Thinking Retirement? Two Questions For You
Ever since I wrote Next – The Retirement Bubble for Barron’s a couple years ago, the end of traditional retirement has been a subject of special interest to me. I have a short post up today at my Retirement Bubble blog that is short and as sweet (or not) as you like. I want to share it here too.
—–
The book is The Changing Body: Health, Nutrition, and Human Development in the Western World since 1700 by Roderick Floud, Robert W. Fogel, Bernard Harris and just published by the Cambridge University Press. Although it provides the impetus for this post, I have not yet read the book, although I have read the research paper which provides the basis for the book. That doesn’t help, as the authors did not address the specific subject that interested me today. They raise a question of importance. I don’t know how they answered it and I only know it was raised thanks to a reviewer at Amazon. Still, it caught my eye. Here is Amazon’s review in whole, emphasizing the portion of the sentence that so intrigued me.
Humans have become much taller and heavier, and experience healthier and longer lives than ever before in human history. However it is only recently that historians, economists, human biologists and demographers have linked the changing size, shape and capability of the human body to economic and demographic change. This fascinating and groundbreaking book presents an accessible introduction to the field of anthropometric history, surveying the causes and consequences of changes in health and mortality, diet and the disease environment in Europe and the United States since 1700. It examines how we define and measure health and nutrition as well as key issues such as whether increased longevity contributes to greater productivity or, instead, imposes burdens on society through the higher costs of healthcare and pensions. The result is a major contribution to economic and social history with important implications for today’s developing world and the health trends of the future.
Perhaps the authors do intend to direct this to the “developing world” (aka, the people making money) and not the “developed world” (aka, the people wasting money), but they have neatly summarized one of the critical issues that led me to write Next – The Retirement Bubble for Barron’s.
Looking beyond ourselves and considering the world we will have to live in for the rest of our lives and our role in it, this does pose a challenging question, doesn’t it? I could run on for a couple dozen paragraphs on this topic, but I am not going to do it. Instead, I am going to pass it along to you. I am going to ask you to accept one thing…that you may live substantially longer than you think you will today, let’s say ten to twenty years longer. Just put aside any doubts about that and accept it. Now, each of us needs to answer two questions. First:
Will my longer lifespan make me more productive or impose a burden on society through the higher costs of healthcare and pensions?
I think you can guess which of the two will make you more popular in years to come and I hope that would be your choice anyhow, but indeed, if your choice is productivity over imposing a burden, then that provides you with the second question:
What am I doing right now or plan to do very soon that will help me answer that question successfully?
That’s it. That is today’s post. Food for thought.
———
Future Brief will be updated as time allows. If you find it interesting, you are welcome to drop by whenever you like. But if you would prefer to save a little time and effort, feel free to subscribe either to the email alerts or RSS feed in the upper-right corner of the page and the system will automatically let you know. Thanks for visiting!
Why we aren’t as dumb as they think we are
I write another blog, The Retirement Bubble, where I occasionally write on a topic I first raised in an essay at Barron’s in 2009. It has drawn more traffic than anything I have written there before and emails arriving suggest that it struck a chord with some folks. I want to share it with you too.
——
Today, I would like to take a look at what is passing through the minds of adult Americans when it comes to retirement. Yes, there are plenty of statistics indicating that the average American has nowhere near enough money to retire, but it is what they are thinking that is most important to me. That is what determines their actions now and in the future, not just what a “financial planner” thinks is appropriate. The good folks at Gallup provide a number of survey results to the public at their site and sprinkled among them are those that focus on retirement. Let’s look at a few.
First, forget the planners, do non-retired adults think they are prepared for the financial demands of retirement?
It’s easy to look at a graph like the one above and get wrapped up in the year-to-year changes, but do me a favor. Just look at the numbers on the far left, then the far right. This is a very dramatic change. The two lines have not traded positions exactly, but they are clearly closing in on that. No wonder some people think the world has turned upside-down.
On a year-to-year basis, there is something else interesting going on. The dots between lines are placed to generally represent the time of year during which the poll was taken. As you can see, they were taken during the first half of each year, typically April. Note the rather dramatic shift in both lines from 2004 through 2005 and how that continues into early 2006, before slowing.
The stock market bubble had collapsed a few years earlier so that was not news, the real estate indices told us that the real estate market just began to turn over in late 2006 and the term “sub-prime crisis” hit the headlines later in 2007. Only then is it assumed by many of the so-called experts that most Americans started to understand that yet another bubble had popped and well into 2008 before the general public really began to get a grip on the severity of the crisis.
