Work From Home Jobs Dorking
Who Is The You In "And Another Fine Mess You Got Me Into?"
Amidst our annoyance over the latest economic mess, a more fundamental question needs to be asked; "What is our personal role in this affair and how can we prevent the next economic downturn from fundamentally affecting our lives?"
In conversations with a myriad of friends, numerous explanations emerge for the Recession of 2007-2009. From the right comes causes such as incompetent government, the extension of credit to those not capable of meeting their financial obligations, lobbyist money and influence subverting the proper processes and role of government, and so on. From the left the explanation focuses on unbridled greed, capitalism gone wild, big money subverting government, etc. What everyone seems to want to focus on is what "they" did to undermine and corrupt our system of government and the economy, not what we as individuals have been doing that helped contribute to the situation.
Personal responsibility is not at play here, the saying goes, but rather external forces we have little or no control over. "The entire market crashed. You can't blame that on two people, " said Aram Hong, a member of the jury that acquitted Ralph Cioffi and Matthew Tannin, two former Bear Stearns hedge-fund managers, on charges of securities fraud...stemming from the 2008 financial crisis ( and the collapse of the $1.6 billion fund they managed-Time Magazine, November 23, 2009). The fact that these two Bear Stearns managers exchanged emails commenting on the pending collapse of the sub-prime market while at the same time reassuring their clients that all was well reminds me of two other men, one at the heart of the collapse, the other brought down by his greed, lawlessness and sociopathic behavior.The first, Dick Fuld, boss of now defunct Lehman brothers, publicly denied his firm's troubles and in fact demanded that his colleagues not even consider selling their stock in the firm for, if they did, the wrath of God (or at least Dick Fuld) would be upon them. Dick followed his own dictates, the firm collapsed, and his and others fortunes went up in smoke. The "Gorilla of Wall Street" at the heart of the sub-prime mess believed his own storyline and fell with it, the height of what the ancients called hubris (the claim that man knew better than the gods).
One year later, the real casualty of Lehman's collapse has been the fate of the bank's former rank and file: secretaries, event planners, and operations staffers. Many of them remain out of work and were not among the roughly 12, 500 Lehman employees who went to Barclays or Nomura Holdings when the two companies purchased divisions of Lehman Brothers following its bankruptcy. "Nobody wants to be in a situation where you work for 25 years and your retirement fund goes to hell because of other people's decisions, " says David Ambinder, a former senior vice president of the bank's support services who left Wall Street to start his own small business.
"Former Lehman executive assistant Stacey Lynn Kobell has yet to find another job, despite previous work in both finance and magazine publishing. The 42-year-old worked for Lehman for six years and had the prototypical life of a single professional in New York, earning $75, 000 and living in an apartment on the Upper East Side.
Like many of her colleagues, her severance has run out. She has maxed out her credit cards. To earn extra money, she buys cosmetics at discount stores and resells them on eBay for a few dollars' profit. "The support staff was hit the hardest because we're at the bottom of the rung, " she says. After years of planning meetings, booking trips to Asia, and organizing the life of her Lehman boss, she says she wishes her Lehman connections would help her land a job. "I'm angry because nobody [from Lehman has done] anything for me, " she says." (Newsweek, September 14, 2009)
The second, Bernie Madoff, needs no introduction. The damage he has done to countless lives, nonprofit foundations, and communities is without parallel. His lying and cheating behavior did not contribute to the 2008 recession (in fact, it was what finally brought him down) but he took advantage over the years of others' culpability and their desire to believe in the impossible as his claimed returns defied all rational understanding of the market. Those victims included Tremont Group Holdings and Fairfield Greenwich Advisors, both of whom will lose billions of their investors' money, countless banks and insurance companies from throughout the world including Bank Medici (so much for the Midas touch) and Bank Santader (one of the best run banks in Europe), Steven Spielberg's private charitable foundation, Mortimer B. Zueckerman's charitable remainder trust (he owns the Daily News and U.S. News & World Report), Yeshiva University, U.S. Senator Frank Lautenberg, Norman Braman (owner of the Philadelphia Eagles), Fire and Police Pension Association of Colorado, Henry Kaufman (former Salomon Brothers chief economist), New York University, The Diocese of St. Thomas (endowment for youngsters at two Catholic elementary schools in St. Croix, the poorest of the U.S. Virgin Islands), Zsa Zsa Gabor (yes, she is still alive at 91years of age), and many more banks, insurance companies, hedge funds, professional investors and individuals such as Larry King, Sandy Koufax, etc. etc...shall I go on or is that enough?
