My previous post got a lot of positive response, but one reader felt I talked lightly about the problem of poverty that is going to be dominating the lives of many more people in the West in the coming years than in previous ones. I should note that for the poor in Africa – this is one crisis that is hardly going to affect them.
For me the worldwide scale comes first. And by a worldwide scale this crisis is more than just a credit crunch: it is telling any one who didn’t know it yet that the time of Western domination (aka the USA are the most powerful country in the world) is over. Those who follow the economic news and pay attention have known for a while now that the West has actually been funded by the Chinese. When you hear ‘national debt’ or ‘national deficit’ what you should immediately think is ‘financed by the Chinese’. The Chinese are doing what people in Europe and the US were doing a century ago: saving. They still have a culture in which the consciousness of how to get rich is simple: you save. In other words: you spend less than you get in each month.
Unlike what they told us last year: that’s the kind of Calvinistic attitude that made the rich countries rich. I don’t think it’s a coincidence that the current crisis comes just a year after the Dutch news reported that the Dutch had passed the point where they were loaning more than they were saving (mortgages included). I also don’t think it’s a coincidence that the current crisis comes in precisely the year that if economic growth had continued, oil production and oil usage were no longer in tandem. I saw a nice graph some time ago made by some US department. It had a line going up for oil use, and a line going up for oil production, but the one on the production side was totally fictitious. There was no real life basis for that projection, because actually oil production isn’t going to grow – within a decade or two oil production will be a trickle of what it is now (though of course the current crisis may postpone that point by five years or so).
So what are the poor supposed to do?
I was talking to my grandmother the other day. She lived through the 1930’s. She said her parents (who were factory workers) were always glad to have made it. She comes from a family of 9 kids (yes nine) and is the youngest of the bunch. Her parents managed to send the youngest three to college. Even back then the issue wasn’t so much paying for college, but not having an income to help support the rest of the family. Which says something about the Dutch educational system. If this crisis is going to be as bad as the 1930’s, my grandmother will have come full circle – though whatever happens, she is still one of those who will be making it.
Her parents also said that the rich were the ones in trouble. Only if you have a house can it be taken away from you. Only if you do invest in stock do falling stock markets affect you. The upside of poverty is that you are used to your situation, and you’ve got nothing left to loose.
Of course the new poor aren’t so happy. They are used to all the luxuries that in the West we still call normal: flat screen TV’s, i-pods, lots of clothes etc. But they can no longer find a bank to loan them the money to buy those things. Which really means the banks have gotten their sanity back.
But what are the poor supposed to do? Well, those with jobs should just do their jobs. (so should the better off, obviously). Those with jobs are the ones that, as long as they keep their jobs, are going to feel the recession the least. An uncle of mine works in a factory baking apple pies. That’s not a luxury item, people are going to keep on eating pies. So he is likely to keep his job, even though right now his factory is not actually making pies: the stocks are full. But with less people vacationing abroad, this summer they will be eating apple pie with coffee in some bar on the Dutch countryside.
The issue with poverty is that there are so few places to go. I think it’s one of the reasons why poor people are often the more generous. If you can easily see what you’ve got, you can also easily give a bit to someone who needs it more.
Unfortunately, poverty also leads to crime. Poverty leads to teen pregnancy. Poverty leads to disease. Poverty in a rich environment leads to a lot of unhappiness. I think it’s psychologically better to be poor among poor people never realizing what riches are possible. That way you don’t get to be jealous of what you don’t have.
We’ve been building our economy on greed – and the poor are the ones closest to the fact of the matter: greed is not actually something that will make you happy.
I found myself writing in response to someone’s blog post ‘the only guarantee for happiness is to be content with what you’ve got’. This is why people into The Secret talk about gratitude so much. I have talked and read about this subject for years. And people who hear that have always responded with something like ‘you are just saying people should not have ambition, that they should not dream about a better future – but how are they going to get out of bad circumstances if they don’t dream?’
There is something to that objection. But it does suppose that we are dependent on our circumstances for our happiness. Ambition is probably necessary to get ahead in this world. But it is no guarantee for happiness or even success.
So what should the poor do? I don’t know that I’m the right person to give them advice. I have bread on the table, a roof over my head etc. I don’t feel myself to be poor, though my income is certainly not high (so I’m going to be applying for a part time job soon). I have parents who aren’t among the richest rich in this world, but who do have a decent amount of money put away and not in any stock market.
But perhaps it will do poor people, people who have recently lost everything, some good to be reminded that ultimately happiness is not dependent on stuff. That shopping is not actually a good way to deal with problems. That it is better to be poor and out of debt, than living in the illusion of wealth with debt.
For more concrete advice I’d direct you to Suze Orman – you know, the financial adviser who has been telling people how to get out of debt on the Oprah show for years now. Those that listened then are in better shape now.