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The future ain’t so bright for boomer retirees

By DAVE CARPENTER
December 28, 2010

Linda Reaves poses for a picture at the Jewish Council for the Aging in Rockville, Md., Wednesday, Dec. 22, 2010. Reaves never had much opportunity to save as a single mother raising two sons and a daughter. After holding a variety of positions over the years _ hotel office manager, research analyst for a mortgage company, hospital mental health counselor _ she was still living paycheck to paycheck. Reaves, who turns 60 this month, plans to work until she’s at least 70 and then wants to travel, even if she doesn't know where the money will come from. (AP Photo/Luis M. Alvarez)

Through a combination of procrastination and bad timing, many baby boomers are facing a personal finance disaster just as they’re hoping to retire. Starting in January, more than 10,000 baby boomers a day will turn 65, a pattern that will continue for the next 19 years.

The boomers, who in their youth revolutionized everything from music to race relations, are set to redefine retirement. But a generation that made its mark in the tumultuous 1960s now faces a crisis as it hits its own mid-60s.

“The situation is extremely serious because baby boomers have not saved very effectively for retirement and are still retiring too early,” says Olivia Mitchell, director of the Boettner Center for Pensions and Retirement Research at the University of Pennsylvania.

There are several reasons to be concerned:

• The traditional pension plan is disappearing. In 1980, some 39 percent of private-sector workers had a pension that guaranteed a steady payout during retirement. Today that number stands closer to 15 percent, according to the Employee Benefit Research Institute in Washington, D.C.

• Reliance on stocks in retirement plans is greater than ever; 42 percent of those workers now have 401(k)s. But the past decade has been a lost one for stocks, with the Standard & Poor’s 500 index posting total returns of just 4 percent since the beginning of 2000.

• Many retirees banked on their homes as their retirement fund. But the crash in housing prices has slashed almost a third of a typical home’s value. Now 22 percent of homeowners, or nearly 11 million people, owe more on their mortgage than their home is worth. Many are boomers.

Michael Vanatta, 61, of Vero Beach, Fla., is paying the price for being a boomer who enjoyed life without saving for the future. He put a daughter through college, but he also spent plenty of money on indulgences like dining out and the latest electronic gadgets.

Vanatta was laid off last January from his $100,000-a-year job as a sales executive for a turf company. And with savings of just $5,000, he’s on a budget for the first time. In April, he will start taking Social Security at age 62.

“If I’d been smarter and planned and had the bucks, I’d wait until 70,” says Vanatta, who is divorced and rents an apartment. “It’s my fault. For years I was making plenty of money and spending plenty of money.”

Vanatta is in the majority. Some 51 percent of early boomer households, headed by those ages 55 to 64, face a retirement with lower living standards, according to a 2009 study by the Center for Retirement Research at Boston College.

Too many boomers have ignored or underestimated the worsening outlook for their finances, says Jean Setzfand, director of financial security for AARP, the group that represents Americans over age 50. By far the greatest shortcoming has been a failure to save. The personal savings rate — the amount of disposable income unspent — averaged close to 10 percent in the 1970s and `80s. By late 2007, the rate had sunk to negative 1 percent.

The recession has helped improve the savings rate — it’s now back above 5 percent. Yet typical boomers are still woefully short on retirement savings. Even those in their 50s and 60s with a 401(k) for at least six years had an average balance of less than $150,000 at the end of 2009, according to the EBRI.

Signs of coming trouble are visible on several other fronts, too:

• Mortgage Debt. Nearly two in three people age 55 to 64 had a mortgage in 2007, with a median debt of $85,000.

• Social Security. Nearly 3 out of 4 people file to claim Social Security benefits as soon as they’re eligible at age 62. That locks them in at a much lower amount than they would get if they waited.

The monthly checks are about 25 percent less if you retire at 62 instead of full retirement age, which is 66 for those born from 1943 to 1954. If you wait until 70, your check can be 75 to 80 percent more than at 62. So, a boomer who claimed a $1,200 monthly benefit in 2008 at age 62 could have received about $2,000 by holding off until 70.

• Medical Costs. Health care expenses are soaring, and the availability of retiree benefits is declining.