How strange. Before there were trillion dollar deficits, before there were “stimulus bills”, before there was a Tea Party, and while the real estate market was in full bull mood, adult Americans were already getting worried about their retirement finances. The 2004-5 period where the two lines start their dramatic shift was not a period of “crisis mentality”.
You know, just maybe the general public is not as dumb as they are made out to be by some of the “experts”. Sure, there are always people who get it all wrong, but as a group, they may be showing us that they’re more sensible and sensitive than they have been credited with. I like that thought. And who knows? Perhaps we have a “leading indicator” here, one that indicates what is coming rather than just what has happened already. If so, the recent dip from last year to a new high on the negative side and just one point short of a new low on the positive may be a leading indicator for the future. Not a pleasant thought, but something to consider.
The other factor I want to consider today is the “when” of retirement. That is affected by finances, obviously, but it is a lot more complex, including many other factors beyond money. This first graph is not surprising, given everything we have been through over the last decade.
It seems so simple and straight-forward. Well, human life is never quite that simple and straight-forward. Gallup also breaks the retirement age goal into three parts – those expecting to retire before 65, those expecting to retire at 65, and those expecting to wait until after 65.
As with the first graph, just focus on the first values and the final value. The change from the two surveys of late 1995 to the most recent in 2011 is dramatic, very dramatic. This is a very different picture than we get from the first “age” graph, although they cover the same period of time. Glance back and forth between the two. Exactly the same question is asked in both cases, but the second graph provides us with a lot more information than the first. That’s good to remember. When any the response to a question is boiled down to one average, you lose a lot. That “smooth” transition in the first graph looks a lot more rocky and troubled in the second, doesn’t it?
This is especially important to remember when a question looks extremely simple, but common sense tells you that answering it can be a very complex process for the person answering.
Now, let’s look at exactly the same information from the same surveys shown immediately above, but in yet another format broken down into a little more detail.
Results provided in a table rather than a graph seem more difficult to get a grip on, but tables like this one have “lines” too. Start at the bottom of each column and work your way up twice. The first time just to get a sense of the flow. The second time a little slower to see a little more of the rise and fall. Those columns are your “lines”. It’s a little more difficult to visualize the results, but it also provides more data. Above all, it’s the “line” under Over 65 that stands out most clearly.
In past posts, I have talked about the necessity for us to grasp the severity of the crisis and its effect on our futures. From that will come a change in behavior and the sooner, the better. Well, it appears that the change is not only underway, but that it began before the crisis was a crisis. The difference between the 2008 survey as the crisis became obvious and the 2011 survey is nowhere near as dramatic as the change from 1995. But ignore 1995. That was a long time ago. Just focus on the difference between 2002 and 2011. I think that’s pretty darn impressive too.
The purpose of an exercise like this is two-fold. First, we get an idea of what is going on in people’s minds. Second, we can look back to the past and follow at least some of the shift over time. This allows us to challenge any assumptions we might have had of what folks were thinking in the past. I know I had to stop and consider how much earlier the shift was underway than I would have guessed before. And there’s a third “fold” too. Maybe we gain a little more respect for the public, and for ourselves, in the process.
I want to take this last paragraph to thank all of you who left such kind comments to my last post, definitely including those who sent emails separately. I very much appreciated every one of them! But I have to apologize. I disappear, then I suddenly reappear, then I disappear again! Well, there are reasons for all that. Among others, I have been doing quite a bit of original research of my own and some of it will be relevant to our discussions. In any case, this post helps bring us up to speed with American retirement planning in the real world (i.e., our heads), not just the theoretical world (someone else’s head).
———
Future Brief will be updated as time allows. If you find it interesting, you are welcome to drop by whenever you like. But if you would prefer to save a little time and effort, feel free to subscribe either to the email alerts or RSS feed in the upper-right corner of the page and the system will automatically let you know. Thanks for visiting!
Thank You
I need to take a moment to express my appreciation to the US Navy Seals for their successful removal of Osama from this world. They do not seek recognition, indeed they strenuously avoid it, but they deserve it, as do all who helped. Gentlemen, whoever you are and wherever you are, thank you.
The blather is already underway. The effects on markets, the effects on US-Pakistani relations, the impact on Al Qaeda, the potential for “blowback” from terrorist groups, the conspiracy theories, the demands for “proof”, which politician deserves the “credit”…it’s all as predictable as the sun rising in the morning and setting in the evening. I will leave that to others.
