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Saturday, March 03, 2012

The Roads Not Taken

"We learn more through our mistakes than our successes," a former mentor of mine used to say.

I like to wonder where I'd be at the opening of the second half of my life, what other lives I could have had.

Professionally: something straight out of Butler perhaps? A Broad Ripple condo or bungalow. Socially: Probably no marriage, being that I was a drinking man in the first half.

Right after graduation, I did apply for the Navy, which did force me to refocus on the physical side.

A 60-day period of physical exercise did suspend for a while the awful stress of a stream of job interviews and jobs I really didn't want to do anyway (but I ended up doing ten years later, at least part-time.)

Joining the armed services would have boosted my Japanese language skills. I did get to graduate school, though, down the road where I did improve them.

Maybe I'm not at the stage of life that you can write your memoirs, but at my age you think of how differently they might have been written.

I was talking with someone else who'd joined the military but not made it through the selection process, a few years before me. Anyway, he was musing about why his admission into the Marines hadn't worked out.

I don't think he was regretting not getting into the Corps, but rather truly perplexed to find himself where he was, on the back half of life, on a downward trajectory, at least in terms of how he viewed his professional achievements, or the lack of them. It's at this stage of life that a lack of achievement does limit your professional opportunities in the time you have remaining.

It's a slippery slope whens life's twists and turns take you so far from where you'd thought you'd be, striding into the recruiter's office, young and confident. The effect is largely emotional. It's easy to assume that you'd be happier, better off, as the grass is always greener on the other side--or, down the road years later in whatever alternative reality your imagination cooks up.

Then I started thinking about how different he would be if he'd been a Marine. I mean, he'd certainly have been someone far different after that, as surely as I would have been after serving as a Navy officer. And like me, perhaps the person he became is the person he should have become, regardless of what he wanted. Perhaps unhappiness vests more in the person we need to be and happiness in the other we never were.

In middle life, we question who we might have been in that alternate universe twenty years later. We're regretful of our mistakes, yes, but more importantly we forge through the flow of the waters of time, upstream, and come to accept more of who we are and who we've become: our fate.

I for one feel made the richer for who I didn't become. I see demonstrations of wealth that might work for others. That doesn't for do it for me, though. I end up thinking of how much less ambitious I'd be for lack of want; how much weaker I'd be without a gritty realism, a passion for living that too much wealth can diminish, through contentedness perhaps.

I admit to being humbled by others who've achieved levels of success in their fields of choice, yet I field no overbearing sense of failure as a result, at least not anymore. Professional jealousy might have given me depression ten years ago. I might have been waylaid by the examples of others who'd by that time had achieved solid mid-career positions, well-paying and secure while I'd been nowhere close, or as Pink Floyd might say, "missed the starting gate."

I will admit to a pang of jealousy when I see the signs of their wealth made obvious in their homes and cares. But that emotion passes. Or maybe more accurately, I've learned to let go and grant them their gloating. It's just easier that way than to admit with every glance that you've been outdone.

As a person at the midway point of life you begin to accept your position, I guess. Perhaps part of that process is wondering who you would have been. Pondering that question acts like a release valve as a stream of memories begins to replace the jealousy, memories as precious as the finest jewels or nicest homes. Because they're yours, and no one can ever take them away.

Stealing the show, again

Perhaps the greatest friction exists between those with professional momentum going at this point in their lives and those who don't. So much of life is a monetary game, yes, but it's more than that. It's not so much having more income as having stability, enjoying the fruits of a half life of labor.

Pensions become more critical. Retirement takes on a new urgency. 401 (k) investing isn't just a cute IRS code. In financial matters, the infirmity of youthful indiscretion must be corrected, a more stable ordering of life final half achieved.

A population's "graying" might lead to a shift in values to reflect those of the largest generation--in our case, the Boomers. As a matter of fact, no study of economics can exclude a basic understanding of Boomer spending trends.

As the Boomers grew up, so too did a range of consumer offerings materialize to meet their ever-shifting needs and wants. Demand for cars, recreation, houses, and investments has all vacillated for decades around the habits and preferences of Boomers.

You probably heard the list: Pampers(tm) for babies, Matchbox(tm) for toddlers, then frisbees and hula hoops. As the Boomer kids hits their twenties, the construction of starter homes boomed.

And for the financial industry, it's the Boomers' income and investment patterns that mean the most. When their incomes climbed, with it too was the demand for investments and insurance. Stock markets soared, with the 1987-2001 bull market the largest in history.

It's not by coincidence that it was at a financial services company where I learned about the economic evolution of the Boomer generation, back in the 90s. And they were right, but only to a point. Since 2001, it's been as if the Boomer demographic has worked against rising stock market values.

