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May 17, 2022

More Work, Less Money: How Life Changed After the American Dream

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More Work, Less Money: How Life Changed After the American Dream

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BY: TARTLE

In this episode, we continue covering history’s biggest lessons. 

We now find ourselves in 1975, when the United States experienced its biggest population boom ever. This boom led to an increase in people looking for jobs—and a massive deficit in the government’s capacity to provide.

From 1975 until now, the people on the ground faced two problems: first, wages stopped increasing; and second, the value of money was decreasing. This means that we are working twice as hard to earn only half as much.

The advent of the internet connected people like never before. But at the same time, they’re getting left behind. The American Dream is becoming increasingly difficult to achieve, and people are still exposed to the same imagery of a Great America. 

The Rise of Debt

How do you influence the favor of the masses? Thatcher’s answer was to give free housing to low-income individuals in the United Kingdom. After that, she decides to introduce mortgages. This effectively turns people into debtors.

What started as something good turned into a new form of slavery.

“You're paying with money that is continually worth less where you have to work more to buy yourself out of something you never even own,” Alexander explained.

In the United States, Reagan decides to deregulate credit. This gave way for Wall Street to begin financing extensively. In turn, everything starts to become more expensive. Everything is just artificial building stimulated by artificial growth.

At the end of the day, your wages aren’t going up. As an ordinary person, you’re still in the rat race all day long. It’s a vicious cycle of having to borrow more money to finance a standard of living that you are expected to maintain.

All this is happening against the backdrop of world events like the rise of the Berlin Wall, the fall of communism, the Silicon boom, offshore manufacturing, and the rise of nations.

Closing Thoughts

Politics is downstream of economics. Throughout history, the system has been twisted to favor the welfare of the one percent.

When we look toward the future, we have to start being proactive. This entails creating the tools and platforms that the people on the ground need to claim personal responsibility and free themselves from a vicious cycle of earning less, incurring debt, and working more.

Start supporting these platforms now. Sign up for TARTLE here.

Feature Image Credit: Envato Elements
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For those who are hard of hearing – the episode transcript can be read below:

TRANSCRIPT

Alexander McCaig (00:00):

Hello, ladies and gentlemen. Welcome back to Tartle Cast. I'm sitting here in the studio by myself. Jason has lost his phone, he's meandering around but I want to get into the macroeconomic history that has led us to where we are today and how Tartle is the solve for the future. Jason, we discussed what happened in World War I, we talked about the Treaty of Versailles, war reparations. People are thinking, how is this going to end up with data and Tartle and humanity? How does it get to it? We talked about the rise of Hitler. We talked about the 1950s with marketing and people at home and the baby boomers.

Jason Rigby (00:43):

Yes. And the trades and tariffs, postwar.

Alexander McCaig (00:46):

Trades and tariffs postwar. So now what?

Jason Rigby (00:48):

The agreement. We have economic interdependence among nations. Global order is kept.

Alexander McCaig (00:54):

It's achieved.

Jason Rigby (00:55):

It's achieved. But 1975.

Alexander McCaig (00:59):

Oh boy.

Jason Rigby (00:59):

We go to 1975, the average boomer in the workforce, think about the age that they're at 1975 from 1940s, the huge increase because we had the largest population boom ever, 78 million people, 40% growth in 20 years in the United States.

Alexander McCaig (01:17):

This is between 40 and 60 years old now, this group.

Jason Rigby (01:20):

Now we have a monster amount of workforce, tons of people wanting a job. 1975, prices explode, demand shock and commodities go through the roof.

Alexander McCaig (01:33):

Oh yeah.

Jason Rigby (01:33):

We know that. We could see it with oil.

Alexander McCaig (01:35):

And gas shortage. Remember that? Oh what's your license plate say, "Is it this letter or this number first? Well you can come on this day of the week."

Jason Rigby (01:41):

We have a huge deficit. In that deficit, we can can't peg our money to the gold anymore.

