, so it behooves the taxpayer to run the numbers and see just how much such a deduction is saving. It may not be worth it.

For us, the IRS...and FICA in particular...got their pound of flesh each year. But now we are 2 years away from reaping the benefits of the massive FICA payments we made.

Our SS monthly check, once it starts even at the reduced rate for a 62 yr old, will be more than enough to maintain our lifestyle. This keeps our principal free to work hard at that compound interest and safe investments.

When it comes to investments like the stock market, though, only put in what you can afford to lose totally without adverse impact on your lifestyle. Think of it as a Vegas adventure, only with a much higher percentage of winning if you play the game yourselves.

Know when to get out and stick to it...the market has room for bulls and bears, but not pigs.

Anonymous said...

ps - stay away from short selling and options...these are vehicles where you can lose more than you initially put in.

Anonymous said...

"It's really not inherently unethical in any way."

Sir are you implying the perfectly legal practice of jurisdiction shopping for the most lucrative places to do business is in any way unethical, and that charging someone compound interest is less so?

Anonymous said...

"ps - stay away from short selling and options...these are vehicles where you can lose more than you initially put in."

You mean like that Hummer that kept breaking down, eating my wallet, and I sold at a loss? Gosh you sound smart. Wish I had the benefit of your wisdom before I turned into a fool.

Anonymous said...

You mean like that Hummer that kept breaking down, eating my wallet, and I sold at a loss?

Also, fundamental, never treat consumer purchases as investments. If you want a Hummer, buy a Hummer. If you want an investment, buy stock.

Anonymous said...

I had a couple of great hummers over in Thailand and Cambodia a while back, but that's another story...