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When I was young, I assumed the 401k had been around forever. But it was introduced in 1978! We're nearing the end of the 50-year period that the guys who inven

When I was young, I assumed the 401k had been around forever. But it was introduced in 1978! We're nearing the end of the 50-year period that the guys who invented it would really need to get staggeringly rich off of the concept, and now that they're getting ready to die everyone's overreliance on the system they set up is causing total gridlock in American life. You can't do ANYTHING that threatens the stock market. The President can't give good advice like "save your money and don't go into debt on new cars" because if people stop spending, everyone's retirement accounts stagnate. (Edit: as a matter of fact, recently the President has been actually advertising going into debt for new cars. And it works! My poor-with-finances brother wants to buy a $38,000 truck, and he's got less than $500 in savings and rents an apartment.) I'm between 25-30 and I'm not even remotely planning on having enough money when I retire. My plan is to have kids, teach them to be clever and resourceful, and then live with them. If they won't have me, I'll live as a pauper in the grand new order when I have to retire. Greater men than I have died penniless.

colpabar 4y ago
This is very interesting - did you read this in a book or a blog or something? I’d love to add it to my list.
- quacked 4y ago
  Honestly, I'm kind of drawing my own conclusions about the financial system based on what I've read. I'm also almost embarrassed to reveal my reading list, as it reveals me as a dilettante, with an undergraduate-sophomore understanding of economics. However, I am very happy and presently financially secure with a good life, so at least my choices about spending aren't completely stupid. I would say these are the sources from which I draw a lot of my opinions about the financial system: - Max Dama on Automated Trading (57-page PDF written by a quantitative trader) - Out-Sourced Profits: The Cornerstone of Successful Subcontracting by Dr. J. L. Hart-Smith (memo written by a Boeing employee about why Boeing was failing to make money and simultaneously driving down quality in the airliner industry) - The Big Short by Michael Lewis - Hipsters on Food Stamps Parts I-III by The Last Psychiatrist (blogger whose blog, "The Last Psychiatrist", is my favorite source of writing and whose advice I orient most of my life and behavior around. Many of his other articles touch on the credit-based financial system) - WTF Happened in 1971? (Website showing trends in American life after the gold standard was abandoned in 1971, it's not necessarily well-researched and they draw a lot of conclusions that more experienced researchers would contradict) - Wikipedia (some great reads on the history of the joint-stock corporation, dollar, credit card, 401k, home loan, auto loan, credit score, etc.) There's a lot of other things I've read, but they're not explicitly about the financial system. I feel very strongly about the structure of civilization and the process of creating engineered goods, and I find that most of my complaints about problems with those two things in modern times resolve back to "the people incentivizing work to happen in modern civilization are amoral, corrupt, and actively destroying the historical incentives that people had to work towards ends that could be described as 'common good'". This leads to my constant sniping about the credit system and 401ks.
  - fxtentacle 4y ago
    Thanks for sharing this list :) The beginning of https://thelastpsychiatrist.com/2012/11/hipsters_on_food_stamps.html https://thelastpsychiatrist.com/2012/11/hipsters_on_food_sta... seems very promising ...
brightball 4y ago
Just the push back on financial advice by guys like Dave Ramsey is shocking. You tell people to save, avoid debt, don’t buy new cars, etc and people react with almost anger at the suggestion.
- mschuster91 4y ago
  It's impossible today to have any sort of major asset without going into debt. Simply said, wages are so low you can't really save up for anything - like what, 60% of Americans live paycheck to paycheck? Back in the Ford era, it was at least commonly understood common sense that people need to be able to afford products. Today? The people are held poor so that they can't afford to strike, much less openly revolt, and nickeled-and-dimed by the credit industry. The advice from Ramsey and friends makes sense and is objectively the best thing people can do, but at the same time its messaging is clear: miss out on the fun everyone else has achieved by debt.
  - quacked 4y ago
    I agree with you and your parent commenter. > Today? The people are held poor so that they can't afford to strike, much less openly revolt, and nickeled-and-dimed by the credit industry. I think it's less that they're held so "poor" (i.e. not having access to a lot of cash) as that they are so completely effectively barred from any kind of sustenance outside of the Debt System that striking would mean the total abandonment of any kind of life they're used to. A real revolution would mean complete blockage from almost every public space and service--unlike the past, there's not anywhere for you to go if you're at odds with the banking system. You'll starve, or you'll be tracked and thrown in jail to suffer the wrath of the stupid, uncivilized drug-addicted gangs. There's not even food in the lands surrounding the towns and cities, it's all single-crop cash yields that get exported. People are also very carefully manipulated (not necessarily deliberately--it's just the net result of all aggregate manipulation) to be extremely suspicious and cautious of anything that would upset the life they're used to. If you talk to anyone above $140k/year household aggregate about the possibility of living 2-3 families in one home or never travelling by air again they look at you like you're speaking a foreign language.