Alexander McCaig (01:46):

No. Because the Bretton Woods standard, gone.

Jason Rigby (01:49):

Yes. We create a fiat money system, the rest of the world follows with this.

Alexander McCaig (01:54):

And the idea is that because we are a world economy, if we have a fiat system, then the exchange rates will then inextricably be tied to one another. It'll actually balance out the volatility we have been currently seeing in our own domestic economy here in the United States.

Jason Rigby (02:08):

Yeah. And this is just a percentage and I want people to understand this and we're going to lead to why people are upset. And we talked about this last time but one of the things that we have to realize, we're going to go back to 1975 but I want people to understand the big story here is from 1975 till now, wages stopped going up. 0.3% a year for median Americans.

Alexander McCaig (02:36):

At that point in 1975, wages don't increase and the money's becoming worth less. Because all these new economic theories are coming out for how we fix these deficits. How do we stimulate the economy? But in doing so you've decreased the value of the money.

Jason Rigby (02:52):

But for all these boomers, they get asset price rise. And a debased currency now.

Alexander McCaig (03:00):

Yeah. My money's worth less but the assets have gone up in value. Really it's netted itself out and no one's paying me more, so that means I'm working harder to own less.

Jason Rigby (03:11):

Yes. Your future self is poor.

Alexander McCaig (03:13):

Yeah. Your future self. As you go into the future, the more you work, the more you have to work on top of that just to maintain the same level you were at before.

Jason Rigby (03:21):

Now, the upper echelon people, the higher wage people, the upper middle class and the rich, they've had a 100% growth in their wages.

Alexander McCaig (03:29):

Of course, because they've owned the assets and they write their own wages. Of course.

Jason Rigby (03:35):

Just off this wage thing, we add the internet in the 1990s.

Alexander McCaig (03:42):

Late 80s, early 90s.

Jason Rigby (03:44):

We add the internet. We have people that are getting left behind. Their wages are decreasing, their house prices and we'll get into real estate here in a second, but prices go through the roof. Everything you're having to leverage more and more and more. We'll get into that. The dream never gets fulfilled. The American dream never gets fulfilled.

Alexander McCaig (04:03):

It's chased.

Jason Rigby (04:04):

The imagery of getting rich and seeing the rich get richer and America's supposed to be great and it's not to you.

Alexander McCaig (04:14):

But there's a greater disparity and people are getting further left behind.

Jason Rigby (04:17):

People begin to get angry. We see Russian bots, Chinese bots going after and trying to pull people from the center to the left or the right. We have all this angry situation. What begins to happen?

Alexander McCaig (04:32):

Economically depressed, politically polarized, what do you have? Chaos.

Jason Rigby (04:37):

Because people don't realize politics is downstream of economics.

Alexander McCaig (04:41):

Oh politics, absolutely. Most politics in our corrupt medieval system today is run by economics.

Jason Rigby (04:48):

Yes. Yeah. I want to go back to the 80s. We have something happen, because this will explain it more. You have these two super powerful people, Reagan and Thatcher and we all know.

Alexander McCaig (05:00):

The Iron Lady.

Jason Rigby (05:02):

Yeah. We all know about Reagan and Thatcher. She decides to do something because she realized the liberals have a thing. They're getting all the votes from the poorer people. The left is getting all the votes from the poorer people. We're watching, Reagan and his team is watching what Thatcher's doing. She decides to give free housing to low income in the United Kingdom. She gave assets for nothing.

Alexander McCaig (05:30):

What is that?

Jason Rigby (05:31):

Then she decides to say, "Hey, okay we gave these assets, we're letting them live so let's give them a mortgage to kind of help them along." Because we realize once people get a mortgage, they usually go more conservative.

Alexander McCaig (05:47):

Oh, so they're saying, "Let's give them something for free, then hand them responsibility And that will transition them to get them to then vote for us."

Jason Rigby (05:56):

this turned them into debtors.

Alexander McCaig (05:58):

Oh good. We took people that were albeit free, poor but free and turned them into debtors to the state.

