Most people don't have the self-confidence in their analytical capabilities to resist the endless drumbeat from the media, from their neighbors, from the government. Many people thought they could not afford their house, but figured they must be wrong because everyone was saying they could.

For obvious reasons, the government & the media do not teach or encourage independent thinking. They want sheeple. They got sheeple. And while I do hold the sheeple accountable, there are mitigating circumstances.

That's what I'm pointing to, in part.

I'm looking at the fundamentally untenable situation we've set up with our fiat currency and its imminent collapse. Who of the rich knew that they were operating in a system that was unsustainable? Whether they would have done something about it is another matter, but I'm quite certain that there were/are many people who authentically thought that free markets, which tend to permit positive feedback loops to be set up quite easily ("the rich get richer"), were "the right" way to better the collective good. I am not blind, by the way, to the fact that the human emotion of greed is operating in many cases when people advocate free markets, too.

On the other hand, I think people "without" also often have a story/narrative that they are somehow disadvantaged ("I wasn't born rich" "I'm not smart" "The system is set up against me" "I have x/y/z skin color" "I think money is evil" "Poor people are better people, therefore I 'choose' to be poor" "People who are rich are somehow sneaky or cheaters or liars") and then they don't take the actions that would make a difference because they are trapped by their story. They may in fact have certain circumstances that are true, but circumstances can almost always be worked around, perhaps with some exceptions. These stories (or "limiting beliefs" as we call them in the coaching world) aren't unique to people without money, but when someone doesn't have money, there is always, in my experience, one of these stories operating. Have the person see that they are just stories ("limiting beliefs") and suddenly they are freed up to take actions they would not have taken before.

Back to the free market system. I come across people now in the environmental field who still think development of "underdeveloped" countries via free market mechanisms will lift the people there out of poverty. Well, it will, and in the early stages of development I don't think people are worried about the end game i.e. that the system will result in what we have in the Western nations with vast differences between the rich and the poor.

It seems to me it always comes down to education. As I said, I just in the past six months learned about the worldwide credit bubble. I don't think many of "the rich" knew that collapse was mathematically the only result possible once the system is set up.

I love how people never like to take responsiblity for their actions.

I ride my bike frequently to Portland - an 18 mile each-way trip. I grow more than enough food for family. My house is paid for. But that is not responsibility, it is congruence. It is as much as I can do and to do less would not be personally acceptable. But it is a luxury that I have that most of those in the vehicles passing me on the road do not have. It's not responsibility - frankly it is more of an experiment: how far can I go on the bleeding/leading edge?

"Never take responsibility for the actions". What would Homer Simpson say? It takes two to fraud. One to create the fraud and another to accept it. And that is American business. Responsibility and American? Oh please - oxymoron. What are consumers supposed to think? Are they supposed to know better than the system, to know that all these loans are fraud?

Who is responsible for the polar bears, the eels, the plankton, the bees, the bats, the trees and the rocks? Perhaps they should hire lobbyists? It's their fault they did not?

cfm in Gray, ME, manufacturer of fine guillotines.

DT - What you're saying is not exactly right. People are looking at circumstances from a societal perspective that have to do with our culture of greed and consumerism. We always wanted more yet more was never enough and we believed that consuming was good at least that was what we were led to believe.

We all went along with it therefore we are complicit in the crimes. But what people are trying to do now is break the spell of these stories once and for all.

TOD is about creating new stories, stories worth living.

SABOTAGE....

For whatever reason, people chose to go into debt. You can argue that they were conned or manipulated, but they were not forced.

For whatever reason, banks chose to make loans. You can argue that they were conned or manipulated, but they were not forced.

And the banks aren't human. Though you can be sure their senior managers and directors will never be cold or hungry. Which side are you on?

It's hard to explain to a crying child
Why her Daddy can't go back
So the family suffer
But it hurts me more
To hear a scab say Sod you, Jack

How do you know that debt is only for things you desire but can't afford? I am a single parent with a full time job, and I have to go into debt to pay for anything over and above food and utility bills: dentist, car repairs, school trips, house maintenance and repairs. We have an old TV, don't take foreign holidays (we only go camping in the UK), I don't smoke, drink or go out socialising and most of our clothes are second hand. Christmas and birthday presents are usually bought on credit. Of course I could choose not to go to the dentist, repair the car, leave the house to crumble around us, etc - but please don't tell me I'm buying luxuries on credit.

Taking the train, in Dallas? Surely you're jesting? ;-)

I have spoken to many others in similar positions as this young couple. It is great that you gave them positive feedback. To go down the same "crazy" path as a couple is a low probability event and if one wavers the relationship is at risk.

Sanity can be viewed as either conforming to social norms (very Freudian) or having a good grasp on reality (very scientific). However, given that we are highly social creatures it is very difficult to base decisions on a reality-based rather than social norm-based epistemology because being told you are crazy feels bad even if you know the people telling you this are clueless. Especially because in the short term they can look like they are doing much better than you!