And now Bernie wants understanding and forgiveness. After sixteen years of SEC failure to uncover his scam, it is their fault for not stopping him. "I wish they caught me six years ago, eight years ago, " he told representatives of the Securities and Exchange Commission (Time Magazine, November 16, 2009). Blame the others for not stopping him, for after all, he is only human.
What can be done in a world of con artists and over-exuberant corporate leaders that believe in their own delusions? How can we defend ourselves against the next big crash? Do we just hope for the best and look for someone else that we can trust to lead us to financial security? What about the numbers? Gross domestic product (GDP) was down for three consecutive quarters so we must be in a recession. Then it goes up in quarter three of 2009 so it must be ending. Have we found that these swings in statistical GDP mirror our own feelings about our financial condition? If not, why?
As with all things outside our personal control (big government, big business, big unions, what the hedge fund Long Term Capital Management called a Perfect Storm - or others may call an act of God ) we can only come up with explanations that try and make sense out of a very complex world. Whether we rely on expert analysis or magical beliefs, they are all reflective of an attempt to control the uncontrollable. And when we then extrapolate from this to a sense that we can control our destiny through manipulation of data to beat the markets (current speculative banking and hedge fund practices to name a few ways), we again look outside ourselves for guidance and assurance that by the nature of the human condition is just not available.
We as American's have a belief in ourselves underpinned by a history of economic, political and military successes that have ranged over more than two hundred years. We tamed the West, built the largest economy in the world, and control a vast military-industrial complex the likes of which has never before existed. We have done this by harnessing the manpower, inspiration, entrepreneurial spirit and raw resources of a continent. But as our society and economy have become more complex, we have looked more and more to others leading our corporations and government to give us the answers. Being human, though, they will fail us at times, which is why we must look to ourselves for the fundamental security we crave in our daily lives.
How can we do this when millions are losing their jobs, pension funds are disappearing, health care costs are skyrocketing, and the traditional security of an extended family is long gone? Part of the answer is to reconnect with our personal values, our family and our community. I recently received a friend's email that referred to the following article he had just read:
Merrill Lynch and Morgan Stanley Smith Barney go toe-to-toe for top brokers
The broker recruiting wars are heating up, with wirehouses jacking up their offers to new heights to lure more representatives in 2010.
Morgan Stanley Smith Barney LLC and Merrill Lynch & Co. Inc.'s Global Wealth Management unit are going toe-to-toe by offering top reps a recruiting package of up to 330% of annual production.
Those levels are the highest ever offered, sources said.
He then asked the straightforward question, " Why do you even deal with these guys? Service, advice or expertise has nothing to do with how you are paid. It is all about your annual production....!"
My response to him was as follows: I work with an advisor that follows my directions and doesn't try to sell me things he knows I don't want. Those directions are guided by my fundamental values that are simply stated and followed: Live within my means, don't borrow to consume, eliminate all debt, accumulate savings in an insured account and finally, don't delude myself into thinking I can make extraordinary returns and beat the odds--in other words, don't be a pig.
All of the above seem straightforward, but they fly against the aggressive salesmanship and hucksterism we are constantly inundated with. In fact, for many, my aphorisms are just plain old-fashioned and who wants to be seen as a fuddy-duddy.
Sociologists have observed an interesting phenomena when examining the spending behavior of the two extremes of wealth: the very poor and the very rich. Both spend as if there is no tomorrow, the wealthy because they can, the poor because they see no hope for the future so why save? Of course, this is an oversimplification and as government statistics have shown, America is a society in which there is greater movement between different classes of wealth (referred to as quintiles) than in any other country. The poor are not necessarily stuck at the bottom rung, and as so many at the top that have either made or inherited their wealth can attest, getting to the top is no guarantee they will stay there.
What, though, of the middle class, the largest economic sector in our country? Is it possible to live within one's means, to hold back from borrowing for the purpose of consumption, and to eliminate all debt? The first step in answering these questions is to look at how we live our lives and the underlying values they reflect.
Nancy Gibbs writes in Time Magazine, November 23, 2009, that there is an interesting paradox between our happiness quotient and the current recession. "I'm struck by how many people tell pollsters that the voluntary downshifting and down-sizing of the past year have come as a kind of relief...Maybe we've lowered our standards. But we already knew that money can buy only comfort, not contentment; happiness correlates much more closely with our causes and connections than with our net worth. Americans may have less money-charitable giving in current dollars dropped for the first time in 20 years in 2008-but about a million more people volunteered their time to a cause...Is it a coincidence that eight of the 10 happiest states in the country (according to the Gallup-Healthways Well-Being Index) also rank in the top 10 for volunteering?"