“People cannot fathom how much money will be needed to simply cover out-of-pocket medical care costs,” says Mitchell of the University of Pennsylvania.

A 55-year-old man with typical drug expenses needs to have about $187,000 just to cover future medical costs. That’s if he wants to be 90 percent certain to have enough money to supplement Medicare coverage in retirement, the EBRI said. Because of greater longevity, a 65-year-old woman would need even more to cover her health insurance premiums and out-of-pocket health expenses: an estimated $213,000.

• Employment. Boomers both need and want to work longer than previous generations. But unemployment is near 10 percent, and many have lost their jobs.

The average unemployment period for those 55 and older was 45 weeks in November. That’s 12 weeks longer than for younger job-seekers. It’s also more than double the 20-week period this group faced at the beginning of the recession in December 2007.

If financial neglect turns out to be many boomers’ undoing, challenging circumstances are stymieing others.

Linda Reaves of Silver Spring, Md., never had much opportunity to save as a single mother raising two sons and a daughter. After holding a variety of positions over the years — hotel office manager, research analyst for a mortgage company, hospital mental health counselor — she was still living paycheck to paycheck. Then she was laid off in 2007 at the age of 57.

She entered a training program to learn new skills, but all she has found since is a string of temporary jobs. In her daily quest for clerical or administrative work, she competes against much younger applicants.

Reaves, who turns 60 this month, plans to work until she’s at least 70 and then wants to travel, even if she doesn’t know where the money will come from.

“I just keep going. I don’t really worry about it,” she says.

Add this all up, and there’s a “slow-burning” retirement crisis for boomers, says Anthony Webb, a research economist at the Center for Retirement Research.

“If you have a crisis where the adverse consequences are immediately clear, then people understand that they have to do something,” Webb says. “When the consequences will be felt 20 or 30 years in the future, the temptation is that we kick the can down the road.”

As a result, he believes many won’t change their behavior.

For less affluent boomers, it won’t take that long to feel the pain of poor planning. Concerns about financial trouble will hang over many of those 65th birthday celebrations in 2011.

Many seem to view their plight through rose-colored granny glasses. An AARP survey last month of boomers turning 65 next year found that they worry no more about money than they did at age 60 — before the recession or the collapse of home prices. But in an acknowledgement of reality, 40 percent said they plan to work “until I drop.”

Copyright © 2010 The Associated Press

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33 Responses to The future ain’t so bright for boomer retirees

  1. woody188

    December 28, 2010 at 11:35 pm

    Wish my CHB blog was still active. Then I could point to my story about the retirement crisis from 2-3 years ago and say I told you so. :)

    Or my piece on the “urban prairies of Detroit” or how about that piece on how Obama would follow Bush Doctrine, expand the war in the Middle East, continue torture, and crank up the warrant-less wiretaps?

    It was all there, years ago and no one would listen.

    FYI, I love how the AP writers blame the boomers for the situation they are in. Have to wonder if the AP writers know about the plan to seize the pensions and 401(k)’s and this is their way of encouraging people back into the market. The only ones in the market now are institutional investors and the banks. Mainstreet has been sidelined.

    • Carl Nemo

      December 29, 2010 at 7:35 am

      I remember your blogposts distinctly Woody and yes you called the future correctly; but, we tend to forget that the people who frequent this site and a host of other enlightened ‘watering holes’ for thought are the minority when it comes to voting as well as critical thinking.

      As I’ve mentioned in the past during my daily travels to the hardware store, Starbucks, grocery shopping etc. I run across folks from all walks of life.

      I’m an affable guy and without getting in their face I’ll try to open up subjects concerning our nation etc. in a casual fashion. Needless to say I don’t get too heavy as I do on CHB, but just gentle probing. I hate to say it, but the average John and Mary Q. Citizen is as dumb as the proverbial ‘box of rocks”. They don’t know sh*t from shinola and worse yet, they don’t care.

      Seemingly Americans are going to get the government they sorely deserve.

      CHB is simply a good place to vent our spleens so to speak and one of the better one’s at that, due to our site host being quite tolerant and seemingly unflappable in the face of the few ‘jackwagons’ that frequent this site.

