1/20/2009

it's finally here

Some people have been waiting all weekend for this! And some have been waiting for months. Some of us have spent the last 8 years in anticipation of today.

And of course, some folks have been waiting for this moment all their lives.

It is good to have things to anticipate. It is also good for those moments to arrive.

We approach today from a variety of angles, of perspectives, of needs, of hopes, of places, but we come to this place united, indivisible, seeking liberty and justice for all.

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1/02/2009

and the numbers are in

Well, if I've done the data entry in Quicken correctly, here's the excitement for my 2008 accounts. There's both a sense of suprise at just how large the drop is, but also, I must admit, a tad bit of excitement at just how not boring the year has been. We don't know exactly what longer term political shifts will result from the tumultuous nature of the economy at the end of the Bush Administration, but it seems clear that we're finally shattering the bubble that kept issues of poverty and hardship in our economy out of mainstream discourse.

Wages can only fall so much until the wealth built upon them, things like housing prices and corporate profits, fall in response. Capital and labor have some tradeoffs at the margin, but the point is that in the big picture, both rise and fall together. You can't have a rich ownership class and a poor labor pool functioning side by side in the same economy indefinitely because both inputs are important in creating wealth; either there's a positive feedback loop with one input investing in the other, or there's a breakdown, with the suffering factor dragging the other down with it. I'm keeping my fingers crossed, but I think homeowners, for example, are starting to realize that their home is only worth what some entry-level worker can afford to pay for it.

I'm generally in the optimistic camp, believing that the past year, far from upending basic investing principles, revealed just how important they are in trying times. Have an emergency stash of cash. Separate your short-term savings from your long-term savings. Don't expect variable asset prices (like real estate and stocks) to rise steadily every year. Have a plan that allows for extreme short-term fluctuations. Don't confuse speculation and day-trading with long-term investing. And most basically, save regularly and live below your means; how much is really an afterthought, something you can worry about once you've established that discipline.

There are public policy options that can help us restore an economic playing field that is more stable and more equitable and more productive than what we have now, but at the same time, there is also the individual responsibility of taking care of yourself, regardless of the barriers around you. Employers have essentially jettisoned the responsibility of retirement savings from their compensation packages for workers, and I think it's important to have both a societal response and an individual response to that dramatic change. It's too simplistic to simply blame other people for your lack of savings, but at the same time, it's rather dishonest to simply blame individuals for not saving enough while ignoring the larger policy changes that have suppressed wages and shifted risk from a collective nature to the individual.

So, for 2008:
My Roth IRA is down a nice 42.6%
My 403(b) [nonprofit 401(k)] is down about 38.4%
My 'Balanced' fund is down-only!-about 32.2%
And for good measure, my cash accounts made about 2.5%

Woohoo :)

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