Money Can't Buy Happiness -- But So What?

“Where do you think you are?” the old woman challenged me. She had opened her shutters and stuck out her gray head across the road as I stood next to my little car in the driveway of one of Mr. DesHais’s friends. I had driven Mr. Deshais to the small village to pick up his rototiller.

I tell you that because the question I had just been posed requires context. The same interrogative in a Paris cafe might be an invitation to discuss existentialism. Or, driving along with Elizabeth, it might be an invitation to an argument. (Elizabeth knows I am reluctant to ask directions or even look at a map.)

But here, on the proletarian side of the little village of Azat-le-Riz, it was a rather rude way of greeting a stranger.

I didn’t know how to answer.

“Why…where am I?… Is this Planet Earth?”

She made no response.

“Ah…” I continued, “yes, it must be. Well, I guess I’ve come to the right place…”

At about that moment, Mr. DesHais emerged from the garage.

“Bonjour Madame,” he called to the woman who, with a sort of grunt of recognition, withdrew her head from the window.

Mr. DesHais is not concerned with money or his neighbors. He has more important things to think about — like drinking. And asparagus. Both need careful attention, leaving no time to worry about money. Mr. DesHais, as near as I can tell, is a happy man.

I followed him into the garage, ducking down through the low door, but hitting my head anyway. On the left were a group of very smelly rabbit cages with enough animals for about a dozen meals.

We passed through the garage and emerged at a vegetable garden. Like all of Mr. DesHais’ garden work, this one was impeccable. Everything was in perfect order. No weeds. Nothing was left untouched. Every square meter had been worked and tended. All of his sense of order and rectitude seems to be focused within garden walls. Outside of them, his life is a mess.

The gardener pulled out some salad plants and gave them to me to carry. Then we made our way back to the car and drove around a series of very tiny roads to another of his hangouts.

The place was dilapidated. You could barely tell that someone lived in the stone building. Smoke was coming from the chimney and there was a dented car in the driveway. Had it not been for those signs, the place might have been mistaken for a sheep barn. There were sheep around. And chickens. And a dog, which barked as we drove up.

I was backing up towards the rototiller when a hulking figure slowly drifted out of the door, like a rusty freighter passing under a bridge. The man was dressed in workclothes. He looked about 50 — except that he had the most remarkable hair. It was black and shiny — like the hair on a newborn baby. It was thick, too.

While I was admiring his hair, I noticed that he leaned to the left. If he was a freighter, he had been loaded improperly and was listing to starboard.

His starboard eye barely opened, too.

“That’s Andre,” explained Mr. DesHais. “He’s a little strange.”

If Mr. DesHais thought he was strange, the man must be a certifiable lunatic. Our gardener lives in a world peopled by colorful drunks and half-wits. As I have told you, his driver’s license was taken away…in the interest of the safety of the rest of commune. So I chauffeur him around on errands.

Elizabeth and I visited the chateau in Azat-le-Riz just a little over a week ago. We had coffee in those polite, but unsatisfying, demi-tasse cups amid the ancestral portraits and peeling wallpaper. Now Mr. DesHais was showing me the other side of the village.

I write like I drive. In today’s letter I have a rough idea of where I am going, but I’m open to surprises. Every road takes you somewhere — though not necessarily where you intended to go.

Wealth is, of course, relative. I exhibit my own relatives as proof. My daughter, Maria, says she is embarrassed to bring her friends over to our apartment. We live in a modest flat on the ground floor. I would not have chosen a street-level apartment, but we were in a hurry to rent something…and it wasn’t easy to find an apartment big enough for our large family. Besides, the place was a bargain.

But ground floor apartments in Paris are very unstylish. They are often lived in by the “concierge,” who looks after the apartment building.

To make matters worse, the children are all going to schools in a rich part of the city — the 16th arrondissement. Maria reported that one of her friends had invited her to lunch. The two girls lunched with her friend’s mother in their apartment, where they were attended by a maid in uniform.

Jules, meanwhile, went to a party at a friend’s apartment and reported that the child lived in an apartment that resembled the palace of Versailles. The apartment was on two floors and had a reception room big enough for 32 12- year-olds to run around.

My mother, meanwhile, who lives with us, affects an “innocents abroad” attitude. “From shirtsleeves to shirtsleeves in three generations,” is the French expression. Money comes and goes. My mother has seen all three of the generations in a single lifetime. She has been rich and poor. She can recall, fondly (I believe she recalls everything fondly), living in a house without indoor plumbing or central heating. A contrarian like her son, she was rich during the Depression, but flat broke during the boom of the `50s.

I recall being broke in the `50s. And the `60s. And the `70s, for that matter. But not fondly.

On the other hand, were it not for the family, I would have a much different attitude towards money. Left to my own devices, I am as happy hobnobbing with Mr. DesHais’s alcoholic n’er-do-wells as I am with Elizabeth’s more upmarket friends.

