I was having a discussion in comments with @dandays last night about the differences in costs like rents and fuel between the US and Finland, among other things like medicine and healthcare. Going on the average salary in Finland, Finns should be living in poverty - but are not. What I find interesting is that there seems to be quite a large difference in where people put their money, with Americans putting a lot more into consumables, while Finns are more likely to consume something to their home instead.
I think this might be due to America having a culture of consumption ingrained into it, whereas Finland (it is changing) has more of a culture of conservation. With 5% of the global population, the US consumes something like 30% of the world's resources, which is an indicator of just how consumption focused the US is. It is the largest economy by far which should give it buying power, but it also pays the most per capita for things like healthcare, but still can't manage to cover all citizens adequately, while most other first-world countries manage.
And from a first-world perspective, the US likely has the largest economic gaps between the rich and the poor, which is being put heavily in the spotlight now and can be witnessed as the problem spills onto the streets in various ways. But, it should be pretty obvious why there is such a gap, as to become rich (in general) requires supplying something that people are willing to pay for - consumer goods or services. In a culture that encourages consumption it is perhaps hard, not to make money and of course, once that money train is rolling, it can be used to increase wealth passively through investment vehicles that aren't open to the average person.
When consumers are driving wealth and the supplies can further extend that wealth via investment , there is always going to be an increasing gap between the top and the bottom, as for the top to make more money, they have to extract money from those below. What this means is that while there is a lot of cultural habit intertwined into this, the class gaps are driven by consumption decisions, which is pretty obvious.
Going back to the Finns for a moment, as said, they tend to spend money in areas where they spend the most time, which is their home, as the average Finn isn't overly social and has a small circle of close friends. The secondary circle of friends is far less engaged than it might be in other cultures. This means that what they are actually spending their money on is more likely something that is seen as an investment or maintenance of an investment. This is changing however, with consumption increasing in Finland more, as many have inherited from parents and grandparents that had a very strong saving culture, due to experiencing the hardships of war and knowing what it is to not have resource availability. Now that this generational wealth has been eaten, credit debt is on the rise.
I talk a fair bit about consumer behavior because I have struggled with it throughout my entire life too. I make bad decisions. What I find though is that when people say something like, "I don't have enough to invest" they fail to see that every consumer decision is an investment and all have an ROI of some kind. The "return" however doesn't have to come in the same currency as the cost. What I mean by this is that normally if we invest money into a stock, we will want to be paid in some form of money back. However, when we invest into a meal at a restaurant, the return is the meal that we will eat and whatever feelings we carry away with us - we do not expect to buy a meal for 10 dollars and leave the restaurant with 15, a 50% profit.
I think that this is conditioning-based, where we have been trained to value the valueless, while paying what has value (or potential value) to those who have convinced us to buy their product. We can see it in many forms, for example where we trade our data and access to our minds, for an ROI of likes and stars from strangers - and we think we have made a good deal, because we feel good about getting those likes, even though we are suffering in many other ways. We are distracted.
And I think that distraction from our conditions is the main driver of consumption of no-yield consumables, where we can get something shiny to take our attention away from just how miserable some parts of our life are. We keep buying into the idea sold to us by the suppliers, that the void we feel, can be filled if we just buy their product - and we buy. You know -
Just do it,
Think differently
Work Hard. Have Fun. Make History.
We are doing it and we are thinking differently about what has value to the point that we value worthless, at the encouragement of those with something to sell. The history being made is the creation of the largest income gaps and the wealthiest people and companies that the world has ever seen.
Consumption is the driving force of an economy and supporter of the wealthy, as it gives the "down payment" to get into the other investment vehicles to really increase wealth exponentially. But, in order to get into those markets, the initial capital has to be reinvested, not consumed. this is where I think a lot of us as consumers make the error - we see our salary as disposable, rather than the potential buy-in to other investments. Our work is our business, the salary is the cost for our service - but then rather than reinvesting it into a generative asset class, we break the value chain and satisfy our no-yield consumer desires instead. A corporation doesn't have this issue, as it is desireless and single-minded with profits the only target.
