The Fear of Not Having Enough

Posted on April 13, 2006 by Dave Pollard
cashflow
There’s an echo in here. A sense of foreboding, of dread. Not the pessimism of the informed, something much more personal. The fear of not having enough, as Derrick Jensen calls it in A Language Older Than Words. It’s an echo because those of us in the blogosphere are more knowledgeable than those in society’s mainstream, where most live with that fear, to a greater or lesser extent all their lives, and because we are less distracted than those who get their information and sense of what is happening from the detached, distorted and learned helplessness-inducing mainstream media.

The rest of society will catch on sooner or later, but for now this fear is our dark secret.

This isn’t just the gnawing fear and guilt and anger of having to do without things we’d really like, for ourselves, for our children, things the rich elite have in obscene abundance and squander without a second thought. This is the deeper, darker fear of soul-destroying deprivation, hunger, desperation, not knowing where the next meal is coming from.

This fear is rooted in two dawning realizations:

  • The economy is horrifically overextended and fragile, and the actions of the rich and powerful elite we still allow to make reckless decisions on our behalves are a game of chicken that, if we lose it, will plunge the world into another Great Depression, and
  • We are now living hand-to-mouth so much, even those with low six-figure incomes, that even a temporary interruption in cash flow would be catastrophic: For the most part we have utterly inadequate savings, and most or all of our wealth is tied up in overpriced real estate and overpriced stocks and bonds, so we cannot afford to retire, ever.

The rich and powerful are immunizing themselves against this risk, although they still, mostly, deny it will happen. Using the economic power engine shown in the chart above (described in this earlier article), they are furiously redistributing wealth from the poor to themselves, calling in political favours to obtain tax cuts, government subsidies, and increased protection from creditors and litigants, and labouring to gut social programs and creditor and legal protection for everyone else, so that this flow of government largesse is not threatened by demands from the poor. They are dumping their domestic workforce in favour of faraway, cheap labourers who will have neither the means nor the will to vent their fury on the corporatists when Depression closes the plants and lifelines to even basic human necessities. They are reneging on pension and health obligations, cynically shifting worker pensions from defined benefit plans to defined contribution plans that will be worth nothing after an economic crash, which is precisely when they are most needed. They are urging the governments in their back pockets to abandon already weakened and inadequate social safety nets by declaring them bankrupt and walking away from them. The objective in all of this is not only to shift wealth from the poor to the rich, but to shift risk in the event of economic collapse from the rich to the poor.

The rest of us have either learned that the government and corpocracy are not here to do us any favours, so we can expect nothing from them, or are prevented by pride and a sense of fairness from the shameless begging from politicians (described euphemistically as ‘lobbying’) that corporatists use to hedge their risks. So we don’t even ask for, or expect, any insurance from the impact of an economic depression or the inadequacy of our savings to provide even minimal needs in our senior years.

There is nothing new in this. It happened during the era of the Robber Barons, and again during the so-called Roaring Twenties. If you harbour the illusion that the 1920s were a period in which the staggering affluence of the rich was shared with the working or even middle class, read this account, from a librarian at U. of Oregon. If the social parallels between the 1920s and the 2000s don’t make you shudder, then you’re not paying attention to what’s happening here, now. The economists, in the pay and employ of the corporatists, while still spouting their lies that ‘average’ GDP has anything at all to do with human well-being, will tell you that the technical causes of the Great Depression of the 1930s cannot recur because of technical safeguards instituted since then.

But the primary cause of the Great Depression was not technical factors at all, but rather a crisis of confidence. It is only public confidence, the consensus of those investing their hard-earned money and savings, that accounts for houses that cost $100,000 to build and another $20,000 per year to commute to and from to work, somehow selling for, and  hence being ‘worth’, $500,000 or more. It is only public confidence that accounts for shares of companies that are massively leveraged, dependent on government subsidies, tax exemptions, and artificially suppressed interest rates, selling crap manufactured half a world away by desperate slave labour, financed by debt ten times larger than anything seen in the history of the planet, imported cheap thanks to artificially suppressed oil prices, and flogged to the public at obscene profit margins, trading at 30x earnings or more — in other words priced on the expectation that these already overstretched and unsustainable profits will continue to increase by 20% or more every year forever.

