Bored on a Sunday ... Schopenhauer said keep busy ... so here we are.
And there's a bonus rant at the end.
CNN Money asked the title question in a January 30, 2014 article called 76% of Americans are living paycheck-to-paycheck.
Last week, online lender CashNetUSA said 22% of the 1,000 people it recently surveyed had less than $100 in savings to cover an emergency, while 46% had less than $800. After paying debts and taking care of housing, car and child care-related expenses, the respondents said there just isn't enough money left over for saving more.
The answer? After paying for necessities, 46% of them don't have any fucking money.
What about the others?
Fewer than one in four Americans have enough money in their savings account to cover at least six months of expenses, enough to help cushion the blow of a job loss, medical emergency or some other unexpected event, according to the survey of 1,000 adults. Meanwhile, 50% of those surveyed have less than a three-month cushion and 27% had no savings at all.
[Graph left from Bankrate's survey. Only 24% of Americans can pay expenses out of savings for 6 months or more. 72% of those making more than $75,000 had at least three months' of emergency savings, compared to 35% of those making less than that.]
"It's disappointing," said Greg McBride, Bankrate.com's senior financial analyst. "Nothing helps you sleep better at night than knowing you have money tucked away for unplanned expenses."
It certainly is disappointing. And there's more disappointment to come.
Even more disappointing, the savings rates have barely changed over the past three years, even though a larger percentage of consumers report an increase in job security, a higher net worth and an overall better financial situation.
The economy is "recovering" and all that, but people aren't saving more. Gee whiz, I wonder why. Maybe the latest Fed Flow of Funds report can help us out there. For the benefit of dummies like us, Bloomberg explains what's going on.
So, basically of $80.7 trillion in household wealth, only $10.6 trillion, or about 13 percent is in 401(k)s and IRAs, the key instruments of middle class wealth accumulation.
Decades of effort to get Americans to save, and incentives from both government and companies haven’t worked very well. The $4.9 trillion in accumulated savings in 401(k)s are much less than the pensions of government employees, who make up just 14 percent of U.S. workers.
Add up IRA and 401(k) plans, and the total is still a scant 25 percent more than government worker pensions alone (and some of those IRAs belong to government employees and retirees). Despite constant exhortations to save, the vast majority of middle-class and even upper middle-class workers don’t. Or at least they don’t in the instruments that they’ve been urged to use.
Decades of effort to get Americans to save. Constant exhortations to save. Uhmmm...
Maybe I've been dreaming or something, but I seem to find myself, like all my other fellow Americans, in a society which can't serve me a fucking web page without loading 17 advertisements urging me to spend spend spend.
But despite those constant exhortations to spend, Americans don't spend enough to make the economy grow, as the Wall Street Journal explains to dummies like us.
Americans' wealth hit the highest level ever last year, according to data released Thursday, reflecting a surge in the value of stocks and homes that has boosted the most affluent U.S. households. The net worth of U.S. households and nonprofit organizations rose 14% last year, or almost $10 trillion, to $80.7 trillion, the highest on record, according to a Federal Reserve report released Thursday.
Even adjusted for inflation using the Fed's preferred gauge of prices, U.S. household net worth—the value of homes, stocks and other assets minus debts and other liabilities—hit a fresh record. The Fed report shows Americans have made considerable progress repairing the damage inflicted by the housing crash and recession, which ran from December 2007 through June 2009 and decimated the wealth of a wide swath of the nation.
But the rebound, while powerful, has been tilted in a way that limits the upside for the broader U.S. economy and is increasingly leaving behind many middle- and lower-income Americans.
"Wealth inequality…has increased over time," said William Emmons, an economist at the Federal Reserve Bank of St. Louis. "So, there seems to be a disconnect: there are big wealth gains, but not much follow-through on consumer spending."
Driving most of the past year's gains was a record-setting rally in the U.S. stock market, which saw the broad Standard & Poor's 500-stock index soar 30% last year. The increase in stock prices has disproportionately benefited affluent Americans, who are more likely to own shares. The value of stocks and mutual funds owned by U.S. households rose $5.6 trillion last year, while the value of residential real estate—the biggest asset for middle-income Americans—grew about $2.3 trillion, the Fed figures show.
Holdings of stocks and bonds as a share of overall net worth, at 35%, is at the highest level since the dot-com bubble burst in 2000, Fed data show. That means that even as wealth increases, it's increasingly going to the affluent.
