naked capitalism

One week ago, I put up a post on the plight of a family that was at the end of its rope financially due to a lack of savings prior to the firing of the main income provider at the start of 2009. They had started using credit cards to pay for necessities, had paid on time until the previous month, and Bank of America stopped approving charges on the card.

This is the start of their story from last week:

Just like most everyone I know, my husband and I are in big debt with our credit card companies. My husband was laid off on New Year’s Eve last year. We were in total shock. I am retired from the USAF and receive a small monthly check, and my husband began collecting a meager unemployment check. He searched all over the US and made several trips out west knocking on doors and handing out his resume. NOTHING. Anyway, we had no saving and a little bit of stock which was cashed in at an all time low. No help there. Then we started living off our credit cards. Without them, we would have not made it, period. Our daughter and her family moved in upstairs and her husband was working of a whopping $8.50 an hour. No help there. So basically we were supporting them as well.

Two surprising things happened. First, one reader, a T. Rex Bean of Honolulu, offered to send the family $1000 if other readers would contribute. I said I would and encouraged others who were interested to ping me.

Second, that act of generosity seemed to particularly incense those inclined to take a dim view of those in debt, and some responded with vitriol, their comments having no grounding in anything more than prejudice, on why this family was having trouble making ends meet. Quite a few of the comments also reflected a considerable lack of understanding as to how the bottom half, income-wise, lives (for instance, saying that the couple “should” have several hundred thousand in savings plus that much in their home equity). A different theme was the couple should be on food stamps and the adult children and their kids should be on Medicare. One reader who rebutted that in comments, pointing out that the thresholds for assets and income were very low, was ignored, and a longer-form discussion came via e-mail:

In the US most aid programs for the poor are not oriented at all to the temporary poor. The way they are set up they don’t seem to treat “poorness” as a condition you are in but more as an identity. Prove you’re one of “them” and you’re all set. But the hassle of proving your poor identity is generally huge, so you want to do it only once. Once you are officially poor, you don’t want to be moving in and out of that designation and facing the paperwork blizzard over and over. It’s a real problem with the system. Treating “poor” as an aspect of identity makes people both reluctant to start getting help and then to stop getting help. The people I’ve known on Medicaid always took care to avoid a job that paid a little too much, lest they lose coverage.

There was also an assumption that the wife was on a full military pension. Note she said “small monthly check”. You need to do a full 20 years to get the inflation adjusted full pension; anything from 10 to 20 years is a % of final year pay.

This is a selection from comments:

What a whiny welfare biatch. I wonder how many Iraqis, Serbs, and Afghanis she killed at the USAF. You wanna do charity, give it to Iraqis, not American military welfare deadbeat crybabies. Dumb bitch.

Sounds like someone doesn’t know how to manage their money. I would bet they are making car payments and eat fast food at least 3 times a week. Probably have cable T.V. and deluxe cell phone plans. They probably get a new car like every two years. What happened to her reenlistment bonuses?

I think the family is at odds with the definition of ‘essential’, as are most Americans. Americans eat out often and call that essential. The food prepared at home is packaged in boxes for convenience: essential. Cell phones, well of course, they’re essential. Cable television? Ditto: essential, after all the cable is cheaper than Blockbuster late fees. Large hummer type transport? Essential: fought a war for that one. Sodas and chips? That’s called lunch.

And one she was a grifter:

I notice this story asking for ‘advice’ and not a hand-out managed to hit all the emotional triggers: military service, lay-off, always paid their bills before, adult son-in-law working valiantly at a low-paying job, grandchildren, no medical insurance…

I am aware that hard times happen to honest people. However the calculated pull for pity in this letter reads like a professional beggar.

Additionally, the letter implies it’s these older parents responsibility to help support the daughter’s family. It isn’t.

So what transpired? The couple is in the rural South, Georgia to be precise.

Even though quite a few readers sent payments (some wrote cover notes encouraging them to accept their offer), the checks were rejected. She only wanted help in dealing with Bank of America and was very grateful for the credit counseling leads some readers also sent along to her.

From her messages:

I’m such an idiot. We are not asking for ANYTHING but some advise on what ideas you might have to save us. My problem is the rising B of A bill, the extra charges being added on when I can’t make the minimum payment, the over the limit fees, late fees and that interest rate moving up and up. It’s got to stop and I don’t see an end to this madness. I just can’t understand why these banks that are being bailed out by us, the tax payers, are trying to bring everyone crashing down so they can collect their big bonuses or whatever they get. We have had it with banks and bonuses and the whole financial crisis. Thanks for all you help and the offer, but there are folks who have already defaulted on their cards and loans and have lost their homes and jobs. At least my husband did finally get a job last week after 10 1/2 months of looking from Baltimore to Berkeley, but the damage has already been done. Someone, somewhere must listen to the people because we are all going down, friends, neighbors, relatives, you name ‘em, we know ‘em….

From another message:

We haven’t eaten out in years, never pick up fast food, ever, don’t walk the malls, never received any public assistance, have a 2000 Tundra and a motorcycle to save on gas, make everything from scratch (even my own homemade laundry soap!)… frankly, I don’t know many folks around here that have saved for a stormy day. Saved? That’s a joke to most of us. We’ve gotten our phone disconnected and share a cell phone, we plan each and every trip to the store with a list of necessities, haven’t had a vacation in over 15 years, and up until my husband got a job last week, we were selling everything we could sell in the house on ebay. At least I am cleaning out the closets that haven’t been cleaned in years.