Today, I just want to say what a relief it is to see the US get a job done. The Afghan War, the Iraqi War, the Libyan War just drag on and on. It is not a surprise and taking out one individual, no matter how difficult, hardly compares to winning a war with tens or hundreds of thousands of participants in nations that have no effective leadership. But that does not take the bloom off this rose for a minute. We needed to bring his career to an end, dead or alive, and it is done, finished, over with. The US can no longer pretend it calls the shots for the majority of the planet as it once did, in effect. Those days are gone. However, we did need to show that we could face a dangerous, challenging task everyone knew we had to complete and complete it. That has been done for all the world to see.
Yes, I am well aware that terrorists are very likely to strike, if they can, and soon in an attempt to restore their “credibility”. I am well aware that minutes after posting this brief commentary, I may have to read reports of the deaths of innocent people, caught in the wrong place at the wrong time by proponents of a fascism that is all the more repugnant when presented as the work of God. But fear of retaliation is never an excuse to complete a task as important as this one. It is not as if failure would have made the world a safer place.
Let me finish as I began. Thank you, Navy Seals and everyone else who helped bring an end to what needed to end.
———
Future Brief will be updated as time allows. If you find it interesting, you are welcome to drop by whenever you like. But if you would prefer to save a little time and effort, feel free to subscribe either to the email alerts or RSS feed in the upper-right corner of the page and the system will automatically let you know. Thanks for visiting!
Stratfor’s George Friedman on Libya and the War
Dr. George Friedman of Stratfor is one of the most widely-read and respected geopolitical analysts. Here are his comments and analysis at this point in the War in Libya. My own commentary will come, but Dr. Friedman’s analysis is always worth reading and sharing.
Libya, the West and the Narrative of Democracy
By George Friedman
STRATFOR
March 21, 2011
Forces from the United States and some European countries have intervened in Libya. Under U.N. authorization, they have imposed a no-fly zone in Libya, meaning they will shoot down any Libyan aircraft that attempts to fly within Libya. In addition, they have conducted attacks against aircraft on the ground, airfields, air defenses and the command, control and communication systems of the Libyan government, and French and U.S. aircraft have struck against Libyan armor and ground forces. There also are reports of European and Egyptian special operations forces deploying in eastern Libya, where the opposition to the government is centered, particularly around the city of Benghazi. In effect, the intervention of this alliance has been against the government of Moammar Gadhafi, and by extension, in favor of his opponents in the east.
The alliance’s full intention is not clear, nor is it clear that the allies are of one mind. The U.N. Security Council resolution clearly authorizes the imposition of a no-fly zone. By extension, this logically authorizes strikes against airfields and related targets. Very broadly, it also defines the mission of the intervention as protecting civilian lives. As such, it does not specifically prohibit the presence of ground forces, though it does clearly state that no “foreign occupation force” shall be permitted on Libyan soil. It can be assumed they intended that forces could intervene in Libya but could not remain in Libya after the intervention. What this means in practice is less than clear.
There is no question that the intervention is designed to protect Gadhafi’s enemies from his forces. Gadhafi had threatened to attack “without mercy” and had mounted a sustained eastward assault that the rebels proved incapable of slowing. Before the intervention, the vanguard of his forces was on the doorstep of Benghazi. The protection of the eastern rebels from Gadhafi’s vengeance coupled with attacks on facilities under Gadhafi’s control logically leads to the conclusion that the alliance wants regime change, that it wants to replace the Gadhafi government with one led by the rebels.
But that would be too much like the invasion of Iraq against Saddam Hussein, and the United Nations and the alliance haven’t gone that far in their rhetoric, regardless of the logic of their actions. Rather, the goal of the intervention is explicitly to stop Gadhafi’s threat to slaughter his enemies, support his enemies but leave the responsibility for the outcome in the hands of the eastern coalition. In other words — and this requires a lot of words to explain — they want to intervene to protect Gadhafi’s enemies, they are prepared to support those enemies (though it is not clear how far they are willing to go in providing that support), but they will not be responsible for the outcome of the civil war.