I think that this has two effects on the economy that drive the income and class gaps. The first is that we are buying from and therefore financing the corporations wealthy. The second is that due to no available resources due to this, we are not competing for a portion of the wealth generated, which means that there are "less people in the pool". This speeds up the degradation of our value, while speeds up the enhancement of wealth at the other end - so that we are like two trains not only head in different directions, but increasing our acceleration away from each other. The problem is, we are running out of track.
The conditions are not sustainable, but we will not see how fragile they have become until it is far too late to adjust, as we are blinded by the conditioning - if we just work a little harder so we can buy one more shiny thing - we will finally be content.
Taraz
[ Gen1: Hive ]
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Yeah. There is that isn't there? This makes me really unhappy, and this is not the place for that discussion, but it is important enough to mention. It's inexcusable, really. Also very much not sustainable.
The 'savings culture' that you describe had it's time here in the US. My Grandparents certainly and to an extent my parents generation practiced pretty judiciously. My generation with mixed results and the next 3 generations show even less inclination.
A small % (less than 10) in my generation promptly re invested generational savings. The rest invested in homes and cars and clothing which has perilously small return. I don't know the % of 'home owners' that re finance their mortgage with regularity but it is significant. In effect they are living off the ROI from their only investment. It's a death spiral, financially.
None of this even begins to address the ever decreasing resource pool. It's just a recipe for disaster. Unfortunately, it looks to me like the 'have not' or 'have less' train will not only accelerate away from the 'have' train, at some point it will turn and crash into itself.
<My Grandparents certainly and to an extent my parents generation practiced pretty judiciously. My generation with mixed results and the next 3 generations show even less inclination.
I think that a good part of the decline in savings culture is the lack of economic hardship and uncertainty faced over the last 50 years. The memory of "need" is being forgotten and replaced by "want".
Not only this, they are not going to pass any capital down to next generations. It can be argued that generational wealth is part of the problem, but that doesn't stop a small percentage of the population from practicing the accrual effectively.
It is like the "snake" game on old Nokias, the train keeps getting longer with less space to manouver.
Exactly. That's a great analogy.
Now I'm seeing the snake that eats it's own tail...
The snake eating the tail is a symbol of alchemy. Instead of lead, it looks like they found a way to turn attention into gold in its place.
!ENGAGE 20
ENGAGEtokens.Some food for thought. I find America's economics hard to get my head around in many ways. As you say, the health care and pharmaceutical drugs are sooo expensive, yet food (if it can be called that) can be really cheap. It stood out for me recently when someone in the US said that Hive payouts were putting food on the table for the family in the lockdown, while here that same amount would barely buy any food. I'd assumed that only developing countries would gain enough value from Hive payouts to help with living costs. I can't imagine that they'd get far with healthcare on those payments, though.
There is a rapidly increasing obesity epidemic for a reason and it has now been so ingrained in culture that it is one of the near systematic class gaps. Poor health, expensive healthcare - do the maths.
An American friend of mine moved back to the US with his finnish wife and ended up having to have his appendix out at some point. His work insurance paid, but if he didn't have insurance it would have been over 100K dollars. Like what???!?!
I'm pretty sure the cost of operating an appendix is a small fraction of that. But what the hospitals do is basically inflate every possible little cost by an absurd amount because they get to milk the insurance companies that way. The cost of doing so is collectively borne by all purchasers of a health insurance policy. Broken incentives.
My pure guess is that operating an appendix shouldn't cost more than $3000 in a first world hospital. It's a small routine operation.
Broken incentives indeed. I assume that the healthcare industry isn't the only one doing similarly. All of that growing national debt is going into pockets somewhere.
It is partly a national balance of payments issue, which means it goes to foreign countries. A significant part of it is spent by the military industrial complex.
The DoD was supposed to be audited for the first time ever in 2018. The audit failed to find out how all of the money was spent. It's a huge organization with an annual budget of over $700 billion.
They should try putting all the accounting on a blockchain accessible by all departments of the US government. That would allow for all the spending or at least that part of it which is public be watched by the other departments. The Congress could have a real-time view of how they money was spent without having to conduct an expensive audit of a number of siloed databases every time. Not holding my breath.
https://www.reuters.com/article/us-usa-pentagon-audit-idUSKCN1NK2MC
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If I remember correctly, wasn't there a trillion or two missing from the last decade?
What are the chances of government financial transparency in any country?
That's my recollection, too.
