I was ambling along on my treadmill one recent day, clicking between my two favorite afternoon TV shows, when the following thoughts occurred to me:
What do Wall Street and the New York Yankees have in common? Well, other than their employees making far more money than most of us, I find them both fascinating and yet, to me at least, irrelevant.
Now I suppose if Wall Street crashed badly enough and brought the U.S. economy tumbling down with it, I would be affected. My wife certainly would — she’s approaching retirement and has a 401k portfolio. (So I’m keeping a good thought about all those brokers, hon.)
But me, I’ve already cashed out. In my last years at work, I crammed as much money as I could into a 401k and, as sheer luck would have it, saw those securities peak out just when I converted them to a standard savings account. So, through no financial skill of my own, I now don’t owe anybody any money, and with the help of Uncle Sam and Social Security, I have enough saved to carry me through a year or so of living expenses.
Now don’t get the wrong idea. I’m no Daddy Warbucks. As I mentioned in an earlier post about retirement, I live a frugal life. And since I get by on a small budget, any major expense — like having to pay for a new car or, say, a new hip — could wipe out my finances.
The sad thing is that most of you, even those with far more money than I, are probably in the same predicament. But I digress.
As for the Yankees, I guess I’m a fan, what with living in New York and all, but it’s not the games I find fascinating. It’s the talk. And you thought the baseball season ended in October. Uh uh.
My favorite TV show, Mike and the Mad Dog, talks about the Yankees year-round. After the World Series, the subjects were whether Joe Torre would survive as manager (he didn’t), whether third-baseman Alex Rodriguez (A-Rod) would stay (he did, for $275 million over 10 years), what about pitcher Mariano Rivera, the team’s ninth-inning closer (he signed for $45 million over three years), and so on.
It’s like a never-ending soap opera. It doesn’t matter to me whether the Yankees win or lose because, whatever happens, the talk goes on.
So there I am on my treadmill, clicking between Mike and the Mad Dog and the Dow Jones ticker on CNBC, realizing that neither one of these worlds really affects me and yet wondering why I’m so fascinated by what these big-money people are doing.
Now that treadmill . . . that’s one of the best investments I ever made. A ProForm model J4 that I bought nine years ago for about $400 and spent another $90 for the TV set that hangs in front of it. I’ve walked on that treadmill nearly every day since. At first, it was three miles a day, but now that arthritis has gotten to my hips, I’m down to about a mile a day. Even averaging a mile a day, I figure I’ve walked at least 3,200 miles on that treadmill — the distance from New York to San Francisco and back to Salt Lake City with 100 miles to spare. (I might go that extra 100 miles, considering my experience with Salt Lake City.)
You know, average Americans haven’t always been as dependent on Wall Street as they are now. But somewhere in the 1980s, we were told we had to take more ‘responsibility’ for our retirement. Company pension plans were phased out, and we were told that was a good thing. Because we should decide what to do with our own money — thus, money market funds, IRAs, 401ks.
I resisted. I knew nothing about finance and didn’t have the years to learn it. For the same reasons, I also don’t do my own dental work or brain surgery.
Some cynics say it was just part of a Republican attack on Social Security, graduated taxes and anything else FDR came up with. Well, they failed on Social Security, but check out today’s tax tables.
And what has this ‘ownership society’ done for us? Well, the national debt, after declining during the Clinton years, is now right back up there where Reagan and the first Bush left it — creeping toward 70 percent of our (annual) gross domestic product. That’s about $9 trillion. Individual Americans are now more indebted than ever, many of them having refinanced their homes and then used the extracted equity to buy a bunch of stuff like gas-guzzling SUVs just in time for the spike in gasoline prices and the plunge in home values. And, oh yeah, we’ve got a war in Iraq that’s going to cost about $1 trillion — if we get out fairly soon, that is.
I wonder what the Yankees are doing.
– Sid Leavitt
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