The things we all want

Yesterday was July 4, and on this day for the last four decades my neighborhood has held a day-long celebration of community and country, in that particular order. I was reminded how much this neighborhood is cherished by an older woman I sat next to. Her son-in-law was raised on the street where we spoke, and his mom still owns that house. He raised his family across the street and helped his daughter buy and remodel the house right behind us.

Some neighborhoods chew you up and spit you out, never wanting to look back. Some are like a cradle that you never want to leave. This neighborhood is that kind of neighborhood. The preferred method of leaving is being carried out feet first. The daughter of the original owner of our house told me that was her mom’s plan. And her mom got her wish.

So on this day, long after the bicycle and scooter parade, sometime between the water balloon toss and bubble gum blowing contest, I stood with a dad I recognized from a few streets over. He worked in finance in London and, since I just happened to a read an Economist article detailing the importance of London as a financial trading center, particularly in derivatives (which it turned out he traded), we got to talking about Brexit.

He believed the whole thing was ridiculous, that clearly the Leavers hadn’t thought through the impacts of breaking close financial ties with Europe and the devastating impact it would have on the economy, supply chains, and the financial markets he traded in. He want on to qualify his disgust, though, by saying that the underlying problems are real. Much like the populist wave here in the United States, Londoners and Brits are also feeling a sense of urgency to protect their own assets: jobs, property, and culture.

Completely pulling the UK out of the European Union is the wrong answer, but that doesn’t mean the question is wrong. How do we make sure as many people are safe, secure, and healthy as possible?

I believe that should be the role of the government, but I definitely understand that government doesn’t always live up to that promise.

We talked about all of this, but maybe due to the heat, it being my 3rd red Solo cup of Racer 5 IPA, and having woken up early with two very excited little girls who couldn’t stop asking when the parade was going to start, I was not as articulate as I intended to be. When we discussed what the things are that people need most, I had opinions but they didn’t come out clearly. I woke up today rehashing parts of that conversation and am writing this now to take a virtual do-over.

Here’s a much better articulation of what all people want, Republican and Democrat, neo-liberal and neo-nazi.


Everyone wants the good life, the American dream, a house and a job and savings for retirement all while being able to afford a family vacation every year and meal or two out at a restaurant every week. This is the picture of “middle-class” America: parents with a kid or three, a house in the suburbs, and enough money to be comfortable now and well into the future.

Most people assume that the middle-class is the bell in the bell curve with a relatively small number of poor at the bottom and rich at the top. It’s not. There’s nothing “middle” about the middle-class.

If you are middle-class in California, you’re well into the top 10% of earners. There are twice as many households making less than $100K per year as there are making more than $100K. And sadly families with $100K of household income would be considered low income (unable to comfortably afford food, shelter, and fun) in most parts of California.

Here’s an interesting exercise. Let’s break down the expenses for a family with two kids in the Bay Area on a $200,000 household income. Note that $200K yields about $140K after tax, or $12K per month.

Monthly expenses for a middle class family of four in the Bay Area:

  • Mortgage + property tax + maintenance on a $1M “starter home”: $5K
  • Childcare (nanny or preschool) for 2 kids: $3K
  • Loan payments (car, student loans, etc): $1K
  • Food (groceries and restaurants): $1K
  • Healthcare (usually taken from paycheck): $1K
  • Savings or other: $1K

On a household income of $200,000, which is a princely sum by any stretch, you are just getting by in the Bay Area. Move-in ready homes in desirable neighborhoods with good schools run about $1 million. Everywhere you look, that’s the rate. You might find a house with some maintenance requirements that will sell for $800-900K but even that will be competitive. Everyone’s looking for deals like that.

Childcare is expensive too. I didn’t know it when I had kids, but for the first five years of their lives I’d basically be responsible for a second mortgage. Unless you have family or some other resource to help out every day (or a stay-at-home parent) you will need to spend at least $2,500 per month on childcare. And then there’s everything else which just adds up.

So if you’re really just getting by at $200K, and by that I mean your boxes are checked but you’re without much cushion, imagine what it means to make less than that. Think about the sacrifices you make to live on $100K with a family here in California. Then look at this chart.

