Owning something used to mean stability and opportunity. Equity stakes, like stock or one’s home, were the “key to success,” remember? The dream was passed on from one generation to the next.
Ownership
was also thought to be the conservative course.
No gambling here, possession was the least risky thing to
do. Manifest destiny was easily
encapsulated in one’s bounty of toys, hopefully paid for.
Indeed,
our country flourished during the post-war (WW2) period, as home ownership,
small business entrepreneurship, and stocks and bonds became part of a
ritualistic dossier everyone was expected to have. The government created and supported programs
for equity to flourish. We were also
encouraged to “own” our education, and to flow into capitalism well-armed and
financially flush. Carried to its
extreme, it was the right idea for the right time and the right confluence of
circumstances.
As
we witness now, however, this covenant became a recipe for near-calamitous
results. The strains on individuals,
households, and our financial institutions were impossible to forestall. Economic brinksmanship drove economies and families
into convulsions of panic and fear that spun “conservatism” into outright
“risk.”
What
once was a reward for economic success became a millstone around our
necks. Stock portfolios, which were
never intended to go straight up, all of a sudden depreciated, slowly at first
then more severely. Home values
decelerated from their never-ending upwards capital gains of decades prior. One’s income was no longer enough. Leverage un-leveraged. A tacit promise was broken.
Accompanying
this capital erosion came a psychological default. Investors looked around and discovered they
couldn’t afford all their “toys.”
Further, we were left to question whether it was all worth it; the
torture, the envy, the guilt.
As markets gyrated we felt our self-worth, as well as
our net worth, gyrate along with them.
As
long as the markets survived, so too would we.
We put more money to work, at greater leverage. Financial institutions cajoled us into more
synthesis, straw into gold. You were
less-than-ordinary if you didn’t participate.
And who wants only to be “ordinary?”
What is “rich?”
Who’s
to blame? Government bought into the
myth. So too did our institutions. Ownership, after all, was supposed to be
without risk. How did depreciation
happen?
I
maintain that the deal wasn’t a fair fight.
If
money is available we take it. If reward
is dangled in front of us we go for it.
It’s human nature. And yet, the
alchemy of turning tangible reward into mysterious losses is as old as the
swindle, itself. When we are faced with
a greed-driven opportunity, we typically lose. It’s simply a mater of evaluating the
choices. The house usually wins.
Entrepreneurship
and risk-taking is part of capitalism, we know that and accept it. Inventiveness and creativity are not only
wealth drivers, they are good for society.
But whomever controls the knowledge, can also mete out its rewards, in
parcels he or she sees fit.
We
should not try to mitigate the consequences of a free market, only to be
aware. But sometimes, below the fertile
fields, the consequences are intergenerational, hardly noticeable until
something bad happens generations later.
We
are all driven to succeed. What
distinguishes us from one another is how we define, and execute, the value and
meaning of “success.”
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