Debt Stress in Middle Class America, Revisited

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.

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  1. Anonymous

    Thanks for posting this Yves. The difference between those who are able to make it and those who aren’t is a thinner line than many would like to believe. An illness, job loss, or decline in business revenue is enough to push many people over the edge.

    For many the support structures (savings, friends with financial security, family) simply don’t exist. And as a society, the U.S. utterly fails at providing support for those who would only be temporarily poor with a better safety net.

  2. Shawn Coffee


    I am regular reader of your blog along with several other economic blogs. My training is as a Ph D (2007) in Chemical Engineering specializing within technology utilized in the semiconductor industry. After spending five years as a poor graduate student, I could not find employment in 2007 (yes, even with a Ph D). The lack of finding work is actually what started me reading economic blogs. Why can I not find work? I am working at Spansion here in Austin, TX as a temporary. It is nerve wracking to not know what tomorrow will bring. If you know anyone who is searching for a capable Ph D engineer, please contact them for me.

    I feel for the family mentioned in the article. They were hard working and suddenly had the rug yanked out from underneath them. All of the hard work and credentials in the world are useless if no one will hire you. The mentality that your often disrespectful readers expressed comes form a job rich past. Up till around 2001, anyone who worked hard could find a means to live. That is no longer the case and the situation is growing worst due to the multiple reasons mentioned throughout your blog. We can only hope people will start to understand they have a bit of luck in their career success.

    Interestingly enough, my blog posting on October 28 covers the debate between hard work and just plain luck making an individual successful. My blog is:

    -Shawn Coffee, Ph D

  3. OregonGuy

    Our Calvinist disdain for the poor isn’t new. Just finished Kurt Vonnegut’s “God Bless You Mr. Rosewater”, written in 1965. The more things change…

    Fortunately, these super-capitalist, social Darwinists are more common in blog comments than in my actual social experience. And even the most rabid Glenn Beck fan can usually be persuaded that the plight of a down-on-their- luck person personally known to us is more nuanced than the strict interpretation of their ideology allows.

  4. winterwarlock

    Many of the credit counseling agencies really work for the banking / credit industry. Call several to get them competing to provide a solution.

  5. justajournalist

    Among all of the economic shocks of the past two years, none has disturbed me more than the inability of a large segment of our affluent population to have zero compassion or empathy for the way the bottom percent lives day to day, week to week, year to year. The most important thing my education taught me is that I have been luckier than most Americans. So that I never forget that lesson, I have for 22 years headed twice a month to the South Side of Chicago where I work in a homeless shelter to remind me of what life is like for millions of Americans who have not been as lucky as I. I help make and serve food, paint the bedrooms, give advice on how to apply for aid, etc. In return, I get a window into who these people are and why they wound up in a shelter. They are with very few exceptions the most upbeat people you’d ever hope to meet. Their belief in the possibility of the future and the goodness of others is astonishing and humbling. They would give their last dime to someone if he or she needed it. Yes, really.

    Yves: it’s your blog and you have every right to decide how to handle comments on it but you have my full support if you decide to delete offensive ones such as the two you posted above. In my opinion, those who presume to know and pass judgment, without any direct knowledge, on what has transpired in the lives of Americans who are living with little are not worthy of representation on your fine site.

  6. Ina Pickle

    Thank you for the update. I hope that they will find relief from the emotional, as well as the financial, aspects of their situation. Fear and shame are exhausting.

    I wish them the very best!

  7. IF

    “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”

    I am nurturing the suspicion that one of the consequences of “globalization” is not only the economic rise of world cities like Moscow, Bombay, Shanghai, but also the fall of the western European, American and Japanese middle classes. After all, if they become more like us, shouldn’t we become more like them as well?

  8. fresno dan

    I remember starting my career in the gubermint as a GS-5. (I had worked at the IRS as a GS-3, but I considered that temporary). As I slooowly worked my way up the chain, I heard a lot about how I should leave, take advantage of investing in stocks, gubermint experience, etcetera. Well, the years go by. I had a heart attack, and am very grateful that I have very good insurance that I get to keep when I retire (as well as being in a country that has the innovation and financial base that enables people to access medical technology) . My pension is as secure as the US (O-OH!). A lot of friends tell me I made a good decision.
    As I always like to say, if I had been born in India I would be selling a kidney to survive.
    Not everything in your life is luck – bad decisions usually result in bad outcomes (taking drugs, gambling, unsafe sex, …) but good decisions (going to school, good work attendance, etc) do not correspondingly result always in good outcomes.

  9. lark

    The secret of American culture is the climate of hate.

    Pull the covers of the ‘opportunity society’ and you see a swarming ugly mess of resentment, greed, and blame.

    That is the real reason that hundreds thousands of people are dead because they lacked health insurance, since the nails were put in the coffin of Hillary Care. Surely Hillary Care was better than streets running red with American blood. But no, because of our climate of hate.

    We love to kill Americans, imprison Americans, and send American jobs overseas.

    Whadaya know. After decades of this, ‘them’ now includes us, and the whole middle class is sliding down into the rubbish heap.

    It is one of the big regrets of my life that I was born American and remained American. Our values disgust me.

  10. michael

    No, it needs not just hard work alone, but also luck, frugality, and integrity to make it.
    Calvinist mindset, constitutionally unable? I fully agree that some comments were scathing based on unproven assumptions – but so much for going over the top and to pigeonhole someone…

    It is part of the human condition that we have a highly developed brain. And with that we can plan ahead, especially for bad scenarios, and even think of worst case scenarios although you cannot be prepared for everything.

