Some years ago, I started to notice the granite counter tops.
In our grandparent’s generation, only shipping magnates and Hollywood stars could afford homes in which the most mundane of functional surfaces doubled as displays of wealth.
Today’s middle income neighborhoods are paved with them.
Granite counter tops never struck me as evidence of wealth creation. (For one thing, too many civil servants buy them.) Instead, they seemed to me a signal that something was going very wrong in the wage-to-wealth creation ratio: that people were either spending more than they were being paid, being paid more than they were worth, or most likely – a combination of both.
It got so I couldn’t see one without thinking that debt was accumulating; if not with the home owner, then somewhere up the chain.
Lots and lots of it.
***
Update: Read this if you think this is about the falling price of granite..
Kind of like how computers used to be only for the rich?
Granite has never been cheaper. That is your answer.
Kind of like how 3,000 square foot homes have “never been cheaper”.
Granite? I thought Corian was the thing to have.
in reflection , the ’60s seemed to be about what we could all afford. 1100 to 1400 ft bungalows on a 50 ft lot, paved streets and three streetlights to a block.
small board hardwood and lino in the kitchen. arborite counters, and chrome taps, a bathroom in the hall.
rarely a two income family , and of course not 30% of the GDP run through the gubmint hands.
post about 1968 is when it all came apart in Canada. rampant inflation and the euforia that comes with endless supplies of money even when it comes off the monopoly press.
I’ve got quartz. Love ’em.
Technology has made the cutting and polishing of granite cheaper than at any time in history. We paid cash for ours, and find them both attractive and practical. Of course, we don’t cut into them with a knife – we have a $10 plastic cutting board we bought at IKEA for that.
While wandering through some 400 year old semi-ruined buildings in Ireland, I happened to notice there were window frames cut from sandstone. That must have been expensive, and it must have taken a lot of skill that would be rare today.
I just wish I could afford to have my motorcycle airbrushed. 😉
Kate , the comments section for Jack! has disappeared , the last comment is Iberia, no one wants to end with one of his.
sorry hadnt read Lances comment that cut off the thread.
cal2
I’m in the process of buying a home built in 1974!
It has EVERYTHING you just described except hardwood strip floors. Even some of the iridescent red and green shag carpet has been preserved in the storage rooms in the basement.
1974! Ha, our place is 1912 vintage.
the wife wants a 200lb butchers block from Texas installed sometime in my remaining life.
Our house was originally around 600 sq.ft. before a modest addition increased it to around 1,000. When it was built about 80 years ago, it was the home of the town _Doctor_.
When China started bringing them in at $40.00 a sheet, prices were somewhat moderated.You are still getting gouged by the locals however. As a plus, Granite is not a suitable stone for the purpose.
You can take the Kenya out of the Keynesian.
Never the Keynesian out of fantasy land.
Particularly when its never their money they blow off.
Of course, it would probably help if you all read the link in its entirety before deciding you know what I’m talking about.
Hopefully Hugo Chavez dies tomorrow
So Keynes isn’t very gneiss?
Those comments after the article are well worth reading. It seems crack smoking is rampant in the interwebs, or perhaps a lot of those commenting are off of their Thorazine.
No granite counter tops for me – potential radiation & Radon risks……..
http://www.househunting.ca/renovating/story.html?id=47b0d36a-3a85-412f-a7dd-8e82976493e7
http://www.epa.gov/radiation/tenorm/granite-countertops.html
Yup, there is going to be hard times for most in the future, because it’ll be “Life after Bankruptcy” not debt, when the global financial Ponzi schemes come tumbling down. Of course some will still be stinking rich, many because they looted the treasuries, others like the mainstream will simply be indebted servants living in a Mexico style ghettoized shadow of ourselves.
Oooo! Ooo! (hand up) – I read the whole link Kate!
Seriously, it doesn’t paint a pretty picture and the author seems to sway back and forth between a desire for the good old Keynesian times and the reality of the moment. I’m not sure who he’s voting for as a winner, but I don’t see very many winners on the horizon anyway.
Sometimes I feel sorry for Keynes. His economic theory said governments should squirrel away funds in boom times so they would have money to inject into the economy in hard times.
Sadly, his theory has been abbreviated and the morons we call politicians use only the “inject money in hard times part” and screw that up by borrowing it.
And then we have Obamassiah.
Soapstone is the new granite, but at the same price. Only way better! Indoor and outdoor use. Showers too!
http://www.soapstonecreations.com/
(Shameless plug for a friend)
There’s no doubt that debt fueled a lot of conspicuous consumption, but let’s not forget some things:
1. Granite is relatively more abundant and hence cheaper than it used to be. Hence, we can all have granite now.
2. Because we can all have it, it is now no longer exclusive. And because it’s not exclusive it’s no longer a symbol of wealth. Thurston Howell was ONLY a millionaire. So am I.
