It would seem that one of the most pervading topics these days is the art of buying and selling. From real estate and investment banking to political campaigns and global economics, the relationships between money and society range from the subtle to the obscene.
As we head into an election year though, all of these intertwined value systems begin to come into a focus that in other times seems to be happening more or less behind the scenes of the average person’s life. I’ve had more conversations about working wages, trade deals, campaign finance, equality and financial philosophy in the past six months than I’ve had in years. While it’s easy to compartmentalize many of these topics it becomes more and more apparent that in actuality they are all tied together in an endless knot, not too dissimilar to the ones I remember trying to untangle in the Christmas lights each year.
Capital is king and if you have capital you are already ahead of the game while with out it, or access to it, the average American finds themselves being subject to it instead. What concerns me most about this dynamic is not that it exists but that it exists in a way that it hasn’t ever existed before. The amount of money it takes to pay rent is often higher than it would cost someone to pay a mortgage for a space of an equal size and so one would think that owning your living space is a no-brainer. The problem isn’t that every person couldn’t afford to carry the mortgage as easily as they pay rent, the problem is getting enough capitol in one place at one time to make the transition.
For someone who lives from paycheck to paycheck, building up capital isn’t easy. Sure, you can afford a descent living space that you have to rent from someone else… but doing so prohibits your ability to generate enough capital in savings to make the leap into ownership. Imagine (and most don’t have to) if you knew that the only thing standing between you and owning a home was saving up $20,000.00 for a down payment and closing costs but because you spend all your money trying to meet your basic needs there was no way to get that chunk of change in one place at one time. If you could, you would happily invest it in a home that you could own right? So once you had that capital you could go right back to living the same lifestyle, making “enough” money only now you would have a fantastic investment.
The reason that example is so poignant to me is because of the number of people in our country that are currently in that position compared to those who do have the capital to make major life investments is pretty dramatic. We have 80% of the people with out the capital to accomplish this simple life goal and 20% who could easily afford to fund it with out batting an eyelash. While there are a million opinions on the subject there is one thing that has become clear. There is plenty of capital to go around, it just isn’t going around.
While you look at this chart of capital distribution… ponder this list of other things that capital has the ability to buy/do:
- Health Insurance
- Child/Children’s Education
- Legal Fees & Court Costs
- Non-Profit Donations
- Relationships with Influential Americans
- Illegal Activities
- Political Campaign Contributions
It is clear to me that capital really is king. So when we allow so many people to have so large a portion of our capital… why is the crown they wear any different than the one we fought to claim our independence from? Simple… we’re buying what they’re selling.