Schadenfreude Nation

Dolors & Sense

by Sanford Rose

Sanford Rose

KISSIMMEE, FL—(Weekly Hubris)—12/6/10—Americans are suffering from a severe case of schadenfreude.

Many of us are beginning to enjoy the plight of the jobless, the homeless and the disadvantaged.

Their existence makes us feel smug, self-satisfied and superior.

They over-borrowed, over-spent, over-consumed.

We didn’t. So we’re better than they.

Don’t bring up their problems. We’ve heard too much about these already.

We’re tired of hearing that half the officially unemployed (fewer than the real total) have been out of work for nearly six months, that a quarter have been jobless for a year, and that 10 percent to 15 percent have been displaced for as much as two years.

And we haven’t heard, but certainly don’t want to hear, that there is a 50 percent to 100 percent increase in the mortality hazard for middle-aged workers in the first years after job displacement and that, if the displacement continues, these workers will surrender about one to two years of life expectancy.

Don’t trouble us with their problems. And especially don’t ask the government to borrow money in order to help these people.

We are the government. We can’t afford to take on more debt to help these people.

Pay no attention to those who say that we have plenty of capacity to borrow and that, if we didn’t, the marketplace would be charging the government a much higher rate of interest than it actually is.

Pay no attention to those who say that the capacity to sustain debt depends on the difference between the rate of interest, minus the effect of inflation, and the rate of growth of the economy. And that if the latter is higher than the former, which is the case now in the US, then we can borrow more.

Pay no attention to those who say that if we borrow more and spend those borrowings wisely, the positive gap between the growth rate and the real cost of servicing debt will widen.

Pay no attention to those who understand that we can get richer, not poorer, by going deeper into hock in order to help those whose jobs have been wiped out by the recession.

Schadenfreude is often a satisfying emotion.

Just as long as we understand that it is also an expensive one.

Editor’s Note: For the lexically deprived among you, schadenfreude is a delicious German noun combining Schaden (harm) and Freude (joy): “Malicious enjoyment of another’s misfortune.”

Sanford Rose, of New Jersey and Florida, served as Associate Editor of Fortune Magazine from 1968 till 1972; Vice President of Chase Manhattan Bank in 1972; Senior Editor of Fortune between 1972 and 1979; and Associate Editor, Financial Editor and Senior Columnist of American Banker newspaper between 1979 and 1991. From 1991 till 2001, Rose worked as a consultant in the banking industry and a professional ghost writer in the field of finance. He has also taught as an adjunct professor of banking at Columbia University and an adjunct instructor of economics at New York University. He states that he left gainful employment in 2001 to concentrate on gain-less investing. (A lifelong photo-phobe, Rose also claims that the head shot accompanying his Weekly Hubris columns is not his own, but belongs, instead, to a skilled woodworker residing in South Carolina.)