    Thoughts on some details:

    A Tundra?? Balanced by a motorcycle for fuel efficiency?
    I don’t know how many people with transportation needs are covered by those two, but maybe one worn but working Civic or Elantra with the smallest engine available would make more sense, saving one registration and insurance premium.

    Making your own soap might be fun and satisfactory, but I doubt it is cost efficient.

    “Get an old farmhouse we can fix up…”
    Ahm, no comment!
    “…and live off the land.”
    Ah yes, and how do you get seeds and tools and machinery? Or do you dig over everything by hand?
    Sorry guys, but we have division of labor for a reason. Even if you count your own toil as free of charge, it is often most cost effective to buy *some* things, especially when comparing prices and looking out for special offers.

    “We demand they live and act all middle class…”
    On the contrary! I would wish the acting would stop, too many people from ALL class levels all around the country have been acting larger then life for too long!!

    –I hope the credit counseling gives them the help they needed.

    1. soulmatic09

      The problem I have with blog comments these days is that all too often, people confuse snark for intelligence.

      I have found one of those times, yet again. I hope this mindset works out for you, Michael.

      FWIW, a 4-wheel drive vehicle in some parts of the country, particularly rural areas, is a necessity. Some of their off the beaten path dirt roads down there aren’t the greatest, especially after it rains.

      1. michael

        Oh, to go further down that line you’re telling me I should assume all people driving a big 4WD all terrain vehicle in the US do this out of pure necessity? Am I or anybody allowed to make *any* suggestion at all if I don’t know *every* tiniest detail of the situation?
        How come YOU seem to know everything they’re doing is perfect?

        1. CasualObserver

          Re: the guy crapping on these people for owning a truck. I don’t know the circumstances of this woman and her family, but I did grow up in a pretty poor part of the country. I saw a lot of poor people in trucks. Sure, some were probably dumb budgeters who would have been better off in a Pinto. But plenty of them needed the truck. Trucks carry stuff: a few cord of wood for the stove, a lawnmower for a job across town, a rototiller you borrow from a neighbor to prepare the soil for the garden, a load of furniture you bought from a house being sold that you’re hoping to resell.

          I think some of the New York readers of this blog would do well to see how the rural half lives sometime. Again, I am not professing to know how this woman and her family live, just that the incidence of truck ownership is much higher in rural areas and your usually pretty-bright readers ought to consider that there may be a utilitarian reason.

    2. ozajh

      it is often most cost effective to buy *some* things

      That presupposes that you have *some* money.

      OK, that’s snark and I do accept your main point, but I suspect the lady is considering a lifestyle that is virtually incomprehensible to the average city/suburban dweller (myself included). Basically subsistence farming, with all that implies (seed saving etc).

      And YES, it is entirely possible to dig over everything by hand.

    3. Richard Smith

      “A Tundra?? Balanced by a motorcycle for fuel efficiency?
      I don’t know how many people with transportation needs are covered by those two, but maybe one worn but working Civic or Elantra with the smallest engine available would make more sense, saving one registration and insurance premium.”

      Well if you don’t know what they are doing that, why on earth do you presume that it hasn’t occurred to them to just have one vehicle?

      “Making your own soap might be fun and satisfactory, but I doubt it is cost efficient.”

      But you haven’t a clue either way, actually, have you?

      ““Get an old farmhouse we can fix up…”
      Ahm, no comment!”

      Why not? Any idea of the budget? No, of course not.

      ““…and live off the land.”
      Ah yes, and how do you get seeds and tools and machinery? Or do you dig over everything by hand?”

      Good questions, to which you don’t know the answers.

      Michael, your confessed ignorance seems somehow to have endowed you with a miraculous ability to judge the correctness of other people’s economic decisions. How does that work?

      Have some snarky questions straight back: are you an exception to your own claim: “It is part of the human condition that we have a highly developed brain”? Or are you just a smug, clueless, and surely urban troll?

  11. Haralambos

    Dear Yves,
    I am a daily reader. Good luck with the final countdown to the book. It is a slog; (admission) I am an academic editor.

    The post and the comments say so much about the contradictions that make up our country: there is empathy and an outpouring of contributions; there is outrage and blame for folks who “fall on hard times” (a huge euphemism); there is a huge mismatch between the wide-screen tv owners, flippers, bonus recipients and so many of the once- but now non-working class. Although it is not enshrined in our Constitution or Bill of Rights, I do think all humans have a right to a sense of dignity, and your posts in regard to these folks highlight how far we are from trying to provide that.

  12. Lavrenti Beria

    If you’re looking for a benchmark here, try this one on for size:

    “When the Son of man comes in his glory, and all the angels with him, then he will sit on his glorious throne. Before him will be gathered all the nations, and he will separate them one from another as a shepherd separates the sheep from the goats, and he will place the sheep at his right hand, but the goats at the left. Then the King will say to those at his right hand, ‘Come, O blessed of my Father, inherit the kingdom prepared for you from the foundation of the world; for I was hungry and you gave me food, I was thirsty and you gave me drink, I was a stranger and you welcomed me, I was naked and you clothed me, I was sick and
    Then the righteous will answer him, ‘Lord, when did we see thee hungry and feed thee, or thirsty and give thee drink?
    And when did we see thee a stranger and welcome thee, or naked and clothe thee? And when did we see thee sick or in prison and visit thee?’ And the King will answer them, ‘Truly, I say to you, as you did it to one of the least of these my brethren, you did it to me.'” … St. Matthew 25:31-40

    1. attempter

      Yup. When I look around at all the scum who infest this country, all the absolute villains who have destroyed this country, I sometimes wish I weren’t an atheist.

      I wish I could believe in Hell, because nothing short of that is what so many deserve.