      I’m always impressed with your thoughts and link material. In fact some of them cause an instant flip stomach as to how close these mattoids are in terms of slamming the door shut on freedom as we once knew it. A lot of fine people are going to get hurt badly by this ever-encroaching police state mechanism known as ‘Homeland Security’ etc.

      Shopping until they drop, their HDTV’s along with viewing the vapid programming and film releases provided by the cunning media moguls, while packing their faces with high caloric, junk food, then shuffling off to the crib for some muscle relaxing fun with mamma is all that’s important to them. Sounds like a ‘feedlot’ paradigm to me. Freedom, Constitutional principals, the Bill of Rights etc. mean nothing to them.

      “Wanna parteeee!” is their mantra. / : |

      Carl Nemo **==

      • woody188

        December 29, 2010 at 4:48 pm

        I too survey the populace and am often surprised by the number of people I find that are aware, although they are waiting for a leader or a plan to unite them. It only takes some 10-15% of the populace to start a revolution, and I believe we have a revolution of ideas already started. We just need some folks with the cojones and the finances to set those ideas in motion.

        We need to start with communications that can compete with our corporate rivals. That means radio and television. If we can get onto those mediums, we can start to change minds en mass. Essentially we need to pull a Harrison Bergeron type of broadcast.

        Everybody wants to change the world
        Everybody wants to change the world
        But no one,
        No one wants to die
        Wanna try, wanna try, wanna try
        Wanna try, wanna try, now
        I’ll be your detonator

        – My Chemical Romance from the song “Na Na Na (Na Na Na Na Na Na Na Na)”

        • Carl Nemo

          December 29, 2010 at 6:29 pm

          Maybe awareness is a regional phenomenon. In my area we have a lot of deep pockets Cali expatriots that sold their properties prior to the bust for millions then migrated to the Pacific Northwest paying cash for McMansions etc. They don’t seem to be hurting and of course they are retired as myself. Many are dual income retirees; ie., Calif police chiefs, wives retired as school superintendants, principals, government sector, in addition to corporate executives etc. They all fled Cali due to its inherent overpopulation and crime problems. The only hazard they risk is if the California public pension system goes bust. Hell, even Uncle Sam’s pension system could go bust too. / : |

          We do have an unemployment problem as everywhere else, but the malls are still jammed even prior to the holidays. The business closures I’ve witnessed in other areas of the nation don’t seem to be as extensive. In fact many vacant mall vacancies are now finding occupants. Evidently the entreprenueurial spirit is alive and well regardless of the banks dragging their feet on business loans etc.

          The parking lots are full of Mercedes, Lexus, BMW’s, Escalades etc. I’m not cheering for this paradigm, but possibly many of the folks that I’ve interfaced with are spoiled and lulled into complacency. The kids and grandkids are a bunch of spoiled seeningly ignorant brats too.

          You are correct we need some deep pockets leadership that has had a bellyful of the “Republicrat” partyline as too ‘We the People”. Maybe if a Ross Perot’ came along today with the same message and commitment in the early 90’s concerning the hazards of ‘free trade’ and the unfettered outsourcing of America’s manufacturing base, then we could get some traction and shut down the political status quo as we now must suffer as function globalistm run amok. Of course hindsight is always 20/20 vision.

          Carl Nemo **==

        • logtroll

          December 29, 2010 at 9:50 pm

          Would it be in any way considered revolutionary to utilize local resources and labor to replace a normally corporate manufactured durable good with one that is superior in quality and 30% less expensive due to the elimination of unnecessary trucking?

          I just spent the day insulating a 1930’s hotel renovation using recycled cardboard that was remanufactured into high quality cellulose insulation by a locally fabricated mobile processing plant.

          In addition, if you care, this insulation will reduce the fossil fuel consumption of the building by 50%, it already eliminated the consumption of 70 gallons of diesel per 1000 cubic feet of product ( due to eliminating shipping), and its greenhouse gas potential is 1.2% of foam insulations and 21% of fiberglass insulation.

          Revolution, anyone?

          • Carl Nemo

            December 29, 2010 at 10:46 pm

            Sounds like an effective alternative ‘green product’ to me logtroll. You might care to supply a link to the suppliers of such for those involved with renovations, commercial or otherwise. Thanks. : )

            Carl Nemo **==

            • logtroll

              December 29, 2010 at 10:58 pm

              You think there are links to the revolution? Get real, my man.

