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Robert J. Samuelson Discusses Risk, Reality and America’s Future

Where Entitlement Ends Reality Begins.

“There is no security on this earth; there is only opportunity.”

– Gen. Douglas MacArthur (HT: Charles Hugh Smith)

The One-Hit Wonder Pop-Act Timbuk3 is probably not the first place you look for philosophical enlightenment. But when it comes to funny, mordant sarcasm that makes an interesting point in a humorous fashion, you could do worse than the YouTube Video below.

Back when I worked as an Operational Tester for Sam’s Army, I was at Ft. Campbell working in my data shed. I took a break to talk to an LTC on my test team. I was talking to him about things he saw over in Iraq.* It stunned the man that Iraqis cared so little about personal safety. They rode around in flatbed trucks with no headgear or seatbelts. They routinely worked in 100 degree + weather with no shirt, no canteens and probably no suntan lotion. He just couldn’t reconcile this with the safety-first risk-averse mentality of the successful Army Staff Officer. These people actually allowed Negative Chance Deviations.**

The soldier I bantered with while my data forms came in from the test range was a great American. He just didn’t realize something that we all seem to be learning now to our demise. Having the resources, time and knowledge to take the risk out of literally everything is a luxury. It is a luxury that we increasingly no longer have. You don’t have to wear shades anymore. The future isn’t bright enough for you to afford that awesome pair of Oakley’s. If Robert J. Samuelson is accurate; we are entering into a new age of risk. He explains below.

We are passing through something more than a period of disappointing economic growth and increasing political polarization. What’s happening is more powerful: the collapse of “entitlement.” By this, I do not mean primarily cuts in specific government benefits, most prominently Social Security, but the demise of a broader mind-set — attitudes and beliefs — that, in one form or another, has gripped Americans since the 1960s. The breakdown of these ideas has rattled us psychologically as well as politically and economically.

Throughout most of history, people have known better than post-modern Americans. Life is tenuous, unfair, unjust, Darwinist and filled with cruel, iniquitous vicissitude. Americans don’t *like* the messages of Old Testament Books such as Ecclesiastes or Job. They particularly wouldn’t like Job if they sat down and gave it a thorough read. I don’t have physical proof that the devil really does “go to and fro in the earth” or that he really “walks up and down it” looking for decent people to screw over. However, in may and divers ways, the life of the average American will get more tenuous and more scary in years to come.

Samuelson cites a poll commissioned by Allstate and The National Journal that describes a frightened country. 59% of the people surveyed felt they would decline in social class over the next few years. However, 56% of the same sample felt they would one day be in a higher social class before they died.

Certain aspects of our existence certainly have become more risky than they were before. Charles Hugh Smith points out that 4/10 of 1% of the professional fund managers on Wall Street successfully beat an index fund of the S&P 500 over a ten year period. He claims this proves fund managers are rentier capitalists and are just out to fleece people. I think it proves reality is too volatile for mathematics to effectively predict.

It’s not that you shouldn’t be entering the markets to prepare for your retirement and to pay children’s college tuitions; it’s just that you have to be a lot more skillful than your Mom and Dad did in order to reach your goals. Investing is now a much more risky proposition than it was when these fund managers developed their techniques. Reality is way more complicated than math and science every single time.

I blogged a similar problem arising with higher education. It was the one thing that caused me to have a quantum of sympathy for a few of the people who protested alongside #OWS. If you want to see rentier capitalism at work that would make both Marx and Keynes throw a conniption fit, take America’s higher education system. No really, take it; please! I opined as follows:

A common gripe that I can empathize with some myself involves the crushing burdens that come with student loans. The protestor pictured below is a prime example.

Screwed

Screwed

Did this guy plan poorly and screw up? Yes. Should he have chosen his school with some concern for his own economic well-being? Certainly. Are we certain he would be the cracker-jack science teacher he would claim to be? Of course not.
But does he make an interesting and valid point about our current system of higher education? Bingo.

It’s not that you absolutely shouldn’t go to college. It’s just that if you choose to, you have to perform better professionally afterwards to justify the expense for four years (i.e. pay off that loan before it becomes a punishment of Sisyphus). College just became a risk instead of a guarantee.

The same is true with employment, health insurance, personal security and hundreds of other different things. We all got used to not even having to think that we would ever be attacked for no logical reason. 9-11 happened. We all got used to thinking that we would pretty much have guaranteed employment if we were good in school and good team players. The recent Great Recession happened. ObamaCare was supposed to fix the entire health insurance problem. Please tip the wait staff I’ll be here telling jokes all week.

So we’ve pretty much rediscovered what the Ancient Hebrews knew in the time of King Solomon.

15 Whatever is has already been,
and what will be has been before;
and God will call the past to account.[b]
16 And I saw something else under the sun:
In the place of judgment—wickedness was there,
in the place of justice—wickedness was there.

So does this mean to the future? Simply that where entitlement ends reality begins. There really is no free lunch. Being decent and doing the right thing does not guarantee success – it only means that success may be possible. I hope we are ready for all that this will entail. Judging from #OWS, and from President Obama’s successful reelection campaign in 2012, I don’t think most of this country has a clue how to live in a world like that.

*-Late 2003 or early 2004, I forget exactly when.
**-Ops Research speak for allowing something to have a chance of going wrong without a possible benefit.

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