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Physicist, Startup Founder, Blogger, Dad

Thursday, March 01, 2012

Struggling on $350k a year




For related posts, click the "income inequality" label below. Here's one: real wealth.

WSJ: ... Schiff says his $350,000 salary just isn’t enough. “I feel stuck,” he told Bloomberg.

He says he struggles to pay rent for their duplex in Brooklyn, as well as the summer rental in Connecticut and the $32,000 a year tuition for his daughter’s private school.

“I can’t imagine what I’m going to do,” Schiff told Bloomberg. “I’m crammed into 1,200 square feet. I don’t have a dishwasher. We do all our dishes by hand.”

He said that it would cost at least $1.5 million to buy even a modest apartment nearby.

“All I want is the stuff that I always thought, growing up, that successful parents had,” adding that he “didn’t want to whine.”

I called Schiff and he confirmed his quotes in the article. He said that the main point he was trying to make was that the costs of living well in New York have soared beyond the reach of even the affluent.

“Look, I know my salary of $350,000 is high,” he said. “My whole point is that education and housing in New York are now priced for the wealthy, not the garden variety wealthy. I’m not living high on the hog and going to St. Barts. I mean my summer rental is bare bones, it’s not the Hamptons. ”

He also said that 48% of his salary goes to taxes. “The taxes I pay are absurd,” he said. “Between Federal, New York state and local.”

40 comments:

RKU1 said...

This is *exactly* what makes the current system so totally stupid.  All the Wall Street types are just bidding up positional goods, and almost nobody's benefiting from the vast flow of national wealth they're absorbing.  Frankly, I bet the reporter could have easily found someone earning $1M per year who was also living paycheck-to-paycheck.  

If the average Wall Street salary suddenly doubled, almost everyone there would remain almost as economically stretched, even though the rest of the country would become totally destitute.

Clearly, one of the stupidest systems a country could possibly devise...

Iamexpert said...

I remember Forbes magazine had an article about how a billion dollars was not even enough to live off, when one factors in the costs of private jets, yaughts, manhattan penthouses, mansions etc. These days with super pacs allowing the uberrich to decide elections, it behooves one more than ever to have unlimited wealth.

Kevin Rose said...

After taxes hes bringing in under 15,000 a month. In NYC, thats a comfortable salary, but it is a far cry from great riches, especially for a family. For a bachelor it would be a very comfortable salary, but even then nothing approaching great wealth. I can totally understand how he is living paycheck to paycheck. After his daughters tuition he has like 12 Gs to play with, which for a family in NYC puts you squarely in the Middle Class, I would think. 

If THIS is an example of our *extravagant* upper classes than we are pretty pathetic as a nation. I wonder if all that effort and education was worth a measly 15gs a month in an expensive city like NY. I suspect this guy put a lot of effort into his education and career expecting the payoff to be a life of wealth and privilege, and now finds himself living at best, comfortably and well, but barely, and with effort and strain - he has every reason to grumble over his situation.

Bobdisqus said...

census bureau 2010 median household income of $50K for New York City.  I guess some people manage to do it.

Oakland Peters said...

This person clearly does not know how to live within their means, is simply complaining, or both.

I just visited a friend who recently purchased a quite reasonable home in a safe region of Jersey City for ~ $200,000. It has enough space to comfortably house 4 adults, the Turkish community is surprisingly friendly, and allows a public transit commute to Wall Street in under an hour (~25 minutes if you drive).

Oakland Peters said...

This person clearly does not know how to live within their means, is simply complaining, or both.
I just visited a friend who recently purchased a quite reasonable home in a safe region of Jersey City for ~ $200,000. It has enough space to comfortably house 4 adults, the Turkish community is refreshingly friendly, and allows a public transit commute to Wall Street in under an hour (~25 minutes if you drive).

David Coughlin said...

 Whenever I read a phrase like "expecting the payoff" I reflexively think, "Naive prior".

Yan Shen said...

Right, one major problem which you and Steve Hsu have both alluded to is that there are too many people going into value-transference fields such as finance and not enough people going into M and S loaded value creation fields in STEM. I think that one major way that this problem can be rectified is if we enacted immigration policies which skewed the American demographic more towards people with abilities in M and S.

The bedrock of economies like Japan and South Korea are based on high tech manufacturing. As you lamented on another blog, America's leading export seems to be IOUs.