I imagine that depends very heavily on the country. Australia, New Zealand, the Nordic countries are relatively transparent by international comparison.
I don't think a large government department never having been audited is even a thing in any of these countries.
Holy crap, that's extortionate!
Pretty speechless now...
!ENGAGE 20
ENGAGEtokens.This is certainly some food for thought. Sometimes I think economy is this big monster created by Frankenstein that instead of causing trouble with its existential crisis is just getting everyone to consume to death. I have not experienced these points you make out firsthand, but I have enough information to make some educated guesses about the problems a country faces when the gaps between it society become too great regarding money.
For example, here in Venezuela, we have the issue that the State has an economy of its own. Laws give it complete control over resources, so once anyone has its grip on it. They don't need the help of the people to keep sucking from this system. This is combined by the idea that nobody wanted to invest in the country as a means to generate wealth. Nowadays, and it is sad o say the economy is driven by what little money people outside the country sends to their relatives here, people playing online games, onlyfans, and some stores that generate enough flow to make it relevant to the system. Meanwhile the government keep tightening its grip over the National Industry and doesn't care about reinvesting their profits to keep things running.
I think that this is a good visualization for it. It is a vampire that sucks value until the consumer is dry.
I think we are seeing it through a lot of the misaligned protests and social movements.
I think that the "nobody" is an important point here. It didn't happen overnight, it was a concerted effort of neglect in many respects.
Will there come a point where the people revolt fully?
Yes, it has been a historic trend. People come to Venezuela to generate wealth, but never invest in the country. Wealth is taken somewhere else. I don't know if people would rebel. The hand of the government relentless when it comes to repression. Besides, they wanted to create this "new man" Socialism demands. They have done a good job on it.
!ENGAGE 20
ENGAGEtokens.I wonder how many Americans reading this have eight pairs of shoes in their closet?
I said to Pura last night when I picked her up how I was talking to a Fin last night about coming to America and he said:
That's disturbing. There's a saying I'll insert here: The truth hurts. Amongst our travels, everyone we met is all wide-eyed when they hear where I'm from and they're drawn to TV glamour, talking about how 'one of these days I hope to go to America.' I hope they do! All of you, really, we should all be free to come and go anywhere, whenever, as we please. Unfortunately, however, something as humanely basic as health care here is gonna send'em to bankruptcy should they get sick or suffer an injury while visiting.
After traveling EU and Commonwealth where suitcases have to be less than 44lbs (55 in the US), you learn to downsize. A few years of that and you learn you're not just downsizing, you're living comfortably rather than unnecessarily. One pair of shoes is all you 'need.'
I could respond to this article for days.
With the stimulus money keeping everyone afloat right now on the edge of collapsing, you'd be shocked to see these people's shopping carts at Target (a consumer haven stocked with everything from groceries to car parts, electronics, clothing, hunting supplies and much more--all under the same roof). We'll be at the register with grocery items (or medication--they sell that there too because unlike everywhere else, medication isn't free) and we're surrounded by people who we know are unemployed and yet their shopping carts are fulla TV's n shit.
Yelp is a popular search engine here and I recently caught a statistic where 55% of their advertisers delisted their ad due to current times--that's a lot! Yelp has no stake in the game, it's just a statistic. 55% of business have closed and 100% of people are still buying TV's.
I love this country, I love everywhere I've been, I just don't understand why doctors in the US need Tesla's and mansions (with an S) in the hills when everywhere else we've been doctors just want healthy patients--fascinating concept.
You know it's unlikely you'll find a 16oz Coke Zero here? Abroad, the things are 16 ounces, here they're 20oz. Consumers we are, it's a design and, if you're none the wiser, that 4oz difference is unknown and it's the combination of all those little things that makes us the worlds leading consumer.
Well written @tarazkp. Another fun fact (I have many) about our programming: As Americans, we rarely take 'vacations' because something as simple as flying two states away is gonna run 2-$300 round trip/person if you buy in advance. Coast to coast is about double. However, flying from the UK and back to any got dang country in the EU is about $40. That basic flight schedule teaches us to stay local, maybe enjoy a weekend here and there but really enjoying time away isn't cost effective therefor we work-work-work.
PS--I still only have one pair of shoes--had to exist 45 years and travel for two to fathom such a minor adjustment but damn it saves money! And I ain't trippin over shit when I'm folding laundry.
