Straight talk on mutual funds, bonds, real estate, and annuities
Techniques for avoiding financial disasters
Tools to help readers track their debt and create a plan for staying out of it
Road maps to buying a home and saving for college and retirement
Order your copy today!
Today's Commentary: 10.24.04
The Next Four Years: One Financial Writer's Outlook
One thing is for sure. In a little over a week this nation will have cast their collective ballots for the presidency of this great land. Although I am confident that the outcome will not be decided for weeks after armies of lawyers take their litigious toll, once again, on the election process and the electoral college, an antiquated provision added by the founding fathers several centuries ago in a time when billions of campaign dollars, 527 groups and whoever had a bankroll large enough to enter the fray were nonexistent have their say. But whoever wins, the outcome will remain the same.
We are nation whose financial divide is growing as fast as our political one. The problem is, the financial one is non-discriminatory, crossing all ideologues with equal vigor. Because if you are not at the top, all you have left is the dream, the false hope that some day you will reside among the land of the truly fortunate, the truly wealthy, and the truly privileged.
Those dreams are the votes we cast. An America, whose economic strength can be found in ever decreasing pockets of status, is the America the next president will be inheriting. An America whose fabric has been fundamentally altered is such a way as to give the illusion that the high road is still possible for the average American to traverse.
The America I write about is on the verge of change so profound that it will be hardly noticeable. Its the old "Rock is Dead, Long Live Rock!" The change will be practically undetectable in the short term as one candidate will pursue a continued and misguided course while the other candidate will try and undo his predecessor's economic gaffs. But the changes have found firm rooting and will not easily be rectified.
In other words, the Jones's are in deep trouble and so are you.
You will begin to hear a good deal of commentary in the coming months about class and status if the current president gains re-election. There is good reason for that. Mr. Bush has sealed his place in the history books as the "Great Class Enabler" widening the chasm between those who have and those who do not in a misguided effort to stimulate the economy and jobs and achieve the agenda of playbacks for special interest support.
But this status and class divide is wearing on America's psyche and in Mr. Bush's America, this distance is working in his favor. Spreading the message that his opponent will change the economic landscape of this country should be welcomed with open arms at his presidentially approved rallies but it is oddly not. Author Alain de Botton writes in his latest book, ""Status Anxiety" of the "congenital uncertainty of our own value" that leads us to believe that we can rise economically through consumption, ambition and the overwhelming belief that we can succeed despite the odds. In the faces of those who believe the president is on the right track with his economic policies are the same ones who see status as the end all to be all, a grab for money, power, influence and ultimately the love that is supposedly part of the package.
Mr. Kerry's audiences look hopeful and worried that their barometer of true worth is off kilter somehow. Possessing all of the same generalities as the other parties members have, the supporters of the challenger seem to be attacking an America that appears outwardly to be better. Not just financially although the wealthy now control two-thirds of the cash and three fourths of the investments, but in terms of health and the ability to maintain themselves within their status. We envy them because they do not envy our misfortune. We were born below them and unless things change, so will our children.
When there is no remorse for giving the upper class an additional break or two under the guise that this will somehow benefit those in the dwindling middle, America, even those at the top should worry. They are after all the reason for any economic success according to the current administration's plan. Even the term upper class has taken on new meaning. No longer is it simply privilege but righteousness.
So either way, the near future of status and America unfolds as follows:
Housing will become less expensive as money gets more expensive. This unfortunate economic balancing will be largely due to the growing cost of keeping the short term interest rates too low for too long. Neither kind of loan exists in the same realm but the mere fact that they will involve a greatly devalued dollar as the cost basis of their worth will impact each equally.
Inflation will continue to rear its ugly head in hidden and excluded ways. With food and energy, according to the nation's top banker, creating volatility in the index that measures prices not counted and therefore not worried about, middle America will pay more for the basics of life. This acts as a tax on the future of this group.
Taxes will go up no matter who takes office. Mr. Bush will raise them directly targeting the middle class in the form of a consumption tax or by the name that rings with more politically harmony, Value Added Tax.
In some parallel universe - not the reality according to W., the constant pressure of the deficit will dismantle any perceived prosperity. Perhaps you were unaware of just how much the debt grows with each passing moment. Not a day passes that we fail to look overseas to borrow just shy of $2 billion. Our best customers may be growing weary of this debt and should that happen, and there is growing evidence that it has begun in earnest, we would find ourselves with a canceled credit card at the most inopportune time.
The Op-Ed page of the New York Times recently suggested that the generous tax cut give to you by the President was actually funded by the sale of debt to China. Drop them a note if only out of politeness.
Which could be why, included in the tax cut the President is running around lately touting as good for business, actually contains breaks for Chinese companies doing business with Home Depot.
Health care and the options available to the working poor will continue to dry up as the statistics for the wealthy continue to improve. Michael Marmot looks at social standing as the inherent guarantee of longer life and better health living it. In his book "The Status Syndrome", this epidemiologist from University College, London comments that social standing is paramount to health and longevity. And with those costs now very much out of the reach of the average citizen and economically crippling on those who attempt to purchase it, Health Savings Accounts will not provide much in the way of workable solutions or closing the widening gap. Money apparently can buy long life.
Jobs unfortunately have become more of a drudge, reminiscent of the days of feudal lords gone past. If some poor working soul should happen to peruse the business section of any national paper, the news about pension reevaluations, company officials decimating company stocks with greed and indictments, and the ghostly growth of the economy, they might just stay home. If they could afford to do so. No longer is the work we do day in and day out done to better ourselves. It is done to stay even.
Mr. Kerry will have to raise taxes as well. He will offer condolences for those who have fallen behind and further promises that the bill for such largess will not fall solely on the children at your dinner table or the grandchild on your knee.
The change in class in this country is forever altered. There is little likelihood that a bridge can be built to even the sides in the four short years Mr. Kerry has but the effort will be both noble and legendary and full of hope. On the faces of his supporters, it can be seen. On the faces of Mr. Bush's supporters, it has yet to be acknowledged.
Note from the Editor: Please Vote.
The Blue Money Report
Financial Commentary covering a wide range of topics concerning money, investing, and how it effects the average investor and their financial health.
It is the World of Money and Investing Explained.
Our Publication
If you are interested in providing your readers with our syndicated column, you can request it here