Which brings me to the point of this little letter (I imagine you are relieved to discover that it has a point).

I find that I am happiest when I am working outside. As a hobby, Churchill laid up brick walls during WWII. Masonry attracts me, too. Imagine what fun it would have been to work on a wall with Winston!

Ah…but the pursuit of pleasure is one thing. Making money is another. If money could make people happy, there should be a lot more happy people in America today than there were 40 years ago.

“According to a Federal Reserve report,” writes Shlomo Maital in a recent issue of “Barron’s,” “between 1992 and 1998 net household wealth rose to $70,000 from $55,000.” Are people nearly 30% happier? Mr. Maital answers the question: “Despite this,” he says, “the percentage of Americans who state they are `very happy’ has actually declined slightly since the mid-1960s from 40% to just over 30%. And studies of self-reported subjective well- being show only a weak link, or no link at all, between happiness and wealth.”

But so what? If money is not worth pursuing…happiness is an even less worthy goal. At least the pursuit of money is much less selfish.

“Greed is good,” said Gordon Gekko, who went on to explain why. People make money, not for themselves, but for others. In making money, people render a service to others and are rewarded for doing so. The more service they give — whether it is by making a software program available to the world or by making capital available to the businesses that need it — the more money they get in return.

At least, that is how it is supposed to work. But this is Planet Earth…where nothing is ever as simple or as straightforward as it seems. And none of life’s roads leads exactly where you expect.

Bill Bonner

London, England May 17, 2000

*** As expected, the Fed bumped up rates by 50 basis points…or one-half a percent.

*** And as expected, Wall Street celebrated. The Dow rose 126 points. The Nasdaq shot up 109 points — or more than 3%.

*** Not only did the Fed increase rates, it also said it would continue to increase rates. Now analysts expect yet another rate hike in June.

*** So why the joy on the street? Well, as one analyst quoted in the Reuters report put it, “Now a lot of the bad news is out of the way.” There may be another hike coming, he said, “but that will be it.”

*** Of course, the explanation makes no sense. But the most recent inflation numbers are soothing. And a lot of people don’t believe the Fed will be able to increase rates in June — or anytime soon, for that matter. It’s getting close to a presidential election. The Fed won’t want to be accused of throwing its weight towards one camp or the other.

*** What is really going on, however, is that while the Fed talks about tightening and raises rates marginally, it is not really stifling the flow of money and credit. Cash, as measured by M2, increased at a rate of 10.7% in April. All the money supply measures are showing increases roughly twice as large as those of output.

*** And the stock market doesn’t seem to know what to do with the mixed signals. It’s been in a bear market. But there’s no guarantee that it will stay in one. A few more days of rising prices and I’ll have to come up with a new explanation. But for now: sell the rallies.

*** Prime lending rates have been boosted to 9.5%.

*** The euro has fallen again. Year to date, the euro has gone down more than the Russian ruble. How’s that for protecting the value of a currency?

*** It is surprising that gold does not react. The euro, the dollar and the yen — none of them has the integrity of even a tort lawyer. And yet gold, which should be giving them competition, acts like a depressed vegetarian. What gives?

*** Andrew Palmer, writing from the Bay Area, passes along the latest real estate news: In Palo Alto, a grand neighborhood, on an “inviting tree-lined street,” a house damaged by fire and uninhabitable…sold for $1.5 million. An 11-acre property, no house, listed for $35 million, sold for $53 million. A 3-bedroom cottage, in the sleepy village of San Mateo. “Modest, humble, small.” List price: $900,000.

*** According to the “San Francisco Chronicle,” 10 homes in San Jose sold last week at an average of $53,000 above list price.

*** By contrast, you can still get eight acres on Roatan Island, Honduras, with a 3,000 foot strip of sandy white beach for just US$5,000 an acre. Or, as I reported here last week, a 3-bedroom cottage in a sleepy village in Ecuador. Modest, humble, small. List price: US$9,000. Visit International Living

*** The “Financial Times” reports that Zimbabwe, where the president’s supporters have been going around murdering and intimidating opponents, has “one of the world’s fastest shrinking economies, with gross domestic product falling between 5% and 10% this year.”

*** London is a lot livelier than Paris. At midnight, restaurants and bars are crowded. Streets are full. You can barely walk through Leicester Square. Like Paris, there are American tourists everywhere.

*** Let’s take a look at the papers: Elizabeth Taylor was at Buckingham Palace yesterday, where she was made a “Dame Commander of the Most Excellent Order of the British Empire.” Dame Elizabeth regretted that the “love of her life,” fellow boozer and two-time husband, Richard Burton, could not be there to see it. Ms. Taylor is, by the way, a British citizen.

*** I see they still have no cash in the cash machines in France. Hmmm…this could pose a problem…

*** And there are fewer “old maids” in Britain…the spinsters are marrying later and later, according to “The Times” report.

The Daily Reckoning