There seems to be a disconnect... Yeah, there's a disconnect because all the wealth gains went to the wealthiest people, which isn't news. And it also isn't news that Americans are not saving or spending because 76% of them don't have any fucking money to save or spend over and above what they're already spending.
Maybe it was the use of the phrase "constant exhortations to save" by the Bloomberg reporter Mark Gimein. Next week, I will complete my 61st year on this planet. Except for 6 months in Italy, I have lived all of those 61 years in the United States of America.
How many times have I seen Americans being exhorted to save money? Zero times. Nadda, zip, not a single time! And in the CNNMoney video below, before the interviewee explains how America's rentier class rips you off by charging non-trivial fees for maintaining your 401k, you will see an advertisement for financial services (probably).
You see, they want to rip you off some more. In fact, the entire move away from traditional pension plans to 401ks and other financial vehicles was enacted in the first place to give financial parasites a way to rip you off by charging outrageous fees for their services. They also wanted to gamble with your money.
Now, the question came up lately in DOTE comments about whether humans are simply stupid. That observation pertains to the fuckees (the ones paying the 401k fees), not the fuckers (those in the financial services). In response to my post Rationalizing The Status Quo, my friend Oliver wrote—
There is a far simpler theory that can be tested - what we could term The General Stupidity Theory. This posits that people are in the main too unconscious (a.k.a. unstimulated, a.k.a. obtuse, a.k.a. stupid) to even begin to ask the right questions about the 'unfairness' of human society based on repetitive theft of resources by a self-protecting, self-reproducing elite. Whether stupidity is genetically predisposed, a random trait or culturally created (e.g. through mind-numbing foods, medical treatment, 'education' and entertainment as evident in the USA and its poodle satellites) could be semi-interesting areas of study. In my book, people who are constantly fucked over and yet continue to tug their forelock in fear of their Wizard of Oz masters are just plain stupid. It may not be their fault as such, but under the umbrella of what you see is what you get, stupidity is as stupidity does.
While it is always tempting to simply write humans off as mindbogglingly stupid, that temptation should always be avoided. Leaving out obvious cases, most humans are smart enough understand what's going on if you explain it to them. The problem is that they don't want to know what's going on. Or as I once put it, Ignorance Is Bliss.
And why is ignorance bliss?
Because almost all humans lower down on the social/financial food chain have been domesticated. It's not a stupidity problem; it's a docility problem. And that comes ultimately from their animal nature. This is where you might want to take the time to study chimpanzee societies.
Humans like to know where they stand in the general scheme of things (in the social hierarchy). And once life sorts that out for them, they are generally OK with it. Only when the dominant assholes really start to squeeze them do they rebel, as we saw recently in the Ukraine. People typically avoid the kind of negative stuff I discussed in today's post. When people do happen to run across bad news, they passively filter it (i.e., it never registers in awareness, where it can be digested and thought about).
Really, people (like me or Oliver) who are actually disgusted with all this opportunistic predation among humans are very rare. For the others, the ones who are not disgusted, the ones who are keeping up with the Kardashians, it's simply a matter of doing what comes naturally. Humans unknowingly spend a lot more time avoiding information (looking the other way) than they do seeking it out with respect to socially disturbing matters like wealth inequality.
So we see people bury themselves in social trivia like celebrity watching or sports. What I see is that people are actually capable of carrying out very sophisticated analyses, but they only apply them to socially non-threatening things. (NBA-wise, and statistically, is Lebron better than Michael Jordon was? Is Carmelo overrated?) This is all very convenient for predatory elites, but it is also the natural order of things.
Sure, Americans worry about money. They worry about it a lot because they don't have enough of it, especially if the shit should hit the fan (post above). But the idea that they might somehow do something politically about this nonsense, or go to the extraordinary lengths necessary to protect themselves from this predatory bullshit, well, that's really asking an awful lot of them.
So Americans are not disgusted with the way things are, but they're not stupid either. They're trying to keep their head down so nobody shoots it off. And even then they don't stand much of a chance because the predators will find you eventually. They're looking for you right now even as I type this. You're only prey to them and they never rest. Deep down, people know that that's the way it is, and, more disturbingly and deeper down, they understand that that's the way it has to be.
I'll be 61 years old this week. And I keep thinking what a hopeless fucking deal life really is, at least for me. I'll miss a few things when I'm gone, but not this shit.