Most people don’t make enough money to be middle class in California. Source:

It’s crazy. About 9 million households in California make less than $100K. About 4 million make more than $100K. And $100K is not even breaking even if you really want to live the middle class American dream. It’s not even close. You need to be in the $200K+ bracket, which is only 8.6% of the population.

In other words, the middle and upper classes are less than 10% of Californians. The rest are barely getting by or not getting by at all. This is the reality we face not only here, but elsewhere in the country as well. It’s hard to live the life we thought we were promised in grade school, where we were taught to get a job, wake up in the morning and go to work, collect a paycheck and come home to support your family.

This was supposed to be achievable simply by going to school and working hard. It wasn’t supposed to be a top 10% proposition. It was supposed to be for everybody. It is not.

This is what led to Trump, to Brexit, and to a host of other populist movements (France, Poland, Italy) gripping the world right now. It’s not an irrational zeal for border protections and trade barriers. It’s perfectly rational. It’s just not the right answer.

The problem isn’t “them.” It’s us.


Our country was founded to avoid religious persecution (and British taxes) but clearly the principal that our founding fathers cared most about was liberty. Freedom to choose your destiny, where you live and work, who you pray to, and how you raise your family. Government was supposed to be primarily invisible, making things work in the background, appearing only when things needed to be fixed. The rest was to be left up to the people.

Our two parties today differ on what ought to be regulated. Democrats lean toward regulating businesses (stronger environmental, labor, and safety restrictions) while Republicans lean toward regulating people (stronger marriage, abortion, immigration, religious restrictions). Neither party is completely “liberal” and instead they differ on where exactly free will should be granted. It’s fascinating when you dig into it.

We all agree, however, in freedom of opportunity. I don’t know a single Republican or Democrat who doesn’t believe that someone should be able to work hard, take some risks, and be rewarded if it works out. That’s the common American ideal, shared by everyone, across party and racial lines. It’s very American, but I think it transcends countries too. Everyone loves the entrepreneurial success story. Every country and culture celebrates its business titans. When fame and fortune come from movies or sports, all the better. We all love our heroes.

Liberty ultimately means the freedom to set your success. If you want to pull in a blue collar paycheck for forty years and retire with a pension to Florida, go for it, it’s yours. If you want to drill for oil and strike it rich and get a library named after you then by all means. Give it a go.

Eat as much or as little of the American pie as you want. That’s liberty.

The problem is when other interests get in the way of that freedom. The destruction of liberties can be slow and silent. When our government prioritizes the health of businesses over the health of workers, when budgets and tax cuts are set to favor one class or one party over another, our collective ability to make an American living deteriorates.

This is what I believe people have been feeling for the last several years. Instead of lashing out against our elected officials and pushing for policies that prop up the middle-class, we elected someone (Donald Trump) who spoke to middle-class ailments but successfully framed them as coming from external sources. It’s Mexico, it’s Islam, it’s China, it’s everything and everyone attacking our liberties except us.

I couldn’t disagree more, but nonetheless that’s the state of things today.

Pursuit of Happiness

What do you do with this American dream? Well, you feel happy. As you should, because you’re lucky to be here. When you have the freedom to either make more money or less money, you’re happy.

Happiness comes in many forms, of course, and not everyone needs the yacht and private jet to be perfectly 100% content with their lot. Merely being able to make your own decisions that impact your own outcome is sufficient to bring happiness. It’s knowing that you did it your way. And if you don’t like it anymore, it’s knowing that you can change your course and fix it.

When any of these elements are taken away or appear to unattainable, the entire system falters. That’s what happened in the US and UK in 2016, first with the UK’s vote to leave the EU and then the US vote to elect Donald Trump. It happened because people lost faith in their ability to reach their goals. They felt suppressed, anxious, untrusting of the existing norms that once yielded happiness but appeared to no longer do so.

I agreed with my neighbor that the populist reaction is wrong, short sighted, and erroneous in thinking that we’ll find strength in cutting off the rest of the world.

I don’t have the answer right now, but I know that blaming everyone else is not the right answer. We have to solve it by looking at the world and making ourselves better. There’s plenty of opportunity, and a lot of it can be taken while actually improving the outlook for ourselves and the rest of the creatures we share this planet with. I’ll dive into this in a future post.

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