3. Granite may have been desired by the wealthy for its relative scarcity, but don’t overlook its desirable qualities unto itself. Sure, gold jewelry is now affordable to the masses, and it’s no longer the metal of kings, but it’s still damned beautiful!
4. People loaded up on granite counters both because they wanted them and because they added more value to a house than they cost. People weren’t replacing old sewage pipes unless they had to, because replacing them added zero value to the house.
My house has Silestone which is less permeable than granite. It came with the house. It’s not the color and shape we would have chosen, but it was much nicer than houses that didn’t have upgraded kitchens.
My mother in law has Corian. She chose the style and color and she’s planning on dying in her condo, so the value is entirely for her benefit.
If anything, cheap luxuries are a sign of tremendous achievement for capitalist economies.
Debt – now that’s another story. It didn’t take a housing and financial crisis to observe what happens to people who live beyond their means and whose employment is on shaky ground.
Hey, I never metamorphic rock I didn’t like…
At the end of the article;
[ The outcome is hard to predict, but in the end it is likely to involve the reduction of both private and public debts to levels that the markets consider sustainable — whether by debt write-offs or through inflation.]
I think THAT is the point of Kate’s post – not the granite per sea.
With ‘debt write off’, the crazies are rewarded and the savers(lenders) are punished.
With ‘inflation’ the crazies are rewarded and the savers (in cash) are punished.
Do I have this right?
So where is the safest place to be? Something with high intrinsic value that is also very liquid? Entities that are now financially very strong and their products, services will continue to be in demand. Something that is not artificially priced high, propped up because of gov’t skewing policies? Something that is not vulnerable to high interest rates?
You tell me.
Several points to consider here. For example:
1. A lot of granite is coming out of China and elsewhere in Asia. It is cheap as chips. Cheaper than Italian marble. In the past granite was a closed market and the product was damned expensive and kept that way; if not a luxury item certainly up there. That aian’t the case today.
2. There are also tops made of crushed granite and a synthetic binder. The better ones look like the real McCoy. They are even cheaper.
3. Granite is durable and easy to keep hygienic. It is cheaper in the long run.
4. Not all granite is equally radioactive e.g Dartmoor vs Aberdeen. Radon is not a problem with the right granite. You will get more radiactivity out of ferroconcrete or a banana than some granites.
5. The really trendy stuff these days is the blue Egyptian granite. It is often used for ensuites on superyachts. A bench top of that would be the bees knees. Not sure of its radioactivity!
With ‘debt write off’, the crazies are rewarded and the savers(lenders) are punished.
The ” savers “, are getting killed by ZIRP . The ” lenders ” ain’t lending . Friday’s gonna be a hoot . The Bernanke’s gonna be sweating bullets and the Great European bank run starts for real .
Granite counter tops were wants and not needs at some point in time. They are now ubiquitous due to technology improvements and access to labour. Technology was allocated to satisfying wants rather than needs. There is little improvement in utility. I’m sure somewhere in Asia there are some beautiful quarries filled with blue-green water that make great swimming holes.
I bought a house that was cheap for its size. It has a crappy Ikea kitchen, but I have a table saw.
Investment in tools and skills is hard to tax away, especially when they’re paid for in cash.
Credit , credit, credit for my life!
I predict a good future in Formica tops, with wattle & daub homes.
I have arborite (actually, “low pressure laminate”) countertops in a 1250 sq ft house. But then, I’m a single income civil servant. Neither granite, nor gold, is in my future. Most simple serpents are not Bureaucrats.
Well i have granite and i do not carry any debt , i work alot and produce a service i fix repair,build and overhaul aircraft.I paid my own way through a one year college and apprenticeship and wnet on to atain my A.M.E. ‘S’ licence .
I refuse to go into debt i recently looked into a garage ,but not gonna happen .
ron in Kelowna >
“You tell me.”
I think you said it already, tangible things with real value that other people may need or want. I’ll echo Phantoms remark, tools and real/ physical skills of any kind go a long way in a collapsed economy.
The everyday people (non super rich) who survive financial collapse are hands on people with two feet in reality who have something of real value to offer others. They also need the physical ability to defend the things you own.
As far as investments? In my opinion these markets are a rigged roulette wheel ready to crash. Best to stick to blue chip investments that pay good dividends, along with energy, agriculture possibly big pharma to hedge if you have extra to lose. *IMO.
