patrick.net

If they were smart, they would fix their credit, trade that piece of shit in and lease a Prius for $300/month.

If they were smart (financially savvy), they would not be in that predicament.

Admittedly, it is dynamic so no matter what happens you have winners and losers.

Yes. Instead of striving for a "fair" society, we should try to become the winners in an "unfair" society.

Peter P Says:
February 25th, 2008 at 10:22 am
"But they proposed the Guest Worker Program, which would take care of that issue."

Right, but that then falls into the dreaded 'A' word category.

Peter P Says:
February 25th, 2008 at 10:50 am
"Yes. Instead of striving for a “fair” society, we should try to become the winners in an “unfair” society."

I struggle with this. Are poor people poor because of the system or because of decisions? I always seem to end up concluding it is due to their own decisions. Big oil isn't turning middle class people into poor people.

I struggle with this. Are poor people poor because of the system or because of decisions?

As someone who grew up dirt poor (something Randy H and I have in common), I can attest that it's a little of both. Bad personal choices may or may not have gotten your parents where they are, but children of poor parents must surmount incredible odds in order to rise above the muck of their upbringing --unlike their privileged elite peers, for whom success is all but guaranteed (think the Hiltons & Trumps).

The problem with being born poor --even if you're the most brilliant, inventive mind on the planet-- is, it stunts your opportunities and limits your options. Being born poor means you do not get to attend the best schools, just whatever public school in the neighborhood where you live. Being born poor means you do not get to attend top Universities, unless you are so brilliant, you are one of the lucky scholarship "Lotto" winners (and even then, you get looked down upon by snobby, rich legacy classmates as some sort of "welfare" case). Being born poor means you do *not* get the prep school/Ivy league friends growing up, who can later provide the backbone of a business network/rich insider's club. Being born poor means, you get to spend a very significant part of your critical early adult years paying off debts incurred for higher education, and paying for Prodigal parents (see SQT's earlier posts).

In short, yes, some people end up poor because of bad personal chioices. However, being born poor is a tremendous disadvantage imposed on a person from birth that hard work, discipline, and smarts alone *may not* be enough to overcome.

I agree that being born poor is a tremendous disadvantage. However, what are we going to do about it?

Strangely, US is known for its ruthless capitalism, yet it provides the best opportunities for upward mobility in the world.

hard work, discipline, and smarts alone *may not* be enough to overcome

The secret sauce has a "secret" ingredient: luck.

Note that luck needs not be random. It is definitely possible to attract luck.

Did I mention that I have great respect for Oprah Winfrey?

Are poor people poor because of the system or because of decisions? I always seem to end up concluding it is due to their own decisions.

I always end up concluding that it is largely due to the system. Agreed that mobility is the key strength of our empire, and without it the entire system crashes. Our education system creates all kinds of barriers to mobility, our corporate culture does the same. Try to imagine how difficult it would be to "escape" out of the barrio if you are a young african american born to a dad in prison and a mother addicted to drugs. I think if Malcolm, Peter P, and myself were born in this state we would currently have lots of tats and neon under the floorboards. Maybe if we were lucky we'd be sitting on a nice pay option arm or two, maybe we'd have turned out to be subprime peddlers. If we were lucky enough to survive.

It doesn't matter who will be the president. Here is the fate that the next President will have to succumb to be it Hillary or Obama or McCain.

1. Raise tax - or pull money out of his ass. If the next President doesn't raise tax, he will charge you more on the inflation tax, just simple as that. This is just the law of gravity that you cannot defy.
2. Massive bailout of the banking system - NO ONE in the oval office can bear to see the collapse of the financial system. All sorts of imaginable programs will be put in place, there is no consideration for moral hazard, because one needs to deal with the hazard right now.
3. Shut the door on illegal and legal immigration - this is a knee-jerk reaction for any country facing recession / depression.

In fact, if you do care about your job, you should welcome illegal immigration but NOT legal immigration. Because illegal immigrants are not those who can compete with you on job offers, legal ones are. Do you want the Congress to import another sharp guy just like you, a younger and healthier version, that can eat your lunch? I frankly don't dislike illegal immigrants, they clean my pool and mow the lawn for such a reasonable cost that I can hardly hate them.

Malcolm Says:

> Are poor people poor because of the system or
> because of decisions?

Most poor people are poor because they are both lazy and stupid. The dirt poor are very lazy and very stupid.

Then HARM Says:

> The problem with being born poor –even if you’re the
> most brilliant, inventive mind on the planet– is, it stunts
> your opportunities and limits your options. Being born
> poor means you do not get to attend the best schools,
> just whatever public school in the neighborhood where
> you live.

If you are born poor it will be very hard to become “rich” but it is not hard to avoid being “poor”. My tree guy and my gutter/sheet metal guy both make over $200K a year and anyone with a basic skill like painting, plumbing or fencing can easily make over $100K a year with just basic smarts and a good work ethic…

Our education system creates all kinds of barriers to mobility, our corporate culture does the same.

