The Great Reset: America’s failure and why I’m considering leaving
My work as a therapist and business coach revolves around helping people and organizations achieve their potential. Much of this focuses on how to optimize oneself or organization to achieve results. However, the environment in which people and organizations exist matters. When the underlying values of that environment create structural barriers that benefit a small few over the many, we will never be a country where anyone who works hard can reach his or her potential. The Coronavirus crisis is exposing how our leaders, and the current values system they are operating under, are failing the vast majority of people to be able to live prosperous lives. I know the crisis is hitting the most vulnerable people in the world the hardest, but I want to highlight the blight of the middle (and even upper-middle) class we are on the cusp of.
I’m privileged. I went to great schools and am well educated. I’ve built a successful business and earn a good living. I’ve taught myself about finance and worked diligently to create financial stability. America is supposed to be built for people like me. Work hard, be entrepreneurial, be smart with your money. I am not supposed to be uncertain if I’ll be able to provide for my family. But the Corona crisis has pushed me, and I suspect many other families, closer to the edge than we should be without much hope for help. And in the process the crisis has illuminated seven key failings of the American political and financial system, which together, make it nearly impossible to get ahead. Here they are:
Failing 1 - Student loan debt
Unless your parents are wealthy, chances are you need to pay for college by taking out student loans. It took me nearly twenty years to pay off my college and graduate school debt. And in my therapy practice and work as a business coach I have had countless clients share how burdened they feel with their student loan debt. Even though they are bright and earn a good income they cannot make a dent in their loans and cannot amass any significant savings to buy a house after they pay their rent and living expenses. The fact is college tuition has become ridiculously expensive.
Failing 2 - Health care
If you work for a company, they cover a portion of your health insurance. You may not like your job but feel you need to stay there to continue to be insured. Every year the costs to you go up and the coverage seems to get worse. Being self employed I have to purchase my own insurance. For a family of 2 kids this runs almost $2,000 a month and that’s for a Bronze plan. We’re forced to try to predict if we will be healthy and choose a plan with low premiums and higher deductibles or if we will need a plan with high premiums but lower deductibles. You better guess right. Unfortunately, our two year old had unforeseen medical issues this year and the bills stacked up, wiping out much of our savings. Other countries around the world provide their citizens with quality health care at reasonable out of pocket prices.
Failing 3 - Inadequate family leave and child care
My wife and I just had a baby and since we are both self employed we have no maternity or paternity leave benefits. If we don’t work we don’t get paid. But even when I did work for a company, one I founded and ran, it wasn’t common in the industry I was in (education for crying out loud) to offer any paid maternity or paternity leave. I didn’t think that was right so I made sure we provided two months paid maternity and one month paid paternity leave which is still not on par compared to what other countries provide, which in some cases is up to a year of paid leave for mothers and fathers. My wife felt pressured to get back to work after she felt well enough and I worked through all of my kids’ first years. Day care and pre-school are options but are not subsidized nationally as they are in countries like Finland where the maximum out-of-pocket is $300 per month.
Failing 4 - High cost of housing
I grew up in New York City in Greenwich Village, a great neighborhood to grow up. I could not afford to live there now. We decided to move to Oakland California for a better quality of life with good work options. And it is insanely expensive here too. Housing is most Americans’ major expense. While the general rule of thumb from financial experts is that housing should be no more than 30% of your budget, Americans routinely spend 40% or more of their monthly budgets on housing. If you want to buy a house you’ll need a 20% down payment. Good luck saving that while you’re trying to pay off your student loans and pay your current rent and other living expenses. Hopefully your parents can help you, because that’s probably the only way you can buy a house nowadays.
Failing 5 - The Dependence economy
Thanks to the four failings above Americans are forced to spend more of their time working than people do in most other countries to pay our high student loan debt, health insurance, and housing costs. This means we spend less time with the people we love doing the things we enjoy. And it means we have to outsource our lives (cleaning, cooking, child care, buying vs. growing our food) so we can make it all work. It creates a vicious cycle of dependence on these services which cost money which force us to work more.
Failing 6 - The growing wealth gap
So who benefits in our system? Big corporations who we all work ourselves to the bone for in order to pay off our student loans, get health insurance, get some paid leave to have kids, buy or rent a house and pay for all the cleaning and childcare so we can work. The wealth gap in America has been growing and is the largest it’s ever been. The system isn’t working for the average (or even above average) American. While the working class toil away wealthy Americans live longer with more healthy years than the rest of us. But interestingly, income equality makes us all less happy, even those with more wealth.
