Tired of running out of time and money? Scrimping and saving just to make ends meet?
Try moving to Harlingen, Texas. The cost of living there is only about 40% of the cost of living in Manhattan.
Here’s Real Time Economics with a report:
Obama has spoken about having the rich pay their fair share, and $250,000 is a lot of money. But to characterize those households that earn that sum as “rich” depends very much on where they live. Thanks to regional differences on costs, $250,000 does not go so far in places like New York City and Honolulu, compared with cities in Texas or Tennessee.
The Council for Community and Economic Research calculates cost of living indexes for US cities based on goods and services bought by households in the top-income quintile, which nationally covers incomes of about $100,000 and above according to US Census data.
What the data show is that the cost of living in Manhattan is 118% higher than the national average. On the other hand, a household in towns like Harlingen, Texas, or Memphis, Tenn., has a cost of living 15% less than the US average.
What the differences do mean is a New York household earning $250,000 is not nearly as “rich” or has nearly the buying power as a Memphis household bringing home, say, $150,000 a year.
You can live more cheaply in a place like Harlingen. You’re almost guaranteed to lower your spending, because there’s not much there to spend money on.
We’ve never been to Harlingen, so maybe we’re wrong, but we imagine it is a pretty slow place. Few fancy restaurants. Few theatres. Few luxury shops. Which makes it hard to part with money.
Of course this improves your cash-flow. But it also allows you the glorious privilege of doing nothing.
As our friend in Florida reminded us, most people can’t stop. Money in; money out. They have to work to pay the bills. No question of taking time off. No time to think. No time to sit still…and wait for the storm to pass.
Back in the time of the Great Depression, millions of Americans were still not completely caught up in the money economy. Many still lived on the land. They kept pigs and chickens. They tended their own gardens and “put up” their own canned goods. They cut their own wood to heat their houses. They pumped water from their own wells. Many still made their own clothes.
When the Depression came, they could hunker down and wait it out.
But today, the developed world is in a Great Correction. And it shows no sign of coming to an end. Japan is already in a slump that has lasted — off and on — longer than most marriages. Europe is headed into a slump — with half of all young people jobless in many countries. And in the US, at this stage in a typical recession/recovery cycle, the economy should be growing at an 8% rate. Instead, growth is below 2%.
Why? This is no typical recession/recovery cycle. Instead, the private sector is cutting back on debt. At the present, household debt is going down (mostly via mortgage foreclosures) at about 5% of GDP per year.
At this rate, it could take 10 years or more to get household debt down to more comfortable levels, say, around 70% of disposable income.
But the average household can’t wait 10 years for de-leveraging to do its work. Heck, it can’t even wait 2 months. Both parents work. They’ve got two cars. And two mortgages. Money in; money out. 24/7…
No garden. No firewood. No chickens. No time to wait. No time to sit still. Just bills…bills…bills…
They’ve got to work…they’ve got to earn money…they’ve got to spend…
They can’t do nothing.
They should move to Harlingen.
Not much action on Wall Street. The Dow barely moved yesterday. Oil is right at $100 a barrel. The 10-year T-note yield is still below 2%.
The Greeks are “toast,” says our colleague Chris Hunter. The Germans are fed up with them. It looks like they are going to push the Greeks into default…and out of the euro.
But the threat of a Greek default casts a shadow over all of Europe. The New York Times is on the story:
BRUSSELS — Moody’s Investors Service cut the debt ratings on Monday of six European countries, including Italy, Spain and Portugal, and became the first big ratings agency to switch Britain’s outlook to negative.
The move came a month after similar downgrades by Standard & Poor’s and Fitch Ratings. All three agencies cited the debt crisis and its ramifications for the region’s economy.
In a statement, Moody’s said the main reasons underpinning its decision were “the uncertainty over the euro area’s prospects for institutional reform of its fiscal and economic framework and the resources that will be made available to deal with the crisis.” It also cited Europe’s increasingly weak macroeconomic prospects, which it said threaten the adoption of austerity programs and the structural reforms needed to promote competitiveness.