It was interesting coming to live in Finland, as I had a "small 3-bedroom house" in Australia. I ended up in a 30m2 studio apartment (~300 sq foot) - my friends had even smaller with one having 17m2. I had a suitcase with me and started life from there. 17 years later, I still don't need as much stuff as I would have collected if in Aus.
This happened in Australia back in 2008 also. People are idiots.
This is also interesting here. My wife's brother in law is a radiologist/ surgeon. He earns comfortably - but nothing like an American in the same position. A friend of mine is a top heart surgeon in the city and he earns about 2.5x what I do. Considering the difference in what we do - that isn't much. If we were in the US, it would be closer to 9x.
I read once (a long time ago) that only about half the senators had been out of the US or even had a passport. When I have talked to some Americans, they see the rest of the world as back country, but how many have actually seen what is out here? Travel enriches understanding as well as relationships at a personal and a geopolitical level.
I have a couple more - but then, there is a 60C difference between summer and winter temperatures. One thing that is needed here is warm clothes :)
Good morning afternoon! Brother, I can't tell you how many of my friends don't have passports--guessing 50%. Even my mother in law, she got her passport when we left the country, first time ever, and she just turned 60. She has it, yes, but did she visit us? No.
Not enough time allotted away from work--not in the budget.
I continue to mention to friends now about their passports and how they should get it and a common response is: I don't need one, if I go anywhere, It'll be in this country.
We've been back since August 1, right? My wife has hinted about moving to England (she's dual citizen so we can do that), I didn't realize she was serious-serious. Then just the other night she broke me off. Showed me properties in South England, like south of London south cuz she knows I'm a sissy in the cold. I guess I didn't realize how serious she was--I slept on it. The following evening we weighed out the pro's & con's and reached an agreement. The current housing market in this country is ridiculous! Prices are more inflated than Steem was pre-fork, I don't even look anymore.
To sum things up... Should the housing market appear to be as hopeless as it currently is come April, next year, we'll reconvene. On my income alone dude, we're so comfortable in England--I felt rich!
Wish the weed laws were as liberal there as they are here but eh.. win some-lose some--hence the pro's & con's list.
Obviously the Americans I know here are pretty well travelled in general, A good friend of mine also lived in Germany for a while (where he met his Finnish wife) and speaks several languages - so they aren't a good representation of the average American -but, they do have family who are. One of my other friends is from Kentucky and she says her family is "as expected" :)
If you are really serious, you might consider Portugal after, as I hear that they don't tax crypto :D
Deal. Sorry.. can't help myself. One thing a lot of people fail to realize is slavery wasn't invented in America, that's a Portugal creation. 😉
Always a pleasure @tarazkp.
!ENGAGE 25
ENGAGEtokens.Interesting. I think a lot of it depends on if you see your house as just a place to live or an actual investment. I know a lot of people choose to rent as well. What is the incentive to put a bunch of money into something that belongs to someone else. I am not justifying it, I am just saying that is probably the thought process for a lot of people. I know I felt that way when I was renting. I'd love to buy some land somewhere up north. There is just something fulfilling about owning property.
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I think that getting into a house in many places these days is very hard for younger generations. their parents had the help of their parents, but there isn't much left over now, since consumption has taken its bite and savings culture is gone. The problem is, the next generation down the line will have close to zero carried over wealth, while a small percentage will have an enormous amount to work with.
I don't have to worry about handing anything down to kids, but I know that my savings isn't where it should be. Like you said, I think a lot of people are that way these days.
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Perhaps this is part of the not having children trend too. It isn't just that people would rather spend on themselves or have more freedom, but they don't want to have the sense of obligation past their death. This isn't just financial though, the environment would come into play too. Why make the effort to improve the environment if you don't care about anything or anyone after death? Not saying that people think like this, but perhaps there is some unconscious position in play too.
t
Could be. I didn't have much of a choice, testicular cancer saw to that :P
@tarazkp, In my opinion Dimensions of Pyramid Economy System is different for country to country. Stay blessed.
Yes they are, but with the drive for globalization of industry and information flow, they will start becoming more and more similar over time, which will mean that the problems will be be multiplied and compounded.
Let's hope and pray for something different and good this time.
Have a pleasant time ahead.
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