I spent some time in the steam room of the Spokane Club, drinking a cold beer, on an autumn Saturday some 30 years ago. Four times a week, my best friend and I would lift weights at what was and is today a rather swanky athletic and social club. I went there because my company paid for the membership and it had a terrific weight room, not because I wanted to hobnob with Spokane’s rich and famous.
On that particular afternoon, I noticed the other men in the steam room. We were quite the crew: two lawyers, a life insurance salesman, a realtor, two stock brokers and, in my case, an investment writer (yes, I get the irony in my writing about this subject).
I commented to my best friend Mark that none of us were really contributing to building a better society — at least not in a way that could be easily measured. The Spokane Club was a world apart from the Calgary Petroleum Club, a place where my dad sometimes took me to when I was a kid.
Fifty years ago, the people at the Petroleum Club were mostly geologists, contractors, engineers, wildcatters and cattle ranchers. There were a handful of stock brokers and car dealers as well; but back then, they were the minority.
America Is One Big Service Center
For many years, I had an old diesel Mercedes-Benz. My friends used to tease me, saying it was so old that Heinrich Himmler had driven it. Sutherland Mercedes in Spokane was up the street from my office, so I took my car there to get the oil changed. There’s no question Mercedes-Benz makes a beautiful car, but I doubt its new $100,000 sedan is four times nicer than a new $25,000 Ford sedan.
One day, I was sitting in the nice showroom drinking cheap coffee and waiting for my oil change. A doctor I knew was car shopping with his trophy wife, who looked to be half his age. The salesman was selling them a big Mercedes that would be her car.
She was giddy at the prospect of getting it. Why wouldn’t she be? I doubt she had to contribute a nickel toward the black Autobahn-slayer which she was itching to show off to her South Hill society friends.
The salesman knew he had the doctor on the ropes so he told the couple: “You know, if you buy a new car from us, we will hand wash it for you free and have it ready in 15 minutes.”
“Hear that, dear: free car washes,” gushed the wife.
The thought crossed my mind to tell them that after they paid twice for the Benz what they would pay for a new Lincoln, the car washes really weren’t free. I remembered my old car was still up on the hoist and decided it was better to keep my big mouth shut.
Many studies have demonstrated that being poor will make you miserable, but being rich does not make you happy. At some level, society has always understood this. The ancient Greeks talked about the elusive notion of what made a good life. They called it “eudaimonia.” It’s the philosophy that happiness comes from work that helps others, not worldly possessions.
There is still a lot of money sloshing around in today’s economy. The professionals that bet on derivatives make six-figure and sometimes seven-figure salaries without really contributing anything productive other than leveraging other people’s money. I suspect that many of these professionals do it because they love the job and not solely because of the money.
Of course, you can’t tell that to the millions of people who line up to buy super lotto tickets each week hoping that one lucky number will grant them heaven on Earth. And for those who can’t beat the odds? Over the past decade, tens of millions of Americans have borrowed more money than they can afford to pay back. That has left a faltering economy which is impacting most people.
The Christian Science Monitor (CSM) reports that the standard of living for Americans has fallen further and more steeply over the past three years than at any time since the U.S. government began recording it five decades ago.
According to the CSM, the average individual now has $1,315 less in disposable income than he or she did three years ago at the onset of the Great Recession, even though President Barack Obama continues to proclaim the recession has ended. That means that an average person has less money.
More telling is that the misery index — which combines inflation and unemployment — has fallen almost back to where it was 30 years ago. That was after inflation had reached 13 percent and stocks had been going down for 16 years, a correction which eliminated two-thirds of the Dow Jones Industrial’s worth when accounting for inflation.
The remarkable turnaround that began in the early 1980s was because of the Reagan recovery and the tech revolution, which created millions of new jobs and trillions of dollars in new wealth in America. That turnaround was helped considerably by the fact that in real terms the price of petroleum fell by more than two-thirds in the 1980s.
This time around, we are not going to be so fortunate. The tech revolution that sent stock indexes soaring is spent, and there does not seem to be a Presidential candidate like Ronald Reagan on the horizon. Meanwhile, Federal government debt is more than 10 times larger than it was during Reagan’s first term.
Can Simpler Be Happier?
My grandparents took a wagon train pulled by horses from Oklahoma to Alberta a century ago. They were not chasing happiness. They were trying to build a life for themselves on “their” land during a period of abundant liberty. They were also intent on giving their children a better life. They lived through severe hardship in a tiny 12-by-12-foot home. Somehow, they survived the Dust Bowl and the Great Depression and they were able to raise three children and put them through college. They were industrious, content and, yes, even happy people.
There is a paradox, says bestselling author Raj Patel in his book, The Value of Nothing: Why Everything Costs So Much More Than We Think.
“After a certain point, more money doesn’t make us happier,” writes Patel. “Instead, we find ourselves on a hedonic treadmill, in which happiness is about matching our level of consumption with our peers, and when they do better and we don’t, even if we are better off in absolute terms, we are less happy.”
Happiness is a relative thing. Many people are convinced that German automobiles and Japanese electronics will help make them happy. When they find out that those things do not make them happy or, worse, that they lose the opportunity to acquire these things because they lose their jobs, a great many people feel cheated. This is the dark underbelly of today’s economic crisis: The ancestors of those who built a better world now have grandchildren and great-grandchildren that are angry over lost opulence.
Yours in good times and bad,
Editor, Myers’ Energy & Gold Report