To be fair, there exist many economic reasons behind any stock market trends, and the recent past cannot be explained by retiring Boomers alone. I've said in older posts here that middle income investors have been disenfranchised from Wall Street, and the recent class wars indicates that the trend persists.

Perhaps it's anecdotal but we did see better stock market performance when participation was broader in the 90's. The middle class saw wages rise steadily under Clinton/Reich and much of that money found its way into the stock market. Unions were stronger, wages were better, and those rising incomes helped everyone in the country.

Since then, unions have been hobbled by policies that encourage offshoring and divestment by multinationals. Yes, there's a global labor market as well: a company like Apple would not have been as profitable as it was without cheap--some would say slave--labor. [By the way, congratulations to those responsible for higher wages down Apple's supply chain, thereby proving 1) collective action can work and 2) profits can't be the only purpose of corporate conveyance, hinting that perhaps there are other metrics than monetary to measure our time here in the planet.)

I guess if all that money went in and made the markets go up, the opposite--that pulling investments out will depress the market--stands true.

Will the Boomer generation continue to influence as it has?

If we're dominated demographically, the Boomers will exercise at a minimum a strong effect on our society. With financial matters, the fear of change manifests as a bunker-tyype mentality resisting any potential change, a reactionary attitude that in my opinion makes economic decline more likely.

My mentor, who I quoted at the top, also just to say, "people will rise or fall in regard to your expectations towards them," is so right. If the Boomers are seeing a ghost behind every branch, and a threat to their financial security in every proposed change, no matter how healthy, we most certainly have a problem.

In such a society, the urge to maintain the status quo is so strong that economic vitality can become stagnant, trapped by the top heavy, upside pay scale favoring the Boomers at the expense of younger people.

Those on government pensions like our soldiers, sailors and Marines crave the benefits they receive. Those who never had a chance to serve, despite volunteering, have no faucet from which to draw.

As wealth held by the Boomers tends to coagulate, stirring little demand as more and more is socked away in order to secure the financials needs of the retired, rather than put to work through the markets as it was in the 80s and 90s.

Statisticians call that "I," or private investment. As "I" hasn't increased, government has seen fit to make government spending ("G") more a matter of policy.

Our deficits have created a huge drag on our collective financial future, our nation's credit score, and ability to borrow in the future, when we are certain to need it more. Paradoxically, the more G, the deeper the trough but less seems to make it down the trough--i.e., it's shallow out in the periphery, deep in the fly-over where housing values and unemployment are still problematic, although agricultural subsidies do offer some rebalancing of wealth geographically.

The take away

I'm not a gambling man, nor am I prone to predictions, but I will venture a stab and say that our system today can't last, for a variety of systemic reasons far more than a single demographic trend.

A broadening span of the populace is getting poorer, denied access to health care and job security. As is explained in Josh Purdy's book In Search of Common Things,he describes the tragedy of the commons where those with resources--corporations, for example--become increasingly more efficient at depleting the shared resources of the commons, and those with fewer resources are therefore left with a more depleted commons, or public area.

Public commons can still be seen through many New England towns. They worked for a while, until the population rose rapidly, imposing too much demand upon the resources of the Commons. The system was unsustainable, like that of our government today perhaps.

With the public commons, Colonial-era Americans faced resource scarcity problems that are perhaps not too different from those the world now faces, albeit on a larger scale. The world's space and resources are finite. Not only must we get more efficient at extracting them (as they will run out), we will need to consume less, and shift our values away from an economic system that puts materialism first.

Through our heavily commercialized lifestyle, our economic future has been put at risk. We'll need to create an economy that doesn't depend on the extraction of natural resources and their energy-intensive transport over vast distances.

In a more modern sense of Commons, a government like ours enables an invasive parasite called private banking to infest the system. You may be familiar with the system: it entrenches workers in a state of modern debt-based peonage wherein tax revenues and interest payments go up the money pyramid. I ramble. For more see Dr. Chris Martenson's website.

Meanwhile banking industry losses are fostered upon the public through the Treasury's borrowings, in what Roubini's calls "lemon socialism."

The consequences of excessive risk-taking and inadequate regulatory enforcement made themselves obvious in the 2008-2009 debacle. Nevertheless the potential for another massive bailout persists as the underlying systemic causes persist, most notably the constant over-leveraging and weak regulatory environment, manifesting in the criminal MF Global debacle.

To put a twist on Yogi Berra's saying that "if something won't last forever, it won't," I'll say that if something is unsustainable, it won't be sustained. It won't be sustained because it can't be sustained. It can't be sustained because the monetary system on which it is based is broken and self-depredating, resulting in severe damage to the economic system in which it's housed.

The article's title refers to a favorite poem of mine by Robert Frost. It's available at this link.


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