Happy New Year

The end of a year, such as it was, seems a grand time to wax philosophic about cosmic questions we ignore all year long to favor the daily required thinking that goes along with our crisis lives. Mine in particular has been pretty rotten lately with no end in sight but I'm trying to view the past, this comming year, as a sunk cost. For those of us with marginal understanding of business concepts, sunk costs are those that are no longer deserving of consideration in future decision making. As simple as it sounds, in reality, and for most of us, they represent the kind of "letting go" we find difficult and, worst of all, sunk costs make for great conversation. Like the time I spent watching the first hour of Cold Mountain. Its an hour I will never recover and there's no sense lamenting the whole affair but I feel the need, when asked, to bring it up again and again when I should have just considered sunk and moved on. If you're anything like me, you sort of operate on "sunk things" and that's what I'm going to change for 2005. (Just to show you how bad the whole sunk thing is, I just now typed "2004"!)

I've already forgotten that the neo-cons have all but taken over this great country and I'm not losing any sleep over all of the Americans, Iraqies and others that have sacrificed their lives for what is now an all but forgotten cause. I no longer wonder why we're there. I'm keeping my head down and looking forward to the next thousand or so casualties trying to equalize a stubbornly male dominated society forever stuck in the fifteenth century. I'm also forgetting about how little free time I now have trying to juggle an increasingly demanding work environment with a simply awful commute. I'm not looking at my real spending power anymore either. All of the entities that had their hands in my pockets to compensate for measily insignificant federal tax cuts have been erased from my mind as of now. Yes, looking only forward invigorates! Can you feel it?

So, tell me. Why don't I feel any better? Maybe its because looking forward four years is like looking in a fun house mirror. Under the new rules I'm not supposed to consider the past but I'm having a lot trouble weaning myself.

My thoughts are with all of those affected by the Tsunami. Soon, even that will be a sunk thought.

Happy new year 2005.

Social Security

Demands of a new position, accompanied by four hours a day commuting and a two weeks of traveling per month, have kept me away from my musings. For this I apologize. The latest news on the Social Security front is compelling enough to squeeze out some time in my new nightmarish schedule to at least confront the "goings on" in the Bush administration relative to this venerable social institution.

First, a little background: Social Security was created by FDR in 1934. It came about as a mechanism to protect all of us from financial uncertanities associated with death, disability and old age. It was concieved as a recognition that the "Farm" no longer was the predominant "protector" (or fallback) in American Life. So, in part, it is a program that recognizes America's passing from an agrarian society to an industrial one...one where we own or, are not a participant, in anything that has any leverage potential long term (such as a farm would have). Social Security is probably the biggest social contract ever enacted and it was put in place by people who lived amongst the worst despair experienced by our society....ever.

Perhaps, like modern Germans, we have, as Stephen King puts it, "forgotton the face or our fathers". Those who are not in jeopardy of suffering due to old age, disability etc. and that no longer can see into the past, would not necessarily see Social Security as a particularly troubling issue. For all of you who side with Mr. Bush and are facing the prospect of either not being able to retire or retireing with little more than the income from Social Security, you have reaped your reward. If you are "middle aged" I suspect you will be hit hardest by what's about to take place. If you are amongst the very young, then perhaps you will grow old only with the fear of your future to depend on since its likely that you may never know of the program that was designed to provide you with at least a fall back to poorly performing markets or the overburdening demands of raising and educating your children. Hopefully, you will not be one of the countless millions that are toiling to keep our small businesses afloat.

So, what's to be done? First, I think we all have to acknowledge two very gremane facts: People are living longer and the baby boomers (the largest single population explosion in our history) are preparing to retire. One thing I think its important to remember from a historical perspective is that the Baby Boom is a temporal anomoly that will, with time, alleviate itself. No one seems to talk about this. What does it mean? Personally, I think it means that whatever we have to do shouldn't last any longer than the fifteen years (plus compensating years for living longer) or so where the number of Social Security drawers are actually drawing benefits. I'm pretty sure that we've been compensating all along for people living, and thus working, longer so I don't see this as a particular issue.

I think it obvious that the FICA limit contributions (whatever the ceiling max is now) is going to have to go away and all of our income is going to have be subject to withholdings. Second, the income from other sources, during the baby boom glut, will have to be considered when calculating SS benefits. By this I mean that, when mandatory draws from retirement accounts are triggered, the income from these draws will have to be considered as "offsets" to social security draws. For example, If I'm one of the lucky ones who, at age 67, has to draw so much from my retirement accounts that I'm pulling say $100K per year out of the accounts, maybe your social security benefit would be reduced by 50% until something changes. This would slow the payouts in any given year but it certainly won't fix everything. Last, we just may have to up the rate. It will be the price we pay for the 7-eleven down the street, the employees that maintain our small towns and the landscapers that keep our yards prim and proper looking at prices we can seemingly manage.