  13. Below the Middle

    To this family and others like them – it’s worth considering the thought that if conventional solutions are not working at all, non-conventional ones might.

    Best wishes.

  14. Cullen


    Thanks for bringing this up.

    One problem is there is a natural “observational bias” for a blog like this.

    Even with very well-written, accessible articles like the ones you produce, the majority of the readers are highly educated and probably investors or work in a related industry.

    Personally, I’m down here on the bottom of the $$$ spectrum, about 28k a year, having always chosen to work in the arts and education fields.

    Myself, I enjoy digging and reading about the U.S. financial system because it’s become obvious that the whole system is broken on some level, but none of the mass media outlets can cover the subject. (I’ll save the rant about the media for another thread…)

    For (an admittedly weird) example, I just drove past a Burger King advertising a bacon-double-cheeseburger for $1.99.

    “So what?”, you say, “Burger King sucks, that’s poor people’s food.”

    Well, when you consider the labor, the material cost, the transportation, the advertising, the whole shebang, it’s obvious that pricing for almost everything is completely ungrounded in reality. Look at wal-mart, look at almost any consumer good that the bottom half buys and it’s all some sort of creepy game where nothing has it’s true value reflected in the price.

    It’s no wonder the bottom half are suffering- globalization has fully arrived. You’re an owner, or a slave. As soon as the middle class finish emptying out their saving and retirement accounts they can join their brethren in the third world.


  15. Cullen

    One last rant:

    If you enjoy history, it’s important to remember that there are times and places where the apparatus of the state emerge to actively destroy the populace, intentional or not.

    We have a tradition in this country of claiming that you can bootstrap yourself up and succeed by dint of honest labor.

    I suggest this may be a period of time when observation outweighs tradition.

    1. Peripheral Visionary

      I think the point is that a great many people *want* for that to be true; they want to have the opportunity to lift themselves up by their bootstraps. The fear and the anger are based on the growing feeling that that opportunity is slipping away, that the good jobs necessary to allow people to support themselves are leaving, never to return.

      And if I could risk a small rant of my own, I think that the government’s leadership has been tone-deaf on this issue. Instead of focusing on rebuilding the economy to help solid middle-class and working-class jobs return, they have been focusing on issues that amount to government support for the poverty class–government-run healthcare, food stamps, affordable housing. People do not want a more comfortable life of poverty; they want to lift themselves out of poverty, and the latter will not happen without jobs, no matter how many or how generous government support programs are.

  16. Fed Up

    “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%.”

    Maybe you should consider that BOTH the democrats and the republicans are the problem and like that only the top 3% are getting improvements in lifestyle?

    How about stop focusing on right vs. left and big gov’t vs. small gov’t? Start focusing on the DEBT!!!

  17. sangellone

    I didn’t comment on the original story because I didn’t know the people and failing that it is hard to judge. I do know that it is possible to blow money when you have it and lose your position in life. I did it when I followed the trendy herd in Marin County when cocaine was all the rage. A wag once said ” A cocaine problem is God’s way of telling you you have too much disposable income”. Maybe so but you won’t have an income for long and a house went up my nose as well and I ended up living in a friends auto body shop for 6 months when it fell apart. Still that was of my own doing and losing your job because you can’t do it anymore is hardly a down on your luck tale.

    That said, the 1980’s were a different era than today. If you lost your job you could find another. You could get back on your feet. You could even make money in stocks or real estate without really trying. Buy and hold was a viable
    investment strategy. Nowadays, its a ‘zero tolerance’ world out there. You screw up once and there is no second chance. Employers use credit reports and police background checks for even entry level jobs. If you want to put some savings in the stock market you have to watch the market like a hawk and how many people with jobs can do that?

    One more thing. While my parents could afford to pay for my college education ( I attended UC Berkeley) I had lots of classmates who worked their way through. It wasn’t that expensive. No one graduated in debt in 1974! As Yves noted we have made it, perhaps, too easy to be poor and damned difficult to be or stay middleclass. Unless that changes we are in for a world of hurt as a nation.

    1. rick

      Thank you for that reality check.

      I often wonder why the west enjoys a relatively high standard of living. It’s certainly not due to a productive economy. Most likely stability and credit. We may have reached the end of credit, as America and its citizens can no longer pay. Will we lose stability as a result?

  18. Warner

    Great article. I have been living and working in various African countries now for 10 years. I am American/Canadian. When travelling through the American south everyone can see the poverty. I would prefer that we not compare it to the third world though. No matter how bad what you see there is I promise you that you have seen nothing that compares to here!!! The poor in America need to unite to ensure that what I see here everyday never happens to America. Wealth is there in America, but it is not distributed evenly to properly. It is a political failure the people need not accept.

    Warner, Bamako

    1. Below the Middle

      It would be nice if we could stop blaming ourselves and each other long enough to see your point.

  19. rick

    “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’m happy that this family is discovering the European way of life – aka living within your means. Yes, if you spend more than you can afford, and have no savings going into retirement, you are over-spending.

    Please don’t label me as a hater. I simply believe that every stable adult is responsible for their own decisions. So I don’t believe that savers should support the lifestyle of spenders. Yet the western governments’ inflationary policies did. This “crisis” is just a major rebalancing in the favour of savers.

    No I’m not an idiot and I too was poor not so long ago. But I saved. I worked 2 minimum wage jobs. I rode an old bike everywhere. I had a roomate. I took part-time college classes to qualify for a technical program that would eventually lead to work. I lived on $15,000 per year in the mid 90s.

    I didn’t need charity, and no physically and mentally fit American does. We need to stop complaining, and start taking responsibility. If anyone is looking for candidate worthy of charity, I’d suggest a bus ride out of Lima Peru or any other third world country.

