Here is a nice bit from the English-language Estonian blog Itching for Eestimaa (really, living in the Internet era is kind of amazing, access-to-materials-wise):
In case you haven't heard, the American economy is a bit jittery at the moment. The real estate market is not well, the large investment companies are trying to stay afloat during the national credit crisis, and gas costs a lot more than it used to cost.
And yet, the SUV drivers soldier on, filling up on oversized foodstuffs at gigantic supermarket chains, making pitstops at the local Starbucks to buy a coffee that costs about as much as a whole bag of coffee elsewhere, and generally spending themselves silly on consumer items they do not need, nor can afford.
But there is trouble in the air. People are beginning to realize that they have been living way above their means for quite some time. When I was in high school, it was the high school students who had the shittiest vehicles. Several years afterwards though, one would not be shocked to see a caravan of teenage girls all go driving past in a BMW on the way to the beach, expensive cellphone in manicured hand.
The reality is that people couldn't afford those goods back then, and they are starting to understand that they cannot actually afford them now. When I was younger and trying to figure out the principle of credit, I understood it as borrowing money from my future self to pay for things I need today. What I think is occuring in 2008, is that we have now become our future selves, and we are angry with our past selves for incurring all this debt.
The assumption in the process of taking on debt is that one's future self will be more affluent than one's present self -- considerably more affluent. But except for a statistically very tiny minority of high wage earners, incomes in the United States (and maybe the rest of the "First World" as well?) have not been going up for some time. The idiocy of the assumption (which I readily admit I have been prone to in my own life) is nothing new, as can be seen in this passage I just read today in Middlemarch:
...Fred had felt confident that he should meet the bill himself, having ample funds at disposal in his own hopefulness. You will hardly demand that his confidence should have a basis in external facts; such confidence, we know, is something less coarse and materialistic: it is a comfortable disposition leading us to expect that the wisdom of providence or the folly of our friends, the mysteries of luck or the still greater mystery of our high individual value in the universe, will bring about agreeable issues, such as are consistent with our good taste in costume, and our general preference for the best style of thing.
...would not the deficiencies of one year be made up for by the surplus of another?
Human hopefulness invariably seizes on the "logic" of that last question. Unfortunately, the answer is often "No," and that has never been more true than it is today. At a time when the health of our entire economy is premised upon borrowing, borrowing makes no bloody sense.
In case you haven't heard, the American economy is a bit jittery at the moment. The real estate market is not well, the large investment companies are trying to stay afloat during the national credit crisis, and gas costs a lot more than it used to cost.
And yet, the SUV drivers soldier on, filling up on oversized foodstuffs at gigantic supermarket chains, making pitstops at the local Starbucks to buy a coffee that costs about as much as a whole bag of coffee elsewhere, and generally spending themselves silly on consumer items they do not need, nor can afford.
But there is trouble in the air. People are beginning to realize that they have been living way above their means for quite some time. When I was in high school, it was the high school students who had the shittiest vehicles. Several years afterwards though, one would not be shocked to see a caravan of teenage girls all go driving past in a BMW on the way to the beach, expensive cellphone in manicured hand.
The reality is that people couldn't afford those goods back then, and they are starting to understand that they cannot actually afford them now. When I was younger and trying to figure out the principle of credit, I understood it as borrowing money from my future self to pay for things I need today. What I think is occuring in 2008, is that we have now become our future selves, and we are angry with our past selves for incurring all this debt.
The assumption in the process of taking on debt is that one's future self will be more affluent than one's present self -- considerably more affluent. But except for a statistically very tiny minority of high wage earners, incomes in the United States (and maybe the rest of the "First World" as well?) have not been going up for some time. The idiocy of the assumption (which I readily admit I have been prone to in my own life) is nothing new, as can be seen in this passage I just read today in Middlemarch:
...Fred had felt confident that he should meet the bill himself, having ample funds at disposal in his own hopefulness. You will hardly demand that his confidence should have a basis in external facts; such confidence, we know, is something less coarse and materialistic: it is a comfortable disposition leading us to expect that the wisdom of providence or the folly of our friends, the mysteries of luck or the still greater mystery of our high individual value in the universe, will bring about agreeable issues, such as are consistent with our good taste in costume, and our general preference for the best style of thing.
...would not the deficiencies of one year be made up for by the surplus of another?
Human hopefulness invariably seizes on the "logic" of that last question. Unfortunately, the answer is often "No," and that has never been more true than it is today. At a time when the health of our entire economy is premised upon borrowing, borrowing makes no bloody sense.
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