Eventually the baby boomers, a billion or more of them, will, except for a tiny elite, be forced to realize that they cannot afford to retire, and that they will have to work until they die, and liquidate everything they have to make ends meet, and stop buying everything except absolute necessities of life, and become self-sufficient (since they will no longer be able to afford to hire others to do everything for them). If you know anything about economics, you know what happens when large numbers of people stop spending and start liquidating their assets. Crash.

Eventually the international game of chicken that has produced such staggering debt and imbalance in trade will reach the point at which someone says ‘uncle’. If the Chinese don’t do so (because their economy and the US economy are co-dependent), the Arab nations, realizing that their only asset is being exhausted by 8% per year and that to offset the fall they need both a commensurate increase in price and a stable currency in which to price it, probably will. If the Mideastern oil supply survives the Bush-Cheney Crusades (there’s evidence it won’t), the OPEC nations will soon start insisting on payment in a non-bankrupt currency. The Ponzi scheme will then be over, and the first to cash in their chips will do fine, the next will scrape by, and the remainder will be stuck with certificates and debentures whose only value is as wallpaper. The result is what is called a default, and it is the ultimate expression of a crisis of confidence. What happens next is that the US dollar becomes worthless, trade grinds to a halt, everyone whose job depends on trade is laid off, so they stop buying, pushing demand down to the point that price is less than cost, huge profits become huge losses, and the whole economy shuts down. It took until 1932 before someone had the courage to call the ‘correction’ what it really was.

Hence the dread. It’s just a question of when. Cash in too soon and you’ll miss the last orgy of real estate and share price rises, leaving you with a nest egg considerably smaller than it could have been. Cash in too late and your assets will be worthless, and you’ll have no nest egg at all. As soon as a significant number of people start cashing in, the Tipping Point is reached, and there’s no turning back. Only the worn-out lies of economists, politicians and corporatists are delaying this inevitability. And, as I’ve already explained, they’ve hedged their bets already.

Then the Fear of Not Having Enough will become a reality. Search the Internet for information on what living in the last Great Depression was like, and you’ll come up with surprisingly little. It’s almost as if this period in our history has been self-censored out of our consciousness. Maybe there’s a fear that if enough people realize how much our world today is like the 1920s, that could make its repetition a self-fulfilling prophecy.

So what do we do? If you do a cash-flow forecast, on the assumption you will live to the age of 90 (likely if you’ve made it this far and in the absence of a pandemic or similar disaster), there’s an extremely high likelihood you will realize you don’t have enough to retire, ever. And if retirement is still too far away for you to be of concern, you need to prepare now to look after yourself and those you love when we reach the Tipping Point and plunge into the next Great Depression.

In either case, you will have to do two things:

  • Get your life in order: Cut your spending to what you absolutely need. Eliminate your debts. Sell off assets that are extraneous, especially if they’re denominated in $US. If you’re hanging on for the final surge before the bubble bursts, watch the markets closely and be prepared to get out fast. A lot of pessimistic economists will tell you to invest your cash only in commodities — gold and oil — but I’m not so sure. I’d invest in things that people will always need and that you yourself can use — like agricultural land close to where you live that has not been exhausted and that can be used to grow food (if you think this is absurdly pessimistic, google “Victory Gardens” and read about how the upper middle class lived in the last Depression). Learn to be self-sufficient — teach yourself how to do things that you currently hire people for (like teaching your children and looking after your own health), and how to fix things instead of throwing them out and buying new ones or relying on others to fix them for you. 
  • Learn how to make a living for yourself: As I’ve been (re-)writing The Natural Enterprise, I’ve come to realize that sustainable entrepreneurship will be even more important to baby boomers with a quarter-century of unfunded ‘post-retirement’ ahead of them, than to the young, downsized and disenchanted the book was originally intended for. The thought of a billion people in their fifties and sixties, set in their ways, needing to learn, in a hurry, how to make a living for themselves, or face poverty and even destitution, is mind-boggling, and not enough economists are paying attention (most of them look at the ‘paper wealth’ of the baby boomers and assume they’ll be just fine, not realizing that this paper wealth will disappear in a depression or even a period of high interest rates).