David said...

Companies are already loaded with low wage H1-B slave labor.  New immigrants in STEM mostly depress wages of native workers rather then increase opportunities for them, and most of the value created by these immigrants lower wages gets transfered to elites (with a few high profile exceptions).  To be honest its mostly just an age thing.  Companies get fresh young IT people and then fire them when they are 45 and skills are out of date.  This is what happened to middle aged white IT people, and it will happen to middle aged Indian people in turn.  Mass immigration was allowed because white people didn't have enough babies to keep exponential growth going, and our monetary system requires exponential growth.

There is no way to fix the country without fixing the elites, period.  Using immigration as a crutch/stop gap to paper over serious structural deficits in your country is a recipe for failure.

David said...

I find it amazing that Schiff is on TV as an expert.  For a guy to predict the housing crash and be living paycheck to paycheck in Manhatten is absurd.  He runs his own brokerage and he is pulling in less then almost any VP at any IB.

steve hsu said...

Are you confusing Schiff and his brother?

Ken Condon said...

That sounds like an Onion article. Is it on the level? If it is it is somewhat amusing. My 2c on this-is this. It is always easier to spend less than earn more. But it seems that no matter what ones income level may be ones expenses rise to met and then exceed that level. So enough is never enough.

One feels poor because they just cannot seem to procure that little extra something that they think they need. They don’t need it of course but they want it. There is a difference. That desire of want makes them uncomfortable and unhappy. Give up the summer rental for one thing Schiff-fer crissake!
Meanwhile:http://www.thesmokinggun.com/documents/wealthy-woman-abuses-maid-658213

Alex Chiu said...

I think the real problem is that world is running out of resource,this is simply a symptom of that.  Back in the 50's you could get a high school education work a white collar or blue collar job and live a Middle Class life in NYC.   However back then we also have to remember that gasoline was $0.10 a gallon.   The cost of all the things you need for life was absolutely miniscule in comparison to your income.   Why things worse now simple: China and India.  China has gone from being a country that produced 1.5 million cars in 1999 to a country that produces 18 million cars, to put this perspective that's more than the US and Japan put together.  Likewise China's income has gone from $1200 per capita in 1980 to $6000-$8000 per capita now.   This is going to bid up the price for all of the world's natural resources.  Even if China's income only rises to $12000-$16000 per capita you can imagine just imagine how much gasoline and fuel will be.   With our current technology the world's way of life isn't sustainable,there simply aren't enough resources to support China and India's emergence into the consumer economy.   Hopefully men like Doctor Steven Hsu will be able to develop the technology we need for the 21st century.  The other Doctor Hsu's emphasis on renewables is absolutely laughable in the face of our global resource problems.

Iamexpert said...

What makes STEM fields more value creating than finance fields? Define value.

Robert Buttons said...

He may have a point on taxes. NYC taxes are insane. This guy (
http://tinyurl.com/8xdn9cy) claims to pay >100% in total tax.

Robert Sykes said...

 Semi-skilled and unskilled people could live a middle class lifestyle in 1950 because the US was the only industrial economy in the world. Europe and Japan had been bombed flat, literally. Also $0.10 gasoline was very expensive. It is equivalent to $9.33 per gallon today. That cost was exacerbated by the low income levels of the "middle class" and the very low fuel efficiency of the average car.

As to global resource problems, please read Julian Simon. The only real resource is human creativity.

Yan Shen said...

 In fact, the more I think about the matter RKU, the more I believe that drastic measures may need to be taken in order the remedy the numerous ailments which afflict American society. Indeed, we may need to drastically re-engineer the demographic makeup of this country and radically alter the very fabric of society itself.

If I were to be elected President of the United States of America in 2012, I would propose that we deport a large segment of the native population, say to Madagascar?
http://en.wikipedia.org/wiki/Madagascar_Plan

These individuals would then be replaced by worthier ones from abroad, people skewed towards abilities in M and S and who can power the value-creation engine of the American economy. What this country needs is more Steve Hsus and Christopher Changs, brilliant men whom skew towards M and S and whom embody the traditional Confucian virtues of under-promising but over-delivering. What this country desperately does not need are most chest-thumping Gordon Gekkos, yapping away and derailing the American economy into an even bigger train wreck than it currently is. That's why a vote for Yan Shen is a vote for a better and more prosperous future for this great nation!