              We’re looking for investors (see post below). There are many others, but you have to put out some effort to connect.

              This product happens to be on track for an uber green office building in Seattle, a joint venture of the Bullitt Foundation and Cascadia.

          • Carl Nemo

            December 29, 2010 at 11:21 pm

            I thought I’d tip you off on a product for which I’m totally enthused. It’s called TekFoil. It has aluminum on both sides with bubble insulation between. It comes in various configurations. This type of product coupled with superior exterior wall insulations such as your described product will kick the effectiveness up even moreso. It’s 97% reflective to IR/heat radiation. So it increase the maintenance of heat within during the cold months and keeps structures cooler in the summer. It’s placed on the inside walls against the stud wall prior to sheet rock or whatever the covering might be. You still have your insulation between the exterior and interior walls, but this gives almost totally reflective surface to long wave radiation. It also serves as a required vapor barrier. It’s amazing stuff indeed.

            http://www.teksupply.com/farm/supplies/cat1m;TPARTNER;;ts1_tekfoil_reflective_foil_insulation.html

            Disclaimer: I have no vested interest in the production or distribution of TekFoil.

            Carl Nemo **==

            • logtroll

              December 30, 2010 at 12:20 am

              I use it, but it comes from China.

              • Carl Nemo

                December 30, 2010 at 12:43 am

                Who cares if it works. Neither you are I are going to change macroeconomics with our feeble protestations concerning that which is “Made in China”.

                The bottomline is one’s utlility bill which is domestic based.

                Carl Nemo **==

                • logtroll

                  December 30, 2010 at 12:50 am

                  The bottom line is the salvation of local economies and we can impact macroeconomics… it’s a matter of huevos.

                  • Carl Nemo

                    December 30, 2010 at 1:01 am

                    Granted my friend in thought, but to wait for some enterprising domestic business to produce “TekFoil” based on national economic survival principals is somewhat disingenuis to say the least…no?

                    I think we need to “stack arms” on this subject. All I can say is let’s have a toast to good insulative science and the implementation thereof. : )

                    Carl Nemo **==

                    • logtroll

                      December 31, 2010 at 12:24 pm

                      Cap’n, you are missing the point. IF somebody would start making tekfoil-style insulation, IF they would use locally recycled materials to make it out of, and IF it could scrape out a decent market share, THEN it might begin to have the revolutionary effect that we are now getting with cellulose.

                      My first post above was in response to yours, and Woody’s, “robo-posts” advocating some vague and impractical “revolution” agin the evil gummit. I am advocating for a smart revolution where direct solutions to a batch of our problems are addressed in a constructive manner. Local production of cellulose insulation (one example among a multitude of similar possible efforts) would do the following: create local jobs; reduce insulation manufacturing energy usage; reduce the consumption of diesel in unecessary shipping; reduce lifecycle energy use in new construction; save energy in retrofits; reduce landfill costs; generate increased municipal revenues for recycled materials; reduce “leakage” from our local economy (buying goods from elsewhere); be replicable in many commmunities; reduce multi-national corporate control over local economies; and reduce the production of greenhouse gases.

                      You want to start a revolution? Participate in creating local industry in your neck of the woods. If you want to make foil bubblepack, using aluminum and plastic from the recycle stream, good on ya! We can share recipes for making new local industries.

      • logtroll

        December 29, 2010 at 9:19 pm

        Cap’n,

        Is a “jackwagon” a good thing or a bad thing? I like wagons, and I find jacks to be very useful in all their forms. I won’t ask about “mattoids”, I hope to remember to look it up after sending this post.

        • Carl Nemo

          December 29, 2010 at 10:44 pm

          Yo logtroll…

          Urban Slang Dictionary: ‘jackwagon’ …a loser, a dud

          An antiquate term for a chow or supply wagon in the military.

          Sgt. R. Lee Ermey, retired USMC drill sergeant and host of various programs dedicated to military tech etc. uses the term in a GEICO commercial where he’s posing as a shrink. His patient starts sniveling. He then throws a box of tissues at him calling the patient such. It’s an old term, just not commonly used in civilian parlance.

