Monday, February 1, 2010

Are YOU a Hoarder? Are You Sure? (Part II of a Four Part Series)

Defining Our Terms Continued…

So far, we’ve discussed two extreme usages of the word “hoarding.” The first one being the rather benign dictionary definition of simply having stored supplies or money beyond our immediate needs and the second usage, on the other end of the spectrum, associated with psychosis. Is there a definition or usage of the term “hoarding” somewhere between these two extremes? We believe so.

Just as we often label others “rich” simply on the basis that they have more than we have, don’t we sometimes label others as “hoarders” on a similar basis? If we have a one car garage with one car parked inside and our rich neighbor has a six car garage containing a variety of exotic automobiles, wouldn’t it be tempting to label our rich neighbor as a “hoarder” of automobiles? If our neighbor on the next block over doesn’t have any car at all, we possibly look upon them as being “poor.” We usually perceive ourselves, however, as being situated quite righteously in the middle of these two extremes. But let’s take a look at ourselves from our neighbor’s point of view. Our rich neighbor could just as easily perceive us, with our one car garage and old jalopy sitting inside, as poor, in much the same way we perceive our poor neighbor who doesn’t have any car at all. And, our poor neighbor, without a car, may perceive us as being “rich.”

The usage of the terms “poor” and “rich” is often a misappropriation of sorts and we do ourselves a great disservice when we attempt applying them to anyone other than ourselves. This is an especially hazardous undertaking when we travel outside our own cultures and view, through our “American Eyes,” the extreme differences in standards of living respective to those of our foreign neighbors. We can certainly be thankful when noting these comparative differences, but do we also struggle with some measure of guilt in the process? Do we sometimes feel compelled to walk with a financial limp before those whom we perceive as being financially lame so as to make ourselves feel less guilty about our comparative prosperity? Do we sometimes pity others who have less, according to our own definitions of what less is, and why are we sometimes obsessed with the need to be the great economic equalizer among those whom we perceive to be less fortunate? Would a worldwide uniform standard of living be desirable? Is a worldwide uniform standard of living achievable? And, why are the terms “hoarding” and “hoarders” suddenly re-emerging in recent times when discussions arise as to the handling of personal finances and preparations for retirement? Is it quite possible the reason these terms are being re-energized is because the expanding gulf between rich and poor, in our own country, is becoming more noticeable?

The Term “Hoarding” Reincarnated

What’s up with the revived interest in the usage of the terms “hoarding” or “hoarder”? Former President Bill Clinton supplied, unbeknownst to him, the answer to this question when he, on numerous occasions, said, “It’s the economy, stupid.”

When the economy was rolling along quite nicely people often had two SUVs parked in the oversized garages that adjoined their McMansions and they were planning their next cruise, shopping extravaganza, and house flipping party. Life was good…even if it was on borrowed money. No one really cared what the President was doing or what was going on in the world.

Well, flipping houses has flopped and the house flipping parties are over. The McMansion is in foreclosure, the cars have been repossessed, the jobs are gone, and people are scared. They are really scared. The words of former President Clinton are as true today, during this current economic crisis, as they were during the boom. The reason the usage of the terms “hoarding” and “hoarder” have seen such a revival is because of the economy. No one really minds being charitable during the good times when enjoying what could be perceived as perpetual prosperity. But, was it real prosperity we were enjoying or was it the false illusion of prosperity? Was it a false prosperity built on the shifting sands of debt or was it true prosperity built on the bedrock of savings? Is it now quite possible many of those finding themselves trapped by the folly of the financial bubble are enviously viewing the “hoarders,” who didn’t succumb to the temptation of living beyond their means, as their financial escape hatch or social safety net? Will the “hoarders” capitulate? Not voluntarily.

The revival of the terms “hoarding” and “hoarder” is a natural occurrence associated with a tapped out and debt ridden consumer. Charitable contributions are understandably dropping and they are dropping drastically as individual households are appropriately retrenching from two and a half decades of irresponsible spending and consumption when many households used inflated home prices to leverage their consumption and charitable giving by borrowing against their home equity.

Since the stock market crash in 2000, the economy has been on a steady downward spiral and many disillusioned stock market investors viewed real estate as a safe haven for their investment funds. Later, when the real estate bubble also popped, these same investors suddenly found themselves immobilized, like deer caught in the headlights, with an illiquid portfolio of real estate, not enough cash flow, and possibly no job. The liquidity crisis quickly spread to the rest of the financial markets that had irresponsibly pyramided derivative products on top of an already overextended and overleveraged property market. The rest of the story is like watching dominoes fall. The next dominoes to fall are the commercial real estate market and residential option ARM re-sets. The crisis in real estate is far from over.

During the boom times, local, county, state, and federal bureaucracies expanded with reckless abandon. Many charitable and religious institutions also increased their own bureaucracies and overhead. This institutional obesity was symbolized best, in the religious realm, by the evolution of the megachurch. Many of these religious institutions are bearing unsustainable debt loads and are on the financial ropes sucking wind alongside their members who are currently dealing with personal bankruptcy, foreclosure, and sustained unemployment.

Governments use force (taxes) and fraud (inflation) to extract needed funding, in this declining economy, while charitable institutions and churches often use false guilt to extract needed funding from those they’ve become dependent on.

Socialist or collectivist thinking has invaded both government and religious institutions and while government can always resort to coercive taxation to get needed funding, they desire to package their forced extractions into more palatable rhetoric like the religious institutions do. The charitable and religious institutions use words such as “hoarding” to make people feel guilty for looking out after their own self-interests (family and household). In the secular realm, hoarders are frequently labeled as isolationists, as being anti-social, or as not being socially responsible. Government and religious institutions serve as brokers in the redistribution of wealth…after, of course, they take their quite respectable cuts squarely off the top to service severely bloated administrative budgets and other costly overhead. A fact grossly overlooked, in the fog of labeling and name calling, is that if households had been more diligent in looking out after their own self-interests, prior to the economic downturn, there would have been fewer personal bankruptcies, foreclosures, and much less stress on our existing social safety nets that are now looking extremely distended and frayed.

Keeping Up With The Joneses Psychosis

We can clearly see that the need to keep up with the Joneses, to our own detriment, during the credit bubble, was not a psychosis exclusive to individuals but it was also a dis-ease embraced by governments, corporations, financial institutions, and many religious groups. We would contend that the obsession to keep up with the Joneses, at the individual or institutional level, is a not-so-distant cousin to the obsessive compulsive psychosis associated with those “hoarders,” previously described, who constantly enlarge their inventory of acquisitions simply for the sake of acquiring them. In the case of individuals and institutions obsessed with the idea of living beyond their means, did not the psychosis take on the characteristics of being a nationwide obsessive compulsive behavioral pandemic? The escalating rate of individual and corporate bankruptcies and home foreclosures would suggest that the answer to that question is yes.

Although it might make us all feel better when we watch daytime TV shows that depict the obsessive compulsive behaviors of others who have seemingly pointless habits, wouldn’t we all be better served by focusing on more pertinent behaviors? Have any of these rather benign behaviors contributed to the implosion of our national economy?

Now that we’ve discussed what hoarding is and how the usage of the word has morphed into something else entirely and the reasons why, we are now ready to move into the next phase of the discussion in Part III of this four part series where we will analyze the interview Craig Ford had with the poor people of PNG. We believe you will find Part III very interesting.

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