We sat in a cab yesterday, stuck in traffic in central London. We watched people walk by and wondered. What are they thinking about? What do they want out of life? What do they think of themselves?
There were hundreds of them…different shapes…different sizes. A businessman in a pin-striped suit, briefcase in hand, concentrating on his sales report; he almost stepped in front of a motorcycle. A salesgirl, grotesquely overweight…yellow hair streaked with brown…wishing she hadn’t had so much to drink the night before. A lawyer daydreaming about his secretary. A man who would have rather been fishing…still in his waxed coat. A woman annoyed about something. A heavy construction worker, his legs splayed outward as he walked. A tense young woman who dared not look up. A woman worrying about her son. A man thinking about buying a new car. One man trying to remember a line from a song he learned 30 years ago. Another talking to herself. One looked like a doctor taking an afternoon stroll. Another was stark raving mad.
All of them walking along…from one place to another…shuffling along…the living towards the dead.
We were thinking of our children. What a different world they grow up in. And yet, it is still the same too. A man might have been stuck on a London street 50 years ago…and hundreds of years ago he might have watched the same shopkeepers and carpenters walk by, each caught in his own thoughts like a fly in a spider’s web.
Our old friend John Mauldin wrote to say that his mother’s experience was not much different than ours. She joined the WACs during the war…met John’s father…and then nature took her course.
But both John and your editor had a big advantage in life. We both caught the upswing.
Not so with our children. They inherit a different world. America was the world’s leading nation in the ’50s and ’60s. And it was growing in power and wealth – rapidly. We grew up with it. Things were getting better and better…we were sure we’d live much grander, richer, and more exciting lives than our parents. The sky was always the limit!
Now, America is in decline. China’s economy grows while hers declines. The Far East has savings, while she has none. The Asia nations are net exporters, making huge profits…while American industries are judged too old, too expensive, and too highly regulated to compete. Americans have debt up the kazoo, while their competitors have little. A young person in America has to look forward to supporting 70 million retired baby boomers…and paying for their drugs, their food, their wars, and their bailouts.
For our children – ours and John’s – the situation on a personal level is different too. Coming from poor families, we could look forward to much more wealth and material success than our parents ever knew.
We came back to Ireland this week for a reason that our parents would never have dreamed of. Your editor has set up a family office. It is a very modest affair by family office standards. The typical family office manages a fortune of $100 million, according to The New York Times. We may not even be on the same planet with these rich families; but we are in the same universe. That is, we try to think about…and manage…our wealth as rich people do…as a family legacy or an endowment, not as a retirement fund.
What wealth we have accumulated – even if it is paltry – will be held by a family-owned corporation. Then, the corporation, run largely by the adult children, manages the assets – from our base in Ireland.
Your editor, freed from the responsibility of managing his own money will be free to wander and think…like a vagabond, a gypsy, a refugee, an itinerant mendicant…forced to sup on whatever is at hand and take lodging wherever he can find it – but favoring the Four Seasons and Chateau Margot when they are available.
Whatever else this does, it puts the children in a very different situation from their parents. Instead of starting out with nothing, they’re starting out with something. While this would seem to be a big advantage to them, it has huge hidden disadvantages. Like America itself, they are in danger of finding themselves slipping downhill. Instead of expecting things to get better, they may find it hard even to hold onto what they’ve got. Instead of the “Morning in America” that Ronald Reagan promised, they may find that it seems more like evening, both in their personal as well as their national lives.
“From shirtsleeves to shirtsleeves in three generations,” say the French. The grandfather begins without a coat. His grandson ends that way.
But what to do? Spend it all now…so the children begin with the same clean slate we had? Move to Brazil or India – countries with more obvious upside?
In the deep, cosmic end, it probably doesn’t matter. The advantage to starting out on an upper rung of the ladder may be about equal to the disadvantage of having to worry about falling off. Who can know?
Every man has to play the cards he’s been dealt. What else can he do? He may have a humpback or a beautiful voice. He may have had a hard upbringing or a soft head. He may have a fortune worth of poetry in his soul but not dime in his pocket. As far as we can tell, every young man starts out even. Each one begins life in the same place – where he is. And every generation takes what it is given, and makes the best of it.
The real advantage in life is having the gumption to get on with it; no one knows where that comes from.
Until next time,
for Markets and Money