Two types of Americans: Those who now realize that we live in a finite world, and those who will realize that we live in a finite world--in much the same way that there were two types of passengers on the Titanic, those who realized that the ship would sink, and those who would realize that the ship would sink.

Bloomberg: Wealth Evaporates as Gas Prices Clobber McMansions, SUV Makers
2008-06-08 19:00 (New York)
By Rich Miller and Matthew Benjamin

June 9 (Bloomberg) -- Sky-high gasoline prices aren't just
raising the cost of Eugene Marino's 120-mile round-trip to his
job in the Washington area. They're reducing his wealth, too.
House prices in his rural subdivision beyond the Blue Ridge
Mountains in Charles Town, West Virginia, have plunged as
commuting expenses have soared. A four-bedroom home down the
street from his is listed for $239,000, after selling new for
$360,000 five years ago.

Homeowners in the exurbs aren't the only ones whose assets
have taken a hit because of the surge in energy costs. Companies
such as General Motors Corp. and UAL Corp. are writing off
billions of dollars in plants and equipment that are no longer
viable in an age of dearer oil. The destruction of wealth and
capital will weigh on U.S. growth for years to come.

``Our whole economy reflects the relative costs of energy:
the cars we drive, the houses we occupy, the kinds of factories
we have and the equipment in them,'' says Dana Johnson, chief
economist at Comerica Bank in Dallas. ``I'm expecting relatively
large changes in all of these things.'' The loss of wealth could be a
double whammy for the U.S. economy. In the short run,
it depresses demand as homeowners save more and spend less,
and companies fire workers. Longer run, it curbs productivity growth,
as firms shift their focus from increasing worker efficiency to
reducing energy costs.

.

Peer Pressure.

Is a terrible thing.

During the late 90's and early Noughties, people were being swamped by offers of loose credit. They offers from card companies and loan companys would hit the door mat daily.

It was made to seem normal. People saw other people getting the house/car/holiday/ lifestyle of their dreams and followed suit. Access to credit was easy - so, why not?

Before the crunch I reduced all our cards to zero balance. This made me a credit 'dead loss'. In terms of a credit company I am exactly the kind of joe soap they dont want.

They sent threatening letters because I had zero balance and zero interest, they threatened to a) reduce my limit, b) tried to tell me it would affect my future credit score!

They got the card back by return post in little bits.

I keep two, put stuff through occasionally, just to keep them warm.

Only today, even now I was offered a loan when I renewed my car insurance.

It is easy to fall into this trap and should not surprise anyone that it happens.

One thing that doesnt happen in the education system is basic financial training.

People were gulled. The small-time victims will pay and the perps will get bail outs and large bonuses.

The system only works if the victim continues to believe thay were at fault.

The only way to win is not to play.

What will be interesting for the Anglo-US model is that the 'Raptor Class' only make money in times of change. Up or down is not the issue for them, but it will be hard to place bets on a chilled system in stasis - without credit or liquidity, they cannot create bubbles to feed off the joe soaps.

Thats what we had: Bubble Capitalism.

Hey Bob I thought about you the other day when I came across this:

http://www.youtube.com/watch?v=hM1x4RljmnE

In economic systems, interest rates are not guaranteed.

Hence, the really smart collect the interests rates that are too important to fail AND can be enforced.

Here's trying again with a new image source:-)

"well above median intelligence"-- whatever that is. I know a lot of people who don't qualify as having a high I.Q. but who have a lot of experience and common sense, and a lot of brainy college grads who do not. The former "get" it, the latter do not.

There is some faculty besides "intelligence" as it is usually defined by academic psychologists that allows people to see the world fairly clearly and to determine their own advantage. And I think JáP has captured it quite well. Even though the "French Disease" might be said to be writing in far too abstruse a manner.

so that its effectiveness can be extended further down the IQ scale

Maybe you could keep it simple by first saying, "I win and you lose". You know, just to get the listeners' blood flowing to their dull brains. Then make them a new offering of finance, for the group purchase of pitchforks. I think they would get the point but then so likely would you.

As far as intelligence goes though, merely winning the game to lose the world doesn't strike me as all that bright.

I love the Black Adder sketch where Nursie talks about her crippled relative who was so smart he invented a way to cut his toenails all at once ... using a scythe.

Very wise commentary Dave, but, following on that, maybe it would also be wise to start the inflation versus deflation controversy going again? I'll start off with this little ditty.

Leaving aside the population growth implication in those lyrics, I imagine you can see on which side I figure my bread will be buttered .

Once upon a time, to get a mortgage you needed:

A savings track record of at least two years with the intended mortgage lender - Usually a Building Society of common ownership and not a bank owned by stock holders.

A 10% deposit.

An interview with a scary mortgage officer (you and your wifey)

Then you would get 2.5 times your salary and 1 times of hers ('the little women will be with child soon anyway').

This made two things form the bulwark of capitalism for little people:

1. They did not lend to dickheads
2. They did not create a bubble and houses were, by and large , affordable.

But then they 'improved' things.