22 Aug Bonus Episode: “The Public Always Forgets”
“The sun shines
And people forget
The spray flies as the speedboat glides
And people forget…”
“Eminence Front” by The Who.
Whenever I publish anything about the déjà vu the current markets are giving me, I will have at least one troll – usually either a mansplainer, corporate shill, or bot – assure me that we could just neeeevvvveeerrrr have another 2008 again. Really?
The crappy thing is: Wall Street is right. The public forgets. I recently watched The Divide: The Real People Behind the Wealth Gap on Java Discover and one of the interviewees, a former VP at Deutsche Bank, recalls a conversation about the bailouts in which she was told, “Well, here’s the thing: the public always forgets.” Now here we are.
You can find the film here: https://www.youtube.com/watch?v=Z1WvDqj1qzQ
Other links I discuss in this episode:
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Transcription by Otter.ai. Please forgive any typos!
Welcome to the Causey Consulting Podcast. You can find his online anytime at CauseyConsultingLLC.com. And now, here’s your host Sara Causey. Hello, Hello, and thanks for tuning in. I wanted to record this bonus episode to talk about a documentary I recently watched over on Java Discover titled The divide the real people behind the wealth gap. Of course, I will drop a link to it so that you can check it out for yourself. I’ve talked before about how I don’t think we’re in a K shaped recovery. I think we’re in a K shaped economy at this point. If you’re not familiar with what a K shaped recovery is, I will use some definitions that are fairly handy from the Business Insider. A K shaped recovery is an unusual scenario where certain industries and individuals pull out of a recession while others stagnate. A K shaped recovery essentially splits an economy into with the divisions occurring along class, racial, geographic or industry lines. A K shaped recovery exposes pre existing divisions and disparities and wealth and can exacerbate them in quote. Yeah, I think that we’re in a K shaped economy. I do not think it’s a K shaped recovery. I recently published an article about Wait a minute, I thought people are doing great. Meanwhile, there are all of these articles about pawn shops across the country talking about people living paycheck to paycheck, people getting desperate for cash, people having to pawn things they never thought they would just to try to get by. So it’s like, wait a minute, how is it that people have more money in savings than ever they are doing great, but then they’re struggling to even make it paycheck to paycheck now and they’re having to go pawn things at a pawn shop. Something here is fishy, something here does not make sense. I will read for you now the description for the divide. The Divide tells the story of seven individuals striving for a better life in the modern day US and UK, where the top point 1% owns as much wealth as the bottom 90%. By plotting these tales together, we uncover how every aspect of our lives is controlled by one factor the size of the gap between rich and poor. This isn’t based on real life. This is real life. Wall Street psychologist Alden wants to make it to the top 1% KFC worker Leah from Richmond, Virginia just wants to make it through the day. Jen in Sacramento, California doesn’t even talk to the neighbors in her upscale gated community. They’ve made it clear to her that she isn’t there kind by weaving the stories with News Archive from 1979. to the present day, the divine creates a lyrical, psychological and tragicomic picture of how economic division creates social division and serves as both a call to arms and a powerful warning. The film is inspired by the critically acclaimed best selling book, The Spirit Level by Richard Wilkinson and Kate Pickett in quote, you know, there was a period of time where Bondo was cool. I’m probably gonna get hate mail for that. But you know, it’s true. I remember back in the 80s and 90s. Man, I played the hell out of U2. And I still, like whenever I start to feel the bringing on a fall, I turn on A Sort of Homecoming immediately, that remains one of my favorite songs, you know, that I listened to you to all through the 80s and 90s. And I remember Bondo, had this character he would do called Macphisto. And there was a routine that he did at one of the concerts where he says something like people of the former Soviet Union, I’ve given you capitalism. So now you can all dream of being as wealthy and glamorous as me. And in watching this documentary, The Divide I remember thinking about Macphisto, saying that now you can all dream of being as wealthy and glamorous as me. He also said to the people of Sarajevo, count your blessings. There are those all over the world who have food, heat and security, but they’re not on TV like you are. There’s some great satire in that. And the sad thing is, maybe it’s not so satirical after all. So in this documentary, the divide, the Wall Street psychologist is