In short, this dread, this Fear of Not Having Enough, that is nagging us, those of us informed about what is happening in this world but not rich enough to immunize ourselves from it, is happening for a reason. We need to be the models for the rest of society, show them what needs to be done. This will take great courage, because we will be accused of being Chicken Littles, or worse, of starting a stampede needlessly. Keynes, the great student of economics, knew the Great Depression was coming but lacked the courage to act, still waiting for the top, for his pessimism to achieve some level of social consensus. As a result, he waited too long and was wiped out.

Here’s how Zane at Lichenology has put it:

So on the cusp of my official mid-life…I am recalibrating and stepping into the fullness of life. I want to serve my family and my community, to live with attention and respect, to be humble and generous. I believe we are entering another time in history when people will be asked to be and do all they can. Each of us must find our rightful place in this unfoldingówe need to find the sense of wholeness from which we can step up to our role. 

We need to relearn to trust our instincts. Preparing for events we cannot even imagine, and which might be farther off than we fear, runs counter to accepted wisdom of ‘rational’ behaviour and to our human nature of acting only when we absolutely must, when there is no other choice. The voices of dread whispering to us, filling us with ‘irrational’ fears, are telling us something important. It’s time to pay attention. Others are dependingon us to show them the way.
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13 Responses to The Fear of Not Having Enough

  1. communicatrix says:
    April 13, 2006 at 18:59

    Dave, your articles are always thought-provoking and usually not a little frightening, but as a middle-aged woman with scant understanding of finances, this one shakes me to my core.On the plus side, I learned early that money would not buy happiness–at least, not at a value for my dollar that working in the hateful advertising industry could justify. I’ve learned to live on far less and picked up some useful skills like cooking, value shopping, caring for my own health and learning to live (well) on much, much less.But I’m fairly awake, a participating member of this here blogosphere, and still scared to death by what you say, mostly b/c it has the ring of truth. I would like to step up and, in turn, lend a helping hand to others when I have my footing. Is there a way to deliver this wake up call with more style and wit and–dare I say–fun? Because the one thing no one is going to listen to while s/he is afraid is why s/he should be even more afraid.I have been formulating an idea for a second blog and podcast that I’m thinking I could rejigger slightly to get the message out there in some small way. Since you are one of the strongest, smartest and most compelling (if scariest!) voices out there when it comes to sustainability, I hope you will take a hard look at your book for youngsters and maybe see how you can address those problems of oldsters that you mentioned. We, the old and inflexible, need at least as much help as those reedy youngsters.

  2. Wissbegieriger says:
    April 14, 2006 at 09:12

    Diplomatically stated, Communicatrix, and I hope you do start that weblog. I have been thinking of doing this myself, while trying not to be overly influenced by the fury that Dave’s utter irresponsibility and post-yuppie ‘system is bad’ hand-wringing provokes.Yes, economy depends on our self-images and our desires for expression. So Dave’s idea appears to be, let’s push that all into the dirt and emerge clean. Or on alternate days, faux-sad-wise ‘advice’ from, let me quote him in this post, ‘those of us in the blogosphere [who] are more knowledgeable than those in society’s mainstream…’ — What is wrong with this picture? To discover, it’s probably time to start actually paying attention to what our writers and artists have been trying to tell us…Kind regards, and yours with the warm but actually thoughtfully and purposefully swimming frogs….

