Frame of Reference

It is important to have an appropriate frame of reference when we evaluate things. Yes, things in the US will get worse in the near future, especially if your frame of reference is the recent past, late 90s and 2000s.

Frame of Reference

“Dear Mr. Ex-KGB” article resulted in a lot of email responses. I spent some time on the phone with a journalist discussing my thoughts on Russia and a story of my family coming to the US from Russia in 1991. Playing a devil’s advocate he would say – “yes, things are bad in Russia but look at the US?”   He’d repeat that question time after time.

This made me realize how important it is to have an appropriate frame of reference when we evaluate things. Yes, things in the US will get worse in the near future, especially if your frame of reference is the recent past, late 90s and 2000s (especially 2000s). I cannot argue with that.  We spent money we did not have and now it is payback time. A number of companies were socialized by our government. So how are we different from Russia then?  

The difference is night and day. The US did not do it for Robin Hood(ian) reasons. It is simply playing the role of lender of last resort. This may prove to be a right or a wrong move, only time will tell. But the US government is reluctant to socialize its private sector, and will de-socialize its stakes in private enterprises as soon as it can. In fact, it has embedded incentives for financial companies that issued preferred stock to the US government to buy it back or at least refinance it within five years, as the preferred dividend rate jumps from 5% to 9%. We are not Russia where permanent socialization is taking place. 

We may have to drive the same cars for a longer time, watch TV on a 42 inch TV set instead of 64 inch, or god forbid eat out less. Most of us don’t have to worry about being able to put food on the table. My kids (my son is 7 and my daughter turned 3 a couple of days ago) were both born in this country and will not have my frame of reference from growing up in Russia – I am thankful for that. But at the same time it is my responsibility as a parent to instill a proper frame of reference in them. They don’t know how lucky they are to be growing up here.  I am planning to watch Pursuit of Happyness with my son (my daughter is too young) a terrific movie starring Will Smith that will hopefully make him appreciate what he has a bit more. 

Even at our worst we don’t have to fear repercussions of being critical of our government or president. We cannot be told by our government what we can or cannot write. In August I wrote a fairly critical article of Russia and war in Georgia. I never submitted the article to be published. I was going to visit Russia in September and simply did not want to take the risk.  I know I am a very small fish and read by only 20 people (on a good day).  Call me a coward, but even a very remote risk of being persecuted for my thoughts while I was visiting Russia did not appeal to me.  We have many freedoms that we simply don’t appreciate, because fortunately (and I mean fortunately) we have a different frame of reference.  We’ve had freedom of speech in this country for a long time and unlike Russia we are not looking at nationwide unrest, dictatorship and loss of personal freedom.  

Today’s conversation with the journalist brought up another sad memory of growing up in Russia. I was eight, my mother took me to sign up for chorus.  The teacher was filling out an application/questionnaire.  One of the questions was “what is your nationality”.   I said I was Jewish.  But I vividly remember guilt and shame when I said it.  I did not know why, but I knew something was wrong with me being Jewish. That was an anti-Semitism in Russia for you.  A freedom of being who you are is another freedom that we take for granted.  

Despite this being quite a very difficult year, there are many things we should be thankful for, we just need a different frame of reference. 

Wishing you a very Happy New Year!

Please read the following important disclosure here.

Enjoyed this read?

Share it with someone who’d love it too!

New to investing?

Explore these valuable guides to get started.

Value Investing
Student
Curriculum

The 6
Commandments
of Value
Investing

Letter to
a Young
Investor

Related Articles

Europe Can’t Hide Behind America Anymore

Europe Can’t Hide Behind America Anymore

Americans have always outspent Europe on defense, but to be fair, we have a currency advantage. Our military might elevated our currency to reserve status.
Europe’s New Status: The Children’s Table (IMA Client Dinner 2025 Video)

IMA’s March 2025 Client Dinner Video

Once a year, my company, IMA, hosts a dinner for our clients. Most of them live outside of Denver—and many outside the U.S.—so this event gives us a rare and meaningful chance to meet face-to-face, often for the first time, and really get to know each other.
The Reputational Bankruptcy of the American Dollar

The Reputational Bankruptcy of the American Dollar

The US dollar will likely continue to get weaker, which is inflationary for the US. Let me start with some easily identifiable reasons.
Tariffs Debt and a Recession by Design

Tariffs, Debt, and a Recession by Design

Trump's tariff decisions are unilateral – even though the Constitution clearly places that power in Congress’s hands. Why does he behave like a king?

Leave a Comment