Here’s a great write-up about surviving the Argentina collapse 1999 – 2002 – what life was like and what the author would have done differently (Supplies, Investments etcetera) –
http://www.silverbearcafe.com/private/10.08/tshtf1.html
“the life after debt” article is missing two important ingredients, one, the ratio of producers to sponges, and the % of wealth “created” through stealth, (intrest, bonds, rising investment values etc)without addressing these in the article you can’t compare today to yesterday
Once again, an article about Keynes is full of misconceptions.
. Such credit could be made available because of the belief that, properly structured, the debts of traditionally uncreditworthy borrowers were as sound as anyone else’s. This idea was part of a broader conviction that advances in financial technique were increasing the amount of debt that the economy could sustain with safety
Yes, the stupid Democrats and ACORN pressured banks into making bad loans. But that wasn’t the real problem; as I written here before, the real problem was the CMO’s (which were not a bad idea at first) and the unscrupulous brokers at places like Countrywide and Washington Mutual. As they realized they could package dubious mortgages quickly (thanks to faster computers and spreadsheets) and sell them off to people like Goldman Sachs and have no risk, that’s when they started the writing the “NINA” mortgages. Goldman would do the same, selling them off to pension funds and other investors as fast as they could get the ratings agencies to stamp them “AAA”. Again, Goldman didn’t care that the mortgages had no documents, no income, and no assets backing them, because they would sell them before the first payment became due. Again, no risk. This is what led to the housing boom, and the leveraging up of the American household. (It’s also why some Goldman employees should be sitting in jail, instead of on their yachts, but that’s another story.)
The markets have highlighted a fundamental shortcoming in Keynes’s ideas: He assumed that governments would always be able to borrow.
Keynes would have been horrified by that assertion. He consistently wrote that in times of full employment, governments should run surpluses, not deficits. Think of it as if you were a commission salesperson with a savings account. When sales are low, you dip into your savings, but (if you’re at all smart) when sales pick up, you don’t spend all the money; you put some back into your savings account.
Unfortunately, brilliant politicians like Barney Frank, Charles Rangel, Maxine Waters, et al decided Keynes’ theories meant all deficits, all the time. After all, there’s nothing most politicians like more than giving out other people’s money. And there was always some interest group asking for a handout (not just poor people, either; lot of business subsidies helped build up those deficits). Even during the Clinton years, where popular mystique is he ran budget surpluses, a quick study of the national debt charts showed that the national debt increased every year of his administration but one.
Especially during the Clinton years, when the so-called “peace dividend” was being enjoyed, and Fukuyama was writing about “The End of History”, Keynes would have recommended government surpluses to pay down the debt, which Canadian governments reluctantly did. (In fact, that was what he recommended to both the US and British governments to do after WWII, which they did.)
There is so much nonsense written in the name of Keynesian economics, I just have to shake my head.
Finally, a comment on another topic: I’m appalled Lance decided to lower a political correctness boom, especially here at SDA. “Someone lost a husband and a father”? Boo-hoo. People lose husbands and wives, mothers and fathers, and yes, even sons and daughters every day. What made Layton’s death noticeable was his politics. And, IMHO, his politics were odious. Like Trudeau, he was that most sickening of creatures: a rich socialist. He liked to pretend he was a man of the people while he and Olivia were pulling down almost $200k a year (and getting a housing allowance to boot). The man was a good actor, and no doubt had some personal charisma, but to the extent that he influenced Mr. Dithers to increase public spending to prop up his minorities, he was no better than any other blackmail artist.
I didn’t wish for him to die, and I’m not going to go dance on his grave, but I’m not going to miss him one tiny little bit, and I’m not going to shed any crocodile tears for him.
Chairman Kaga:
You have quartz? That’s not allowed. Quickly: switch to litrz before The Man catches you!
Read the whole article. Did not find anything about accumulated debt, might have missed it.
It would seem that if you have a few deficits and then start repaying the accumulated debt then it can work. Read somewhere recently that there are payments being made for deficits from the time of Eisenhower.
You clearly can’t just build deficit after deficit and forget about paying it back. Deficit on its own does not look all that bad, though when you add it up, to some 14 bill, you are looking at a catastrophe.
Closing one’s eyes is not gonna change a damn thing.
Granite? I like to SEE that the counter is clean!
I expect that the politicians will have to learn the economic lesson all over again. Unfortunately most of us will have to suffer some fallout from their ineptitude.
The likes of Barney Frank, Charles Rangel, Maxine Waters, et al have the aim of destroying the western economies hoping that their brand of radical leftism will prevail.
A little Canadianna fer y’all:
Oh, yes we are the people
Running in the race,
Buying up the bargains in the old marketplace,
Another sale on something,
We’ll buy it while it’s hot
And save a lot of money spending money we don’t got…….
