Something There Is That Loves a Wall

Dolors & Sense

by Sanford Rose

KISSIMMEE, FL—(Weekly Hubris)—1/17/11—The recession took place just outside my front door. Only I didn’t see it.

I live in a retirement community plunked down in one of the most depressed parts of Central Florida. The community is shielded from unpleasant sights by a five-foot wall that no one, quite surprisingly to me, troubles to climb over.

On the other side of the wall, barely 100 yards from my door, is 12 percent adult unemployment.

On the other side are teenagers virtually without any job prospects at all.

On the other side are houses that have halved, or more, in value in the last two years.

On the other side is growing resentment toward those on this side because we, the elderly, seem to have it better than they.

We do, in some senses. We have larger resources, though we have not been spared some of the depredations of this recession.

There is of course a similar decline in house values, but not quite as large percentagewise as that beyond the wall.

Those inside the wall who, relatively unsophisticated, depended on short-term, largely money-market investments, have been savaged financially, since the Federal Reserve has mandated that short-term rates remain close to zero.

In a sense, this governmental fiat can be seen as an income transfer from the older generation to the taxpayer, who tends to be younger.

It is an intergenerational transfer, a kind of living bequest.

In another sense, however, it can be viewed as a tax paid indirectly by older people to the banks, which are the chief beneficiaries of the government’s low-interest policy.

Yet again, since the owners of the banks are largely pension funds, there may be no intergenerational transfer at all. The older people are perhaps paying themselves the tax.

One can play with hypotheses about economic effects all one wishes. But the recession outside my door has perhaps a larger emotional than economic toll.

As noted, they hate us more. And, of course, some of us fear and even hate them more.

The recession is thus an architect. It has added perhaps another five feet to the wall separating the so-called haves from the have-nots.

That wall has in consequence become far harder to tear down and so much more necessary to those who huddle inside it.