And this one:

We had lentils and cornbread last night…yum yum, and we’ll heat them up tonight as well. I did mention that my husband got his first paycheck last Friday. Sent from Heaven. We celebrated with brats and homemade kraut and hard rolls! Beats a t-bone any day in our book. Hubby is from Austria, so he can make some great kraut.

I should mention another little fact that goes along with all of this. Someone mentioned, maybe you, about proud folks in the south and everywhere. Well, my brother, who has an English degree from the University of GA and is a struggling wallpaper hanger, invited us in June to his son’s wedding in Savannah. He is my one and only nephew and I love him dearly, but we just could not afford to go. Savannah is about 4 hours from here, so gas to get down and back, hotel for a night, food and such…we just did not have the money. But instead of telling them the real story of why we could not make it, I gave them the BS excuse, hurt their feeling like you would not believe, and they haven’t spoken to us since! People just don’t want others, especially family, to know what kinds of problems they are going through.

Our neighbors across the street are struggling as well, but always have a cheery smile and something nice to say. Their son, who is a firefighter and his bride of one year just moved back in with them in September. Just couldn’t make it on their own. BUT, that’s the European way of life and we like it. Parents, grandparents, great grandparents, kids, grandkids, and maybe even great uncle Bernhardt live together. They help each other, eat out of the same pot, know each other’s ups and downs and so on. I was criticized for allowing my daughter, son-in-law and granddaughter to move in by some moron on the blog. Maybe they live in an adult only condo at Palm Beach and absolutely hate it when the grandkids come to visit. Interrupts their golf and bridge games perhaps. So those who criticize over half the US population for “over spending” and “living high on the hog” with credit cards are so out of touch with real America. They are a pathetic bunch of idiots.

I spoke with my son last night in Chicago who knows how we have been struggling. He told me to please hang in there for a few more months and his family has decided to move down to North Carolina out in the foothills somewhere. He wants us to all to pool our resources, get an old farmhouse we can fix up, and live off the land. Of course we will all have to find jobs, any jobs, but everyone is willing to work together for a common goal…the survival of our family and our community….

Now if only those jokers in Washington will pass the government option healthcare proposal, crack down on the credit card companies for their outrageous practices, and get us out of that war that the Bush regime got us into, maybe things will improve for the whole country, not just the top 3%.

I think quite a few readers owe her an apology. But I am also sure those readers are so locked into their Calvinist mindset that they will find some basis for criticizing this family. Some people seem constitutionally unable to admit that success and prosperity are not the result of hard work alone. I know plenty of people who are hardworking and talented. Some are making a fraction (and I mean less than 1/10) than people I know who strike me as less talented, often less natively intelligent, and certainly worked less hard. I know others who took considerable reversals through no fault of their own (including one in particular, a former high flier who has had to move back to his parent’s home, with the reasons including that he gave a lot of money to struggling relatives). Luck also plays a big role, what family you were born into, what breaks you got along the way, what landmines you avoided. It is part of the human condition that we lack foresight. Things that look like a logical choice can turn out badly for reasons beyond one’s control, and many people lack the luxury of choices to begin with.

This from another reader:

I am astonished at how many readers you have who have no idea whatever how the financial bottom fourth or fifth of America lives. When I was a kid in western Kentucky I had a few classmates who lived in unpainted old clapboard houses out in the country, in some cases
former slave quarters and so a century old. I remember one such house that even had a dirt floor. When I was little my mom’s parents lived in a tiny mountainside house in Appalachia that had no indoor
plumbing. They hand pumped water from a well and heated it on a coal stove, and for a toilet across the dirt road there was an outhouse that hung out over and dumped onto the weeds on the descending slope. Stunk to high heaven, of course, and there were lots of bugs. At eight years of age, having to go in the middle of the night armed only with a flashlight was a character-building experience.

Things are a little better in the rural south now, but they sure aren’t good, now that the small farms are gone. In my adult life I’ve seen one relative living in a broken-down trailer with a caved-in roof
and a goat tied up in the yard. And I’ve seen my cousin, with a small-college degree in math no less, getting by for a good while in the middle of nowhere, south Carolina on $9,000 a year from intermittent and part-time jobs. We can be all snooty about the poor not working hard enough, but I’ve also seen a sister quit a job pulling visibly diseased tissue off of Tyson chickens on a production line rather than get campylobacter one more time. We demand they live and act all middle class, but as a society we honestly don’t give them half a chance.

These guys who talk about saving hundreds of $thousands in small-town rural America are particularly irritating. How do you do that on $9K/year or $12K/year exactly? The US Census Bureau says in 2007 the bottom 20% of US households earned less than $19,178, so these are not trivial numbers of people. We never won our war on poverty really. We just forgot about it when the conservatives become obsessed with the hordes of welfare queens (and drag queens) that they imagined were filling our cities.

One of my big shocks when I started traveling more was to discover that compared to a lot of places a large part of the central and southern US (including parts of the upper Midwest) was actually what used to be called a third-world country, with way more poverty, illness, and and borderline illiteracy than Europe et al. Re literacy I remember in Turkey seeing Chekov plays for sale at a truck stop in the middle of nowhere. My Turkish friends thought it odd that I’d find that odd. To them it was perfectly reasonable that a truck driver might want something interesting to read.

One of the big lies about the poor or the struggling lower middle class is “surely they could have made something of themselves.” If you local school is lousy, how are you going to do that? I hate to say it, but from the time I have spent in Alabama, the level of education among average people (and I don’t mean poor, I mean average) is not hot at all. Multiply that across quite a few lower-income states.