Looking Ahead to Hard Times

The concept that the United States is entering a new era where materialistic achievement and expectations will be scaled back is beginning to seep into the writings of people who a few weeks ago would have mocked anyone making such predictions.

Or, in simpler terms, people are catching on that hard times are a comin'.

Today's offering: Jim Manzi posting in The Corner.

We use the abstract expression “deleveraging” to describe what’s happening in the economy right now. That’s fine for a textbook or a newspaper article. But what’s really happening is that people are learning that the world is not as benign as many people in America talked themselves into believing it to be. Most middle class Americans are going to drive older cars, live in worse houses, and travel less than they thought they would even a couple of years ago. They will be less able to afford to move to the school district that they think will put their kids into the school that they think best for them. They are going to retire later, and have less money to spend when they do. This is painful and dispiriting. It is unequally shared suffering, and much of the distribution of relative pain is driven by luck, which makes it especially bitter to those who have been unlucky.

Manzi starts his post discussing the fallout from the Bernard Madoff fraud. Unless you've been sleeping or over-indulging in Christmas egg nog, you know that over $50 billion of other people's money was misappropriated, siphoned off and otherwise pissed away by one charmingly clever individual who apparently thought Charles Ponzi and the federal Social Security system were great role models.

Should the taxpayers bail out the Madoff victims? My gut reaction is not "no," but "Hell, no!"

But I think it will happen, at least to some limited extent. I also think that many average Americans are going to be very unhappy when they realize that our federal government is putting itself in the position of determining who are the true deserving and undeserving victims of our economic straits. This poses a potential for civil unrest, and that's not a good thing.

Thanks to the billions (trillions?) in financial experiments undertaken by the Administration and the Congress, it is not likely that we can avoid the economic pain ahead, especially considering the incoming Obama administration is even less economically savvy than its predecessor. The best advice for most of us is to pay off our debts as rapidly as we can, reduce our monthly overhead, and make preparations for a period of time that we pray will never come.

And if you're one of those people who still cling to the idea that "it can't happen here" because this is America or that God won't allow it, please try to remember that it already did happen here 80 years ago and the American people then were a lot more God-fearing and devout than they are today.