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Nation of Envy

Nation of Envy

April 06, 2023

When Moses was given the ten commandments on Mount Sinai many years ago, he came down to the people he led, his beloved Israel, and saw them betraying God in pagan worship of a golden calf—something they made. When I was young I would hear this story in church, and would think, “How stupid of them! Couldn’t they just keep it together a little longer?” Easier said than done. 

About that time in my life (first grade) I was caught red handed with a mouth full of dumdum suckers when my teacher left me unattended for a few minutes. I had been ordered to stay inside due to a cough and was with her in the classroom while the other kids played outside. When she stepped out to run down the hall leaving me unattended, I moseyed over to the big colorful candy jar on her desk, and began worshipping the flavors in my childish head. “I’ll just get one and eat it fast, and she won’t know,” I remember thinking. But one led to two, and three… and then five and before I knew it I was skipping around the classroom looking like I Love Lucy working the licorice line. When my teacher returned, she was appalled. I remember her saying, “I was only gone for a few minutes! I thought you were better than this!” The pain of her disappointment hurt worse than the three licks I got that afternoon. 

Once caught, I was truly regretful. I couldn’t believe that I had lost my will so easily. Wrestling with the idea that I was no different than the same people I had judged from Exodus, I wished I could go back in time and choose again.  

The tenth commandment, the one about coveting--desiring excessively that which we don’t have--is the heart of the problem for us Americans. This theme is repeated throughout the Bible. In Ecclesiastes 1:8 it says “The eye is not satisfied by seeing or the ear filled with hearing.” (Or in my case my mouth with candy.) Charlie Munger once said, “We aren’t a nation of greed, we’re a nation of envy.” We want what we don’t have. So what does all of this have to do with the economy? 

Well, those suckers were displayed so beautifully on that desk because they were my teacher’s currency. She used them to reward us for good behavior. In fact, I would often receive them for getting my work done or behaving during quiet time. When earned, they were a good thing. But everyone in class also benefitted from this system due to the productivity it created. When I took more than I deserved, the overload of sugar created adverse effects, and the results were destructive.  

Money is like this. When we work and produce with our hands, good things are created for the communities we live in. People are productive and they get paid. They then use their earned money to purchase the things they need and want, and this stimulates others to do a good job too. But when money is dumped into our accounts without the balance of work and production, nothing is added to the community, and the dollars are not as valuable. Productivity drops since we don’t have to work as hard for the money we are receiving. We begin to buy more stuff and this begins the sugar high.   

We haven’t realized this in over forty years because low interest rates have kept the metabolism going and the sugar has been on steady drip.  But recent events that originated with the global financial crisis of 2008-09 and the global health crisis of Covid-19 have forced the world’s central banks and governments to stimulate beyond anything ever imagined.   

According to, the U.S. spent more in one year for Covid-19 than in the four years following the great recession. The site claims the stimulus count is over 11 trillion dollars today. That’s too many suckers. 

Inflation is caused by too many dollars chasing too few goods, but also by supply restrictions in the face of demand.  We had both at once, resulting in our economy being surged with sugar while the metabolism was grinding ever slower. Sure, we made it through, but nothing is without cost. We are hooked on low interest and high cash flow, and now that it’s time to get back in shape, the body is fighting. This is magnified when the Fed tries to announce quantitative tightening (selling bonds) and the markets overreact, causing outcries from Washington. And it’s not just in the U.S. 

All over the world countries have saturated their economies with cash to sustain and survive the pandemic. The IMF projects that one third of the world will be in recession this year. Ours will play out different than China’s and Europe’s, but it will be significant. Three weeks ago, some cracks appeared in a few banks due to prolonged exposure to low rates and zeal for profits. Banks also buckled in Switzerland and Germany, proving that our financial systems are intertwined. Opinions abound about how this could have been prevented with more oversight and diversification, but they could still be the canary in the coal mine indicating more financial stress ahead. 

To make matters worse, we have been conditioned to think that if another crisis happens, the Fed and Congress will step in and pay for it all. But now there is a catch. The more they assist, the higher inflation will go. Since the Fed’s mandate is to maintain a healthy level of inflation and tolerable unemployment, they may be forced to choose. (Save the financial system and allow inflation to run up, or allow unemployment and possible bank failures while tightening down on the economy?) Neither is good, but the latter is the right thing to do long term.   

So what can we do with this information? First, we should pay down debts and avoid taking on new ones, especially unsecured or floating rate loans. Second, tighten the budget. Just because inflation is slowing now doesn’t mean it’s gone and won’t flare up again. Energy and food are the most susceptible to price increases.  Encourage your younger family members to tighten their belts as well.  For them, something as simple as a job change may be a big misstep if layoffs begin. Instead of job hopping, encourage them to pursue excellence in their current profession, making themselves more valuable to those who make decisions. And finally, diversify your portfolio, but maybe not in the way you always have. Last year’s investment winners may be next years’ losers. Focus on high credit quality in your investments, and maybe add alternative investments that don’t march to the traditional beat of our economy. Ask your financial advisor about this, because some markets are overvalued. While diversifying, be sure to stay within your risk appetite with the money you invest. Now’s not the time to go diving into risky investments, unless you have time to recover. 

Finally, do not be afraid to use cash and CDs for some of your funds.  While a lot of financial advisors poo-poo this idea, many of our wealthiest investors do just this when recession risk is high. And if we do see another large sell-off in equities, remember that there are always opportunities in those times. The next ten years will likely be way different than the last ten years, so don’t take for granted that things will always remain status quo. Always ask for help from your financial and tax advisors. If you feel the need to reach out to me, I’m here for you.   

Always with Candor, 


*The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

*The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.