Our tax system, which recently gave a huge tax break to big corporations and the wealthiest Americans and was already full of loopholes so that people who earn the most end up paying proportionally less than anyone else. And this is because our government has become a pay for access system which represents the interests of the wealthy over and above the common person. The bailouts that we saw for banks after the 2008 financial crisis helped banks increase their profits and increase pay for their top executives while millions of Americans saw their savings and investments disappear. It’s pretty easy to guess that the Coronavirus related bailouts for large companies (airlines, banks, etc.) will far outpace any relief for average Americans. Our government for the people by the people has solidly become government for the rich by the rich. Just yesterday there were reports of US Senators who unloaded hundreds of thousands of dollars of stocks before markets crashed while assuring Americans that the crisis was overblown.
Failing 7 - Corporate Welfare
The biggest impact of the Coronavirus will probably be on small business owners and their employees as the economy grinds to a standstill. The government bailout will go to big corporations (many of whom spent the last decade enriching themselves instead of saving for a rainy day) who have big lobbyists and give big campaign contributions. Also hit hard will be low wage workers at big companies who will be laid off in the coming months as these companies continue their priority of maximizing shareholder value. Americans who have put their blood, sweat and tears into building their own businesses will be forced to fold. Amazon and other big companies will be the last ones standing as they have the ability to weather the economic storm by laying off workers and will be the beneficiaries of government bailouts. Meanwhile, the German government distributed money to 150,000 artists, shop owners, and other small business owners as well as freelancers to help them get through the economic shutdown.
These seven failings underscore a system dictated by the following values: everyone for themselves, privilege counts more than merit or hard work, profits are more important than people and family, and excessive consumption. Unless we all want to go pack boxes for Amazon we have two options:
Option 1: Leave the country
Seriously. Let’s go to a country that actually provides the basics for its people and where the people who make the most money understand their responsibility to pay taxes rather than doing whatever they can to skirt taxes. Or even a not so high functioning country where it’s cheaper to live and where housing and healthcare won’t force you to have to work sixty hours a week. I am seriously considering this option. Top of my list are Finland (which actually has enough masks and medical gear), Denmark, Norway or Sweden which all provide great paid family leave and healthcare and regularly are at the top of the happiest countries in the world list (The US is #18). Other places on my list include countries with lower cost of living like Indonesia or Costa Rica.
Option 2: Reset ourselves and demand reform
If you love America and decide to stay, here are some things you can do to reset your behavior and push for system reform.
Get your housing costs under control by moving to a smaller house or cheaper area.
Do work you enjoy doing and work less. Spend more time with your loved ones and do what you truly enjoy.
Stop outsourcing and do more yourself (grow food, take care of your kids, clean your own house, etc)
Wherever you can shop from small local businesses to help keep your local community strong. And stop shopping so much. You don’t need all that stuff.
Start and fund a 529 college savings plan for your children so they can graduate college without debt. Consider community college for two years and then transfer to a four year college. Go to state schools with lower tuition.
Build generational wealth and pass it down to your children. Most people who have prospered in America, with it’s built in inequities, are those who’ve been helped financially by parents or grandparents. In addition to the 529 plan, create a brokerage portfolio when your children are young and give what you can to it each year, buy a home or other real estate investment and pass it down to your kids.
Support political candidates who are not pawns of big money interests. Those who are will represent those interests and not ordinary people.
Support candidates who are for bringing healthcare costs down while ensuring access to for all Americans.
Government and big business ought to do the following before they face a further erosion of public trust and/or a mass exodus from the U.S.
Follow business leaders like Marc Benioff, CEO of Salesforce, who have committed their companies to a new capitalism which maximizes the interests of all stakeholders and not only shareholders.
Consider enacting a four day work week.
Understand that the current healthcare system isn’t working for the vast majority of Americans and support real efforts to reform the system.
Don’t pass on the cost of healthcare to employees (and don’t skimp on plans that provide coverage on IVF)
Provide employees up to six weeks of annual leave
Provide adequate paid family leave for all parents
Subsidize high-quality day care and pre-school for all children
Make college tuition free or highly subsidized
Until we create a system with underlying values of taking care of each other, equality of access and opportunity, people and family over profit, and social responsibility America will never live up to its truest values and may not be a place for us to call home much longer.
I’d love to hear how the current situation has impacted your thinking.
Bob Lesser is a therapist, business coach and graduate of Harvard’s John F Kennedy School of Government