Jason Rigby (06:05):

And debt makes slaves.

Alexander McCaig (06:06):

Yeah. It does. It's a new form of slavery. Why? Because you're paying with money that is continually worth less where you have to work more to buy yourself out of something you never even own.

Jason Rigby (06:15):

Reagan and he is cronies, decided to say, "Hey, this is awesome. Let's deregulate the credit here in the United States. This is the solution."

Alexander McCaig (06:27):

That's the solution.

Jason Rigby (06:27):

The credit rise.

Alexander McCaig (06:28):

Give people more debt. What happens? Everyone's like, "let's get all the houses. Let's get everything we dreamed of. We've been essentially economically repressed from all these things and now we can be a part of that class we want to be a part of." But what happens?

Jason Rigby (06:42):

What happens is with this credit rise, Wall Street begins to finance like crazy.

Alexander McCaig (06:47):

Yeah. Why not? Oh wow. New financial products to you? What's your credit score? It doesn't matter.

Jason Rigby (06:51):

Get freed up.

Alexander McCaig (06:52):

Why not?

Jason Rigby (06:53):

They could do whatever they want with them now.

Alexander McCaig (06:54):

Oh you guys want to invest in this? Why don't you invest in some debt?

Jason Rigby (06:57):

Yes. Investment 401(k)? That comes out.

Alexander McCaig (07:00):

Love that.

Jason Rigby (07:01):

This cool thing. Stock prices go up so everyone else can afford less.

Alexander McCaig (07:06):

Wow. Thank you, derivatives.

Jason Rigby (07:08):

Property goes up. Why do property goes up? And so how is it?

Alexander McCaig (07:14):

Why?

Jason Rigby (07:14):

How is it harder to access debt now?

Alexander McCaig (07:16):

That's because it's artificial building that's happening all the time, stimulated by artificial growth. That means you have to pay more because now people are artificially increasing the value of property in the area so it's now leaving people behind. They got to take out more debt to be a part of this rise that's occurring.

Jason Rigby (07:30):

But wages aren't going up.

Alexander McCaig (07:31):

No, they're not.

Jason Rigby (07:32):

You're on the hamster wheel.

Alexander McCaig (07:33):

All day long.

Jason Rigby (07:35):

You have to borrow more money. And people and companies are borrowing money, Wall Street's going crazy. People are making shit loads of money. This is the 80s.

Alexander McCaig (07:41):

This is awesome. I love the 80s. Bonds, bonds, bonds.

Jason Rigby (07:44):

Ferraris, all that. Now you have people borrowing more money. Gold goes super high. Healthcare explodes because you have 78 million baby boomers.

Alexander McCaig (07:55):

Right. And people are living longer.

Jason Rigby (07:56):

Now I have a standard of living I need to maintain.

Alexander McCaig (08:03):

Crap. We set an artificial bar which we can't reach and now it's starting to slip out of our grasp. I'm falling off the pull up bar.

Jason Rigby (08:12):

This is where they fall off the pull up bar.

Alexander McCaig (08:14):

Not good.

Jason Rigby (08:15):

1987 crash.

Alexander McCaig (08:15):

Well thank you derivatives market. See what happens when you use the Black-Scholes model? That is the precipitous drop of the value of billions of dollars in the United States economy, gone. Disappear.

Jason Rigby (08:30):

Here's the crazy part. The power of manufacturing here in the United States, we were the powerhouse for manufacturing. With all this dead and all these derivatives and this fund stuff that we can play around, we don't really need manufacturing anymore.

Alexander McCaig (08:43):

No, we don't. We can sell financial products. Our GDP then does a flip. Now 70% of our GDP or more is driven by financial services.

Jason Rigby (08:51):

And the stocks that are going up are not manufacturing stocks.

Alexander McCaig (08:53):

No. They're financial service. It's banks that are increasing in value.

Jason Rigby (08:56):

Yeah. GE becomes like a zombie. They call them the zombie company or whatever. It's not making any money.