Iamexpert said...

Well it assumes some objective definition of value exists independent of the market. Your value is simply a function of how much people value you and that's measured by how much of their valuable money they're willing to pay you. Now I suppose you could argue someone has transferred value if their market value comes not from their actual work but some credential they have that legally protects them from market competition or if they are offering fraudulent goods or services or simply stealing value through theft or plagiarism . But generally speaking, what you earn is in direct proportion to the value you provide, at least to the people paying, and they're the ones who decide.

Edwin said...

"1) How crucial is this job to the efficient functioning of the economy
2) How many people exist who can do this job"
And finance fails on both counts.Could you mention a country that has BECOME   great by doing value transference stuff?Its when nations are on the decline that its aristocracy go to school in fluffy stuff like art history and move on to "management".The American elite are behaving in the exact same way as the British on  decline.Does it occur to you as odd that EVERY rising power right now is more involved in making than transferrence?Value transferrence lies on the selfish,shortterm premise that some people will create something worth transferring.But with the increasing disdain for value adding activities in the US,what do you plan to transfer in 50 years?

Yan Shen said...

"Your value is simply a function of how much people value you and that's measured by how much of their valuable money they're willing to pay you."

Well I agree that there's no objective definition of value in the Platonic sense. Value is just a word that people use and it can be defined however one chooses to define it. But I think most people use it in a different way than how you seem to be using it. Tulip mania during the early 1600s amongst the Dutch drove the prices of tulips to extraordinarily high levels. Most people would argue that the tulip merchants capitalizing on this craze were transferring value to themselves rather than creating it by offering the Dutch tulips that were absolutely vital to the functioning of the economy, despite the fact that there were numerous people willing to pay exorbitantly high prices for such tulips.

Edwin said...

So...if finance does not assure you of a comfortable livelihood,what does?Medicine?startups?what?

Kevin Rose said...

I dont know, Edwin, Germany makes things - fantastic and complex things - and is hardly a rising power. China provides cheap, regimented labor for the West and Japan to translate its ideas into reality - it is the laboring class to the Wests owning and managing class. Besides, you kind of missed my point that there is no such thing as value transference. Every time you do something useful you *create* value for the economy, and finance is necessary for efficient capital allocation. Since the value of finance, though crucial, tends to be obscure, there is a superstition that it is somehow *cheating*. This has been an enduring superstition amongst the less thoughtful segments of the population for some time now. 

Its a mistake to be blinded by the concept of *rise*. A countrys capacity to *rise* is very much a function of where it is it is now. Sure, China is rising, but from how low a base? Anyone who starts from a very low base will begin to show an incredible rise if he gets his act together even a little bit. Whats interesting to me is that Chinas rise is so utterly dependent on the contributions of the West and Japan. I can think of no other country whose economic rise is so tied to the contributions of others, and who themselves provide so little aside from sheer brute, physical labor. S Korea actually designs and develops its own things, so does Japan. In my view, the rise of China - so utterly dependent on foreigners, so utterly a function of providing cheap labor, starting from so hardscrabble a base - is perhaps the least impressive of any of the Asian countries, despite its superficial glamor. Its no more than a well organized African country that leases out its human labor to the highest bidder. It is a sad irony that the country of scholarly mandarins should now excel at providing brute labor, but history loves ironic reversals. Now, there is every chance that things will change with China, and she will join the ranks of nations actually capable of doing more than merely serving as cheap labor for others. I myself believe this is bound to happen. But what we are seeing NOW is hardly impressive. Let us look at perhaps the two countries best at *making* things - Japan and Germany. They probably produce the most, and best, things. Japan is in the economic doldrums and while Germany is doing reasonably well, nothing spectacular going on there economically. Singapore, which is almost entirely *value transference*, Hong Kong, likewise, is doing great, and always has. Anyways doing a comprehensive survey would be tedious, and you get my point. Clearly, the evidence - at this point - does not suggest any ironclad connection between manufacturing and wealth.

dwbudd said...

This story is being tweeted and poked by the picadores of the American left as we speak.  

A couple of observations.

