To The Moon

Or “Confessions of a Lapsed Libertarian” Photo byJon TysononUnsplash Years ago I read something about the old, high-end Hilton hotels. Apparently, they were each built with an “Atrium” towards the top of the property where the Operations Director or General Manager would live. That always hit me as a bit too on the nose, so to speak: they were literally looking down on their employees. At the same time, it sounded pretty neat as far as hospitality management went. But now that I live in Ivory Tower Town — sometimes referred to as Naples, Florida, other times “The Paradise Coast” — I don’t think the Hilton GMs were a problem. Not by comparison, at least. Because of after years of living in an area best described as the epitome of oligarchical, caste-type living, I have been forced to confront my beliefs head-on. I’ve found them to be sorely lacking. I’ve long been, at least ideologically, a libertarian. I believe that everyone should be free to live their life as they see fit and spend their money as they desire, provided they do not harm others. You’re free to swing your fists wildly in the air for as long as you like, but those rights cease as soon as your fist hits my face. But there’s a big difference between ideology and reality — and my pragmatic nature is definitely winning out over my idealistic beliefs. Pragmatically, at least 60% of the population in the United States (probably more) is anything but free. Their housing selection is limited or non-existent. Their workforce options close off every day as the pitchforked-shaped threats of AI, automation, and offshoring take hold of numerous fields. Their mobility is hobbled by limited assets, limited resources, and limited options. Artificial limitations are antithetical to the type of freedom I believe in. So what I’d like to do today, if you’ll let me, is twofold: Explain how my horrible town gives us a little bit of insight into the future, and why years of living here and in NYC have caused me to gradually shift from a free-marketeer into a more left-leaning creation. I think, occasionally, a voice from the other side is useful. Since, by Medium standards, I represent the other side, I’d like to provide a different perspective on our economic problems — even if we come up with the same solutions. So, let’s begin. Wealth We can’t talk about our economic system without first talking about wealth. I also can’t talk about the two places I’ve most recently worked — Naples and New York City — without also discussing wealth. So we’ll start there. A lot of the systems that create wealth in the United States, and the political thinking or ideologies that support them, come from a few underlying beliefs that could generally fit on a bumper sticker. Among them: “The freer the market the freer the people” “Government is inefficient and/or corrupt” “The market will correct itself if things get too far out of whack” “Hard work and smart investing alone can get you to the top” Now, depending on your philosophy, this sounds like a bunch of talking points. But in a theoretical world, where models and half-completed hypotheses rule the day, they can all seem functional. Ideal, even. But again, idealism and pragmatism often collide. And this underlying concept of a “free” market that libertarian and old-school conservative types rely on is a very subjective thing. Photo byJuan MarinonUnsplash Roughly 130 years ago, we discovered that a “freer” market meant that monopolies could not exist. As the “market” can be cornered quite easily in some circumstances, this was a big step — an acknowledgment that sometimes outside forces need to enter and watch the market to ensure it remains free. Rather than seeing regulation as a restriction on freedoms, it was designed to protect them. And that brings us to our current wealth problem. When the top 40% of the nation has 95% of the wealth, or more importantly,the top 10% has three-quarters of it, you’re approaching a wealth monopoly. Markets respond to the needs of money more than the needs of people. When things are balanced, they may be one and the same, but they’re not. When the top 1% of the country has 3,200% of the purchasing powerof the bottom half of it combined, the market is not going to respond to the latter group. It just won’t. If I’m a business, targeting just that wealthy little sliver gives me more potential earnings than if I took every dollar the bottom half of the country earned for the next 30 years. Why would I, as a corporate executive, give a shit about appeasing the needs of 150 million people just to make 97% less than what I would from targeting 3 million? There was an old restaurant saying I used to hear working in catering that was something along the lines of “those who feed the kings dine like peasants, those who feed the peasants dine like kings.” Or something like that. Essentially, it was purporting that large-volume business to the masses was more profitable than selective business to the upper crust of society. That’s no longer the case because we have a wealth monopoly. Of course, it’s not just wealth — it’s everything that wealth can buy. Which is, well, pretty much anything. Sure, the Beatles said you can’t buy love, but you can certainly buy the illusion of it. Take big-ticket items like housing —36% of the United States rents, so those buildings are investor-owned. But investorsare also gobbling up single-family units nowso that market is starting to get cornered as well. Once it does, goodbye housing for anyone south of the 70th percentile in income. Think it can’t happen? It could happen tomorrow. Right now, the top 1% has $41 trillion. Total home values in the United States are currently $45 trillion. Without even bringing in their meager cohorts in the top 5%, the wealthiest among us could scoop up 90% of the property in the entire United States using only their existing assets and no financing tomorrow. That’s how monopolies start. Societal In practice, this creates something of a caste system in our society. I’ve spoken about that system before, but I think my tiers within it are changing. The bottom half of the country lacks enough purchasing power to dramatically impact markets, politics, or anything else, so no changes are to their benefit unless it happens accidentally. https://unsplash.com/photos/3aGZ7a97qwA Then you have the caste that doesokaybut has seen its share of the pie decline with each passing