Friday, January 14, 2005

Are we too rich?

I've been wondering about this a lot lately. I don't really enjoy working, and sometimes I try to think about why I do it. I mean, I enjoy my job inasmuch as it's still a job, and I know that I do it for the paycheck. But I'm living way over the survival level.
I was thinking about my grandparents and great-grandparents and how they worked. It wasn't an option for them. They were born, grew up, and went to work to support the family. Otherwise they would die. There was no talk about work/life balance. They did it because they had to. Do I have to? Standards of living have increased since then, that's for sure. But if I wanted to live the lifestyle they lived in say, the 1940's, I certainly wouldn't have to work terribly hard. To have one small black and white TV without cable; one car without leather, power windows, fuel injection, or airbags; a 3 bedroom, 1 bathroom bungalow in the suburbs; health care that couldn't protect against the chicken pox, much less against polio or cancer.
But I have more stuff, and I like the stuff. And companies work very hard to make sure I buy even more stuff. So here's my problem: we're losing ground to emerging economies like China and to the new superpower of Europe. We're in a situation much like the one we were in during the 70's and 80's, when American manufacturing, lulled by 30 years of world dominance (due to monopoly status), was toppled by the Japanese and brought to a crisis. You remember that time - maybe you just saw the pictures - American cities in ruin, without enough money to clean up their subways or streets. Small towns in Pennsylvania and Ohio practically deserted. We reclaimed our cities in the 1990s, which not coincidentally saw the longest period of sustained growth in peacetime. So what's happening now?
We're lulled into malaise because our money (the dollar) has been the only dominent currency in the world for the past hundred years. Well, ever. And because we've been the world's largest consumer for the past 60 at least. But that's changing. The EU has their own currency, and we're finding that the competition is not treating us kindly. People worldwide choose the Euro now that they have a choice. The Federal Reserve ( estimates that two-thirds of all dollars are outside the United States. What would happen if those businesses and countries and people traded it in for the Euro? Certainly Europe isn't running deficits as scary as ours.
We are also not the world's largest consumer any longer (although not for lack of trying). China is surpassing us and guess what? The rest of the world isn't catering to us any more because they don't have to. We've squandered our goodwill when we had monopoly status. Now we're being voted off the island.
What do you think?

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