          ***
          mattoid: noun
          (Psychiatry) Rare a person displaying eccentric behaviour and mental characteristics that approach the psychotic

          ***

          Now DROP and give me 25 sailor…! : |

          Carl Nemo **==

          • griff

            December 29, 2010 at 10:50 pm

            You mean this commercial?

            Ha. My favorite is still the woodchuck one.Hey you dang woodchucks, quit chuckin’ my wood!

            • Carl Nemo

              December 31, 2010 at 1:40 pm

              Thanks Griff for the ‘woodchuck’ commercial. They haven’t aired that one in my area at least I haven’t viewed it.

              Of course I’m in a rut, all I watch is History, History International, Discovery, Animal Planet and on occasion SPIKE’s “Reality TV” series in order to get a taste of what the masses are up to. A “Thousand Ways to Die” is a hoot. : ))

              I opted for Comcast’s DVR a couple of years back, that way I can speed through commericals or not waste time on a program that turns out to be less than expected.

              Carl Nemo **==

              • griff

                December 31, 2010 at 6:26 pm

                Ha. Yeah those are the about the only TV channels I watch too, but the Geico commercials play heavily during NFL games. There’s not much good on TV these days, but you occasionally run into a commercial or two that makes you laugh.

          • logtroll

            December 29, 2010 at 10:51 pm

            Mattoid, also; genius and fool.

            • Carl Nemo

              December 29, 2010 at 10:56 pm

              Btw, logtroll, I’ve enjoyed your posts of late and you’ve matured into a solid CHB asset. Welcome aboard…!

              Wishing a Happy and Successful New Year 2011 to you and yours my friend in thought. : )

              Carl Nemo **==

              • logtroll

                December 29, 2010 at 10:59 pm

                Matured, my ass…!

                • Carl Nemo

                  December 29, 2010 at 11:07 pm

                  I wouldn’t have expected less for a response…: ))

                  Gotcha! :D

                  Nemo **==

                  • logtroll

                    December 29, 2010 at 11:10 pm

                    It seems you have simply caught my groove, nemotoid sync’d with the mattoid.

  2. Fivebyfives

    December 29, 2010 at 12:52 pm

    A little trick the Nazi courts used with defendants was to make them wear outsized pants with no belt. That way they had to stand in court with one hand holding their pants up while the judge berated them for appearing so slovenly.

    It is this I think of as an analogy for all these “experts” decrying the spendthrift, thoughtless, and selfish ways of Boomers. Robert Samuelson needs a bib because of his salivating over what’s coming next year: the final solution for Social Security.

    Equipped with half a brain, anyone can discern that SS BY LAW is not connected to the budget. Apparently what matters now is laying of sacrificies upon the altar of the “investing class.”

    I read long ago that politics and economics parted company in the early 1970’s. What this article fails to provide (other than what the writer apparentlly sees as wit…rose colored granny glasses indeed.) are some salient facts. A half-truth works as well as a lie and there is nothing humorous about it. Boomers failed to save? With what? In the early 80’s the Greenspan Commission came up with the proposal (adopted of course) that Boomers would have to pay much higher SS contributions in order for the plan to remain solvent.

    It appears now that this so-called “lock box” was indeed just that. But the key to open it belongs to Wall Street. And they want that money that Greenspan set aside for them way back then. As Carl Nemo pointed out in another thread, the adoption of the FIRE economy (Finance, Insurance and Real Estate) resulted in labor being a disposal commodity. Most productivity gains were not shared by those producing them, yet costs continued to rise to such an extent that a Boomer could in no way approach the ease with which his or her parents financed a home, car, kids, etc.

    The cornucopia of screwy ideas being put out by the elites is astounding. Perhaps a Soylent Green brand of cat food might be offered up until all those Boomers die off. It’s the least they can do.

    The most frightening thing of all is Carl’s observation about the preferred ignorance of citizens. Part of an explanation may lie in the notion about economics and politics parting company long ago. Looking ahead, though, a critical mass can be reached with any populace no matter the current apathy. Hunger has a great way of sharpening the senses.

    Sorry to ramble; tripe like this whipped cream passing for thought pisses me off.