just working and working and working and working as a tiny office that looks to me like it’s about the size of a broom closet. And that’s where he spends most of his time. And I remember in the documentary, he says something like, if I’m lucky that I get to go across the street to the diner and I can sit and read the New York Post, and that’s my little slice of heaven. I can just be alone and I thought, wow, that’s, that feels pretty intense. And while I myself am against hustle culture, I am a proponent of free will. And if it is that man’s prerogative to sit in his broom closet office and see client after client after client after client because that’s what he chooses to do. I’m not going to get in the way of that if someone chooses to work a lot of hours because that is what they are doing have their own free will. Okay, okay. Where I feel like my, like I get a sour taste in my mouth about hustle culture is when it’s forced on people. When founders and CEOs of companies act like well, you need to be as bought into this place as I am, I started this company with my own blood, sweat and tears 30 years ago, and dammit, you need to care as much about it as I do. Meanwhile, this person is making a fraction of a fraction of a fraction of the amount of money and they’re just trying to survive. It’s like, no, they’re not bought in to your mission. They don’t care as much about your baby as you do get real. But if someone is an entrepreneur, and they say I do want to work 20 hours a day, I’m on my hustle, I’m on my grind. No one’s forcing it upon me, I am doing this out of my own freewill. I’m not gonna stand in the way of that. Based on what we see in the documentary, he is apparently trying to get into a situation where he and the wife and the two kids are moving out somewhere to the suburbs, they’re getting into some affluent house and an affluent neighborhood and they’re very status conscious, oh, look at the cars that are here. You can tell a lot about the neighborhood by what kind of cars you see parked in the driveway. Oh, so if he wants to do that, if he wants to work 20 hours a day in order to try to get his family into this affluent house. That’s his business. It’s not the life that I wouldn’t want to leave. But it’s his choice. It’s his life, liberty and the pursuit of happiness. And if he feels like that’s what’s going to make him happy, then that’s on him. They also follow a fast food worker in Richmond, Virginia, who as they say she’s just trying to make it through the day. She’s trying to do the best that she can to get by. And she talks about how she had congestive heart failure during one of her pregnancies, and she’s on high blood pressure medicine. And in her neighborhood, she talks about we don’t go out after dark. As soon as it starts to get sunset, we go in the house, we lock the doors and we just stay in. Because it’s not safe to be out. It’s not safe to try to go out and do anything social at night because you could get hurt. Then you have this other lady who’s behind a gated community in Sacramento and it’s never really explicated how they got there. The most that she says in the documentary is well, it’s not like we won the lottery and decided to move to a gated community, but it’s never like, she doesn’t explain well, how did they get there? It’s as if they’re miserable in this gated community, but it’s so it’s like, why did you go there? Then? What What if you felt like you were going to stick out like a sore thumb? Then why did you move in there? What was it that you were trying to do? Were you chasing status? Did it really mean something important to you? Again, the most the most that we get in the documentary is an explanation of well, we wanted our kids to be in a good area, we school systems matter. But then at the same time, she turns around and says, Well, we’re probably going to homeschool the kids. I don’t understand there’s some dynamic there. There’s something that’s not being said, there’s something that’s not being explained. And when this woman takes her kids, she’s pregnant with another child, and she takes the two kids that are out of the womb, to the playground, nobody wants to play with them. And it’s been made clear to her that they they don’t want the other people in the neighborhood have more money, they have more power. They don’t really, they don’t really want to socialize. It’s almost like you’re the riffraff. You’re the token riffraff that somehow got into this neighborhood. And we don’t want to be anywhere around you. Also, in the documentary, there’s a part where a second gate is potentially going to be added to this gated community to like separate the haves from the have nots within this gated community, like Well, here’s the people that we really want in here with their golf carts and their certain kind of dog and there’s certain kinds of vehicles and you know, they don’t do their own yard work. We want to separate the cream of the crop here from the scumbags that somehow got in at all. One