Friday, October 10, 2008


I was sitting in my office yesterday afternoon. I'd just finished sending one of the partners an e-mail suggesting how we might save one of the clients whose return I'd just reviewed about $12K in taxes, and I decided to take a quick look at Yahoo Finance. I saw that the Dow was down about another 7%, and I said to myself, "Huh." And then I moved on to reviewing another tax return because it needed to be done.

My apparent lack of concern about the fact that my retirement accounts are down by more than a third (or they were: now it's more like forty percent) reveals both the good and bad aspects of my character. This past weekend, while sitting at dinner at a wedding, someone I'd only just met told me that I must be a great comfort to my clients because I project a very clear air of calmness. I like to think that's true, but the flip side (There is always a flip side. Anything you like about someone carries within it the seed of something you won't like. Similarly, anything you deplore has a plus side.) is that I often come across as apathetic. It is possible for me to be very animated, but it usually takes something a lot closer to my heart than money. If something pleases or displeases one of my children, for example, my reaction is often stronger than theirs. A discussion about food or music will often banish my placid demeanor. And, really, a discussion of any topic that truly engages my intellect is the best way to engage me. (It is one of my great disappointments with the Internet, as with real life, that true intellectualism is such a rare thing, but that is both a discussion for another time and a problem that is unlikely to yield to any form of attack. Alas.) And I'm pretty sure that there's one other way to really get me worked up, body and soul, but I can't remember what it is at the moment. Perhaps if you read some of the other entries on my blog, you'll get an inkling.

But money? Not so much. That wasn't always the case. The people who have to worry the most about money are the ones who don't have any, and back when I was going through my divorce, I spent an awful lot of time worrying about all the money that I didn't have. But these days I'm more comfortable and secure. Besides, when you've been through a vicious divorce with a custody battle, you learn to focus on what's important and ignore things that matter less. And things that you can't do anything about. I'm pretty sure that the market didn't fall another three or four percent today just because I failed to worry about it enough. And if I'm wrong about that, I really think it's incumbent upon either Secretary Paulson or Chairman Bernanke to call me and let me know. (Or, hey, you're both fit and successful older men, and you both spend a fair amount of time in DC, and you're probably both pretty tense right about now, so just give me a call, and I'll give you some lessons in how to adopt a more submissive attitude while you're taking it. I'm sure that'll come in handy in your dealings with Congress.) Until I hear otherwise, though, I'm just going to keep on working on my tax returns.

But while I'm not going to panic, I certainly don't want to minimize the mess we're all in here. The financial crisis is affecting some people (bankers, financial executives, stockbrokers) more quickly than others, but sooner or later (and probably sooner than we all think), it's going to start affecting everyone. I'm not especially distressed that my retirement accounts are all down by about [Who can keep track, really? They've probably lost another few percent while I've been typing this.], in part because I'm at least twenty years from wanting to get at that money. But if the financial markets don't recover soon, it's not a stretch to think that we'll be dealing with double-digit rates of unemployment. And that means a lot of pain for a lot of people.

None of this is particularly surprising to me. I'm certainly no economist, but for a long time I've had a definite sense that the economy we had didn't make sense. It comes down to a simple question for me: how many people do you know who do something that's truly essential? Maybe you all hang out primarily with ER doctors or farmers, but I don't. I reckon I know a lot of people who were essential to the continued smooth functioning of the service economy, but people that other people couldn't survive without? Very few of my acquaintances leap to mind. Put another way, over the last few years, there has been a great deal of wealth created without anything tangible to back it up. If you can create wealth out of nothing, it really can't be that hard to return it to nothing.

Like I said, the financial system and all that is not something I know much about, nor is it anything that I want to know much more about. It's clear to me that we live in a world of uncontrolled complexity, and my way of dealing with overwhelming and/or useless complexity is to look at the big picture and rely on general principles. In other words, not to deal with it at all. So rather than yammer on about a subject on which I'm inadequately informed (because, you know, nobody on the Internet ever does that), I think I'd prefer to spend some time looking at the silver linings of the end of life as we know it. Because, sure, we all may be digging worms in the dark before long, but every unpleasant situation carries the seeds of opportunity. Herewith, a few of the bright sides.

1. Terrific deals on travel to Iceland! Ok, sure, late fall and winter may not be the ideal time to visit Reykjavik (except if you're all about the nightlife), but while your strengthening dollar is still mighty weak any place they use those crazy Euros, it's a positive blockbuster against the Icelandic currency. I hear that pretty soon the Icelanders will have to return to their traditional industry of fishing, but that just means that primitive cruises will be as cheap as primitive hotel rooms. And if the krona is still in the toilet come next spring and summer, you'll be able to party all night long like it's 1999 for next to nothing. Besides, I like herring.

2. Cheap chic. After decades of glorified excess and relentless prostration at the altar of wealth, parsimony will be making a comeback. This is especially good news for b&c who has long been ahead of his time in elevating cheapness to an art form. Ok, I'm kidding a little bit (but not about b&c's cheapness), but I do think that when people stop idolizing Donald Trump and Paris Hilton, we'll all be a lot better off. Put another way -- out: The Real Housewives of Atlanta. In: The Real Bachelor Farmers of the Northern Plains. It's a healthy realignment of values that's long overdue.

3. Schadenfreude. You know how much you hated those hedge fund managers, but, at the same time, you couldn't help being at least a little bit envious of them? Well, envy no more. The people who used to be insufferable guys with enough money to pay for an army of ass kissers are now going to be insufferable guys on street corners, carrying signs saying "Will kiss ass for food." (Come to think of it, that's a sign that I should have been carrying for the last five years or so. But I digress.) Schadenfreude is an ugly emotion, of course, but, hell, meat is murder, and that never stopped me, either. Besides, soon I might not be able to afford meat, so I'm going to indulge in what's still plentiful and free: laughing at the once rich and powerful. If you still feel guilty about it, then I suggest you consider just how much guilt hedge fund managers used to feel about laughing at those less fortunate than they were.

Anyway, this is a topic that'll be on all of our minds for some time to come, I reckon. And if I were to approach it more seriously, I'd probably say something like: it's time to cut down on your spending; maybe you should think about building your emergency cash reserves from six months of expenses up to nine months or a year; plant a garden; it's not necessarily a bad time to consider a fundamental change (like, maybe, going entirely off the grid and starting or joining an order of the Brothers of Perpetual Extasis); recognize that material wealth is likely to become scarce and work on building your relationships and other non-material sources of satisfaction; and, as always, have another glass of wine and a lot more sex. Who knows whether there will even be a tomorrow? Better to go out with a bang than a whimper.


shantung said...

Tnwh: you know and understand the only things a person NEEDS to know about the financial system. And that many who understand the complexities far better than you or anyone else just plain forgot ignored or dismissed as old school thinking. They were morons but they had capital and now we're going to be paying for their ignorance / arrogance. But you're right it won't be entirely a bad thing and many good things - unexpected and surprising good things will be byproducts. I think all of it is not so much scary as fascinating to witness the suddenness with which people have adjusted their habits beliefs values in reaction to the financial situation. Thanks for your observations!

tornwordo said...

Spouse is like you. Can't be bothered to care. And I must concur with your statement on intellectualism.