1) Yan Shen's comments about shipping chunks of the American population to Madagascar is incredibly similar to a proposal, about a century and a half ago, by Sir Francis Galton, on how to "solve" the problems of Britain's colonies in Africa.  In an editorial comment submitted to the Times of London, he made more or less the same point as our friend here does, albeit more long-windedly and with considerably less political decorum (http://galton.org/letters/africa-for-chinese/AfricaForTheChinese.htm)

2) It's easy to mock this guy as whining, and RKU1 (below) raises a good point about positional goods.  Surely, the whinge about a vacation home in Connecticut opens him (Schiff, not RKU) to ridicule.  On the other hand, I don't think access to a good education is "positional."  I would point those here to Professor Hsu's earlier treatment of the classes at Stuyvessant High School for evidence. 

3) The larger point - one ignored by the Republicans and lied about by the Democrats - is the Occupy Wall Street meme - that what is "wealthy" in one place may be considerably less so elsewhere.  Now, no one - even the most jaded cynic on the Upper East Side - would argue that $350,000 per year is working class, let alone poor.  But $350,000 per year makes you quite wealthy in Topeka, KS, but I would think if not "middle class," not exactly "rich" in Manhattan.  (For the record, Mr Schiff apparently resides in Cobble Hill, which is Brooklyn).  

This subtlety is lost when, for example, the President talks about "the rich," proposes taxes on "millionaires" who in fact earn a quarter of that, or most innumerate of all, says frankly stupid things about "millionaires and billionaires," as if there is no significant difference between the two.

4) I disagree with another poster (Alex Chiu) that the problem is so easily reduced to the world "running out of resources," citing gasoline costs as an example.  In point of fact, adjusted for inflation, gasoline - even $4.00 per gallon - is a relative bargain compared to the halcyon days of the 1950s.  Clothing (thanks largely to our favourite political political and economic whipping boy) is relatively inexpensive.  Most other items (food, furniture) are roughly the same now in real dollars as they were.

Space, on the other hand, and in particular, housing in desirable places, IS limited, but populations are not.  In Charles Murray's new book, he highlights what it cost to buy a home in Manhattan in 1960 vs. today.  Spots at desirable public and private schools have not kept pace.  There are places a lot of people want to live, such as Manhattan (the metric of "New York City" is the wrong one here), the San Francisco Bay area.  To a lesser degree, Southern California and Boston.  The cost of entry here is very high.  

Jirka Lahvicka said...

"
That doesn’t mean Mr. Ross pays more in taxes than he earns. His total tax as a percentage of his adjusted gross income was 20 percent, which is much lower than mine."

Kevin Rose said...

Large parts of Brooklyn should be classed together with Manhattan as just as desirable and as expensive, which was completely not the case when I was growing up in NYC. NYC has become so trendy that the *good* areas are expanding at a steady clip. So many Europeans come over that it is practically a colony of Europe. I love it. If this continues, then I predict even more of Brooklyn and perhaps parts of Queens - which has a distinct and under-appreciated architectural feel - will be gobbled up by the expansion of *desirable* neighborhoods. 

reservoir_dogs said...

Kevin,

People tends to look at their immediate surroundings and make conjectures based on this limited data. For any country to rise as United State did and China is doing, making things for others is just a small part of the net wealth gained. What is really transformative is to learn to do things differently and more efficiently. For example, in the 70's, the Chinese used to have shops with glass case manned by uncaring employees who did not wanted to be bothered. Now they have super markets as efficient as any in the West. This export stuff is important in that it allow them to learn a great deal from the West. Their main dependence of the West has more to do with the West providing a model rather than the destination of their exports. Seeing it from our perspective, everything is made in China. but if you look at the numbers, net value added as part of their export is a small though significant part of their GDP and has not grown in proportion over the years.
Certainly they are not creating many break throughs yet, but if it was just brute physical labor, surely many countries in the world has that. Why is it that no one else comes close to the length and magnitude of growth they acheive? If you look at a place like Singapore in the 60's you would make the same comments about them, diddo Taiwan. Give it a little more time.

Matthew Carnegie said...

"That's life in the big city in a world where the labor theory of value isn't true". 

At least that's what I'd expect anyone in the finance industry to say to anyone complaining that despite their hard work, they really weren't any better off...

David said...

I worked in IB.  Anyone who thinks it isn't value transference is either ignorant or wants to be ignorant.  Perhaps 20% of what is done in IB is value creation, and that is generous.

The whole idea that the market is the best determinate of prices if absurd.  Adam Smith knew 300 years ago that the market conditions he assumed for the models were based on a number of assumptions that didn't exist in many real world cases.

