You Guys Should Enjoy This- Howard Davidowitz Says Americans Going Downmarket

[Rustic23]

Looking at my own family DW - Stay at home mom
Both kids advanced degrees
Both still married
Both seem quite happy

Anecdotal evidence often if not always proves nothing!

 

[Independent]

Interesting discussion.

I've thought for many years that the upward spiral of the standard of living would have to come to an end or at least slow down. Neither of those possibilities bothers me too much. I can adjust to a gradual shift. What is frightening is the "collapse" of our standard of living which may be in the works. When the net lenders decide to stop lending, the party will truly be over. Then, we might find ourselves back in "the good old days". Except they weren't all that good - and it will be difficult to adjust.

Since the majority of posters so far seem to believe we are at the end of an era (post WWII boom or bubble) do we have strategies to deal with this scenario? I have built considerable slack into my FIRE plan, but if the whole game has changed, I'm not sure there are any obvious moves. We don't even know if we're headed for deflation or inflation in the future. Makes planning problematic, especially for those of us who've already committed to retirement.

I'm pessimistic by nature, but it sounds like I'm not the only one at this point.

My strategy for dealing with a long term poor economy is to go back to the "good old days". I'm old enough to remember that they weren't all that good, but I think I can adjust because I've been there before. My kids would have more problems.

Financially, I'm like you. I have considerable slack in the FIRE plan. I was defensively invested back in 2006 (lots of TIPS and I-bonds) and stayed there. I don't see any obvious moves from here, though I'd be glad to hear any ideas that people have.

 

[Independent]

More productive workers will get paid more than less productive workers, period. And you can be absolutely sure that worker productivity is higher today than it was before. .

Productivity may have gone up, but CPI-adjusted median wages for males have been stagnant. Sometimes the productivity gains are captured by someone other than the workers.

 

[MichaelB]

Nota bene: I am either a moron or an idiot. So don't pay any attention to anything I say or you are one too. Please consult your financial advisor, astrologer or proctologist for whatever it may be that you are seeking.

Ha, I gotta say - this is the best signature line I have ever read. Really good job.

Now, I can't resist. I took your advice and consulted - with the proctologist. I asked for his outlook. His response - he said things looked sh*tty.

 

[haha]

Now, I can't resist. I took your advice and consulted - with the proctologist. I asked for his outlook. His response - he said things looked sh*tty.

 

[Gone4Good]

Productivity may have gone up, but CPI-adjusted median wages for males have been stagnant. Sometimes the productivity gains are captured by someone other than the workers.

Can happen, at least for a while. Capital has been grabbing a disproportionate share in recent years. Feels like the pendulum may start to swing back the other way given how the political winds are now blowing.

 

[Gone4Good]

Interesting factoid to consider when thinking about "the good old days". In 1955 Americans spent 38.4% of their budget on food and clothing. In 2008 that percentage dropped to 19.5%. So basic necessities account for roughly half as much of our spending as they did 43 years ago, leaving a 19% slice for other things. Sounds like we enjoy not only more discretionary income but also a much greater financial margin before we go hungry.

 

[BunsGettingFirm]

Wow! Another observation to agree with! As a retired manufacturing guy, I think you're spot on. It was inevitable that our offshore sources of manufactured goods and natural resources would only be willing to send them to us in exchange for our "paper shuffling" abilities for so long.

I don't know about that. Some of the paper shuffling jobs I have done have been pretty freaking hard. Imagine sitting at your desk at 2 AM knocking your head against the monitor because somebody wrote some weird bug in a program, and the program needed to be fixed by 8 AM the next day.

As long as somebody is willing to pay for your expertise, then it doesn't matter if your jobs involves heavy iron and heavy lifting.