    1. Vernon

      No, I don’t label you as a hater, I label you as ignorant. Discover a European style of life? How is any US citizen supposed to experience that? Do we have socialized medicine here? Do we have generous welfare benefits here? What is the cost of education here? What is the economic mobility here? Have you ever been or lived in Europe? If so, where?

      With regard to saving, we’ll see how long your savings last if you have a major illness (the number one cause of personal bankruptcies in the US). How many bankruptcies are a result of health care in Europe? Where is the money of US consumers going? Not on binge spending but on health care – nicely summed up here:

      1. rick

        Vernon, perhaps this couple’s financial disaster could be attributed to health depts. That is a fair point, but the article mentions a job loss with no indication of health problems.

        Don’t claim that Americans are disadvantaged over their European middle class due to their social programs. They pay for it through higher taxes and less freedom. Nothing is free.

        1. connolly

          I deeply suspect you have no idea what you speak of re: Euro Mid Class.
          Each social/cultural experience is as different as imaginable insofar as they both are a part of Western Civilization.
          In the past I wouild say that IF Americans knew how well the Europeans live they would be SHOCKED and envious.
          Now I know SOME would and some would miss the chance to try to take it ALL and to hell with anyone else.
          Sad what this Country has become………………….


        2. attempter

          Don’t claim that Americans are disadvantaged over their European middle class due to their social programs. They pay for it through higher taxes and less freedom. Nothing is free.

          Certainly these are at the core of America’s psychopathy and rot:

          1. That “freedom” has anything to do with sleeping under a bridge while all wealth is monopolized by a diminishing handful.

          2. That a society could ever meaningfully have “freedom” so long as it has such extreme Hobbesian instability, insecurity, and wealth concentration. (Indeed, that you can even have “society” under those conditions.)

          3. That so many morally and intellectually deficient people have been brainwashed into being the ideological flunkies of the predatory rich even though they’re not rich themselves and never will be.

          4. America is certainly the least free among industrialized countries precisely because here everything has been monetized, at extremely high prices. So if you’re not rich or on the rat-race treadmill of debt, there’s no way to survive. “Nothing is free” indeed.

          That’s America’s form of Nazi Gleichschaltung, “coordination”. You may not have to be in perfect ideological conformity, but if you don’t conform to the rat race, you’re every bit as disenfranchised and ostracized.

          1. rick

            As for points 1-3 and the loose linkage between freedom and poverty: America doesn’t yet know poverty. Consider this: According to statistics from the World Bank, 56 percent of the world’s population lives in extreme poverty. They survive on an income of less than $730 per year or $2 per day.

            I guess socialism is only “unamerican” when times are good. Socialism may be the answer, but I have a feeling that americans don’t understand the price. For example, you’ll see middle class tax increases of around 20% to match Canada.

            “4. America is certainly the least free among industrialized countries precisely because here everything has been monetized, at extremely high prices. So if you’re not rich or on the rat-race treadmill of debt, there’s no way to survive. “Nothing is free” indeed.”

            Utter ignorance. Consumer prices are generally lower in the USA due to the high dollar and lower taxes – compare. Asset prices are higher in many countries including Canada where the housing bubble is still inflating.

            “You may not have to be in perfect ideological conformity, but if you don’t conform to the rat race, you’re every bit as disenfranchised and ostracized.”

            This is so incredibly weak – “But all the other kids are doing it”. Be an individual, take responsibility and don’t blame others for our mistakes.

          2. ERG

            Very nicely put, regardless of what the other reply here has to say! Everything here IS monetized, to such an unrealistic degree. Here we really can’t stay in the tarpaper shack, earning 730.00 per year, because if you do, you are hauled away as a vagrant, or your tent cities get razed and you get “evicted.”

  20. timbo

    This story outlines for me at least, two of the most insidious parts of the credit bubble.

    1) Availability if credit distorted/prevented the natural evolution of labor. People worked lowered productivity jobs and bridged the lifestyle gap via cheap credit.

    2) The criminally egregious tax code. As long as the warfare/welfare Federal Govt continues on its path to bankrupt our nation, no real progress can occur. They are too busy bailing out the Banksters and fighting wars to really care about middle/lower class.

    Thats the ruse of it. It order for big business to continue to sell items to the middle class, the middle class must be productive, or have access to cheap credit. Now the credit is gone, productivity must come back. Whos gonna buy the shit at Target and Wal Mart if no ones gotta job? Globalization ebbs and flows like everything.

    In short, sending labor overseas for productivity gains kills demand. They bridged it with platinum cards and home equity lines, but that gig is up.

    Don’t feel bad though. We just gave a trillion dollars to the banks, are expanding a broke Healthcare system, gonna add some troops in Afghanistan, and congress gave itself a raise in 2008.

    If i were her.. Fuck B o America. Id file bankruptcy and wouldn’t pay them a dime. Its what they would do.

  21. don

    I am continually reminded how such a significant portion of the US population are living in a bubble, oblivious to conditions effecting very a much larger portion of society. Who are these people who live in a bubble? The rich and very rich, of course.

    I live in a rural area in a valley in far southwest Oregon. Fact is, the recession hasn’t been felt all that much here. Sure, there have been a lot of foreclosures, but not that many jobs lost? Why, because there aren’t that many jobs to begin with. A very large segment of the population of around 15,000 (scattered throughout the forested valley), aren’t lower middle class, they’re poor, many on welfare.

    I’m continually surprised at the number of people in there early twenties who use a food stamp card when going through the grocery store check out.. It is the poor who are mostly hidden from the view of many. So they have been living in poverty all along, and the deep recession hasn’t had the kind of measurable impact that it has on the middle class.