The Regional Context
To understand this logic, it is essential to begin by considering recent events in North Africa and the Arab world and the manner in which Western governments interpreted them. Beginning with Tunisia, spreading to Egypt and then to the Arabian Peninsula, the last two months have seen widespread unrest in the Arab world. Three assumptions have been made about this unrest. The first was that it represented broad-based popular opposition to existing governments, rather than representing the discontent of fragmented minorities — in other words, that they were popular revolutions. Second, it assumed that these revolutions had as a common goal the creation of a democratic society. Third, it assumed that the kind of democratic society they wanted was similar to European-American democracy, in other words, a constitutional system supporting Western democratic values.
Each of the countries experiencing unrest was very different. For example, in Egypt, while the cameras focused on demonstrators, they spent little time filming the vast majority of the country that did not rise up. Unlike 1979 in Iran, the shopkeepers and workers did not protest en masse. Whether they supported the demonstrators in Tahrir Square is a matter of conjecture. They might have, but the demonstrators were a tiny fraction of Egyptian society, and while they clearly wanted a democracy, it is less than clear that they wanted a liberal democracy. Recall that the Iranian Revolution created an Islamic Republic more democratic than its critics would like to admit, but radically illiberal and oppressive. In Egypt, it is clear that Mubarak was generally loathed but not clear that the regime in general was being rejected. It is not clear from the outcome what will happen now. Egypt may stay as it is, it may become an illiberal democracy or it may become a liberal democracy.
Consider also Bahrain. Clearly, the majority of the population is Shiite, and resentment toward the Sunni government is apparent. It should be assumed that the protesters want to dramatically increase Shiite power, and elections should do the trick. Whether they want to create a liberal democracy fully aligned with the U.N. doctrines on human rights is somewhat more problematic.
Egypt is a complicated country, and any simple statement about what is going on is going to be wrong. Bahrain is somewhat less complex, but the same holds there. The idea that opposition to the government means support for liberal democracy is a tremendous stretch in all cases — and the idea that what the demonstrators say they want on camera is what they actually want is problematic. Even more problematic in many cases is the idea that the demonstrators in the streets simply represent a universal popular will.
Nevertheless, a narrative on what has happened in the Arab world has emerged and has become the framework for thinking about the region. The narrative says that the region is being swept by democratic revolutions (in the Western sense) rising up against oppressive regimes. The West must support these uprisings gently. That means that they must not sponsor them but at the same time act to prevent the repressive regimes from crushing them.
This is a complex maneuver. The West supporting the rebels will turn it into another phase of Western imperialism, under this theory. But the failure to support the rising will be a betrayal of fundamental moral principles. Leaving aside whether the narrative is accurate, reconciling these two principles is not easy — but it particularly appeals to Europeans with their ideological preference for “soft power.”
The West has been walking a tightrope of these contradictory principles; Libya became the place where they fell off. According to the narrative, what happened in Libya was another in a series of democratic uprisings, but in this case suppressed with a brutality outside the bounds of what could be tolerated. Bahrain apparently was inside the bounds, and Egypt was a success, but Libya was a case in which the world could not stand aside while Gadhafi destroyed a democratic uprising. Now, the fact that the world had stood aside for more than 40 years while Gadhafi brutalized his own and other people was not the issue. In the narrative being told, Libya was no longer an isolated tyranny but part of a widespread rising — and the one in which the West’s moral integrity was being tested in the extreme. Now was different from before.
Of course, as with other countries, there was a massive divergence between the narrative and what actually happened. Certainly, that there was unrest in Tunisia and Egypt caused opponents of Gadhafi to think about opportunities, and the apparent ease of the Tunisian and Egyptian uprisings gave them some degree of confidence. But it would be an enormous mistake to see what has happened in Libya as a mass, liberal democratic uprising. The narrative has to be strained to work in most countries, but in Libya, it breaks down completely.
The Libyan Uprising
As we have pointed out, the Libyan uprising consisted of a cluster of tribes and personalities, some within the Libyan government, some within the army and many others longtime opponents of the regime, all of whom saw an opportunity at this particular moment. Though many in western portions of Libya, notably in the cities of Zawiya and Misurata, identify themselves with the opposition, they do not represent the heart of the historic opposition to Tripoli found in the east. It is this region, known in the pre-independence era as Cyrenaica, that is the core of the opposition movement. United perhaps only by their opposition to Gadhafi, these people hold no common ideology and certainly do not all advocate Western-style democracy. Rather, they saw an opportunity to take greater power, and they tried to seize it.