No one denies the heartache and humiliation that comes with being laid off from a job, seeing your company go bust, or losing your life savings in a bad investment. What Nancy is pointing to, though, is the importance of relationships and altruism, both of which have little to do with our economic life but a lot to do with our psychological and emotional well being.
In another of her essays, (Time Magazine, November 9, 2009), Nancy Gibbs writes about modesty, another critical element in the interplay between personal values and a complex world. "Modesty means admitting the possibility of error, subsuming the self for the good of the whole, remaining open to surprise and the gifts that only failure can bring. There are many ways to practice it. Try taking up golf...or raising a teenager. Modesty in private life is attractive, but in public life it is essential, especially now, when those who immodestly claimed to Know It All have Wiped Us Out. The problems we face are too fierce to accommodate arrogance. Humility leaves room for complexity, honors honest dissent, welcomes the outlandish idea that sweeps past ideology and feeds invention...the odds are much better if we come to the table assuming we don't already have all the answers."
Where am I going with all this talk of humility, happiness in the face of an economic recession, and the ephemeral nature of our economic position in life? As I told my friend in response to his email, personal well being is in our hands and not that of others. When we look outside ourselves for economic salvation, we are not only trusting that they will care for us better than we can care for ourselves, but we also are buying into an idea that has grown immeasurably over the decades; trust others because they are the experts and know best what is good for us.
This, of course, has led to tragic results and anguish for millions. Looking outside of ourselves for happiness and fulfillment is a journey that rarely leads to a happy ending. Rather, it is the feeling we get from being with friends and family, helping our community and the rich reward of appreciation and respect that follows, marching to our own drummer rather than that of the visually rich advertisement that says "buy me and you will be happy."
Finance guru Dave Ramsey (Lead Us Not Into Debt, The Atlantic, December 2009) built a financial advice empire on the simple nostrum that you can live within your means. Simply put, his advice is as follows: cut up your debit and credit cards, give 10 percent of your income to charity (evangelical churches are one of his biggest distribution networks), save 15 percent for retirement, build up a sizeable emergency stash and college fund for your kids, and above all, stop borrowing money. In fact, Ramsey's devotees pay for everything they can with cash and the rest with checks drawn on an account with a positive balance (forget overdraw protection with all its add-on costs!
The psychology of Ramsey's advice is quite simple; when you have to pay cash for something, you think twice about buying it. "When you pay for something with a credit card, or even a debit card, you can easily spend a few extra dollars here and there. But...if you have to actually hand over some of your dwindling cash supply (from a series of envelopes labeled food, clothing, gas, and so on you replenish after each pay check), you tend to ponder every purchase. That impulsive latte' buy becomes a little less enjoyable."
One recent survey (CareerBuilder) found that six of every 10 workers lived always or usually from pay check to pay check. Even affluent, highly educated people with salaries in excess of $100, 000 per year reported, three out of ten, that they spend their money as fast as they make it. Education, in fact, may contribute to this as one of my friends told me, "I don't worry about how much I spend as I have a professional degree that affords me an excellent living."
And what about buying a home? "Houses were (and are) being priced, not on some notion of intrinsic value, but on the maximum payment that likely buyers could afford (to be in the 'right' school district)." However, most school districts are reasonably well run and as research has shown, a child's educational success is based more on parental expectations and a disciplined approach to homework than the differences between school districts.
Ramsey is clear in his program of getting out of and staying out of debt. The only exception to no debt, according to Ramsey, is the mortgage on your home and that should be one that has a predictable cost over a reasonable period of time; in other words, a fifteen year, fixed interest loan. If you can't afford to buy a particular house with a 20% down payment and a 15 year fixed interest mortgage, then look elsewhere.
Dave Ramsey has little patience with (the argument that you must go into debt for your child's education)...no school, he avers, is so much better than the local college (or K-12 local school district) that it's worth gambling with your financial future...There's some evidence that he's right about this; a study by the economists Stacy Berg Dale and Alan Krueger famously found that students who were accepted by schools with high average SAT scores, but chose to go somewhere else, earn about the same as those who actually attend the higher-ranked school (there is evidence to the contrary which is why people would rather stretch and spend the money than gamble with their child's financial future).
Which gets me back to the simple dictums I shared with my friend: live within your means, don't borrow for consumption, eliminate all debt in your life and invest your savings conservatively. The first you can do by spending less than you earn, the second through self-control and making decisions based on true needs rather than ephemeral wants, the third can be a goal you work towards one small step at a time, and the forth through a recognition that for most of us our choice of investments should focus on preservation of capital first, return on capital second.
Michael Pinto
November 28, 2009
By michael pinto - successful retired entrepreneur, teacher, writer, full time volunteer as board chairman for several nonprofit foundations including Institute for nonprofit education and research at the University of San Die...
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