  3. Franco says:
    April 14, 2006 at 13:46

    This article is just wrong on so many levels. To put it simply, the “Rich” are not a conniving group on some “team” out to get the “poor.” %90 of millionairs in the US made their money themselves. They earned it by adding value to the economy.People keep talking about economic entitlements as good things, so I wonder if they’ve ever done any research on the topic other than watching CNN or reading the “Blog-O-Sphere.” (Great way to keep informed guys.)Tying the economic interests of a population to the government a la NEW DEAL, was first thought up by OTTO VON BISMARK of Prussia. The purpose? Not to help people, but to avoid the population overthrowing the government. If your pension comes from the government, would you join the communists and try to overthrow it? Neither would I. Otto had just united several states into one, and wanted to keep them in line. Sound familiar USA?Later, in the face of a great depression caused not by wall street, but by faulty monetary policy on the part of US regulators, and extended by the new deal, the US government, terrified of being taken over by communists, instituted social security and myriad other social programs. Not to help the poor, but to avoid the chance that communism would take hold here. (please remember, that around this time, Russia had just experienced the first communist revolution and stupid intellectuals and artists everywhere were jazzed about the philosophy. Until the Soviet Union collapsed, people took Marx’s silly ideas very seriously.)If you really want to eradicate poverty and “SAVE THE WORLD,” the solution is to tie our economic interests not to the government, but to the economy. Put the rich to work FOR the poor. This way everyone will have a vested interested in healthy economic growth and the improvements in quality of life that comes with it.I hope you guys can see the connection there. And if you can’t, well, I’m sorry for you.

  4. Wissbegieriger says:
    April 14, 2006 at 16:55

    Oh my. Well, the mention of artists and writers, Franco, was for what they can help us recognise about the complex motives and interests of each person. Thus to understand why no one idea or plan or system by itself can be ‘the right one’.Kind regards…

  5. Dave Pollard says:
    April 14, 2006 at 21:45

    Wissbegieriger, Franco: Perhaps language is an issue here, but I can’t even fathom what your sweeping dismissals of my arguments are trying to say. If you want to criticize my points, please at least try to be coherent. There are lots of head-in-the-sand blogs out there that proclaim that the market is perfect, that trickle-down economics works and that government regulation is always evil, that I’m sure would be more to your liking. But please spare us the naive libertarian mythology. And if you’re really suggesting the New Deal was a bad idea, I have to wonder what you’ve been smoking, or if you’ve ever read a history book.

  6. Anya says:
    April 15, 2006 at 00:43

    I came to you from the reblog link. Very stimulating post… I’m in the middle of a radical “getting rid of stuff” phase (even before this I owned much less than the average american) and I love to see other people making arguments for simplifying and spending less. Something that has really helped me is freecycle.org (where you can give away things you no longer want/need).

  7. Wissbegieriger says:
    April 15, 2006 at 07:50

    Dave, I am very far from libertarian thinking, hence the reply to Franco. But I do find it very hard to see the romantic-revolutionary nature of your own writing as healthy. The occasional outbursts as the one I have not forgotten against the Chinese just show one of the real surfaces when we encourage acting directly out of dismay and fear. Our challenge is not to refute the financial community – that is just standing in front of a train. I think we need to accept that even their mono-mania has caused to emerge beneficial side-effects, as in China, India, Eastern Europe, and Southeast Asia, where persons live better than decades of aid and politics had brought them, and yes, stipulating to all the atrocities you can dig up — remember even the recent past however. What then for ‘us’, as you clearly concern? Why can’t many of the ideas which you are attracted to be put to use in a positive way, building constantly beside what the money consciousness feels driven to do, and thus as appropriate transforming this? Yes, it is a deliberately open question…

  8. Franco says:
    April 15, 2006 at 10:46

    Dave,The underlying assumptions of your article are more troublesome than the points themselves.By assuming a relationship of win- lose between wealthy interests and the “rest of us,” it fails to consider how this natural tendency of the ambitious can be redirected to help everyone in a win-win way.If we assume, as economists do, that the market is a system of wealth distribution, with price being the primary communication method, then, in a relatively free (compared to the rest of the world) market like the US’s, the more expensive things tend to have more value to the people who buy them.It’s in everyone’s best interest for the economy to expand. In this context, the main difference between right and left in this country, is how much to redistribute back to those who didn’t directly earn it.So if you tie wealth redistribution to the growth of government, like the new deal and the left historically have, you create an unnatural tension between the rich, who want free markets, and the poor, who want higher taxes, market distortions, and other political tools that give them advantages. The poor push for big government, so they can get richer, and the rich push for small gov., so they can get richer. Instead of working against a growing free market economy, if wealth redistribution was done automatically and amounts the poor were paid directly were tied directly to the growth of the economy, all the forces would align for sustained growth. The poor would want less government, less corporate corruption, less war, etc. cause all that’s bad for the economy, and would decrease their weekly piece of the pie. This may sound shallow to some. But long term, it would mean better and cheaper health care, lower infant mortality, less racism, and an eradication of poverty. There’s nothing shallow about that.In the short term, my recommendation for you, is next time you’re about to invest a good chunk of your time on an article like this, go out and have some fun, play with a jack russel terrier, or get some sun. Then see if you still feel like writing it.Franco

