Understand the meltdown? Me neither.

Okay, I’ve been trying to figure out what the Hell is going on with the economy.
This is not an easy task for me to get my head around because I’ve never been much interested in it and I have the net worth to prove it.
But here’s a bit of irony for you. It turns out that a lot of people, smart people, people who are interested in that stuff don’t have much higher net worth than I do.

It turns out that my “investments” in books, compact discs (written out so as not to be confused with the other kind of CD’s), DVD’s and baseball cards (ones that don’t even have pictures) have put me on the same rung of the economic ladder as people who invested in the other kind of CD’s, banks, insurance companies, mutual funds, hedge funds and stocks.
So what have we learned? Not much.

While I’ve still got my music, movies, books and toys we’re both pretty much screwed at this point.
There’s no money, jobs are disappearing in wholesale lots and Bernie Madoff’s been taking money out of the blind man’s cup while stealing his pencils.

Most of us have been willing partners in this to some extent or another.
I’ve never been one to look under the hood of the car to see how the whole thing works.
I know where to put the gasoline in, where the key goes to start the thing and as long as it gets me where I want to go and the radio/cd player works I don’t much care about any of the other details.
Would it be better for all concerned if I knew how the damn thing worked?
Maybe…but I trust the marketplace to limit the number of lemons available to me and let it go at that.

I think most of us are that way about our investments too.
We don’t really care how they make money for us we’re just happy that our little nest egg gets bigger each year so that we can eventually have that dream retirement at age (fill in the blank here_____) and coast through our golden years.

For some the first step on that ladder is a house. Owning your own house in America is pretty basic. As a matter of fact we rarely refer to it as owning a house.
We call it “owning your own home.” That’s a significant difference, right there.
Because if you own a house it’s just a building, but if you own your own home you’ve done something for your family and become a part of a community.
If you rent you’re a transient and some sort of different, lower class, not quite there yet, kind of person. We rent.

Over the last 15 years I can’t begin to tell you how many times I’ve heard some variation of, “you know for what you’re paying in rent you could buy a house.”
Well yeah, I probably could have bought a house but I also knew that it was unlikely that I’d be able to pay a mortgage, do the upkeep, pay the taxes and learn all the do-it-yourself skills that you need to have to own a house.
In short I wouldn’t be dumb enough to do business with anyone dumb enough to give me a mortgage.

Turns out the people handing out mortgages to people like me-who thought they needed to own a house to have a home-weren’t as dumb as I thought.
They were too smart by half.

They didn’t care who got a mortgage because they weren’t going to be the ones collecting the payments.
They’d just bundle up a bunch of them and sell them off to someone else to collect on.
Then the next level did the same.
And another level.
And another level.

So these geniuses built a house of cards and now they’re all shocked (shocked!!!) that it’s collapsed.
They lied to themselves, to each other and to everyone else about what they were doing and apparently convinced all concerned that it was going to be fine.

The sad thing is they’re still doing it.
They’re taking tax-payer money to bail themselves out but they’re still convinced they are geniuses who have such great ways of making money that they don’t have to explain to any one how they do it.
Oh, and yes, they really are worth their multi-million dollar salaries and although they’ve driven their own companies, their own countries economies and the world economy a cliff they still deserve huge bonuses because...well don’t worry about that you wouldn’t understand it anyway.

And they’re right. I probably wouldn’t understand it.

There's a whole breed of people I don't understand. I once worked for a guy who was, as near as I could tell, incapable of telling the truth.
We still refer to him with the description that, “Chris would lie about what he had for breakfast.” It was that basic with the guy.
There’s no reason to lie about it but it was the only way he could say anything. He HAD to lie, or not speak at all.
Now that I’ve learned to spot them I try to avoid people like that. I just don’t understand how they live that way.

I’m not one of them but I bet there are people out there who do understand how to make money and who can tell the difference between something that’s a real investment and something that’s the same kind of bullshit we’ve been getting from Wall Street over the last 20 or 30 years. I’m sure there’s money to be made by lending people money and doing the other things that people in the world of finance do.
But I’ll still feel better about an economy that produces something-goods, services, ideas-and makes it’s money by doing that than I do about an economy that makes it’s money by reaching into the next guy’s pocket.