    So the focus on this post, on the lower middle class (we have the lower, the middle middle, and the higher middle), reveals more than it may intend to. Yes, many in the middle class are falling through the cracks and finding themselves as poor, but isn’t true that they are really all the same, that they are one class, the working class.

    Odd, if one really thinks about it, that when one is driving down a road under reconstruction and one sees a ‘Men at Work’ sign, the sneaking impression enters the mind, whether aware or not, that this is something not to be seen, that the working man (and woman), are to be hidden from view, for the thought of work is something that gets in the way of our identity as . . . no, not citizens, but consumers. In a sense, working, physical labor, is thought of as demeaning.

  22. un75441

    Wow Yves:

    What can I say other than I see this more often then not being based north of Ann Arbor near the Big Three and Detroit. Manufacturing has been a tough field to be in and as of recent has been rife with give backs to corporations because of poor management decisons over the years having nothing to do with Labor. Chief amongst those suffering the most are the minorities and those with just a high school education. Up here even the ditch digging jobs are gone.

    I do not understand the self-righteous and the Horatio Alger attitudes expressed by some who seem to believe this is entirely the fault of those who find themselves in such predicament. The boot straps to pull one’s self up by disappeared years ago when what once took one income to sustain a family now takes two.

    Perhaps as we enter the month of Thanksgiving, those who would heap scorn upon those who have suffered the most will again begin to have a heart.

    More than likely, the debt owed to BofA is unsecured debt. They should be able to just walk away from it as long as they have no car loans with BofA or affiliates.

  23. DownSouth

    The real “haves” are they who can acquire freedom, self-confidence, and even riches without depriving others of them. They acquire all of these by developing and applying their potentialities. On the other hand, the real “have nots” are they who cannot have aught except by depriving others of it. They can feel free only by diminishing the freedom of others, self-confident by spreading fear and dependence among others, and rich by making others poor.
    –Eric Hoffer

  24. T. Rex Bean

    Sorry, I come late to this and have to go to work but for those of you interested in why so many feel it necessary to blame innocent victims of misfortune, economic or otherwise, here’s some interesting reading:

    Essentially, the authors examine the implications of the so-called “Just World Theory,” which hypothesizes that the sight of innocent suffering threatens the observer’s believe in a world where justice prevails (stop your laughing, now) and so is compelled to blame the victim for her misfortune. A quote:

    Ellard and Bates’s findings suggest that one contributor to status
    generalization phenomena is people’s need to believe that the
    world is a just place in which individuals get what they deserve
    (see also K. L. Dion & Dion, 1987). This need may motivate
    people to restore a sense of fairness in unfair power hierarchies by
    rationalizing that individuals who have undeserved power (and
    those who are undeservedly lacking in power), after all, do possess
    the proper requirements for their position in the social structure
    (see also Jost, 1995). Thus, paradoxically, a need for justice may
    exacerbate an unjust distribution of power.

    There are many other interesting observations on the tendency to blame the victim — none of which flatter the blamers. What interests me about the above paragraph is that it links inequality (and the past 20 years have seen a staggering increase in economic inequality) with a need to justify it by blaming those who benefit least. There’s a reason the rich believe they are the sole architects of their fortune — admitting otherwise calls into question whether they deserve all they have.

    Just a thought. Must go to work now.

  25. ScottB

    Yves, another thank you.

    I remember reading Lewis Mumford years ago, and how he noted that the turning point in class relations came sometime in the eleventh or twelfth century when nobles decided to stop eating with the peasants, and so last track of how the other 90 percent live…

  26. T. Rex Bean

    And for those who can’t understand why everybody doesn’t just bootstrap themselves out of poverty in this land of equal opportunity, consider this: a child born to impoverished parents in America is far more likely to remain poor than if that child was born in say, Denmark, Sweden, Finland, Norway, or the U.K.
    Don’t believe it? Read “Creating an Opportunity Society” by Brookings Institution scholars Ronald Haskins and Isabel Sawhill, excellently reviewed by the National Journal’s Ronald Brownstein.

    Quoting from Brownstein’s review:

    In the generation after World War II, the [U.S.] median income roughly doubled, increasing faster for those on the lower rungs of the ladder than for those at the top. Since 1979, the median income has advanced much more slowly overall, and it has grown much faster for the affluent than for those below them. Today, Haskins and Sawhill note, family incomes are higher than in the 1970s almost entirely because women are working, and earning, more than they did then; men in their 30s today earn less than their fathers did at the same age.
    In this environment, upward mobility becomes tougher. Analyzing long-term economic studies, the authors found that millions of Americans eventually outearn their parents, no matter where they start out. But the pair’s calculations also show more continuity than our national myths imply.
    More than 60 percent of Americans whose parents scaled the top fifth of the income ladder have reached the top two-fifths themselves, Haskins and Sawhill found. By contrast, 65 percent of Americans with parents from the lowest fifth of earners remain stuck in the bottom two-fifths. Though we venerate the American Dream, studies show that children born to low-income parents in the United States are more likely to remain trapped near the bottom than their counterparts in Europe, the authors report.
    Many factors constrain upward mobility in America, including the decline of the two-parent family and bad personal decisions such as teen parenthood. But another reason the escalator is slowing for many on the bottom is that income is now so dependent on education. Today, four-year college graduates earn about 80 percent more than workers with high school degrees. That’s more than double the gap in the 1960s.
    Young people who begin with the most advantages are considerably more likely than the less well-off to add the advantage of advanced education. Sawhill and Haskins report that children of parents in the top fifth of income are now more than twice as likely to attend college, and nearly five times as likely to graduate, as are children of parents in the bottom fifth. Separate research from Thomas Mortenson of the nonpartisan Pell Institute shows that this income gap in college completion has widened substantially since the 1970s. Children whose parents obtained college degrees are now nearly five times more likely to complete college themselves than are children whose parents did not.
    These are deeply unhealthy, even destabilizing, patterns. If advanced education is the key to economic success, it’s dangerous to reserve it primarily for those who start out on top. Such ossification is a recipe for class and racial conflict — particularly if the economy remains weak. “It’s a completely unsettling trend,” Haskins says.

