"A tough time for the very wealthy", says the Wall St Journal. "They may not be able to have a new yacht the very second they want it", explains Mark Reed.When is a recession truly a recession?
Is it when I hear about 1,125 billionaires becoming merely 793 billionaires? Or Forbes reporting their total net worth plummeting to $2.4tn from $4.4tn?
Is that poverty? Only the poverty of ideas, where all you seem to have as a goal is to make and keep money. Having £1,000,000,000 in assets is not a recession: it's the type of immense luxury that ensures you need not do anything you don't want to ever again. Apart from die. Not even money can conquer mortality. Yet.
If you're a billionaire, and you have, say £1,000,000,000 in assets, well, you're probably worth more than the total earnings – before tax – of around 50,000 people on the national average wage. Or, the lifetime earnings of a village of 800 people.
If you're a billionaire, you are 'worth' more than the whole of most corporations pay a year to all their employees.
If you're a billionaire, you can do whatever you want, whenever you want. You may not be able to have a new yacht the very second you want it, but if that's the biggest of your worries, well, you haven't got any worries at all.
If you're a billionaire, and you've invested your money poorly, and your 1,000,000,000 is not liquid, then you're not a billionaire. After all, if I look at the value of the assets I have, I'm worth an awful lot more than my bank balance tells me. If you were a billioanire and held onto now useless shares and assets instead of selling them when the market peaked ('the bigger fool theory'), then frankly, your greed is your undoing, not a recession.
Money is no good unless you can access it. It's not about what you are worth – an imaginary figure you could possibly achieve if you sold everything – but about what you can get.
If a billionaire isn't a billionaire anymore, well, I have no sympathy. A billionaire is already worth 50,000 years what someone on the average wage earns. A billionaire, or a millionaire for that matter, may have some money worries: but not like most people do. Not eating, sleeping in the streets, not earning a penny: these are our worries. Not if I'm not worth £1,000,000,000 anymore.
Of course, billionaires, millionaires, gazillionaires all get rich through one of two ways: either they were born into luxury and they are (mostly) utterly useless, or they make their money by taking risks and staking money in order to make money through business of some form or other. The problem with the latter way of thinking is that ultimately, you get rich by gambling.
And the house always wins.
And so the billionaires, who gamble their money, they've always won, they think they'll keep winning. That whilst they may be on a losing streak – they've won before – and the tide will turn. They'll win again.
This is how billionaires feel a recession. A stream of losses, but not actually losing what is important.
But a recession is rather more vicious than that.
We don't just wear clothes we've worn before to social engagements. We buy often and small, because the fridge isn't that big. We cut the frays off our jeans because we can't always get the sizes we want in the sales. We live with wives or husbands we have grown to hate because we cannot afford to live on our own.
It might be "a tough time for the very wealthy", according to the Wall Street Journal. But that definition of a “tough time” is the definition of luxury to almost everyone else on the planet.
A tough time for me, and many of us, is juggling overdrafts and credit cards and debts so we can still buy food. A tough time is making sandwiches and eating them at your desk at work, and going to an all-you-can-buffet and eating once a day. A tough time is hoping your shoes don't get holes in when it rains.
A tough time is going to the supermarket at the hour they discount the stock and playing Russian Roulette with food.
A tough time is having two separate bank accounts with two banks so that your overdraft cannot eat your salary in 'offset'.
A tough time is hoping to God you don't get the invite into the Director's Office at 4.00pm on a Friday afternoon after a long line of heartbroken and unemployed workers have been before.
A tough time is living in fear of the telephone and the scream from your Mother as you Dad tries to invent another way to avoid repossession and / or bankruptcy.
A tough time is a pay off at 53 and knowing that you may never work again.
Billionaires do not face the problems the rest of us have. The very wealthy's problems are insignificant to all but them: they have homes, and food, and futures. They may have to give up the yacht and forego the unearned cruise, but they will be able to buy new clothes and food. The very wealthy may have to forego living in a 6 bedroom mansion in SW1, but they at least have the option of selling up, moving out, living quietly in a suburb and not working again if that is what they absolutely want to do and can look beyond such imaginary vestiges of 'status'.
They need not fear the knock at 11.00am, or cutting the edge off mouldy bread and toasting it in the hope that they can not taste the bacteria anymore.
They need not face the age of 65 without a pension. They need not work behind the counter of McDonalds at 70. They need not rent from abusive landlords and hope they die before they need to go to a retirement home, because they have properties to sell to fund a retirement home, and many of us lost these homes, and we will simply curl away, a burden and dying before we should in an act of invisible, corporate murder.
This is how the recession kills us: not with a weapon, but with a consequence, often many decades away.
This the recession, and it is brutal, and ugly. And if a billionaire is now only a merely millionaire, he is still richer than 99.9% of the rest of the planet will ever be. And in that way, the only poverty they will ever know is that of ideas. There is more to life than money. But when money is the one thing you don't have, it is the one thing you need.