    • logtroll

      December 29, 2010 at 10:00 pm

      A suggestion; stop “investing” in Wall Street. Figure out how to invest locally. Know the company you are investing in, know the people who own it. Starve the f*cking machine. Be responsible with your money.

      If you have ANY money “invested” in the machine, then you are part of the problem.

  3. bogofree

    December 31, 2010 at 4:24 pm

    I have money invested in the machine and the reason is I follow where the real money is going and tag along. When bailouts began I loaded up on bank stocks so any losses of 2008 were vaporized. Those stocks have made a remarkable comeback thanks to being propped up. Precious metal funds have been a goldmine and I do mean gold. Opportunity exist when chaos reigns.

    The best financial advice my father ever gave me was “Don’t depend on the government.” So strategy has always been what if what I have been promised is not there? Well…it is there – for the time being – and it is the gravy.

    • logtroll

      December 31, 2010 at 4:31 pm

      If it is “playing the market” that you are doing, then it is the same thing as printing money (if you are coming out ahead). It’s hard not to be one of “them”, ain’t it?

  4. bogofree

    December 31, 2010 at 5:42 pm

    My first and foremost obligation is to my wife and myself to preserve what we have worked incredibly hard to accumulate. All too often I read/hear this high pitched whine about “big business” and “Big Government” and I have absolutely no issue with investment in a variety of areas that have been quite rewarding. Most major corporations are well run, responsible and are honorable members of our society. I just don’t subscribe to an us against them philosophy.

    As far as “printing money” I find that a bit different since I consider it earning money. I choose my risks according to information I sift through as many of the companies and primarily funds have been profitable. If an opportunity rises such as in banking I latch on to it since the importance is to keep either the illusion or the reality of that sector fiscally solid. I was spot on with that and wish I was with Bear and Lehman.

    I guess I am “one of them” and it is certainly better than living under a bridge complaining about how all the forces of perceived evil have conspired to screw me. I have taken some risks and some have failed but most have been successful.

  5. logtroll

    December 31, 2010 at 7:10 pm

    bfree,

    I understand that reality bites. I have my meager IRA in a mutual fund, though I am working to figure out a way to make that investment apply to something more real and local than whatever the hell it is doing now.

    The concept that I am working on in most of my posts is that our fundamental problems are built into the American culture, into that vague ideology called Capitalism, and that we all participate in it like a gaggle of zombies.

    The problem is not the “others”, the threat is not from a government conspiracy, we are all complicit. We often feel we are buggered by the system and want to opt out, but that’s not possible, either. As for revolution, who does one revolt against, and how? To what purpose?

    The one form of revolution that we can enact is for constructive local change, including changing our own habitual culture. We need to learn to think differently, and that new thinking needs to have a firm basis in a fresh and livable ideology, one that is not looking for enemies and not predicated on climbing over our neighbors out of fear and greed. We need to live more consciously and collaboratively and fight the cultural drift into impersonal isolation.

    To learn to think differently we need to have some pretty in-depth discussions, and to open those discussions it is often necessary to say things bluntly, especially when dealing with heavily fortified preconceptions and disparate assumptions about word meanings.

    Frankly, I don’t expect much in the way of actual progress as a result of posting on CHB. We don’t know each other, we aren’t engaged in any shared efforts, and this form of communication is problematic in reaching any mutual understandings with opposing (or even shared) ideologies. But I find the attempts to be useful in refining my own thinking and I enjoy the creative process of sparring with other posters with art and humor. CHB is an extremely impersonal format, very safe yet virtually useless on its own. I often reuse posts in local interactions, so I get some practice here before taking comments live.

    In spite of apparently really pissing Carl Nemo off recently by calling the kettle black, I am most gratified by his statement that I have “matured” of late. I think that his perception is based substantially on the fact that I have improved my ability to communicate my ideas, because my content has not changed much over the last several years.

    I love satire, lampoon, and wit; I think that others do not always, particularly if they might be the subject. I allow that if I am going to dish it, then I have to be willing to take it, too. I do hope that if I’m on the taking end that is really good stuff! If nothing else, posting on CHB should be entertaining.

  6. bogofree

    December 31, 2010 at 7:19 pm

    Logtroll wrote:

    “The one form of revolution that we can enact is for constructive local change, including changing our own habitual culture. ”

    Nice post. Elaborate on this section please.