    The full review is here:

    1. run75441

      Mr. Bean:

      Let me add a 40 – something page study you may appreciate which will enhance your views on poverty, poor and upward mobility. “Understanding Mobility in America” Tom Hertz” Similar quotes to what you have found:

      “The table below, taken from Hertz (2005), compares the mobility experiences of white and African-American children who were born between 1942 and 1972, and whose parents’ long-run family incomes put them in the bottom quarter of the national distribution. When these children grew up, 32 percent of the whites were still in the bottom quartile, compared to 63 percent of blacks. The proportions who made it to the top quartile were similarly skewed: about 14 percent for whites but just 3.6 percent for blacks.”

      Last weekend and into Monday, I attended “Showdown in Chicago” with a group of Americans who have lost jobs, homes, and much more. Yes, I put my into action more than just words. I dare say the 1000 protestors listening on Sunday would have loved to hear the words of wisdom put forth on this blog about choice and making their own bed. In most cases, a loss of choice is one paycheck away or as Dr. Elizabeth Warren said, one lay off away for one of the two breadwinners needed to meet the bills in the 21st century that were easily taken care of by one breadwinner in the seventies. How silly many of the replies are here and they lack any basis to have meaning other than just another opinion; but then, this is the internet. “The Coming Collapse of the Middle Class”

      Spencer at Angry Bear gives a sound economic account at what has happened to payroll wage earners over the last 30 years. “Labor’s Share”

      “This development was a secular decline in labor’s share of the pie. Prior to the 1982 recession there was a strong cyclical pattern of labor’s but it was around a long term or secular flat trend. But since the early 1980s labor’s share of the pie has fallen sharply by about ten percentage points.” (The decline is greater as the index uses 1992 = 100.)

      I was hoping you would be around. I applaud your generousity towards someone in need when so many would just listen and walk away hopefully in silence. As I would walk the streets of Chicago (the city I grew up in), I would always have one dollar bills in my pockets so as not to have to take my wallet out. In the past, it was not unusual to find many minority and older people looking for hand outs. This time while I attended “Showdown in Chicago,” I found a greater number of young on the streets.

      So where does this all go if people can not sustain themselves by earning a fair wage?

      Me: James Gilligan takes it a step further in his study (“Reflections on A National Epidemic – Violence” Gilligan); quoting H.A. Bulhan’s reference to structural violence.

      “For every 1% increase in unemployment in the United States, there was an increased mortality of 37,000 deaths per year (natural and violent) including ~2,000 more suicides and homicides than might otherwise occur.” Or explained in simpler terms, for every 1% increase in Unemployment, we can expect to see increases in the mortality rate by 2%, homicides and imprisonments by 6%, and infant mortality by 5%. Since WWII, the unemployment rate for blacks has been twice as high as that of whites. (Frantz Fanon and the Psychology of Oppression; H.A Bulhan; Mental Illness and the Economy, M.H Brenner).”

      1. Bob Goodwin

        There is no difference in white mobility between the US and Europe. Overall mobility is lower in the US because of the lower rates of mobility of minorities. Mobility correlates with academic achievement and testing scores. A lot of poverty and lack of mobility does correlate with skills. American society has done better than most in integrating new populations, but we have not been successful with the black and hispanic populations (which are less prevalent in Europe).


        1. run75441


          Not sure of the basis for your statement on mobility between Europe and the US and I would hope for something more than an opinion at this point. We speak of entire populations of countries in terms of opportunity. The same as the days of Gideon, Horatio Alger died in the seventies when income began the descend for most of America.

          While upward mobility does have an educational/skills factor in it, there are other structural issues to be discussed with regard to the mobility of African Americans in the US that go beyond just “academic achievement and testing scores,” which are superficial and symptomatic to the root causes and does not explain the lack there of and neither are they true measures. A deeper examination would reveal reasons for a lack of excellence in either. I believe Hertz touches upon these issues rather nicely.

          Yes, the US has the highest number of immigrants in the world. When looking at immigrants and new populations as a percentage of population, the US fits nicely amongst the European nations (your post mixes new populations with African Americans and Hispanics interchangeability). Canada (~18%) to the north has a higher percentage of the population as immigrants than the US (~12%). In comparison to the US, European Countries such as France ~10%; Sweden ~12%; Germany 12%; Netherlands ~10%, etc. have similar percentages of immigrants in the population from which upward mobility is measured. (I was lazy) The US still experiences the lowest overall intergenerational mobility in comparison with the exception of England.

          Joel Garreau’s “300 million and Counting” makes a prediction for 2050 which portends 50% of the population being Hispanic in the US. Half of the US population under 5 years of age are of ethnic background or racial. It appears, the assimilation problem for Hispanics will be resolved by the numbers as they are the fastest growing minority within the US. Yet the US has a replacement rate of 2.03 (2006) and occupies a fraction of its land mass.

          You draw a conclusion between Black-Americans, Hispanics, and minorities which appears to be unsupported and muddled (not trying to be mean). I will address your conclusion according to what I stated. 2008 US Census numbers revealed 12.8% of the population to be Black-Americans and 65% of the nation to be Caucasian and non-Hispanic. Is it possible for the 12.8% of the population representing Black-American to have the numbers to pull down the mobility of Caucasians? I am not sure and I am not prepared to argue that conclusion.