Empires come and go. And in coming and going, they seem to be symmetrical. The way up takes about as long as the way down. The Roman Empire took hundreds of years to reach its peak and hundreds of years to go away. The Third Reich was supposed to last for 1,000 years, too. Instead, it lasted 12, with about 8 years of expansion and 4 years of contraction.
The British Empire got underway with the conquest of Scotland and Ireland. One hundred years after the Battle of Culloden, which crushed the clans and sealed Scotland’s fate, the Brits ruled half the world. But 100 years later, their empire was mostly gone…with the US having taken away the imperial crown.
America’s empire could be said to have begun with the defeat of the South in the War Between the States. Or, perhaps with the invasion of the Philippines in 1899. It peaked in the early ’70s…when US wages reached a top. Or, maybe in the ’80s, when China began to compete with it and the US shifted from a creditor nation to a debtor. Now it is on the downward slope. In a few years, China will have the world’s biggest economy. A few years later, it will probably have the world’s dominant military force.
Will the decline be graceful and dignified? Or marked by bankruptcy, hyperinflation, war and shame?
John Kagan, writing in The Wall Street Journal, doesn’t think he will like it.
If and when American power declines, the institutions and norms that American power has supported will decline, too. Or more likely, if history is a guide, they may collapse altogether as we make a transition to another kind of world order, or to disorder. We may discover then that the US was essential to keeping the present world order together and that the alternative to American power was not peace and harmony but chaos and catastrophe — which is what the world looked like right before the American order came into being.
We don’t know what will happen. But we doubt we will like it either.
Still, we’re not silly enough to think that the path to imperial decay can be blocked by our own willpower. Here’s Kagan again, delusional:
…international order is not an evolution; it is an imposition. It is the domination of one vision over others — in America’s case, the domination of free-market and democratic principles, together with an international system that supports them. The present order will last only as long as those who favor it and benefit from it retain the will and capacity to defend it.
He seems to think that if an imperial power spends more money on its military industry it will somehow resist the tides and the winds. All of imperial history argues that he’s wrong.
When an empire’s time is up…it’s up.
Bill Bonnerfor The Daily Reckoning
Since founding Agora Inc. in 1979, Bill Bonner has found success and garnered camaraderie in numerous communities and industries. A man of many talents, his entrepreneurial savvy, unique writings, philanthropic undertakings, and preservationist activities have all been recognized and awarded by some of America's most respected authorities. Along with Addison Wiggin, his friend and colleague, Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. Both works have been critically acclaimed internationally. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind The Daily Reckoning. Dice Have No Memory: Big Bets & Bad Economics from Paris to the Pampas, the newest book from Bill Bonner, is the definitive compendium of Bill's daily reckonings from more than a decade: 1999-2010.
Okay, the Pentagon’s budget for R&D/Procurement ALONE was reported this week to be $180B. All we’ve been hearing for 9 months is that Greek debt of $170B could collapse the free market worldwide.
So which is it? Is $180B Economic Armeggeddon or just another day at the (Pentagon) office? Can’t be both, kids.
Major interview by Thomas Friedman on CBS today:
Can you imagine the small towns of the USA being invaded by Manhattans lawyers, infestors and taxi drivers?… and their wives?
I’m thinking it’s a mad mad mad mad world.
Bill, your fatalism is something else. The winding down of the empire may take the rest of your life to play out. Maybe to the end of your bloodline.
The transfer of power from the people to the oligarchs appears to be complete.
I think most of us know what would happen to Ron Paul if he was to pull off a miracle and win, so one can’t even hope for that.
EMPIRE ENDS, SO WHAT?
Bill’s warnings of the end of the American Empire usually imply that this will be a bad thing for the average American (but highly entertainong for Bill).
But wait, as Bill often says,the average American does not benefit much from the empire.
The average Brit is far far better off than the average Brit at the peak of the British Empire. So too, the average citizen of Rome is infinitely better off than at the zenith of the Roman empire. Germans, same thing.
So bring on the end of the empire ASAP please. It will be entertaining and will not hurt the average citizen much if at all.