  - 4y ago
goodoldneon 4y ago
What’s the alternative? Pensions? If your retirement is dependent on a pension, and the pension goes belly up, then you’re left with a fraction of what you planned for (since PGBC doesn’t cover it all)
- brightball 4y ago
  The realistic alternative is multigenerational family units sticking together. Grandparents help raise the grand kids instead of day care and baby sitters. Kids take care of their aging parents. Communities pull together to help each other. There are complexities to it, but without a lot of the artificial financial structures that we have in place (loans, insurance, stocks, government programs) that’s probably what society has to revert to and in many ways it’s the most efficient long term way for society to function.
  - mschuster91 4y ago
    Outright impossible to do with the demands of employment these days - young people are expected to go wherever the jobs are, they cannot stick around in some backwater rural town to take care of their parents. Not to mention that people these days don't have anywhere close to enough children, and it's pretty immoral to force people to breed like rabbits for their retirement.
    - ldh0011 4y ago
      Children sticking around isn't the only option. My mom intends to follow me once I've found a place to settle down in the next few years. I'll give her extra money which should allow her to live quite well on top of what she has saved and she's already expressed interest in helping with grandkids if I have any (I probably will at some point). Obviously this plan is made much easier by remote work and good earning potential for tech workers and I suppose some parents will be more attached to where they currently live than my mom is. But multi-generational is not outright impossible, I'd wager a significant chunk of the population could pull it off to varying degrees in one way or another.
    - 4y ago
kiliantics 4y ago
I have a very similar outlook. It's pretty clear to me that things are moving faster and faster in society and likely not towards anything very good. So it seems naive to expect the old models to continue working. My "retirement plan" therefore is something between conventional wisdom and prepping. Put some money into savings for emergencies and the remaining possibility that stocks may have some growth in future, but diversify into self-reliance. Buying land and tools that can be used to live off at low cost (i.e. no rent, do my own maintenance, grow some of my food and fuel) and assume that I probably won't ever afford to retire but hopefully will afford to just be able to work less and less over time. Your last statement is certainly a good and humbling thing to remember. What's the point in amassing all this wealth anyway, since we certainly can't take any of it with us when we go. Giving your children the wealth of knowledge they will likely need in times to come is probably much more practical.
- quacked 4y ago
  I'm glad to hear you say that. There are a lot of people out there who are kind of thinking the same thing. The only thing I really worry about is that if the time does come and we really need to use our paltry reserves of food, land, ammunition, etc. whether or not we have the ability to do the real civilizational dirty work--forming strategic alliances, committing violence when necessary, avoiding starvation through back-breaking farming work that actually yields harvests, etc. Like, I've got some acreage, the skills to warm my old house through the winter on the woods, and enough knowledge to garden through the summer. But what about food in spring and fall? What if a band of 200 raiders from the city walks down the groomed road my driveway is off of and decides they want to live on my patch? And even if civilization doesn't fall, do you really "own" land when your ownership claims are validated by paid police and the people who don't own land not thinking to come and take your land? I wouldn't say civilization "fell" between 1900 and 1930, but surely those Russian landowners assumed they "owned" their land before the Bolsheviks started peacefully discussing their ideas with the Tsarist government. You start thinking about this stuff and realizing that these problems have been solved over and over again, since before writing. All of the stuff in history that seems so antiquated (like needing elaborate gift-giving rituals when meeting neighboring foreign nobility) suddenly seems clever and meaningful when it's juxtaposed against the context of starvation, enslavement, death by the plague, and no electricity.
Ekaros 4y ago
I'm single, probably not being able to change that. So I guess I will just end up dead at or before retirement... Not really so horrid thought yet.
paulmd 4y ago
Houses are another fun one. There are a lot of boomers who will be looking to cash in on their houses at the same time as everyone else. Plus the increases to interest rate will have the effect of pushing down the amount people are willing to bid on future houses. Boomers who bought in the 80s-90s are in no danger of being underwater, but, there's going to be a lot of people whose houses are worth a lot less than they were in 2021. People who bought in the last 5-10 years are going to find that their assets at best are not going to appreciate very much, and sometimes investments do go down, that's the risk. It's not going to be an automatic escalator to the upper-middle class like it was a few decades ago. And that's a good thing for younger generations (if landlord corps don't buy everything up) but the political power of boomers and of heartland states are really the elephant in the room with american politics.