It is therefore necessary to think beyond what we were told.

Most top billionaires did not finish higher education when they created their own corporate culture.

If one considers making 300K - 1M a year "successful" then perhaps it is sufficient to have a "rich" dad paying for business school.

What is worse? Being born in a poor family or being born into a poor mindset?

If the next President doesn’t raise tax, he will charge you more on the inflation tax, just simple as that.

I will take inflation "tax" any day. I want more after-tax money to buy gold.

I like a socialist system. Even a feadal aristocratic system isn't as bad as a plutocracy. In the latter, men who should never procreate try very hard to make money and "succeed" in order to have a better shot at reproduction. Capitalists are ruthless and mean. It's because they were born with low level of testosterone to begin with. Men with high amount of T are dominant, but they are fair.

It's not that I came from a poor and/or uneducated family. But I have to say, "Fuck rich people." They are all greedy cowards. Sooner or later, the military caste in this country will have enough of it and stage a coup to topple the rich and their clowns (Obama that is).

northernvirginiarenter Says:

> Try to imagine how difficult it would be to “escape” out
> of the barrio if you are a young african american born
> to a dad in prison and a mother addicted to drugs.

It will be very hard for a guy like this to get a job at a top 5 VC firm or get in to the Pacific Union Club, but not many people will ask about your Dad or Mom when hiring a painter. If you have a reputation of showing up on time and doing a good job cutting trees or painting apartments you will have plenty of work and make plenty of money…

Unless you are already very well off, you won't benefit much from inflation, because your pay typically lags inflation, and gold has long gone off on a wild run, your after-tax money won't be able to buy much anyway.

Be it deflation or inflation or stagflation, only smart money on the top of the food chain will be able to benefit the most.

please unmoderate my comment.

My tree guy and my gutter/sheet metal guy both make over $200K a year and anyone with a basic skill like painting, plumbing or fencing can easily make over $100K a year with just basic smarts and a good work ethic

So why isn't the median HH income aover $200k a year then --not even in "rich" Kalifornia? A: it's not really so easy to make that kind of money. Most painters & plumbers don't make that kind of money unless they own an established and profitable business that employs other craftsmen (who earn a lot less $), which is --surprise, surprise -- not so easy.

What is worse? Being born in a poor family or being born into a poor mindset?

A: Being born poor. Mindset can easily be changed with experience. Acquiring wealth from zero (despite FAB's apocryphal "tree guy and "gutter/sheet metal guy" making VP-level salaries), not so easily changed. ;-)

and gold has long gone off on a wild run

Time will tell. Gee, I thought homes were expensive in 2000.

Gold is still way off its inflation-adjusted peak. When there is a gold bubble, you will feel it.

Mindset can easily be changed with experience.

It is harder than you think. It takes enlightenment and a temporary abandonment of "reality" to change one's mindset.

Many poor people are so bitter that adopting the idea of "abundance" is all but impossible.

Good trades persons are paid on CASH. That tells you why the "median" income is...low.

I have come across a few good contractors who do make quite a bit of money, perhaps not $200K, but certainly over $100K. They all accept cash only.

And all these salons and restaurants that accept cash only...

We go to this hair stylist whose place is always full with customers, her price is very good but accepts cash only. She told me she shows IRS $1K a month in profit, hehe. I don't mind, since she passes on the savings to me.

Median Salary by Years Experience - Job: Painter, Construction and Maintenance (United States)
10-19 years $45,009

http://www.payscale.com/research/US/Job=Painter,_Construction_and_Maintenance/Salary

HARM, 'job' and 'business' are very different concepts.

HARM,

such a payscale survey is valid for all salaried jobs like ours. Not the case with sole proprietors who interact directly with the customers and negotiate price and service.

I know quite a couple restaurant owners who all declare $70-80K income on their return. Let me be frank, no one will work that hard for a mere $80K annual income.

There is a very big underground cash economy in the US that is outside of the IRS system. Salaryman like ourselves are unfortunately trapped.

I like a zosialist system. Even a feudal aristocratic system isn’t as bad as a plutocracy. In the latter, men who should never procreate try very hard to make money and “succeed” in order to have a better shot at reproduction. Kapitalists are ruthless and mean. It’s because they were born with low level of testosterone to begin with. Men with high amount of T are dominant, but they are fair.

It’s not that I came from a poor and/or uneducated family. But I have to say, “Fxxk rich people.” They are all greedy cowards. Sooner or later, the military caste in this country will have enough of it and stage a coup to topple the rich and their clowns (Obama that is).

Salaryman like ourselves are unfortunately trapped.

Celerymen ought to be trapped. An economy should incentivize entrepreneurship over employment.

Many poor people are so bitter that adopting the idea of “abundance” is all but impossible.

The idea of "abundance" may be hard for a person to grasp when all they see around them is scarcity.