Alexander McCaig (08:59):

Nobody hangs out at factories.

Jason Rigby (09:01):

No, they're just taking on more day.

Alexander McCaig (09:02):

That's not where people go to work.

Jason Rigby (09:03):

Then in 1990, we have the Berlin Wall.

Alexander McCaig (09:06):

Yes. Thank you.

Jason Rigby (09:07):

We have communism fall. And China opens up and Russia is kind of like, "Hmm. We have all the natural resources."

Alexander McCaig (09:14):

Communism is open for business, ladies in gentlemen.

Jason Rigby (09:16):

Russia is like, "Hey, we can cut deals to Europe, sell natural gas, do all these things." 1996, tariffs, trades changed to the WTO.

Alexander McCaig (09:25):

World Trade Organization kicking it.

Jason Rigby (09:28):

Now we have this fun thing. We have Americans with all this debt. We have them super, super high in debt. No wage increase.

Alexander McCaig (09:38):

Politically charged.

Jason Rigby (09:39):

But guess what? Workers in America are going to compete with the global workforce.

Alexander McCaig (09:45):

It's not going to happen.

Jason Rigby (09:46):

You're getting triple fucked now.

Alexander McCaig (09:48):

Every single time. You don't understand, every single one of these things that are occurring because of these artificial stimuli that came in place because the removal of responsibility, this false standard of living, these tariffs and these ideas from this new economic theory that people think is beneficial is actually creating harm and making this system fragile.

Jason Rigby (10:08):

You know what else begins to fuck you?

Alexander McCaig (10:09):

Tell me.

Jason Rigby (10:10):

And then 1996 chips, technology begins to explode.

Alexander McCaig (10:15):

Silicon boom.

Jason Rigby (10:16):

You have offshore manufacturing, you have the silicon boom, jobs become less, wages, they're never going up again.

Alexander McCaig (10:24):

No, they're not. I'm going to drink my PBR, smoke my cigarette and realize that I just can't find a way out.

Jason Rigby (10:31):

1987 hits. There's a man that comes on the scene.

Alexander McCaig (10:35):

What's his name?

Jason Rigby (10:36):

Alan Greenspan.

Alexander McCaig (10:37):

Nice, Greenspan. He's like, "I have the solve."

Jason Rigby (10:40):

This crash hits. He is like, "There's only one thing to do. We're stimulating. We got everything going on so hey, let's cut interest rates."

Alexander McCaig (10:48):

Yeah, we'll cut interest rates. Borrowing money, let's make it practically free.

Jason Rigby (10:53):

And this will be, become a tool in the central banker's toolbox.

Alexander McCaig (10:56):

Wait, hold on. We got fractional reserve system. What does the bank do? We need to lend. Because every time we lend out, we can then hold 10% more in those reserves. We're essentially printing money ourselves with every loan we hand out. What does that mean?

Jason Rigby (11:10):

Now, we're teaching the rest of the world to do this. And we have WTO and so we begin to leverage emerging markets.

Alexander McCaig (11:18):

Oh no, it's ugly.

Jason Rigby (11:22):

What begins to happen?

Alexander McCaig (11:23):

It's ugly.

Jason Rigby (11:24):

Nations begin in the 1990s, nations begin to blow up.

Alexander McCaig (11:27):

What did Japan do? Japan's like stimulus, quantitative easing. We're the king.

Jason Rigby (11:33):

Asian countries take on too much leverage. They lend too much. We're seeing this with China right now. And in dollars. They take on the leverage in dollars. These nations, listen, these nations don't earn dollars.

Alexander McCaig (11:46):

No, they don't. They earn another currency.

Jason Rigby (11:48):

And then they're like, "What are we going to do?" All of these, a lot of the Asian countries still have not recovered from what happened in 1990.

Alexander McCaig (11:55):

Then what happens when we have a crash, when you inextricably link your financial gains to a US dollar?