thing she says in this documentary is that a man like stares at her doing her own yard work and says nobody rakes their own leaves. And apparently, this family is looked down upon in this gated community because they have not yet hired a gardener. Okay, so again, I guess my question is, well, what did you expect? If you move into a gated community full of uptight yuppies? What did you think was going to happen? You know, it just reminds me of that Randy Travis song better class of losers. I’m getting out of this high rise penthouse suite where we pretend to life’s rosy and sweet. I’m going back to the folks that I used to know where everyone is what they seem to be. And these high class friends that you like to hang around when they look my way, they’re always looking down. So I don’t know what these people expected when they moved into a gated community full of uptight yuppies, but I guess they got a good lesson and what that lifestyle is like, I know I sure wouldn’t want it. In the UK, they also profile a home health care worker, and her schedule is insane. There. It’s like she has to haul ass to get to a stop. And then she’ll say, Okay, I’ve only got 20 minutes to get in here, get this elderly person out of the bed, help them put their clothes on serve them breakfast, try to have something like a meaningful conversation with them. And then I’ve got a haul as to the next destination. I mean, it was crazy. It was I doubt that woman probably collapses from sheer exhaustion. As soon as she gets home, there was another man in Scotland who was talking about how his mother had died very young. And he felt like he was on the same path due to using alcohol and cigarettes. And he just says, like, I don’t feel like ever really had a chance based on where I was born. And the way that I grew up drinking and smoking. I wish I could have gotten addicted to something like fruits and vegetables are addicted to going to the gym. But unfortunately, I got addicted to cigarettes and alcohol. It was very, very sad situation. So in this documentary, you have an interesting juxtaposition. And I think it really does highlight my argument about the K shaped economy, you have some people that they’re just they’re hustling, you know, they’re always chasing that next destination, whether it’s another house. In fact, the people that were so keen on getting into this gated community only to find out that they were considered to be the Riff Raff of the community, it shows them going out looking for other houses. Okay, and then you have the psychologist who I’m gonna sit in in this cardboard box sized office and work myself after death, because we got to get into the status symbol house, we’ve got to have this the status symbol clothing, I’ve got to look a certain way. And sometimes I let my wife dress me, because she knows what brands are best. So you have these people that are always chasing. The next thing. In juxtaposition with the guy in Scotland is just trying to survive. He’s just trying to live longer than his mother did. The home health care worker that’s just trying to get to the next destination and help the next client, the fast food worker that’s just trying to get home without getting shot and killed, be able to sit down on her front porch without worrying about violence. They also profiled a lady somewhere in the south, I think she may have been in Louisiana, but she had owned and operated her own retail store. And then when Walmart came to that community, it really like put the kibosh on her store and made it to where she couldn’t compete. So she decided to go to work at Walmart. And she talks about the stresses that she faces in that job. So here we have this case shape of people that it seems no matter what they’re trying and how hard they’re trying. Their situation is just hand to mouth. But then on the other side of it, you have oh, well, we want to get out of this yuppie gated community and get into another house, oh, well, I want to get out of my apartment and get into a house that looks a certain way. And it’s in a certain school district and we can wear certain clothes, and it’s like, where do we go from here? I don’t have an answer for that. I really don’t. And and wouldn’t even try to offer a prescription for it. The part in this that absolutely chilled me to the bone was a quote that comes from a former vice president at Deutsche Bank. Anytime that I tried to publish anything, whether it’s a podcast episode, it’s a blog post something on one of the other platforms where I’m a writer. When I publish anything, saying that I have deja vu about the current markets, I feel like we’re back in a loop. I feel like we’re back in 82. Or I feel like we’re back in 2007 2008. I will have at least one troll. And it’s usually either a mansplain or a bot or some type of paid corporate shill in my opinion, because I do believe they are out there. I will have one individual who will assure me that we’re good jazz. No, never. And the minute that I hear well, we