I just got back from visiting family in So. Cal. The trip was an interesting experience, but then again, it always is. It's amazing what a guy notices when he moves away from a place and only returns for occasional visits. This time, I dropped by a former neighbor who lives in a house almost directly across the street from where I used to live. We got to talking about people we both knew, while a couple of his grandchildren showed me their new puppies and their Christmas presents.
He told me about another neighbor who sold his house a few months ago, for a bit over $250K. The man was forced to sell his house because of the lifestyle he had lived during the good years of the Southern California real estate boom. He had added a couple of rooms on to what was originally a Korean War vintage, two bed, one bath house in a working-class neighborhood, and had decked out the interior with genuine tile floors, granite countertops and the works. He had also bought an RV, two all-terrain tricycles, an SUV, and a boat in addition to his work truck. He paid for it all by refinancing his home loan with an adjustable-rate mortgage. He ended up owing a few hundred thousand more than he paid for the house when he bought it. When the mortgage reset, he could no longer afford the monthly payment. Even though he was able to sell his house and relocate, he is still massively in debt.
Of course, I had known that our present economic collapse would be hard on many Americans who had made foolish choices because they were seduced by wanting to live rich. But my friend began to tell me about his own situation, a situation of unavoidable hardship caused by economic contraction. My friend is originally from Mexico, and does not have a college education. He does, however, have a great deal of common sense, and he has chosen to live within his means. He too has a two-bed, one-bath Korean War vintage house, and he is paying only the original mortgage he received when he first bought his house. But his employer is slowing down and may close the place where he works. If that happens, he too will be forced to move.
This was sad news to hear. But it did provoke a discussion of true wisdom in these times, and the art of living happily without a lot of money. It also showed how sharp my neighbor is. As I said, he is originally from Mexico, and did not go to college. His English is not that good. (My Spanish is much worse, believe me!) Yet when, over two years ago, I put my house up for sale, I remember him coming by and asking why I was moving, and I explained to him all that I was then finding out about Peak Oil and the fragile state of the American economy. He got it. Every word. This is much better than I can say of many college-educated Americans I have talked with over the last two years, men and women who refuse to examine the back story behind the illusion of wealth in which we all have lived for the last few decades, and who refuse to believe that it's all about to end. My friend, on the other hand, is a clear-eyed realist. He still gets it.
For this trip, I drove down and back, as usual. (I no longer entirely trust flying.) I noticed that a lot of rest stops in California are now closed. Also, there didn't seem to be as many Highway Patrol cars as usual. I am sure that this is due to California's budget “crisis.” But these things got me thinking on the return trip, as I was driving north past Bakersfield and before Sacramento. On that particular stretch, I was listening to a podcast I had downloaded of a presentation given by a man named James Howard Kunstler to the Commonwealth Club of California in March 2007. (For those who have heard that podcast, it's the one where at the end, Kunstler doesn't realize that he's still being recorded and he asks the chairman of the club, “Where's my mug?” Maybe they give commemorative mugs to their guest speakers.)
Mr. Kunstler had stated in his talk that social systems organized on a giant scale would get in trouble in an era of economic contraction. Those closed rest stops were just one sign of the trouble that California is in. But those closed rest stops made me ask what the citizens of California were actually getting in return for their tax dollars. For they had been asked to accept severe cutbacks in State government services in order to balance their budget, yet they were still required to pay taxes. I know that money is not going toward maintaining a safety net for Californians, because many of them have been trained to regard government safety nets as evil. And they surely are not building that high speed rail line that voters approved in 2008.
Anyway, it seems that we all, including those of us in government, will have to quickly learn the art of living happily without a lot of money. As the benefits provided by government at all levels continue to shrink, this will mean that we must do much more for ourselves.