colpabar 4y ago

This is very interesting - did you read this in a book or a blog or something? I’d love to add it to my list.

quacked 4y ago
Honestly, I'm kind of drawing my own conclusions about the financial system based on what I've read. I'm also almost embarrassed to reveal my reading list, as it reveals me as a dilettante, with an undergraduate-sophomore understanding of economics. However, I am very happy and presently financially secure with a good life, so at least my choices about spending aren't completely stupid. I would say these are the sources from which I draw a lot of my opinions about the financial system: - Max Dama on Automated Trading (57-page PDF written by a quantitative trader) - Out-Sourced Profits: The Cornerstone of Successful Subcontracting by Dr. J. L. Hart-Smith (memo written by a Boeing employee about why Boeing was failing to make money and simultaneously driving down quality in the airliner industry) - The Big Short by Michael Lewis - Hipsters on Food Stamps Parts I-III by The Last Psychiatrist (blogger whose blog, "The Last Psychiatrist", is my favorite source of writing and whose advice I orient most of my life and behavior around. Many of his other articles touch on the credit-based financial system) - WTF Happened in 1971? (Website showing trends in American life after the gold standard was abandoned in 1971, it's not necessarily well-researched and they draw a lot of conclusions that more experienced researchers would contradict) - Wikipedia (some great reads on the history of the joint-stock corporation, dollar, credit card, 401k, home loan, auto loan, credit score, etc.) There's a lot of other things I've read, but they're not explicitly about the financial system. I feel very strongly about the structure of civilization and the process of creating engineered goods, and I find that most of my complaints about problems with those two things in modern times resolve back to "the people incentivizing work to happen in modern civilization are amoral, corrupt, and actively destroying the historical incentives that people had to work towards ends that could be described as 'common good'". This leads to my constant sniping about the credit system and 401ks.
- fxtentacle 4y ago
  Thanks for sharing this list :) The beginning of https://thelastpsychiatrist.com/2012/11/hipsters_on_food_stamps.html https://thelastpsychiatrist.com/2012/11/hipsters_on_food_sta... seems very promising ...

brightball 4y ago

Just the push back on financial advice by guys like Dave Ramsey is shocking. You tell people to save, avoid debt, don’t buy new cars, etc and people react with almost anger at the suggestion.

mschuster91 4y ago
It's impossible today to have any sort of major asset without going into debt. Simply said, wages are so low you can't really save up for anything - like what, 60% of Americans live paycheck to paycheck? Back in the Ford era, it was at least commonly understood common sense that people need to be able to afford products. Today? The people are held poor so that they can't afford to strike, much less openly revolt, and nickeled-and-dimed by the credit industry. The advice from Ramsey and friends makes sense and is objectively the best thing people can do, but at the same time its messaging is clear: miss out on the fun everyone else has achieved by debt.
- quacked 4y ago
  I agree with you and your parent commenter. > Today? The people are held poor so that they can't afford to strike, much less openly revolt, and nickeled-and-dimed by the credit industry. I think it's less that they're held so "poor" (i.e. not having access to a lot of cash) as that they are so completely effectively barred from any kind of sustenance outside of the Debt System that striking would mean the total abandonment of any kind of life they're used to. A real revolution would mean complete blockage from almost every public space and service--unlike the past, there's not anywhere for you to go if you're at odds with the banking system. You'll starve, or you'll be tracked and thrown in jail to suffer the wrath of the stupid, uncivilized drug-addicted gangs. There's not even food in the lands surrounding the towns and cities, it's all single-crop cash yields that get exported. People are also very carefully manipulated (not necessarily deliberately--it's just the net result of all aggregate manipulation) to be extremely suspicious and cautious of anything that would upset the life they're used to. If you talk to anyone above $140k/year household aggregate about the possibility of living 2-3 families in one home or never travelling by air again they look at you like you're speaking a foreign language.
- 4y ago