could just never I tune out. You’ve lost me you’re not in my opinion about to make anything resembling a rational argument. Anytime we get into these big sweeping clickbait statements always never everyone no one entire generations are lazy. entire generations don’t want to work. I tune out because you’re being so broad. You’re painting in such broad strokes, that I’m not going to go there like come back to me with some data come back to me with some evidence. And in my mind sitting back and pompously saying, well, we could do this. No, we’re having another 2000 A delegate. We’re helping again. What planet are you on? You know in real estate for whatever reason seems to be the worst of it. That seems to be where the most mansplain errs and bots want to get up on their high horse until you Oh, well, the banks are not giving out junk loans like they did back then they’re being so much more careful. You could just never have another housing market collapse. And it’s like, well, I don’t know if you believe that. I don’t know if you’re being paid to put that message out. I don’t know, if you’re a piece of AI that’s just being programmed to put that message out by some fat cat, I don’t know who you are. But if you’re an actual flesh and blood human being with finances, I hope you don’t believe that. Because you could get yourself into a world of hurt thinking like that. And I hope other people who are perhaps more impressionable won’t believe it either. Because they can get themselves into a world of hurt like any you lose me, anytime we get it, we could just nerve or so this VP, this former VP, I should say, from Deutsche Bank recalls a conversation about the bailouts. You know, those those of us who were alive and well, back then we remember when we were asked to bail out these industries that were too big to fail. They were just too important. And one of the things that I like about this documentary is they don’t get partisan. They don’t say, Okay, well, it was just Republicans. It was just Democrats. It was just this president, it was just that President, they don’t they they play clips across the board. I mean, there’s one of wo W. Up there. Well, I know that we shouldn’t bail out people that just made bad housing decisions. They just got greedy, and they bought more house than they could afford. But then you also have, you know, Democrats up there saying, Well, you know, normally I understand we you know, we wouldn’t ask I mean, we wouldn’t come to you hat in hand and ask the American taxpayer to do this. It’s just that these industries are just so important. We can’t just let them fail. And it’s like, yes, you can’t. If we had anything that was truly resembling a free market economy, then you wouldn’t have collusion between corporate America and the politicians. You wouldn’t have corporate America going to the politicians going to the government saying, hey, hey there, buddy, old pal, can you give us some taxpayer money and bail us out of this little switch? We got ourselves into Thank you kindly. We would that wouldn’t be going on. So draw, I’m politically agnostic on this podcast. So draw your own conclusions about why that’s allowed to go on. So this former VP is talking to her boss saying it was the public ever going to forgive us for what’s happened here? Are they ever going to forgive us for these bailouts that we took from them? And her boss allegedly said to her, Well, here’s the thing, the public always forgets, the public forgot, after the savings and loan crisis, the public forgot, after long term capital management blew up, the public always forgets. So they’ll forget again, and we’ll move on, things will go back to normal, so don’t worry about it. Now, as I said, whenever we get into the big sweeping statements of everyone, and no one always and never, I start to check out. So I’m not going to sit here and say that everyone, I think everyone forgets everyone goes back into a state of ignorance is bliss. That’s not true. I would say, a lot of people forget, a lot of people just sweep it under the rug and keep moving on and they get into the well, we could just never happen again. Oh, well, of course it could. It could be happening again, right now who who are we going to be asked to bail out in this ugly ball of wax? Will it be crypto? Will it be banks again? Will it be the housing market? I don’t know. I have no idea. But I just I would not be at all surprised if we don’t get another you know, hey, we’re coming to you with our hands in our hands and asking you all for bail out. bomp, bomp. That can happen. I definitely think that we’re going to see some big shakeups in the housing market. Now, as I’ve said before, I’m not an economist, a professional financial advisor or planner. I am not a billionaire or hedge fund manager, not an all seeing Oracle, I cannot give you advice and I am not giving you advice. I’m just sitting here, opining for your entertainment only and I definitely think that we will see some major poopoo