Children Growing Up in a Different World

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We sat in a cab yesterday, stuck in traffic in central London. We watched people walk by and wondered. What are they thinking about? What do they want out of life? What do they think of themselves?

There were hundreds of them…different shapes…different sizes. A businessman in a pin-striped suit, briefcase in hand, concentrating on his sales report; he almost stepped in front of a motorcycle. A salesgirl, grotesquely overweight…yellow hair streaked with brown…wishing she hadn’t had so much to drink the night before. A lawyer daydreaming about his secretary. A man who would have rather been fishing…still in his waxed coat. A woman annoyed about something. A heavy construction worker, his legs splayed outward as he walked. A tense young woman who dared not look up. A woman worrying about her son. A man thinking about buying a new car. One man trying to remember a line from a song he learned 30 years ago. Another talking to herself. One looked like a doctor taking an afternoon stroll. Another was stark raving mad.

All of them walking along…from one place to another…shuffling along…the living towards the dead.

We were thinking of our children. What a different world they grow up in. And yet, it is still the same too. A man might have been stuck on a London street 50 years ago…and hundreds of years ago he might have watched the same shopkeepers and carpenters walk by, each caught in his own thoughts like a fly in a spider’s web.

Our old friend John Mauldin wrote to say that his mother’s experience was not much different than ours. She joined the WACs during the war…met John’s father…and then nature took her course.

But both John and your editor had a big advantage in life. We both caught the upswing.

Not so with our children. They inherit a different world. America was the world’s leading nation in the ’50s and ’60s. And it was growing in power and wealth – rapidly. We grew up with it. Things were getting better and better…we were sure we’d live much grander, richer, and more exciting lives than our parents. The sky was always the limit!

Now, America is in decline. China’s economy grows while hers declines. The Far East has savings, while she has none. The Asia nations are net exporters, making huge profits…while American industries are judged too old, too expensive, and too highly regulated to compete. Americans have debt up the kazoo, while their competitors have little. A young person in America has to look forward to supporting 70 million retired baby boomers…and paying for their drugs, their food, their wars, and their bailouts.

For our children – ours and John’s – the situation on a personal level is different too. Coming from poor families, we could look forward to much more wealth and material success than our parents ever knew.

We came back to Ireland this week for a reason that our parents would never have dreamed of. Your editor has set up a family office. It is a very modest affair by family office standards. The typical family office manages a fortune of $100 million, according to The New York Times. We may not even be on the same planet with these rich families; but we are in the same universe. That is, we try to think about…and manage…our wealth as rich people do…as a family legacy or an endowment, not as a retirement fund.

What wealth we have accumulated – even if it is paltry – will be held by a family-owned corporation. Then, the corporation, run largely by the adult children, manages the assets – from our base in Ireland.

Your editor, freed from the responsibility of managing his own money will be free to wander and think…like a vagabond, a gypsy, a refugee, an itinerant mendicant…forced to sup on whatever is at hand and take lodging wherever he can find it – but favoring the Four Seasons and Chateau Margot when they are available.

Whatever else this does, it puts the children in a very different situation from their parents. Instead of starting out with nothing, they’re starting out with something. While this would seem to be a big advantage to them, it has huge hidden disadvantages. Like America itself, they are in danger of finding themselves slipping downhill. Instead of expecting things to get better, they may find it hard even to hold onto what they’ve got. Instead of the “Morning in America” that Ronald Reagan promised, they may find that it seems more like evening, both in their personal as well as their national lives.

“From shirtsleeves to shirtsleeves in three generations,” say the French. The grandfather begins without a coat. His grandson ends that way.

But what to do? Spend it all now…so the children begin with the same clean slate we had? Move to Brazil or India – countries with more obvious upside?

In the deep, cosmic end, it probably doesn’t matter. The advantage to starting out on an upper rung of the ladder may be about equal to the disadvantage of having to worry about falling off. Who can know?

Every man has to play the cards he’s been dealt. What else can he do? He may have a humpback or a beautiful voice. He may have had a hard upbringing or a soft head. He may have a fortune worth of poetry in his soul but not dime in his pocket. As far as we can tell, every young man starts out even. Each one begins life in the same place – where he is. And every generation takes what it is given, and makes the best of it.

The real advantage in life is having the gumption to get on with it; no one knows where that comes from.

Until next time,

Bill Bonner
for The Daily Reckoning Australia

Bill Bonner

Bill Bonner

Best-selling investment author Bill Bonner is the founder and president of Agora Publishing, one of the world's most successful consumer newsletter companies. Owner of both Fleet Street Publications and MoneyWeek magazine in the UK, he is also author of the free daily e-mail The Daily Reckoning.
Bill Bonner

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Comments

  1. Surely it is not all that bad, Bill!
    America is still a beautiful land with great potential for self-sufficiency. Self-sufficiency in food and an educated workforce are great treaures “in the bank” already.
    If anything, these times might lead to some improvements in quality of life. As an Australian Generation X-er, I have noticed some small shifts in thinking among (some of) my peers. There has been some greater appreciation of the jobs that we DO have. Many are learning the art of self-sufficiency (knitting, sewing, gardening, recycling). There seems to be less interest in enormous houses with 6 bedrooms (that nobody uses) and more notice of more moderate accommodation that we CAN afford. All these are simple things that our grandparents took for granted. And they bring a peace of mind that a bank “book entry” cannot hope to achieve- let’s hope these small changes last!
    The real risk I see is the geopolitical one. Pax-Americana has seen some relative stability over these last 60 years that has led to better lives for many. Loss of American influence will see a shift that will lead to many other powers trying to fill the void. This will be the real test for my generation….

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  2. I would say I am more inclined to go with John Mauldin’s view/outlook than Bill Bonner’s. Thanks for the link Goldwing.

    Greg Atkinson
    October 27, 2009
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  3. Mr Bonner’s position appears to be pessimistic Sir. America faces difficulties. Her people are accustomed to advantages. However, to adapt from a position of infinite superiority to superiority, should not be an immense hardship.

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  4. I think Bill has identified his real asset – his family. If you build your family well, with some sort of proper culture, attitudes and life education (as opposed to schooling), then what little you have materially is less important, because in the end it’s people and their actions that make life what it is, not so much inanimate objects.

    If you have no family (or your family is broken), then it’s all the more sad when you have wealth, because it will surely evaporate. It’s all ancient advice but some how today it sounds more radical than it ever. From what I have seen, most people’s inability to rise from the financial bottom (or even get their head above water) has more to do with their personal and family disarray than their economics/tax/business/financial prowess. The western world’s weakness is that, lacking extended families, individuals rely on safety nets – it’s sometimes the most expensive way to do things.

    Maybe we don’t realize the real way we are being robbed blind – not through taxes, but through the destruction of centuries old family culture.

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  5. Dan I would add health to the list of truly valuable assets. No use working like a dog and then falling off the perch too early :) Stress is a killer but I think I safely soak that away at the local public hot baths.

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  6. The world is going back to the 1930s and nothing can stop it. America, like Greece, cannot pay back its debts and the socialist-handout nations of Europe and broke, Australia and Canada are killing themselves with runaway living costs (rent, carbon taxes and unmentioned real inflation). As for China, it won’t replace America as China is facing demographic collapse that is more severe than the demographic crash that has just erupted in America.

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