Kevin Rose said...

Well, its not just brute labor, its well organized and regimented brute labor provided cheaply under relatively stable political conditions. And even as to brute labor, I am not sure there are many people with the same work ethic as the Chinese - in fact I rather doubt it. The Chinese early became famous for being willing to work harder and longer, under worse conditions, and for less pay, than any other people in the world - it is the thing most noted about the Chinese through the past few centuries. In my view, this capacity is THE distinguishing feature of the Chinese and can probably be considered their most formidable quality. So it is no real surprise that the Chinese have become the worlds workhorse in a global economy, where each country does what it is best at. Without going into too deep detail, I dont think Taiwan or Singapore fundamentally change this picture.

But I am quite willing to give China more time, and I said that I do think this picture will be modified somewhat in the future. I just say that what is happening right now in China is not really a big deal. Most of what is said about China today is just hot air and hype driven by the medias need to constantly generate sensational news stories.  

I remember reading all these fantastic things about China and how its modernity vastly eclipsed anything found in America (in the big coastal cities) and getting all excited and eager before my first trip. When I got there it was like, this is it? I really wanted China to be like all those news articles! I realized then just how much the media is hyping China.

But I do think that these 3 things will remain Chinas main competitive advantage in a global economy 1) A capacity for hard work 2) A high tolerance for bad working conditions 3) A high tolerance for a worse lifestyle in reward for that hard work and those bad conditions.
 

Yan Shen said...

You know, all of this talk about value transference as opposed to value creation reminds me of the Steve Jobs/Steve Wozniack pairing at Apple. It was obvious that Wozniack was the one with the technical chops, the engineering genius. Jobs was the consummate businessman, the talker, the guy who could suck others into his reality distortion field.

There was an interesting anecdote in the recent Steve Jobs biography by Walter Issacson about how early on during the existence of Apple, Wozniak's dad told Jobs that he didn't deserve shit because he had created nothing, causing Jobs to burst into tears and to offer to give up control of the company entirely to Wozniak. Meanwhile, decades later Jobs is universally hailed as a genius, while the shy, quiet, socially awkward, but technically brilliant Wozniak has more or less faded into obscurity...

RKU1 said...

Well, let's take a black-box approach to the issue...

From what I've read, forty or fifty years ago most people working on Wall Street weren't paid all that much more than public school teachers in NYC.  So back then, Wall Street was "poor" but the country was rich.  These days, Wall Street is rich, but the country is poor.  This may or may not indicate anything.

Or take the opinion of Paul Volcker, perhaps America's most highly-respected banker.  He's suggested that the only useful innovation which the financial services industry has created during the past generation or two was the ATM.  Nonetheless, the quantity of national resources absorbed by that industry has grown exponentially.

I think there's a descriptive biological term for entities which absorb vast quantities of nutrients while producing little discernible value.

LaurentMelchiorTellier said...

It was only a matter of time before Alex Chiu would find his way to this blog. I'm a big reader of your work, Alex!

Matthew Carnegie said...

Yan, verbal, mathematical and spatial strengths are interesting, and I think it's cool that you have a special interest in this area (I think it's an interesting topic), but it might be better to discuss this on your own blog? Not sure it's OT.

That said, I've been thinking about this (as you know), and one thing I read recently which you might be interested in on this topic about performance (largely visual spatial) vs verbal task performance is that there tends to be a strong skew towards performance IQ away from verbal IQ in criminals in general and in particular in psychopaths, at least in incarcerated (prison) populations.

There are a number of conclusions or interpretations you could draw from this:

1) There is actually something about verbal IQ which is tends away from criminal and sociopathic behaviour (like directly giving better empathic understanding of other people or better ways to work with people rather than just steal or compete for position in zero sum games)
2) Performance IQ is just correlated with masculinity in a general population, which is why it shows up in sociopaths and autistics OR performance IQ is correlated with social skills and empathy, but isn't actually mechanically helpful to it directly
3) The verbally oriented criminals and psychopaths exist at as high a frequency as performance dominated ones, but manage to avoid detection better!
4) Intelligence profiles tend to be more verbally dominated in high SES populations relative to low SES populations, so it might just be that criminals tend to be very poor.
5) If there is something protective about verbal IQ (and a verbal led profile) from criminal and psychopathic behaviour, then it's even more interesting that East Asians show such low levels of criminal and psychopathic behaviour (although that's mollified by their overall high IQ).
6) If the more performance oriented people are more likely to behave criminally, then it's even important to have a social system which keeps them on task, if the gain strengths at maths (and maybe to a lesser extent spatial) in a way expected of their performance IQ skew.