  9. etbnc says:
    April 15, 2006 at 10:57

    Win-win certainly sounds good. In my experience, most models are wrong, but some are useful. It seems to me it might be useful to explore the assumptions that underly “economic growth”.

  11. Wissbegieriger says:
    April 15, 2006 at 13:18

    I think he’s trying to wish us Happy Easter, which is surely better than arguing absolutes. Absolutes being patterns that accountants, financiers, or managers believe solely in. Happy Easter to you, Dave. Thanks for the shaggy dog story, Franco – a good one, especially on the lawn. Cheers to etbnc, Anya, and communicatrix.Kind regards

  12. Slawek Rogulski says:
    April 18, 2006 at 03:39

    Hello Dave and Dave’s readers.I wonder what is the minimum size of a self-sustaining community such as the one you describe. I realise that the actual number will depend on a number of factors, but perhaps there has been some study or someone has given some thought to this. Is it a case of a Noah’s arc that we list all the essential occupations and take one of each then add a little on top?And also, I wonder abou the impending great depression that you write about. Yes some of the factors are similar to those before the last depression but there are others that are different. Does it matter that back then the world was about industry and now it is much less so and more about knowledge, information and other non-tangibles? I agree that some indicators are pointing to a bubble filled with greed that will have to correct. I still want to remain optimistic and so I am trying to see the possibility at least of a way out.

  13. Toma says:
    April 20, 2006 at 02:59

    Dave,Your article reminds me of a scene from a 1992 movie “Sneakers”, in particular, a conversation between Robert Redford’s character and Ben Kingsely’s in a protected server room where they talk about how you can crash a bank…cause people to lose faith in their bank, they withdraw their money, bank collapses. The idea that we should all become more self-sustaining is in my humble opinion a bit extreme, in that there are a lot of factors into what is truly required to become completely independent of not only corporations but government as well. Not everyone can own land, farm it, generate their own electricity so they can read your blog, provide themselves oil independent transportation that doesn’t leave them limited to how far their horse can take them, or their hydrogen fuel-celled motorcycle can get them (of course learning how the hydrogen fuel-cell system works so that when the reaction of separating water into hydrogen and oxygen halts they can fix it). Why not discuss the possibility of reinstating publicly allocated corporate charters that the robber barons you referred to fought so cleverly to eliminate? Get corporations truly accountable to the public, and not “public” in name only. Give the people the right to pull a corporate charter when a company has made it clear that they serve their own interests and not any one “public” (See Charles Derber’s Corporate Nation for a more eloquent, yet long winded arguments for this). While I’m fairly convinced that the current administration is pursuing foreign policy agendas that give your article more meaning, the idea of a unified affluent community that is hedging their bets to create further separation from the poor while shifting the “risk” to them simultaneously in some malicious sinister theme is a little conspiracy theorist, even for a general skeptic as myself. Advancements in alternative fuels and technology constantly threaten to reshape the financial landscape (for the better in my opinion) and to envoke a redistribution of wealth from which anyone could benefit, e.g. hydrogen fuel cell research (if better delivery methods can be found), biodiesel research and other renewable energy sources can have a significant impact on world economies.All of this said, you do bring up points that should be considered (effects of fragile economies and who really suffers upon their collapse), and it’s always healthy to keep the public eye open…perhaps a less dooms-day, FUD filled dialogue could be more useful?Be well,Toma

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