According to the narrative, Gadhafi should quickly have been overwhelmed — but he wasn’t. He actually had substantial support among some tribes and within the army. All of these supporters had a great deal to lose if he was overthrown. Therefore, they proved far stronger collectively than the opposition, even if they were taken aback by the initial opposition successes. To everyone’s surprise, Gadhafi not only didn’t flee, he counterattacked and repulsed his enemies.
This should not have surprised the world as much as it did. Gadhafi did not run Libya for the past 42 years because he was a fool, nor because he didn’t have support. He was very careful to reward his friends and hurt and weaken his enemies, and his supporters were substantial and motivated. One of the parts of the narrative is that the tyrant is surviving only by force and that the democratic rising readily routs him. The fact is that the tyrant had a lot of support in this case, the opposition wasn’t particularly democratic, much less organized or cohesive, and it was Gadhafi who routed them.
As Gadhafi closed in on Benghazi, the narrative shifted from the triumph of the democratic masses to the need to protect them from Gadhafi — hence the urgent calls for airstrikes. But this was tempered by reluctance to act decisively by landing troops, engaging the Libyan army and handing power to the rebels: Imperialism had to be avoided by doing the least possible to protect the rebels while arming them to defeat Gadhafi. Armed and trained by the West, provided with command of the air by the foreign air forces — this was the arbitrary line over which the new government keeps from being a Western puppet. It still seems a bit over the line, but that’s how the story goes.
In fact, the West is now supporting a very diverse and sometimes mutually hostile group of tribes and individuals, bound together by hostility to Gadhafi and not much else. It is possible that over time they could coalesce into a fighting force, but it is far more difficult imagining them defeating Gadhafi’s forces anytime soon, much less governing Libya together. There are simply too many issues between them. It is, in part, these divisions that allowed Gadhafi to stay in power as long as he did. The West’s ability to impose order on them without governing them, particularly in a short amount of time, is difficult to imagine. They remind me of Hamid Karzai in Afghanistan, anointed by the Americans, distrusted by much of the country and supported by a fractious coalition.
Other Factors
There are other factors involved, of course. Italy has an interest in Libyan oil, and the United Kingdom was looking for access to the same. But just as Gadhafi was happy to sell the oil, so would any successor regime be; this war was not necessary to guarantee access to oil. NATO politics also played a role. The Germans refused to go with this operation, and that drove the French closer to the Americans and British. There is the Arab League, which supported a no-fly zone (though it did an about-face when it found out that a no-fly zone included bombing things) and offered the opportunity to work with the Arab world.
But it would be a mistake to assume that these passing interests took precedence over the ideological narrative, the genuine belief that it was possible to thread the needle between humanitarianism and imperialism — that it was possible to intervene in Libya on humanitarian grounds without thereby interfering in the internal affairs of the country. The belief that one can take recourse to war to save the lives of the innocent without, in the course of that war, taking even more lives of innocents, also was in play.
The comparison to Iraq is obvious. Both countries had a monstrous dictator. Both were subjected to no-fly zones. The no-fly zones don’t deter the dictator. In due course, this evolves into a massive intervention in which the government is overthrown and the opposition goes into an internal civil war while simultaneously attacking the invaders. Of course, alternatively, this might play out like the Kosovo war, where a few months of bombing saw the government surrender the province. But in that case, only a province was in play. In this case, although focused ostensibly on the east, Gadhafi in effect is being asked to give up everything, and the same with his supporters — a harder business.
In my view, waging war to pursue the national interest is on rare occasion necessary. Waging war for ideological reasons requires a clear understanding of the ideology and an even clearer understanding of the reality on the ground. In this intervention, the ideology is not crystal clear, torn as it is between the concept of self-determination and the obligation to intervene to protect the favored faction. The reality on the ground is even less clear. The reality of democratic uprisings in the Arab world is much more complicated than the narrative makes it out to be, and the application of the narrative to Libya simply breaks down. There is unrest, but unrest comes in many sizes, democratic being only one.
Whenever you intervene in a country, whatever your intentions, you are intervening on someone’s side. In this case, the United States, France and Britain are intervening in favor of a poorly defined group of mutually hostile and suspicious tribes and factions that have failed to coalesce, at least so far, into a meaningful military force. The intervention may well succeed. The question is whether the outcome will create a morally superior nation. It is said that there can’t be anything worse than Gadhafi. But Gadhafi did not rule for 42 years because he was simply a dictator using force against innocents, but rather because he speaks to a real and powerful dimension of Libya.
Libya, the West and the Narrative of Democracy is republished with permission of STRATFOR.