          The stat on African Americans does reveal that race is one factor in determining upward mobility; but, it is not the only factor and not the largest factor. For “all” people; if born to a low income family, the chance of becoming rich are 1%. I would again point you to Spencer’s short study at Angry Bear, “Labor’s Share,” as income is another determining factor in upward mobility.

  27. David

    Didn’t Gilberto Freyre say something like, “The poor are poor because they are poor.” This was the famous oft-repeated lesson of a longer treatise on why it is so hard for poor people to “pull themselves up by their own bootstraps.” If you look at successful groups and countries, you see that things like education are universal and free or heavily subsidized as are certain necessities of getting ahead such as transportation, basic health care, and a minimum standard of housing. Ideologies are one thing, but reality is another. All I’m saying …

  28. T. Rex Bean

    Yet more on the forces that shape our lives, for good or ill, this time from Peter Orzag, director of the White House’s Office of Management and Budget (sorry, I don’t’ know how to reproduce the graphic here, I’ll link to the post at the end of these quotes from Orzag’s post on the OMB Web site.

    We often hear about people who are unlucky in love, but what of those who are unlucky in the business cycle? What is the impact of being born two decades before a significant economic downturn, such that you graduate from college and enter the labor force in the middle of a period of high unemployment?
    As the class of 2009 is keenly aware, entering the labor market during a recession has immediate negative effects. Job offers are harder to find: according to the National Association of Colleges and Employers, less than 20 percent of the class of 2009 graduated from college with a job offer in hand, compared to 25 percent in the class of 2008 and more than 50 percent in the class of 2007. Whereas year to year starting salaries on average tend to increase, with the tough competition in this year’s labor market, average starting offers for the class of 2009 are slightly down.

    I recently read a paper that suggests that, for this cohort, the wage effect of graduating during a period of high unemployment will continue well beyond the end of the recession and even the labor market rebound. In examining the cohorts of college graduates that entered the labor market before, during, and after the recession of the early 1980s, Lisa Kahn of the Yale School of Management found that an increase in unemployment produces a significant and enduring negative wage effect.

    The chart below illustrates this effect: a one percentage point increase in the national unemployment rate is associated with a 6 to 7 percent loss in initial wages. The annual wage loss declines over time, but is still statistically significant 15 years later. Comparing the wages earned by the class of 1982 (a peak unemployment year) with the wages of the class of 1988 (a peak employment year) over the first 20 years of a career, the wage difference resulted in a difference of nearly $100,000 in cumulative earnings in net present value.
    The long-term effect isn’t just a residual of low first-year wages: the author suggests that poor job match, lower prestige placements, and fewer opportunities for training and promotion also play a role. Other researchers have found similar effects: Oreopolous et al find persistent wage effects for Canadian college graduates; Bowlus and Liu find persistent wage effects for high school graduates moving directly into the work force, and other studies assess how the macroeconomy affects impact newly minted MBAs and economics PhDs.

    The evidence thus suggests that a recession hits young people particularly hard, knocking them off course with effects that last for years to come. As we rebuild a new foundation for economic growth, it’s critical that we keep this in mind.

    End quote. Here’s the link (I think I got this from one of Paul Krugman’s NYT posts, by the way):

  29. Jim

    I’d like to recommend to your readers Elizabeth Warren and her daughter Amelia Tyagi’s 2003 book, ‘The Two Income Trap’. It explains why a two income family today has less discretionary income that a one income family in the ’70s. In retrospect, it appears that stay at home mothers served a very important financial role which was not appreciated by liberals or conservatives back then. Greater instability in the job market combined with the fact that most families now have two earners means that the average family is far more likely to experience a destabilizing job loss than a few decades ago.

  30. lambert strether

    Too bad she’s got faith in the “government option” on health care, because she’s going to be sadly deceived.

    Thanks, Yves, for a great post, putting a face on what the banksters wrought (and thirty years of conservative governance from BOTH parties).

  31. Jeff

    my brother, who has an English degree from the University of GA and is a struggling wallpaper hanger

    All of you with children should pay attention to this. My kids know that I constantly pushed them to taking math and science classes in junior and senior high, and into getting technical degrees when they went to college. They got sick of me saying: “There is interesting work to be done in just about every field, so you should go into one that pays!”

    But they all have tech degrees and will never be on the dole or hanging wallpaper.

    1. Dave Raithel

      Counterpoint: My oldest graduated in May with a BS in Environmental Science from Mizzoo. It’s not some fru fru artsy fartsy feel good basket weaving degree, but a burden of soil chemistry, botany, geology, hydrology. Want to recover a strip mine, keep pollutants out of your water, stop an eroding construction, retire an invasive species? He’s the guy to call. While getting the degree, he spent three years doing the field work and data collection for a comp sci professor using mutant varieties of corn as her empirical set for genetic algorithm research. He understands computers in ways I cannot comprehend. He can talk extemporaneously why cooling and and injecting diesel fumes into the ground might be, and might not be, a good idea (links readers from Sunday will know the story) and will frustrate most of us by insisting that only research will show one way or the other – single anecdotes ain’t scientific.

      He’s been sending out resumes since March; he’s had one interview. Of his friends from his and related fields in Natural Resources who HAVE landed jobs: ALL of them are one or two year TEMP contracts (e.g., doing lab tech work for Monsanto; forest fire mitigation – clearing and selecting suitable varieties – in California) with no benefits, paying about $15 an hour. 30 grand a year is not bad for a SINGLE adult, but again – no health, no dental, no pension or 401k – it’s just the money and workman’s comp should somebody get hurt on the job. They of course ALL have some debt, even our son, and we picked up the bulk of his costs. One of his buds decided to join the Peace Corp; he’s now in El Salvador helping with clean water and sewage control projects ….

