Twitter | Search | |
ted, 15 May 18
I think it’s worth mentioning with all the retirement talk going around that the very idea that everyday people could save up their own money to retire was basically unthinkable until the (very unevenly distributed) post-WWII boom.
Reply Retweet Like
ted, 15 May 18
Replying to @teioh
Pensions were not a widespread thing until the 1940s (civil seevice pensions started in the 1920s). The 401(k) started in 1978 and then subsequently replaced many pensions in the 1980s - 1990s. Almost every retirement financial instrument didn’t exist before the 1950s.
Reply Retweet Like
ted, 15 May 18
Replying to @teioh
Even banks are mostly unrecognizable compared to the 1920s outside of the savings account. Certificates of deposit were a later thing. Government bonds for everyday people really didn’t take off until Wilson’s War Bond campaign during WWI (1917-1918 really).
Reply Retweet Like
ted, 15 May 18
Replying to @teioh
The idea of regular people investing in the stock market at all was absolutely laughable (and Wall Street resisted it for some time) until the 1930s-ish. Then the idea of the everyday investor citizen really took off.
Reply Retweet Like
ted,
What I’m basically saying is that most “retirement experts” have data that is derived from, at most, one full generation, tops, from a unique moment in US economic history, whose economic climate has changed dramatically in the last fifty years.
Reply Retweet Like More
ted, 15 May 18
Replying to @teioh
I’m not saying they’re economic snake oil salesmen, but they’re also not exactly the Arbiters of Hard, Cold, Financial Truth, either. They’re totally making it up as they go.
Reply Retweet Like
ted, 15 May 18
Replying to @teioh
We’re All Screwed, But We Were Always Screwed is basically what my thesis is arguing
Reply Retweet Like
ted, 15 May 18
Replying to @teioh
I remember once arguing with someone in 2004 that 401(k)s are an untested, unverifiable financial instrument. “What,” he said, “you think AIG and Lehman Brothers are gonna disappear in your lifetime? They’ve been around for a long time.” Indeed.
Reply Retweet Like
ted, 15 May 18
Replying to @teioh
I’m not saying this to be smug or gloat that, haha, I was right, and everyone else are rubes. I wish I was wrong. But this is America where security is only guaranteed if you already could buy it. And it’s only gotten steadily worse as the decades have rolled by.
Reply Retweet Like
ted, 15 May 18
Replying to @teioh
Absolutely that financial advice works for a certain slice of the demographic. But you will never be able to save up on your own for retirement working minimum wage. The powers that be have certainly made sure of that.
Reply Retweet Like
ted, 15 May 18
Replying to @teioh
It’s in their best interests to make you believe it’s your own damn fault you’re poor because then you are too busy castigating yourself and others to notice their hands are in your pockets.
Reply Retweet Like
ted, 15 May 18
Replying to @teioh
To add to the history facts though, FDIC and Social Security came out of the 1930s. Federal Reserve was born in 1913 but didn’t really get any teeth again until the 1930s. Until then, bank panics were cyclical and often, usually occurring at least once a decade.
Reply Retweet Like
ted, 15 May 18
Replying to @teioh
Our current financial system is less than 80 years old, really. We haven’t had more than one generation from cradle to grave who has experienced what they were supposed to experience within the financial systems we created.
Reply Retweet Like
ted, 15 May 18
Replying to @teioh
People born around Social Security’s creation (1935) wouldn’t start collecting until 1995-2000, when it was already “in crisis.”
Reply Retweet Like
ted, 15 May 18
Replying to @teioh
Even then, Social Security did a lot to eliminate poverty among the elderly in the US. The poverty rate for those over 65 was something like 40% before Social Security. It dropped to 10%ish (but has continued to climb steadily once again).
Reply Retweet Like
ted, 15 May 18
Replying to @teioh
The US’ haphazard welfare programs still provided a lot of good to millions. They were once very popular and well regarded as an efficient means for redistributing wealth and keeping the working poor alive enough to stop rioting and striking for the most part.
Reply Retweet Like
ted, 15 May 18
Replying to @teioh
What changed? Well, a lot of things. But since the 1970s you can see one particularly noticeable trend: as more non-white people who were once explicitly excluded began to gain entry to gov’t programs, white people stopped supporting those programs. 🤔
Reply Retweet Like
ted, 15 May 18
Replying to @teioh
Anyway, US economic history is fascinating and I recommend reading about it. I’d argue you must understand the US’ economic history to understand anything else. One prof remarked they could teach the entire US history from the perspective of housing. I’d kill to take that class.
Reply Retweet Like
ted, 15 May 18
Replying to @teioh
If you want to know especially about the development of the idea of an ‘investor democracy’, I highly recommend When Wall Street Met Main Street by Julia Ott. Anyway, tl;dr - most of this “timeless” retirement wisdom is less than 50 years old.
Reply Retweet Like
building thinking growing 15 May 18
Replying to @teioh
So what would you recommend for a millennial wanting/needing to some day retire from work?
Reply Retweet Like