Every scam has unforeseen consequences. Some say it is a pendulum which swings back, others say it is a rubber band which slips the finger of the stretcher once it is stretched to the point of breaking. It matters not how you visualize it, what matters is that you reserve some quiet time each day to which events are creating such forces so you do not get crushed when the swing the other way.
People living in the suburbs with garages kept buying stuff until their garage got full, then they started renting garages at storage places. The storage business grew enough that people who lived in the high priced city, but had cars, began using them so they could have just a bit of stuff. Criminal fraud in business causes companies, sometimes entire economies, to collapse. Sometimes people just spend too much so the storage place cannot auto-bill their maxed out credit card. This creates an industry where abandoned/seized lockers contents get auctioned off. So far, the financial advisors are right, but, I have yet to hear any of them speak of the return swing, snap back, or what is sometimes called the “counter trend.”
Establishment tends to bribe and market heavily against counter trends. This keeps them hidden or inaccessible to enough gullible people to keep the cash flow going for just a little while longer. By establishment I mean whatever individuals and businesses making money from the current trend who won’t exist when the counter trend takes root. Some trends last nearly a lifetime so many people have a strong emotional attachment to them. You should put “Other People’s Money” on your DVD rental list. Danny Divito has a great line which I will paraphrase for you: “I bet the last maker of buggy whips made the best damn buggy whip you ever saw!” This one line, however it was actually worded, speaks volumes today. I imagine the writer threw it in for shock factor at the time, but it has become a touchstone for trend watchers.
A century or so of ever shrinking dwelling spaces in major cities have created multiple generations of people used to not having stuff. (Ever hear of a “junior one bedroom”? It is smaller than today’s one bedroom but larger than a studio. Five years from now it will be the definition of a one bedroom and the current one bedroom units will be divided to become “junior two bedrooms.”) Multiple generations of twenty-somethings got accustomed to taking their old clothes to Good Will or resale shops when buying new simply because they only had storage for one season’s worth of clothing. They got used to buying books to read and movies to watch then either donating them to libraries or used book/movie/video stores.
For a while, the trend was for twenty-somethings to become thirty-somethings with kids. They launched themselves into the suburbs and went on a buying binge. This has basically stopped. We can debate for decades the reasons behind it, but it basically has stopped. Fewer and fewer of today’s twenty-somethings feel compelled to pop out grandchildren for their parents. In truth, fewer and fewer, due to the rash of criminal activity trashing companies and economies, have the financial fortitude to support such a lifestyle. Less than 80 years ago, a high school graduate could take a job in a factory for a large producer of things and be reasonably certain working hard without being a jerk would allow them to have a job for 30+ years so they could raise a family and plan a future. Due to criminal activity at the CEO and government levels, no such belief exists anywhere in America today. That level of trust will never be placed in leaders again because they squandered it for their own gain.
Today’s twenty-somethings don’t believe their is anyone anywhere in leadership which will provide them a future. The Squeeze generation has been telling them this for a while. Naturally many didn’t believe it, at least until two significant events happened. The first event was Mr. Madoff going to prison. In large part this was the marketing ploy convincing them there was someone still looking out for them so the Squeeze generation was full of it. This was followed by mortgage fraud committed with wanton abandonment trashing the global economy and not one banking leader becoming Mr. Madoff’s cell mate for the rest of their natural lives. The rubber band snapped. It will stretch for a long time in the other direction with many consumer driven businesses failing along the way.
We are now faced with multiple generations of people who have lived with little at one time, not because they couldn’t afford it, but because they couldn’t store it. We also have multiple generations which lived with nothing because criminal activity at the leadership level made certain they couldn’t afford it. Are you really surprised that trailer parks, once considered crime ridden areas for the down and out have started to up-scale with the tiny home movement? We now see two story high end tiny homes short enough to get under interstate overpasses becoming the trendy dwelling of choice. This trend isn’t something which is a fad or will die off as soon as the economy improves. Tiny dwellings were forced on the population for many years. The only new part of this trend is that now they are mobile.
As an IT consultant I work with many of the younger crowd and the Squeeze generation. As shocking as it may be for you to hear, a goodly number of them don’t even own televisions. They tend to have a dumb phone and either a laptop or tablet. When they aren’t at work or hanging out with friends, all of their entertainment come via those devices. Many don’t even rent DVDs because their devices don’t have built in players anymore. You will be hard pressed to find a clock radio in their possession as well. Most use the alarm functions built into their phone.
Restricting ones device ownership to these also restricts where one can choose to live. One has to live in a major metropolitan area to get enough Internet bandwidth for this lifestyle to work. While satellite entertainment providers will be able to hang on to the vast majority of American real estate which isn’t covered by other forms of Internet service, cable television is basically becoming a fossil.
Some years back on “The West Wing” Josh Lyman’s character had a brief monologue about how someone he worked for being branded a lunatic because he said we should make retirement and health insurance completely portable because people were going to have 15-20 jobs in their lifetime. Today that lunatic is spot on. The 401K rollover business is huge and a growing number of companies are opting to provide workers with an insurance allowance so they can obtain whatever insurance they want via Obammacare. Despite one dying party’s plan to abolish it, the business community will not let it go away. They haven’t completely figured out how to put money into individual health savings accounts for employees to use on insurance, but they will. Instead of spending months wrangling with insurance companies to get a “good deal” they can now wait for the plans to come out each year, choose a plan level and say, “this is how much we will give you, get your own insurance.” For these companies it is becoming a financial benefit.
Forty years ago the thought of having 15 or more jobs over one’s lifetime was something near heresy, today, it is an accepted fact for most Millennials and much of the Squeeze generation. They realize their life will be spent as a temporary worker. They will live in half a dozen to a dozen cities following projects around the country. What is important to them is their friends and life’s experiences. To some extent, this lack of stuff lifestyle has been forced on them, but they have created a culture around it.
Once it was considered the hallmark of failure to move back home after college. Today it is considered a solid business plan. They stay there working temporary jobs until they take a temporary job in another city or state. During lulls in project work they move back home to help the Squeeze generation with family obligations. A large number of Squeeze generation have completely backed off when it comes to pressuring their children to become grandchildren factories. Personally, I’m not a Millennial, but in large part I’ve adopted this portion of the lifestyle. During my 30+ years in IT I’ve worked close to 20 different projects spread around the country. Unless my skills become completely unmarketable I don’t see it changing for at least another 20 years. There was a time when it was unheard of for a family to not stay in a certain area but now it is very uncommon for a family to not be spread across the country.