Here’s my point. 70 years ago, the average wealth creator was responsible for their day to day cost of living, plus providing for their retirement and medical costs. That’s why homes were smaller and more modestly finished.
Since the advent of modern pension benefits and government funded health care, those costs shifted from the individual to the state, freeing up a lot of disposable income. The granite counter top is simply symbolic. (I could have chosen leather furniture, the two car garage, or central air.)
The problem is that the average middle income earner won’t create enough surplus wealth during their lifetime to cover their own costly retirement and medical care, much less those of the segment of the population that doesn’t work at all.
70 years ago the life expectancy for males was 58 years – most didn’t survive to enjoy retirement. Nor did they expect and demand advanced cancer treatments, MRI’s, organ transplants, or complex end of life hospital support.
Logically, as life expectancies advanced, middle class homes should have become _smaller and more modest_ in preparation to the coming drawdown on resources during retirement years – regardless of who was writing the cheques. Instead, the reverse has happened.
”
At the state’s end of the chain, we have “social contracts” that consist of trillions in unfunded liabilities. At the individual’s end, the money that should have been sitting in pension funds or savings accounts is “invested” instead in tastefully decorated homes with four baths and three empty bedrooms. And why not? Their retirement and health care is “taken care of”. Right? Right?
Forget Keynes. These governments are practicing unicorn economics.
Kate
Somewhere the social contract was rewritten one comma and phoneme at a time until it became the incomprehensible mess it is.
The correction is gonna be painful for those who most need correction…works for me.
Instead of sda I think it should be called ‘Orientate’ or ‘Reality Today’ or … ?
And should be required reading in public schools. Would the Teach go for that?
Kate,
You could also add that ZIRP has eliminated the main (and perhaps only reliable) tool people have to accumulate surplus wealth. Not to mention it encouraged the same people to take on more debt.
aka productivity.
Lifestyle is, or rather should be, a function of productivity. We are worth what others are willing to reward us with. But a BIG problem arose when politicians started thinking buying lots of votes with Ponzi Schemes is productivity.
Speaking of durable and heavy, I’d love a 100 lb anvil. That should last a while…..
“I’d love a 100 lb anvil.”
I believe ACME Co. sells them.
With regard to Kate mentioning how much smaller our parent’s and grandparent’s homes were – even with families of 5 or 6 kids – an economist whose name I can’t recall, mentioned that a primary indicator of ‘false wealth’ is the fact that our three and four thousand sq. ft. homes are unable to contain all of the ‘stuff’ we buy.
Hence the proliferation of self-storage parks everywhere you look. Think about it. How many large self-store facilities have been built in your area over the last ten years? And people only resort to those because their two car garage is full, while the cars remain parked in the driveway.
When Kate said, “70 years ago, the average wealth creator was responsible for their day to day cost of living, plus providing for their retirement and medical costs.”, I thought to myself, “hey, I’m that guy”.
My wife and I ran a small business consisting only of ourselves. And despite a gov’t that demanded we pay both the employee’s (us) premiums and the company’s (us) unemployment premiums while denying us the opportunity of ever collecting, we did our very best. We bought when we had the cash – including taking vacations only when we could afford to – put money into savings, paid down our mortgage and lived quite modestly.
Now the excesses of others have put all of our prudence in peril, leaving us in a quandry as to how best to secure our retirement years. We’ve put some money into non-RRSP dividend paying companies, but the bulk of our ‘wealth’ lies in a large secondary piece of property. We’ve got it up for sale as we’re ready to do the retirement thing of travel and exploring other interests.
I consider myself a fairly astute investor, having past the Canadian Investment Funds exams, but these are crazy times. Normally, printing vast amounts of money would result in rampant inflation and higher interest rates, but the huge amounts of public and personal debt, the collapse in consumer confidence and high unemployment will likely keep interest rates low and may in fact result in a degree of deflation.
So whats’ a prudent guy to do? Sell the property and invest the cash in blue chip dividend paying companies? Or keep the property and the decent cash flow from good renters while defering the retirement dreams for a few more years?
It’s a dilemma, but I guess compared to many, it’s a good dilemma.
In our parents and grandparents time a home was a place to raise a family. Non-essential material possessions were less important because family came first. Today it’s more of a showplace for people’s perceived status and ‘keeping up with the Joneses’. That’s why symbols of success like granite counter tops are so important. It’s not about who you really are, but rather who you appear to be.
Watch the film The Joneses for an entertaining insight into what’s important to many in the modern American lifestyle.
Lot’s of good posts here but I’ll go with Ron in Kelowna – savers are gonna be punished. To mitigate that likelihood I invested heavily in precious metals: gold & lead.