Frame of Reference
This made me realize how important it is to have an appropriate frame of reference when we evaluate things. Yes, things in the US will get worse in the near future, especially if your frame of reference is the recent past, late 90s and 2000s (especially 2000s). I cannot argue with that. We spent money we did not have and now it is payback time. A number of companies were socialized by our government. So how are we different from Russia then?
The difference is night and day. The US did not do it for Robin Hood(ian) reasons. It is simply playing the role of lender of last resort. This may prove to be a right or a wrong move, only time will tell. But the US government is reluctant to socialize its private sector, and will de-socialize its stakes in private enterprises as soon as it can. In fact, it has embedded incentives for financial companies that issued preferred stock to the US government to buy it back or at least refinance it within five years, as the preferred dividend rate jumps from 5% to 9%. We are not Russia where permanent socialization is taking place.
We may have to drive the same cars for a longer time, watch TV on a 42 inch TV set instead of 64 inch, or god forbid eat out less. Most of us don’t have to worry about being able to put food on the table. My kids (my son is 7 and my daughter turned 3 a couple of days ago) were both born in this country and will not have my frame of reference from growing up in Russia – I am thankful for that. But at the same time it is my responsibility as a parent to instill a proper frame of reference in them. They don’t know how lucky they are to be growing up here. I am planning to watch Pursuit of Happyness with my son (my daughter is too young) a terrific movie starring Will Smith that will hopefully make him appreciate what he has a bit more.
Even at our worst we don’t have to fear repercussions of being critical of our government or president. We cannot be told by our government what we can or cannot write. In August I wrote a fairly critical article of Russia and war in Georgia. I never submitted the article to be published. I was going to visit Russia in September and simply did not want to take the risk. I know I am a very small fish and read by only 20 people (on a good day). Call me a coward, but even a very remote risk of being persecuted for my thoughts while I was visiting Russia did not appeal to me. We have many freedoms that we simply don’t appreciate, because fortunately (and I mean fortunately) we have a different frame of reference. We’ve had freedom of speech in this country for a long time and unlike Russia we are not looking at nationwide unrest, dictatorship and loss of personal freedom.
Today’s conversation with the journalist brought up another sad memory of growing up in Russia. I was eight, my mother took me to sign up for chorus. The teacher was filling out an application/questionnaire. One of the questions was “what is your nationality”. I said I was Jewish. But I vividly remember guilt and shame when I said it. I did not know why, but I knew something was wrong with me being Jewish. That was an anti-Semitism in Russia for you. A freedom of being who you are is another freedom that we take for granted.
Despite this being quite a very difficult year, there are many things we should be thankful for, we just need a different frame of reference.
Wishing you a very Happy New Year!
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I wholeheartedly agree with your thoughts. A comparison within modern day US is almost impossible. I watch two major news services on a daily basis, and read online, yet I find no mention of the inflation rate as a percentage. Only discussions of deflation/inflation/recession/depression and what somebody thinks it is, how about a “mini-depression”. The WSJ and most are optimistic for 2009, that we’ve hit bottom, (Gee that’s a safe bet) and I think this: the interest rate is almost 0. We do have inflation, because Groceries cost more. We guaranteed 7 to 8 Trillion dollars worth of ??? to ???. Yes, WE Did. That means more money in the system, and things will cost more, and then more inflation. And 3 million jobs ? Illegal immigrants becoming legal, NAFTA, and rebuilding roads, will soak up those jobs. Not put the out of work back to work. Unless of course, Someone changes the Math, or just says “The unemployment rate is down”. “Inflation is down”. Back to the start, my groceries will keep getting more expensive. Inflation.
You are read by more than 20!
Humility is a nice trait to have.
In your case, however, if Mssr. Putin was one of the 20 then perhaps there would have been a problem.
I have been impressed (not in a positivel light, but impressed nevertheless) with the extent to which the radiation-treatment was “allegedly brought from Russia to England.
Have you ever done any studies on Master Limited Partnerships, such as REITS, Canadian Royalty Trusts, etc?
Sam Marx
I appreciate your insight into Russia. Living on the West Coast, I have noted how Russian immigrants rapidly embrace the value of living in this country, in terms of freedom and opportunity.
I only wish that some other immigrant groups would spend less time advocating for nonassimilation and even parity for their homeland cultural traditions and customs, and spend more time considering why they left their homeland for America.
What are your thoughts on the predictions of Russian academic Igor Panarin? I know his views are extreme but he is getting a lot od attention (apparantly).
Happy New Year!
Cheers,
Gene
Maybe only 20 people read your blog but I, for one, heartily recommend others do so. I was a holder of AIG stock when I came across your column on it in early 2008. I found the logic compelling: if former AIG chairman Greenberg can’t figure out what the company is worth, how can anyone else hope to? So, I sold at a small loss in the mid-50s, even though the paid advisory services I subscribe to still recommended it. Most of us know what happened later in the year (Congress put a TARP over the AIG corpse.)
I don’t want to sound like a shill (or a relative) but I’d also recommend the “Active Value Investing” book.
Its interesting to read your comments regarding Russia. They are comically inaccurate. There is nothing you could have written as remotely vitriolic of the current goverment as that which can be found on their free press, free internet and free radio. National TV news does have a heavy state lean – the equivalent of Fox. In fact, all the vitriolic articles written by the Neo-con/pro Israel lobby in the USA are translated at www. inosmi.ru for all Russians to read. We can not say the same. Russia’s economic problems stem from a drop in demand which can be easily countered with Keynesian stimulus possible in a surplus country. This approach will fail in the USA as we are a deficit country. If you hadn’t noticed the entire US economy is now a farce. Panarin’s predictions would have already come true if the Fed had not abused the dollar’s status as world reserve currency and created money forbankrupt banks and corporations. The Emperor is exposed , and its fat and ugly. It is also sad that so many emigrees from Russia of Jewish extraction continually bash Russia with a stream of lies. You have not lived their for 17 years. What do you know of Russia? That which you read in our corporate controlled mass media who push an agenda? BTW. Russian has just scratched the surface of its economic/strategic potential and will certainly be the richest and most poweful country in the world by 2020-2025. Thats something you can take to the bank – if their still working