hitting the fan in the housing market. I don’t see any way around that. And these people that want to act like we just never have another 2008 I don’t feel that confident. I don’t feel like that’s the case. I feel like we could have yet again, another poopoo storm of epic proportions where people got into the fever pitch of FOMO. They bought at an inopportune time they saw the low interest rate but they didn’t necessarily see all the things that were wrong with the house that they bought, whether it’s in a crime infested neighborhood, whether the whole house is a lemon and everything needs to be fixed and they can’t afford it. A lot of these people also got in based on their ability to make the monthly payment. Hello, that’s part of how it works. So what happens if one of the people in the household gets laid off? What happens if both individuals in the household get laid off? There’s a lot of things that could go wrong and cause the wheels to come flying Not the whole, the whole vehicle. I mean, speaking of vehicles, auto auto loans, there’s more defaults happening on those. I feel like there’s this whole entanglement of things that could potentially go wrong. And I’m not sitting here trying to sound like an ER or gloom and doom are really what I want to do is to just pull the curtain back a little bit and say, Hey, are you prepared? Do you have a job loss survival plan? Are you living beneath your means? Did you go out in the midst of FOMO last summer and buy a place that was more house that you could afford? Or did you waive and and a home inspection and get stuck with a limit isn’t a house now where the okay the plumbing is shot and the H back is shot and the electrical needs to be redone? And you’re sitting there? Like, what in the EFF did we do? Did you move into a yuppie gated community and suddenly get surprised that you were with uptight yuppies? Sorry, I know it probably sounds like I’m lambasted those people. But I just I don’t understand. It’s like, what did you expect was going to happen? That’s the part that I don’t get. This is also why I have said repetitively by the time the general public wakes up, in my opinion, you have waited too late. You’ve waited too late to rough out a job loss survival plan. I mean, let’s look at it this way. If you’re part of a mass layoff, if you already have a game plan, you know who that first phone call is going to be you you you have a little bit of money put back, you have a plan roughed out, you’re automatically going to be in better shape than somebody who had their head in the clouds, like, oh, I had no idea that a layoff was impossible. labor shortage, labor shortage, job market hot, you know what I mean? Like, you’ve at least gotten your mind in a place where you can cope with this reality. And you can try like hell to get hired again, at another company, get some money coming in, etc. If we have a food and water shortage, if you’ve put some back to help yourself and your family get through, you’re in better shape than someone who doesn’t have anything at all. Unfortunately, I think the boss in this situation is correct. Not everybody in the public. But I think a lot of people in the public forget. They they put these things under the rug, they forget about previous bailouts. They forget about the sins of Wall Street and the bankers and corrupt corporations, and they just keep on going, maybe it’ll be different this time. Maybe something like that will just never happen again. But then it does. You know, you give it five to 10 years, and then they’re they come back with their hat in their hand. So sorry to have to trouble you for your hard earned tax dollars. But is there any way we could have some of that money so we can take and do all of this all over again, another decade? That’d be great. Okay, thanks. Check out the documentary if you want to, I thought that it was pretty interesting. I’d love to tell you that I don’t think we’re in a K shaped economy. But I think we are. And whatever is brewing up here might indeed make it worse, because there are people that never fully recovered from what happened in 2008. So you wonder about what will happen to those people this time around. It’s a scary and sobering thought it is I don’t want I don’t want to be a gloom and doom or I don’t want to be an Eeyore. Get your mind right. You know, decide whatever is about to happen. Whatever kind of poopoo storm is brewing up in the economy, we’re going to make it through. We’re going to we’re going to make adequate preparations. We’re going to stay we’re going to stay sane. You know, whether that involves prayer and meditation, mindset work, we’re going to do what we need to do to stay healthy and stay sane. In the meantime, please do just that. Stay healthy, stay sane, and I’ll see you in the next episode. We hope you enjoyed today’s episode. If you haven’t already, please take a quick second to subscribe to this podcast and share it with your friends. Thanks for tuning in. We’ll see you next time.