I’m going out on a limb now, but this may be the dumbest thing Shawn has ever said, totally ignoring the advances that have occurred worldwide in the intervening time.:
“So too, the average citizen of Rome is infinitely better off than at the zenith of the Roman empire.”
Yeah, now he can watch Europe crumble on the evening news.
être doux avec Shawn. Il a pas le même puisque les médecins supprimé le béton de son cerveau.
We believe a Greek payment default could be a greater shock to the system than Lehman’s failure, immediately causing global economies to contract and markets to decline. The euro is structurally flawed and will likely eventually unravel.
Vote Rick Santorum!
Harlingen Texas? And if you move to the South, sure the cost of living is less but there is a reason it is that way. What is there to do? Nothing. Where will you work? Not many choices and the ones available are probably low paying blue collar jobs. In the rural areas you have to drive long distances to get any place, how much will you spend on gas just for basic transportation? We all need friends, how well are you going to fit into a new small community and culture especially if you are an outsider ie not born and raised in the South? Sounds like a lonely, miserable, boring life for someone who was not born and raised with that type of life.
“The present order will last only as long as those who favor it and benefit from it retain the will and capacity to defend it.”
The capacity only lasts as long as it is a wise investment. When $1 spent in defending the present order provides $2 payback. That’s no longer the case. Now, hundreds of billions spent in Iraq and Afghanistan and the Chinese end up with oil contracts.
My point is empires come and go, but economic progress rolls on.
As an America you are not on team America, (team Empire), you are on Team YOU.
Team YOU may be better off as the empire crumbles.
My parents lived in Texas. I was almost born there (missed it by a few months).
The corner gas station had a wall that “moved”. Bugs, lots of bugs. Dirt and dust. But maybe a New Yorker will feel right at home?
“Where will you work?”
remember the infestor’s creed. “Other People Work For ME.”
Lets all head for Rancho Santana.
I live in Happy, TX, which has a population of 647 people, (when everybody is home). We have a bank, a gas station, a cafe, a firehouse, a school, a post office and 4 places of worship. With all due respect, we’re pretty happy that y’all don’t want to be here any more than we would want you to come with all of your problems.
Here’s to living where your happy!
What about Argentina? Ohh yeah, it’s a ticking bomb…
Ooops – need to do your homework, Bill! Metro Harlingen has a population of around 65,000 and it’s slap bang in the middle of the Rio Grande Valley – population of more than 1 million.
Nothing to do or spend money on? Try telling that to the HORDES of Mexicans from Monterrey, Tampico, Ciudad Victoria and San Luis Potosi – around christmas time, one is hard pressed to find a Texas license plate in the rivers of Mexican vehicles along Expressway 83 that runs the from Brownsville to McAllen.
Bill, Bill, Bill… why are you doing this? We’ve got enough problems with folks coming into the South (I’m from Tennessee) from other places, attracted by the “low cost of living”. Most of them love the people, the scenery, and the food, but soon start whining about not having all of the government “services” that they were used to having up north, or out west. Soon, they’re trying to get taxes raised so THEY can have those “services”, all while building big houses that cause their neighbors property taxes to increase because our politicians see one big fancy house in an area and decide that the “value” of all the property in the region has gone up.
Why not encourage people to keep their jobs at home, move to a simpler dwelling with a bit of yard space, and grow a garden? They’re doing that in Detroit. Why do you want to send them all down here to roost?
Nothing against Yankees in general, but we don’t want another invasion thank you very much.
Apologies for the excessive use of quotation marks.
When you've got a room full of 200 oil insiders scratching their heads at current high prices, something's gotta give.
For most investors, it’s weird to think of stocks as their go-to investing option.
The petropoly has bills to pay and setting the price of oil was a simple way to balance their budgets.
Investors don’t seem to care that what's propping up their investments is what will ultimately destroy them: government monetary policy.
For the next decade the energy revolution will be likely confined to the US, displaying the robustness of American entrepreneurship.
Why the Sage of Baltimore’s commentary persists through America’s changing times.
After attending Platt’s oil conference in London I want to relay two important themes you need to know.