I think also interestingly psychotics (in prisons) as opposed to psychopaths tend to display the opposite pattern, with a lower performance to verbal skew. Maybe not too surprising, again, that a verbally led pattern would be connected to psychosis, which has been theoretically (I think experimentally perhaps not so clearly) connected to creativity.

Yan Shen said...

 You are a truly strange and bizarre fellow Matthew.

Matthew Carnegie said...

I wouldn't say I'm really "moderating" or attempting to influence Steve's commenting policy. I'm certainly not calling you out for bad behavior or anything (like bizarre attempts to force a blog owner control "WN" or "AN" readers or somesuch ;) ). It's more a suggestion of what might get you more appreciative readers, rather than your creativity and insights being lost in the comment section with perhaps less readers than they might deserve and less of a consistent and easy way to read your thought over time (maybe I should follow my own advice). Steve's suggestion of an FAQ for your basic points was good, I thought.

Surprised you aren't interested in the points about performance vs verbal profiles... Probably too OT - I just thought that, since you have an interest...

Yan Shen said...

And of course you have no problem with white nationalists/neo-Nazis derailing every single Steve Hsu thread on affirmative action right?

Matthew Carnegie said...

Well, you can draw your own conclusions I guess. I've read Sailer's and Sigma's blogs, as have you, less so recently, as they don't recently really seem to have had much of interest to say. I fairly certain when I've commented it's not been mindless "And this is why White people are awesome and should all live together" cheerleading, as much as it may not have been pleasing to you necessarily. I'm not really too interested in arguing the toss with you over this or filling the comment section up with contentless garbage (I'm not saying what you have to say is contentless garbage, just that this kind of back and forth is).

You're a more persistent commentator than most other people here and a lot of the discussion with "WNs" seems to follow you around quite closely. I can't really think of any other commentator that is persistent enough along the same line of argument or eccentric enough in their opinions in relation to the topic to make that kind of suggestion to (maybe myself?). You're not the *most* tendentious commentator on these subjects though.

tractal said...

But how is it happening? If there is really no 'real' alpha, and the financial sector is merely sucking at the trow, how does the market sustain itself? Its one thing to say that people are all fooled, but there are a lot of smart people scrutinizing this process. I'm sure there is something to be said for institution size advantages, but still. If it is really a mere value transference scam it is incredibly successful. 

Kevin Rose said...

Yan, there are White Nationalists under your bed right now! And some in your closet! Quick, blast them with your Asian Supremacist ray gun! Or make them dissolve into dust shrieking by blasting them with your Asian Supremacist arguments!  

RKU1 said...

Well, the compensation levels on Wall Street obviously have a huge dispersion skew, with the median being nothing remotely like the mean.  But from everything I've read, typical financial compensation is enormously higher than nearly all other sectors of the economy.

But as for ordinary Wall Street people being "rich" its certainly a matter of definition.  As I mentioned, the vast flow of dollar wealth has bid up the local positional goods to ridiculous levels, so I wouldn't doubt that lots of people earning $350K per year in NYC have much smaller homes than people earning $50K per year in the Mid West.  And since they're often paying up to $40K per year per child in private school tuition, I can see them often being more financially stretched than the average plumber in Akron.

In some respects, this reminds me a little of what the history books say happened in Spain, with the vast inflow of looted gold and silver from the New World destroying the productive Spanish economy and causing Spain to become backward and impoverished for several centuries afterward.

As for the financial products they produce, back a decade ago I certainly wouldn't have been nearly so harsh in my judgment.  But as near as I can tell, in recent years there's been a strong inverse correlation between the sophistication of a country's financial system and its economic performance.  In particular, encouraging ordinary people to focus on their financial investments rather than their regular employment has negative consequences.  Chinese people mostly put their money in low interest savings accounts, and their incomes are doubling every decade.  Americans are encouraged to cash-out their home equity, and they often go broke.  German behavior seems much closer to that of the Chinese, and they're doing quite well economically.

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