    • logtroll

      December 31, 2010 at 8:19 pm

      Jeez, you don’t ask for much, do you?

      My thought behind that quote was related to the local insulation maufacturing scenario that I described above in this thread. In my community, a small and fairly isolated one, whenever a house is built , it contains only a small percentage of local materials; essentially consisting solely of the aggregate in the concrete in the foundation. It is possible to use other locally sourced materials, but usually they will be not in compliance with the building code because they have not been “certified” in one way or another. Our culture has supported an incremental growth in the “certification” industry due to ostensible safety concerns, which has come to mean that a building material cannot be used as a matter of course unless it is manufactured by a company that is large enough to absorb the costs of certification. That leaves out every Mom and Pop business, the backbone of local economies. In a nod to the mentality of conspiracies, much of what is now in the building codes was written by large corporate entities for the primary purpose of limiting competition, not enhancing public safety.

      Perversely, the cultural inclination regarding money is that whatever makes one the most money without being illegal (well, maybe illegal too, if the risk of getting caught is low) is the best. When it comes to investing, financial industry rules that have a similar effect as the building codes govern the game; it is far easier to invest in the Big Machine than it is to invest in our local economies, i.e. Mom and Pop. We even think that it is safer.

      All this is what is killing us. The only return on investment from Wall Street is money. But the corporations that get the money (that’s leftover from the speculation games) goes to further eliminate Mom and Pop from running a business. And there are all the other hidden costs; to the environment, access to healthcare, financial security, etc., that accrue. “We” pay “them” to take advantage of us in exchange for a little bit of money, but it’s not a fair exchange.

      But I don’t buy into the notion that we are helpless because “they” are in control. I believe that we are helpless because we acquiesce to a culture where we are sort of taken care of in exchange for not working all that hard. We believe what we are told, especially where some fear might play a role, and it’s easier to buy substandard insulation made by a multinational corporation and sold to us at Big Box stores than it is to make it ourselves out of our own waste materials and get it “certified” for use in our own homes.

      As it turns out, dealing with the building code issues is a great way to get some proactive experience and traction with local and state governments. And starting up local manufacturing with its attendant jobs really gets their attention. That little bit of political clout then comes into play with the state building code authorities, who (it turns out) aren’t active in any conspiracy to limit competition, they just adopt the code language that they are given. But they have the power to adopt national standards in whole, part, or not at all. And when a local government comes calling that has a manufacturing industry in its community, you’d be pleasantly surprised to note their reaction to code certification.

      Now, wouldn’t you like to invest in such a business in your community if you could? Would you invest in Dow Corning if you had a local Mom and Pop cellulose company, producing that long list of benefits described in a post above, if you knew that Dow was actively engaged in stomping out cellulose as a competing product?

      That was a bit of a ramble; I hope it means something beneficial to you.

      • bogofree

        December 31, 2010 at 8:46 pm

        Unfortunately the road blocks that are placed sometimes can act quite detrimentally for both local businesses and larger more national enterprises. I could go into great detail on my own personal experience in this area and that of many others. IMO much of government is determined to tell you why you cannot do something rather than how you can. I have posted many such examples in the past on CHB. And I am talking local and state and specifically Massachusetts. I am also familiar with Texas and the business environment seems more realistic than in Massachusetts.

        Buying locally is always a significant part of my purchases and the name Bogofree has a specific meaning that translates into being a smart shopper. One would be quite surprised at the ability of locals to actually compete with the “Big Boys” when given that opportunity. Again, I could go on and on about that aspect and have in the past.

        I do disagree with your statement about the only return from Wall Street is money. Money is the result of some – at times – risky capital investments. Many consider Wall Street as some sort of fiscal shell game where money is just funneled from hand to hand. Those investments create the money which is the end result of investing which means job creation and business expansion. I do have some real issues with excessive foreign investments depreciating our own manufacturing base.

        • logtroll

          January 1, 2011 at 2:16 am

          I see that you are paying attention in your life and I respect that.

          One of the drawbacks to this communication format is the need to oversimplify some issues in order to make a point, which I have done. I agree that not all Wall Street investments are just for money, and I expect that you would agree that thoughtfulness is not a fundamental principle in the financial industry in general.