Is it when I hear about 1,125 billionaires becoming merely 793 billionaires? Or Forbes reporting their total net worth plummeting to $2.4tn from $4.4tn?
Is that poverty? Only the poverty of ideas, where all you seem to have as a goal is to make and keep money. Having £1,000,000,000 in assets is not a recession: it's the type of immense luxury that ensures you need not do anything you don't want to ever again. Apart from die. Not even money can conquer mortality. Yet.
If you're a billionaire, and you have, say £1,000,000,000 in assets, well, you're probably worth more than the total earnings – before tax – of around 50,000 people on the national average wage. Or, the lifetime earnings of a village of 800 people.
If you're a billionaire, you are 'worth' more than the whole of most corporations pay a year to all their employees.
If you're a billionaire, you can do whatever you want, whenever you want. You may not be able to have a new yacht the very second you want it, but if that's the biggest of your worries, well, you haven't got any worries at all.
If you're a billionaire, and you've invested your money poorly, and your 1,000,000,000 is not liquid, then you're not a billionaire. After all, if I look at the value of the assets I have, I'm worth an awful lot more than my bank balance tells me. If you were a billioanire and held onto now useless shares and assets instead of selling them when the market peaked ('the bigger fool theory'), then frankly, your greed is your undoing, not a recession.
Money is no good unless you can access it. It's not about what you are worth – an imaginary figure you could possibly achieve if you sold everything – but about what you can get.
If a billionaire isn't a billionaire anymore, well, I have no sympathy. A billionaire is already worth 50,000 years what someone on the average wage earns. A billionaire, or a millionaire for that matter, may have some money worries: but not like most people do. Not eating, sleeping in the streets, not earning a penny: these are our worries. Not if I'm not worth £1,000,000,000 anymore.
Of course, billionaires, millionaires, gazillionaires all get rich through one of two ways: either they were born into luxury and they are (mostly) utterly useless, or they make their money by taking risks and staking money in order to make money through business of some form or other. The problem with the latter way of thinking is that ultimately, you get rich by gambling.
And the house always wins.
And so the billionaires, who gamble their money, they've always won, they think they'll keep winning. That whilst they may be on a losing streak – they've won before – and the tide will turn. They'll win again.This is how billionaires feel a recession. A stream of losses, but not actually losing what is important.
But a recession is rather more vicious than that.
We don't just wear clothes we've worn before to social engagements. We buy often and small, because the fridge isn't that big. We cut the frays off our jeans because we can't always get the sizes we want in the sales. We live with wives or husbands we have grown to hate because we cannot afford to live on our own.
It might be "a tough time for the very wealthy", according to the Wall Street Journal. But that definition of a “tough time” is the definition of luxury to almost everyone else on the planet.
A tough time for me, and many of us, is juggling overdrafts and credit cards and debts so we can still buy food. A tough time is making sandwiches and eating them at your desk at work, and going to an all-you-can-buffet and eating once a day. A tough time is hoping your shoes don't get holes in when it rains.
A tough time is going to the supermarket at the hour they discount the stock and playing Russian Roulette with food.
A tough time is having two separate bank accounts with two banks so that your overdraft cannot eat your salary in 'offset'.
A tough time is hoping to God you don't get the invite into the Director's Office at 4.00pm on a Friday afternoon after a long line of heartbroken and unemployed workers have been before.
A tough time is living in fear of the telephone and the scream from your Mother as you Dad tries to invent another way to avoid repossession and / or bankruptcy.
A tough time is a pay off at 53 and knowing that you may never work again.
Billionaires do not face the problems the rest of us have. The very wealthy's problems are insignificant to all but them: they have homes, and food, and futures. They may have to give up the yacht and forego the unearned cruise, but they will be able to buy new clothes and food. The very wealthy may have to forego living in a 6 bedroom mansion in SW1, but they at least have the option of selling up, moving out, living quietly in a suburb and not working again if that is what they absolutely want to do and can look beyond such imaginary vestiges of 'status'.They need not fear the knock at 11.00am, or cutting the edge off mouldy bread and toasting it in the hope that they can not taste the bacteria anymore.
They need not face the age of 65 without a pension. They need not work behind the counter of McDonalds at 70. They need not rent from abusive landlords and hope they die before they need to go to a retirement home, because they have properties to sell to fund a retirement home, and many of us lost these homes, and we will simply curl away, a burden and dying before we should in an act of invisible, corporate murder.
This is how the recession kills us: not with a weapon, but with a consequence, often many decades away.
This the recession, and it is brutal, and ugly. And if a billionaire is now only a merely millionaire, he is still richer than 99.9% of the rest of the planet will ever be. And in that way, the only poverty they will ever know is that of ideas. There is more to life than money. But when money is the one thing you don't have, it is the one thing you need.
2 comments:
Marvellous post.
This article is very timely and relevant. As I quote Cameron Muir, an economist, "Home sales are unlikely to fall much further..That being said we expect home sales not to decline much further."
But it's never too late, with the right business plan set up, it will lead to valuable outcome. This is what most counselors would give as an advise.
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