Orcas, Salmon, and the Government

As originally appeared in The Jerusalem Post on July 20, 2018.

The most terrifying words in the English language are: I’m from the government and I’m here to help.

-Ronald Reagan

There was an article in the New York Times last week about the declining numbers of Orca whales in the Pacific Northwest. Jim Robbins wrote, “For the last three years, not one calf has been born to the dwindling pods of black-and-white killer whales spouting geysers of mist off the coast in the Pacific Northwest. Normally four or five calves would be born each year among this fairly unique urban population of whales — pods named J, K, and L. But most recently, the number of orcas here has dwindled to just 75, a 30-year-low in what seems to be an inexorable, perplexing decline. Listed as endangered since 2005, the orcas are essentially starving, as their primary prey, the Chinook, or king salmon, are dying off.”

Why are the salmon dying off? The article doesn’t say. After attributing the Orca decline to not having enough food, the Times then goes off and also blames underwater noise, kayaks and a host of other nutty reasons. The real reason is because they are starving. Why? Because of a sea lion named Herschel and inept governmental policies. I know that it’s a shock to see both ‘inept’ and governmental ‘policies’ in the same sentence but it happens!

I am going to condense more than 35 years of history into a few lines. Back in the mid-1980’s, when I was a teenager growing up in Seattle, a California sea lion later named Herschel showed up at the Ballard locks. At the locks, there is a fish ladder where various species of salmon must climb to move from salt-water into fresh water on their final voyage before they spawn and die. The sea lions realized that they could basically hang out right in front of this fish ladder and eat virtually every salmon that tries to pass. For years the government refused to move, or shoot these sea-lions, rather they tried scaring them with firecrackers and other ingenious ideas, to no avail. Needless to say, they have decimated the salmon populations. As an example of the decimation, Priscilla Long writes in the American Scholar, “In 1983, 2,600 steelhead swam up the fish ladder. In 2012 perhaps four were counted.”

What does any of this have to do with personal finance? It’s a classic case of government ineptitude. When I speak to people about retirement planning, a common response that I get is, “I don’t need to plan for retirement because the government will take care of me.” When I hear this I cringe. The government doesn’t have the greatest track record when it comes to efficiently help out its citizenry. The approximately 2500NIS of monthly Bituach Leumi money isn’t likely to help fulfill your retirement dreams.

Will there be anything left?

Especially in Israel, government pensions were created with the purpose of preventing elderly retirees from being thrown out in the streets. While there were never any promises that these pensions would make you rich, there was the assumption that the payments would pay for the living expenses of the elderly. There was an article in Calcalist this week that said for a woman making a 10,000NIS monthly salary her pension will be 3100NIS. Not great considering all of her contributions and her employers matching.

As life expectancy increases and retirement ages are static, especially for women, the system will pay out more than it takes in. With little political will to increase the retirement age for women and after decades of mismanagement and mounting deficits, there is a real possibility that the government will not be able to meet their long-term obligations.

Can Government Help

Instead of taking individual responsibility, more and more people look to the government to solve their problems. As if some politician has the secret sauce and knows what’s better for you than you know. After all, none of us realized that when standing in line we should let a pregnant woman move to the front. Thankfully the Knesset came to the rescue and actually passed a law that in places of public service pregnant women go to the head of the line! Of course, now she will have to bring a letter to prove her pregnancy. We will create a bureaucracy for this. We have come to the point of legislating and them complicating what is just plain old common decency.

Just do it

Take control of your own pension. Create a disciplined approach to saving. When doing your budget make sure that the first line is savings. In addition to what you may be saving for pension and in Keren Hishtalmut, try and add another 10-15% to long-term savings.

The ball is in your court

Don’t delay and certainly don’t depend on our brilliant Knesset members to provide for your retirement. Take charge now and start saving and you can have the retirement of your dreams.

The information contained in this article reflects the opinion of the author and not necessarily the opinion of Portfolio Resources Group, Inc. or its affiliates.

Aaron Katsman is author of the book Retirement GPS: How to Navigate Your Way to A Secure Financial Future with Global Investing (McGraw-Hill), and is a licensed financial professional both in the United States and Israel, and helps people who open investment accounts in the United States. Securities are offered through Portfolio Resources Group, Inc. (www.prginc.net). Member FINRA, SIPC, MSRB, FSI. For more information, call (02) 624-0995 visit www.gpsinvestor.com or email aaron@lighthousecapital.co.il.