RE: cash economy, I agree the median figures may be misleading for some job categories (though interestingly enough, the I.R.S. seems to "know" this and tweaks the income stats accordingly), however, not all tradesmen make $100-200k/year, just the very best. The other thing to consider is that construction is a very cyclic feast/famine industry --in sync with housing. You need to save/invest a substantial portion of your boom-years income in order to survive the bust years.

The idea of “abundance” may be hard for a person to grasp when all they see around them is scarcity.

Exactly. I dare to speculate that most poor people stayed poor because of this mindset.

But God created all of us with a Free Mind. We are free to adopt ANY mindset.

IRS of course knows about this, it's just that these fish are too small to trifle with.

A restaurant owner I know went through an IRS audit before, they had to send out an agent to camp out at his restaurant 3 days out of a week, and then went through all his suppliers to triangulate the number. That's a lot of manpower. In the end, since he was careful not to leave trails, he got off clean.

In the past I've brought up the Pursuit of Happyness" guy Chris Gardner. I think he's a great example of what you can accomplish.

When they were interviewing Will Smith for the part Chris very specifically wanted to know if he thought the story would be about fast cars and easy money? It wasn't until Chris was comfortable that Will "got it" that they went ahead and made the movie.

For CG it was about "breaking the cycle" and being there for his son. (Unlike his own upbringing) The success he enjoyed later in life wasn't nearly as important to him as having a real relationship w/ his son.

THIS is what we should be striving to do. (Personally I cut-out any and all drinking during the week) So "my" contribution is that I'm "only" a weekend drunk. Something my children only saw when they were pretty much grown-up anyway. My brother-in-law (LA acctg. firm VP) made a promise to himself *not to abuse his wife (the way he grew up).

So it's about incremental changes and making self-improvements where and when you can. Not a pep talk but Rome wasn't built in a day and I definitely do better than my dad did. (I was lucky too) :)

Hey, don't get me wrong --I never said personal responsibility, PMA and refusing to give up *wasn't* an important component of 'success' (however you choose to define it). It's just that the material type of "success" is not as easy to come by as some here may think.

I clearly recall being an eager "willing an able" college grad in '91, sending out a mountain of resumes and pounding the pavement daily (this was pre-web), and getting... hardly a single call back.

Willingness to work is no guarantee of success. Willingness + opportunity works much better.

Willingness to work is no guarantee of success. Willingness + opportunity works much better.

Don't forget the luck factor. Just go watch The Secret. Seriously.

Note that luck needs not be random. It is definitely possible to attract luck.

Even more important is to grab any opportunity (i.e. "good luck") with both hands when you see it.

Even more important is to grab any opportunity (i.e. “good luck”) with both hands when you see it.

Yes. One must be ready to receive.

I WILL say those options weren't as readily available for our kids. Had it not been for paying off their college loans and... coming up with a down payment for their house they'd be in an apartment and languishing in debt.

I have confidence though they'll do better b/c they spent so much time w/ me being honest about the mistakes "I" made!

There's a lot of practical lessons we can take away from this very blog for instance? It was reassuring for me to see there were others that shared my attitude and values about debt. Without a counter-balance it's all too easy for young people to get very comfortable w/ huge amounts of debt!

"One must be ready to receive"

That's .... true but one must also be willing to .... play the hand they're dealt. My way out of lower-middle class was through salesmanship. Yeah, I know, sucks but it was the BEST thing being remotely "offered" to me?

At some point you just have to say, hey, this is it. Fall in love with whatever "it" is and run with "it" as hard as you can. Of course there's no guarantee but look at all the kids that grow up w/ every advantage in the world and STILL manage to f@ck it up? Why... just look at all the "legacy" kids that we're doing better than? (Primarily b/c we're still ALIVE, but you get my drift)

For every Chris Gardner, there are 100's in not 1000's of rats chasing this dream that never actually get there. It's in the hard statistics, an undeniable fact.

Its useful for corporate interests to hold out this "dream"; to keep the rats running on the treadmills, chasing that carrot in all likelihood that will never be tasted. Microcosm example typical Big 5 consulting firm or high end law firms, churning through people, using them up, all chasing a carrot that maybe only a few percent ever reach.

Bill Gates, Michael Dell, Sergey Brin etal are held out as examples of the mobility that is possible, not unlike the casinos that publicize the million dollar jackpot winner who represents less than .0000015% of gamblers.

Seriously ingrained in our belief system is this uniquely American concept of material achievement and success. IMHO, our society would be better served with a different set of values and priorities. Granite countertops do nothing to further our civilization.

Materialism is a dead end in and of itself, it will prove our undoing.

Greenspan's Latest: Oil Boom Will Likely 'Go on Forever'

I am reconsidering my position re: Peak Oil. If AG's convinced it's real, then it must be wrong.

What Peak Oil?

At $100/b, economically-feasible oil is abundant in many places.