People are just no damn good, says The Atlantic


Click on pic for the story. Three questions:

1. Suppose you had $100 in a savings account and the interest rate was 2 percent per year. After five years, how much do you think you would have in the account if you left the money to grow? A) more than $102; B) exactly $102; C) less than $102; D) do not know; refuse to answer.

2. Imagine that the interest rate on your savings account is 1 percent per year and inflation is 2 percent per year. After one year, would you be able to buy A) more than, B) exactly the same as, or C) less than today with the money in this account?; D) do not know; refuse to answer.

3. Do you think that the following statement is true or false? “Buying a single company stock usually provides a safer return than a stock mutual fund.” A) true; B) false; C) do not know; refuse to answer.

The Atlantic deplores the results:

In Russia, 96 percent of those surveyed could not answer the three questions correctly…. only 30 percent of Americans aced the quiz. The best-performing respondents were the Germans (53 percent got a perfect score) and the Swiss (50 percent), but this still leaves almost half of each country’s population without a basic understanding of financial matters… 79 percent of Swedes, 75 percent of Italians, 73 percent of Japanese, and 69 percent of French could not respond correctly to all three questions.

We’re living in the world of The Hunger Games, and the Atlantic wants everybody to learn archery.

14 thoughts on “People are just no damn good, says The Atlantic

  1. This is exactly why most people don’t deserve to have money! They’ll just blow it on shit like groceries, rent and clothing rather than prudently investing that money and allowing it to compound until they have millions of dollars. If I was an employer, I would withhold paychecks until they could prove that they will invest it wisely. It’s the only responsible thing to do.

    If you want to regain your faith in humanity, I suggest reading the comments to this article:

  2. Damn those idiots for not being able to do something that, if they were able to do it, would completely impoverish them. And damn them for tuning out after the epic crash of 08. Not to mention 87, not to mention….

  3. If Billy works 8 hours at his minimum wage temp job, then drives for 12 hours as an Uber cab driver, how long will it take for Billy to cause a fatal traffic accident?(extra credit if you text the answer while driving)

  4. There’s a characteristic sickness in our idea of compounding currencies, but ironically, the way those get sold to people is through vehicles like Americanized Battle Royale. Plagiarism, hype, depthlessness and cliche are the very things that lead inexorably toward the conclusion that we might as well have a compounding currency in order to produce a financial meritocracy which can allow those of us who figure it out to enjoy more positive sensations, in this bitter world, than those who do not.

    The Fed has its own beauty, certainly. We can watch them speak, to Congress or the news, like figure skaters on a different level, leading so many idiots to the slaughter while never actually saying, “Slaughter.” And Collins has that same ability, with its own inherent vile beauty, making you think you’re merely being subjected to light entertainment.

  5. “Scientists have developed a powerful new weapon that destroys people but leaves buildings standing — it’s called the 17% interest rate.” –Johnny Carson

    I would think the banksters and their mouthpieces in the media would be happy people don’t understand the miracle of compound interest. They would revolt if they did.

  6. Mrs. B and I are old enough to be (and are) retired persons. We were expecting to augment our SSB’s er… social security benefits to younger folk… with interest earned on life savings. There is a huge cohort retiring just now with similar expectations.

    There are no such earnings, i.e., insured savings earn about 0.1% to 0.25% interest ever since 2008. Inflation is at a somewhat higher level than that every year. At least inflation on food and other essentials. So that older folks are eating their savings here just like the retired people did in the USSR after Yeltsin invited in Smith’s Chicago boys back in the 1990’s. The banks however have remained solvent at least officially and the bank officers have merited bonuses annually. I think that that is what became of the expected income-augmenting interest. Our interest became their bonuses.

    The reality sort makes the Atlantic’s quiz rather pointless. In hindsight Mrs. B and I should have tossed the life savings into the stock market in 2008 or 2009 and made out like bandits …. but it didn’t look so prudent at that time, given the crash that had just occurred in 2008. Maybe the Atlantic should be asking people questions about the expected value of a lottery ticket. THAT should reveal some interesting beliefs.

    • Ah, the days when you could expect a reliable 3%, or when you could use the military bank and get a nicely subsidized 10% on insured deposit accounts. That only worked so long as too few people took advantage of it; now, after a generation of pushing the stock market to standard middle-classers, the same fate should befall that.

      Just do the sensible thing, and start interviewing local community college business majors to run a franchise you’re funding with your retirement money. Then end up working there all day anyway to keep the kid from robbing the till and eating all the loose peperoncini.

      But no, seriously, if you want to make money with money then be what you’re really trying to be–a capitalist. Exert the mental effort that you’re asking the banks to do on your part, and give small loans to people who need them. Bear your own risks, screen your own clients, and help a bunch of people get a first home, a car, go to school, insure stuff, or start a business.

      Then when the first several deadbeats cost you your savings, you’ll have to realize, “Wow, I guess banks weren’t so bad after all.” …Or will you? No offense meant, my friend, but what an interesting quandary for middle-class anti-banker American liberals to face, though, isn’t it? <3

        • Jesting aside, you could actually consider entering the mortgage market or rental market on a small scale. If you find one of those jobless JDs to help with the paperwork and potential foreclosure, get an inspection, and require a down payment, you could end up being a line of hope to people who might otherwise get really shafted by a bank. Your decent interest rate and lack of clever closing costs could be just the thing to help some kids get a first home without getting ground through the Fannie machine.

          Same issue with rentals–if you’re not afraid of interviewing a few low-income decisionmakers and occasionally hiring plumbers and plaster dudes to fix leaks, you could offer the opportunity of a reliable home, instead of a cramped apartment, to a lot of young families.

          There are bad experiences out there, to be sure, but you might find the overall process to be way more rewarding than just looking to the bank. Be the heroes to a single mom who thought her kids would never get to have their own backyard; turn a neighborhood around by snatching up a couple abandoned houses and putting real human beings into them.

          If you have the cash up front, you can easily turn a 5% annual rental profit, while undercutting the asshole apartment developers in your area, gradually improving your own long-term investment, and really bringing sunshine to someone else’s life at the same time.

          (Disclaimer: all written content is fictional and subject to the vagaries of the internet.)

          • The real returns are made in owning a mobile home park. I’ve read you can make a steady 25% per year.

    • Well, that’s the unpleasant issue we must face, isn’t it? It is, of course, so much nicer being cheated by the Fed here than it is to get gang-raped by coalition soldiers in Afghanistan–and yet, it really does suck to get cheated out of a few years of reliable relaxation by the Fed.

      Yet, that expectation some of us educated prog-blog-reading bourgeois had–of those dwindling years of fixed, but survivable, income–is built upon all that exploitation we decry. Those of you who have nest eggs built them up using a system of exploitation that denied a safe retirement to, say, Hispanic agricultural workers who fed you, asbestos-stuffed miners who powered your house, or even the painfully obvious dead Iraqi who powered your car (and your 401[k]). We’re upset that our interest rates are down, even though the banks that we wanted to get those interest rates from are the ones who have spent decades denying that same security to the “illegal Mexicans” who fund Social Security while never collecting any, or who stock shelves or pack our shipping boxes while never earning enough to have their own nest egg.

      Secretly, we were all hoping that, despite the malfeasance of which we were quite aware, things would still turn out okay for us. So I share that pain, but what the hell else did we expect at this point? We’re talking about bankers who have, with malice aforethought, starved literally millions of children, polluted the cradle of human civilization with depleted uranium, and who meet every week to discuss who to kill with their flying robots. What good was going to come out of that?

      Like I said a couple days before that discussion happened to start up there, thank God for Iraq.

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