Jason Rigby (11:59):

IMF comes in, International Monetary Fund comes in.

Alexander McCaig (12:02):

We'll save you.

Jason Rigby (12:03):

Bails them out.

Alexander McCaig (12:03):

We'll save you. Here's what we're going to do. We'll bail you out but by the way, have you seen those contracts? The IMF owns the hard assets and infrastructure in that country.

Jason Rigby (12:12):

And they're like, "Hey South Korea, hey Taiwan, we're going to help you."

Alexander McCaig (12:16):

This is ugly. Not good.

Jason Rigby (12:18):

The United States, we are not learning from the emerging markets. Emerging markets blow up. We're not seeing it. We're not learning for it. We began in the 90s, we're 25 times leveraged, US households are.

Alexander McCaig (12:28):

Well, we don't even know where this debt has been collateralized, re-collateralized.

Jason Rigby (12:33):

Well, that's what Wall Street did with it. They said, "Hey, we're 25 times leveraged? Let's take this and leverage that."

Alexander McCaig (12:38):

I got a bond, which people can't pay and then I'm going to put insurance on this thing and then I'm going to actually bet against the insurance.

Jason Rigby (12:44):

And then let's leverage the debt.

Alexander McCaig (12:46):

This is great. This is like the forex market but made for fixed income.

Jason Rigby (12:50):

And I know we almost got to be done with this episode but so Alan Greenspan cuts rates twice.

Alexander McCaig (12:53):

I bet he does.

Jason Rigby (12:54):

World stabilized. The banks are saved. Safety net was established.

Alexander McCaig (13:00):

You've saved the banks at what cost to the people?

Jason Rigby (13:03):

You know what happens?

Alexander McCaig (13:03):

What?

Jason Rigby (13:04):

Because everybody knows, all the 1% know, they're going to get bailed out every time.

Alexander McCaig (13:08):

Every single time. Why?

Jason Rigby (13:09):

Now we just create the largest stock market bubble ever in the 90s. And so to keep it from getting burst, they just keep cutting interest rates. They have to cut, cut, cut, cut.

Alexander McCaig (13:20):

Because you want to continue to see it rise. Because when it crashes, that doesn't help anybody.

Jason Rigby (13:24):

Who's making all the money now in all this?

Alexander McCaig (13:25):

Well, in the assets ahead of time, the bankers.

Jason Rigby (13:28):

Guess what happens? And we'll end in this. The sad part is your 25 times leveraged, your wages aren't going up still. This of late 1990s. You have to say, "Hey sorry, but husband, wife, partner, whatever, you've got to get a job." Because I got have dual income.

Alexander McCaig (13:46):

The whole idea of the man running the household, with this 1950s propagated marketing idea of manliness, own the car, the Corvette, white picket fence. Do this, the wife's at home. Bullshit. Everybody's got to work now.

Jason Rigby (13:59):

Philip Morris was all excited when they got double their profits because they got women to smoke. So did these central bankers get all excited when they were able to double the income. They got the stigma put past all of that, which is great.

Alexander McCaig (14:12):

Now everybody's working.

Jason Rigby (14:13):

I'm glad that women are working. That's awesome because we're all humans, we're all equal.

Alexander McCaig (14:16):

I'm twice the amount of taxable people.

Jason Rigby (14:18):

But they come into record numbers, come into the work face. You have double income. What do asset prices do?

Alexander McCaig (14:24):

They're going to shoot up.

Jason Rigby (14:25):

Yes.

Alexander McCaig (14:26):

Of course they do because people are spending more now.

Jason Rigby (14:29):

We're in this crazy dilemma. It's the late 1990s. Next episode we're going to get into, because I want people to understand where they're at now. What the future looks like and how Tartle is the save for all macroeconomics in the world.

Alexander McCaig (14:43):

Love it.

Speaker 3 (14:51):

Thank you for listening to Tartle Cast with your hosts, Alexander McCaig and Jason Rigby, where humanity steps into the future and source data defines the path. What's your data worth?

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