goodoldneon 4y ago

What’s the alternative? Pensions? If your retirement is dependent on a pension, and the pension goes belly up, then you’re left with a fraction of what you planned for (since PGBC doesn’t cover it all)

brightball 4y ago
The realistic alternative is multigenerational family units sticking together. Grandparents help raise the grand kids instead of day care and baby sitters. Kids take care of their aging parents. Communities pull together to help each other. There are complexities to it, but without a lot of the artificial financial structures that we have in place (loans, insurance, stocks, government programs) that’s probably what society has to revert to and in many ways it’s the most efficient long term way for society to function.
- mschuster91 4y ago
  Outright impossible to do with the demands of employment these days - young people are expected to go wherever the jobs are, they cannot stick around in some backwater rural town to take care of their parents. Not to mention that people these days don't have anywhere close to enough children, and it's pretty immoral to force people to breed like rabbits for their retirement.
  - ldh0011 4y ago
    Children sticking around isn't the only option. My mom intends to follow me once I've found a place to settle down in the next few years. I'll give her extra money which should allow her to live quite well on top of what she has saved and she's already expressed interest in helping with grandkids if I have any (I probably will at some point). Obviously this plan is made much easier by remote work and good earning potential for tech workers and I suppose some parents will be more attached to where they currently live than my mom is. But multi-generational is not outright impossible, I'd wager a significant chunk of the population could pull it off to varying degrees in one way or another.
  - 4y ago

kiliantics 4y ago

I have a very similar outlook. It's pretty clear to me that things are moving faster and faster in society and likely not towards anything very good. So it seems naive to expect the old models to continue working. My "retirement plan" therefore is something between conventional wisdom and prepping. Put some money into savings for emergencies and the remaining possibility that stocks may have some growth in future, but diversify into self-reliance. Buying land and tools that can be used to live off at low cost (i.e. no rent, do my own maintenance, grow some of my food and fuel) and assume that I probably won't ever afford to retire but hopefully will afford to just be able to work less and less over time. Your last statement is certainly a good and humbling thing to remember. What's the point in amassing all this wealth anyway, since we certainly can't take any of it with us when we go. Giving your children the wealth of knowledge they will likely need in times to come is probably much more practical.

quacked 4y ago
I'm glad to hear you say that. There are a lot of people out there who are kind of thinking the same thing. The only thing I really worry about is that if the time does come and we really need to use our paltry reserves of food, land, ammunition, etc. whether or not we have the ability to do the real civilizational dirty work--forming strategic alliances, committing violence when necessary, avoiding starvation through back-breaking farming work that actually yields harvests, etc. Like, I've got some acreage, the skills to warm my old house through the winter on the woods, and enough knowledge to garden through the summer. But what about food in spring and fall? What if a band of 200 raiders from the city walks down the groomed road my driveway is off of and decides they want to live on my patch? And even if civilization doesn't fall, do you really "own" land when your ownership claims are validated by paid police and the people who don't own land not thinking to come and take your land? I wouldn't say civilization "fell" between 1900 and 1930, but surely those Russian landowners assumed they "owned" their land before the Bolsheviks started peacefully discussing their ideas with the Tsarist government. You start thinking about this stuff and realizing that these problems have been solved over and over again, since before writing. All of the stuff in history that seems so antiquated (like needing elaborate gift-giving rituals when meeting neighboring foreign nobility) suddenly seems clever and meaningful when it's juxtaposed against the context of starvation, enslavement, death by the plague, and no electricity.

Ekaros 4y ago

I'm single, probably not being able to change that. So I guess I will just end up dead at or before retirement... Not really so horrid thought yet.

paulmd 4y ago

Houses are another fun one. There are a lot of boomers who will be looking to cash in on their houses at the same time as everyone else. Plus the increases to interest rate will have the effect of pushing down the amount people are willing to bid on future houses. Boomers who bought in the 80s-90s are in no danger of being underwater, but, there's going to be a lot of people whose houses are worth a lot less than they were in 2021. People who bought in the last 5-10 years are going to find that their assets at best are not going to appreciate very much, and sometimes investments do go down, that's the risk. It's not going to be an automatic escalator to the upper-middle class like it was a few decades ago. And that's a good thing for younger generations (if landlord corps don't buy everything up) but the political power of boomers and of heartland states are really the elephant in the room with american politics.