year, even as its costs rise. This is commonly called the middle class and has a very vague definition when it comes to who is included in it. I would argue that is also shrinking, but that’s another discussion entirely. My newest insertion is actually a tier that I think is fairly large, which are people notquitein the top 10% but close enough to it. This tier is maybe the only one that regularly deals with the upper echelon of society because they are theinstrumentsof that group. Some may kid themselves into thinking they’re among the wealthiest in society — many of my colleagues did — but they are most certainly not. These are the ones who facilitate the loans, grow the investments, secure the real estate deals, etc. I spent most of my career in banking and lending making the wealthy wealthier and I was compensated well for it. This group may act onbehalfof the top few percentiles of America, but they will never be of the top percentiles, not socially anyway. When the gaps between these different castes widen —as they are— and the mobility between them decreases —as they have— we no longer have a “free” market. We have an “assigned” market in which you can move up and down to some extent within your tier, but not move out of it. There’s been a lot of talk about equity versus equality in opportunity lately, and I haven’t moved so far to the left as to advocate for the former. But I’m not conservative enough to sincerely believe we have the latter, either. I’ve literally reached a mix of both viewpoints in most matters, depending on what is most pragmatic. When all of the assets are controlled by a small minority that also exerts disproportionate influence on laws, regulations, and the rest of the economy, a vicious cycle can begin. One which favors the same small group over and over again at the expense of everyone else. Parts of this would be called an oligarchy, I suppose. With that in mind, it’s time to head to Naples, Florida — for a glimpse into the nation’s future. Dichotomy What does it look like when an economy breaks down? Well, I know spring break is over, but you can come down to southwest Florida and see for yourself. We’ll grab an expresso and talk about macroeconomics. It’s fun, I promise. Now the wealth in our country is, as is almost the case, concentrated among the older generations. This is not unusual nor should it be. People who have lived longer have had more years to earn and save money. That’s not concerning by itself, though an aging work force poses a few threats elsewhere. But, not all of each generation is created alike. And in the southwestern area of Florida and Naples in particular, it’s the wealthiest, oldest crowd that reigns supreme. The median age here is 65.4— where I should be around the average age of a population, down here I’m basically 30 years younger than everyone. The median home value is over $1,000,000, and 61.7% of the population holds a bachelor’s degree or higher versus 35% nationwide. Only 37% of the population is in the workforce, and we’re the 6th-most expensive zip code in the South. Naples, FL. Photo byTamara MalaniyonUnsplash They’ve come from wealth, grown up in wealth, stayed in wealth, and retired in wealth. In the same town, we have a massively growing homeless population, signs everywhere warning of “increased criminal activity”, people stealing catalytic converters off of cars constantly, and one of the worst housing shortages in the country. But all of that happens outside the walled compounds of our wealthiest areas. It’s literally a dystopian society. Multi-million dollar homes with security guards, maids, and cooking staff surrounded by homeless and poverty wages. The area’s economy has bent to the whims of the wealthiest set of people who live there. Corporations, office jobs? No, we don’t want or need those. Glass buildings would clutter the skyline. But we do need nice restaurants to go to, some hotels for our relatives to stay at, and a few upscale bars to drink in. So we have a large quantity of retired or otherwise inactive wealth, serviced by a hospitality, service, and food/beverage economy that doesn’t provide enough wages for the “help” to actually live in the town. Which is by design. Affordable housing, by the traditional definition, will never be allowed in this town. No way. Naples does have some areas that have been deemed “affordable” by the housing fairy, but those apartments are $2,200 monthly for a one-bedroom apartment. I hear residents around town gleefully pronounce that, eventually, none of “those” people will be able to live in their town. Who “they” are is up to the viewer’s interpretation. The word to describe all of this is a basic one — “sad.” Just outside of one of the wealthiest zip codes in the country is the area where some of the service workers live, and it’s literally a private little dystopian area where the homeless loiter alongside the bottom rung of apartments that some local workers are desperately clinging to. Inthatarea — which is in the same town, by the way — only 5% of the population has a bachelor’s, a third are uninsured, and the workforce participation is more than double the rest of the area at 74%. Despite the fact that everyone in that area works, I’ve not yet seen anyone make it from that area to a nicer part of town. We’re just cemented in our castes, the same way the rest of the country is trending. And it isn’t pretty. Change It’s all set to get worse, in my opinion, as the jobs that provide a “ladder” to a better life are all staring down major headwinds. Many labor and trade roles that allow an escape into the working or middle class without a college degree are on the automation chopping block. The administrative and support roles that provide an entryway into the corporate offices of the world are prime targets for AI. While I still hold plenty of opinions that probably put me to the right of the typical Medium writer or reader, Idobelieve that some course correction is now necessary. A truly free market needs plenty of opportunity and an absence of monopolies. We have declining opportunities and a group that increasingly holds a monopoly on wealth and assets. Correcting years of neglect and reversing decades of worrisome trends won’t happen overnight, but we need to at least get started. We’re already nearing the breaking point in many, many ways. $NASDAQ(.IXIC)$ $DJIA(.DJI)$ Follow me to learn more about analysis!!