ARMs were supposed to be a way to realize the American dream of home
ownership. But, like much else in American life, that dream too has been
hollowed out.
For two reasons. The first is "declining marginal utility." The more you
have of something, the less each additional unit is worth to you. A little
defense is precious. But add more soldiers, weapons...more office workers,
consultants, crony contractors and pension programs, the less real defense
you get for your dime. And eventually, if you spend enough, you get a
negative return...as we have in the Middle East today. There, once, only a
few extremists hated us. Now, a couple of hundred thousand soldiers and
two wars later, whole countries and civilizations hate us. And, we are
less secure than ever. The marginal utility of defense spending has fallen
below zero.
The second reason for the hollowing of America is that the horde of
parasites aging institutions, picks up managers, hangers-on, hustlers,
opportunists - who pursue their own agendas, and subvert their clients'
goals.
And so it is with the American home. People fantasize about the peace of
mind, the security, and the independence they will get from owning their
own piece of earth. Even if things go against them, they tell themselves
wistfully, at least they will have a place to rest their heads...a castle
of their own where they will be king, emperor, tyrant, and elected
chief-of-state all at once. Home sweet home.
But look what they actually get. Peace of mind? Security? Independence?
Only if they are comatose enough not to notice the incessant barrage of
property taxes, zoning laws, building codes, and mortgage payments that
rains down on them from the first day they become owners. In fact, with
today's mortgages, they never actually own their house - it owns them!
The kings of today's castles are not independent; they're chained to the
grindstone of work to meet mortgage payments. And they're not secure: miss
a payment, and their houses are snatched from them. They have no peace of
mind; the dream of free and clear ownership swings perpetually just beyond
their grasp, like Tantalus's grapes. Our kings switch from one mortgage to
another like galley slaves trying out oars.
And well they know it. People may be slow to think, but they are fast
enough to feel. In surveys of American attitudes, pollsters have
discovered that people already have a vague feeling that they are not as
well off as their parents, and that they expect to be even less well off
in the future. Of course, social scientists and economists dismiss these
sentiments in favor of the numbers. Per capita consumption, they claim, is
way up over the last half century. People have two and a half times as
many cars and watch a lot more television. They earn more money. They have
about three times as much house per person and graduate from college more
often. They can now go into supermarkets and select from as many as 200
different kinds of breakfast cereal. How's that for a great country?
Thus the number crunchers prevaricate. But behind the dissembling numbers
are the sentiments that tell the truth. People feel worse off because
their real quality of life is falling. Real earnings - after inflation and
taxes - have been falling for the working stiff for the last 30 years.
Highway traffic moves more slowly. It's harder to find a parking place.
People spend more on education and health care - with less to show for it.
They work more hours than before, only to have more shopping malls than
high schools. They use vastly more energy than the rest of the denizens of
the planet and make more per hour, but they live in a way scarcely
better...and perhaps much worse.
All institutions age, decay, and collapse, we observe. Even the American
dream...
(From today's Daily Reckoning)
dailyreckoning.com |