      Are these kids TOO technical? What they DON’T do is manufacture or repair commodities (for which skills people go to ITT or Linn Tech); they don’t have skills – though their math abilities would certainly translate – appropriate to the “service” industries that redistribute wealth – insurance, finance, advertising/promotion. They are not salespeople pushing things at people who cannot afford what they already have. These are kids who know how to do things … that the “market” has decided “it” does not want much done.

      The heartbreaking irony is that I have the fru fru artsy fartsy degree (Ph.D. Philosophy) that has never been my livelihood. My son’s mother and I encouraged him to pursue a degree that seemed to best fit his strong desire to be of use and his natural disposition to take things apart to see how they work. Silly us.

      T. Rex Bean and others have amply linked to research showing how dependent one’s success in life is upon one’s milieu, one’s very birth cohort. The world’s full of hard working people who do all the right things and still fail, and then there are those fortunate sons who, but for the grace of familial associates would be selling blood plasma. I’m only adding a particular case study: There’s a generation of technically trained kids who carry burdens and insecurities that simply did not weigh on the wave of boomers entering the “adult” world of the 60s/70s. Even the GenXs had it, in hindsight (something from Thompson’s “Generation of Swine” is echoing from the back of my mind) better than the prospects I see facing my children’s generation ….

      That all said – even paper hangers (no pun intended) ought to make a living wage….

    2. JTFaraday

      And what do *you* do? You don’t sound like any of the people working in a technology field that I know.

    3. JTFaraday

      Seriously. About three or so years ago I was at a family funeral and one of my mother’s cousins 2 sons were graduating college (first in their family!) and when they said their degrees–both of them– were in “computer engineering” my heart sank.

      I don’t know how they’re doing. Probably okay–but that’s today.

  32. i on the ball patriot

    What this couple needs to realize, and others reading on, is that they need to;

    1. Get better politically informed, and, 2. Take a more active role in the political process …

    1. Getting better politically informed, for starters, realize and internalize that …

    • This is class warfare. It is rich against poor.
    • People are kept poor, ignorant, demonized and exploited by intentional design. It is not because they lack intelligence as the elite sell out media hacks would have you believe. These are evil, self serving, elite scum bags in control.
    • Those in the middle class are now a target for greater exploitation and decimation. Along with food and living assistance offer political assistance.
    • The wealthy ruling elite have been buying politicians and laws that allow them to exploit others for generations. As a result the ‘rule of law’ is now a non responsive to the public scam.
    • It has become so through aggregate generational corruption, i.e., the wealthy ruling elite scum bags have been buying politicians for so long that they have now virtually tilted the playing field all in their favor.

    2. Take a more active role in the political process …

    • Totally diss your scam non responsive government. Shun them and shame them unless absolutely necessary to conduct your personal state required business.

    • Write your supervisor of elections and inform him/her that you are boycotting the electoral process as a ‘vote’ of no confidence in government and the electoral process. Demand a new constitutional convention that will craft a more democratic electoral process.

    • Make all of your grievances from this day forward known in the court of public opinion.Like this blog and on the streets, not in front of government buildings where they want you to protest, but in front of greedy corporate business locations.

    In this particular case, in order to resolve your Bank of America problems I suggest you swallow that system instilled, hat in hand ‘pride’, and mount a protest in front of your local Bank of America. Make posters as large as you can afford that have a big grainy black and white picture of Ken Lewis (Bank of America CEO)on it. The dominant one word title at the top, from sign margin, to sign margin, and over the Ken Lewis picture should say: “RAPIST!”, in black bold Helvetica. Below that, and adjacent to the picture, also in type as large as possible to fit the sign, but sub dominant to the title type, put KEN LEWIS, CEO OF, Bank of America. Do this in three lines of type. You should be able to read this from fifty yards away. Below this put in a bulleted list of your grievances and your ‘political’ message …

    • Raping you and your families with Unfair Fees!

    • Keeping you poor with Excessive Fees!

    • Enslaving you with usurious interest!

    • Exploiting CEO Rapist under investigation!

    • etc. …

    Create a hand out telling your story and have it printed at a copy center, two sided and in a lay out that will allow you to cut and fold so as to get two copies from each sheet. Use black and white and let it look home made. Use your own creativity and get the public involved. Make a “Honk if you hate Bankers” sign! Bring ear plugs. Good luck!

    Deception is the strongest political force on the planet.

    1. Skippy

      You said…Make all of your grievances from this day forward known in the court of public opinion. Like this blog and on the streets, not in front of government buildings where they want you to protest, but in front of greedy corporate business locations.

      Concur and very erudite of you, go to the source not through the shield that our political class has become.

      Skippy..well spoken!

  33. Mannwich

    These vitriolic, mean-spirited comments are indicative of the lengths to which we have become so divided in this country. We’ve devolved into any unsympathetic, unempathetic every man, woman and child for themselves country. It’s quite sad, really, and just what our elites want. To see the Sheeple fight over the tables scraps while they continue to make off with the spoils of that labor.

  34. macndub

    Only a fraction of successful people I have met credit their success to luck. In fact, this is the most appalling aspect of runaway executive compensation in the U.S.: of the handful that pull down multi-million $ salaries, there are thousands of equally smart, hard working people whose tickets didn’t get punched.

    I’ve never been poor, thank heavens and touch wood. I have friends defaulting on mortgages, on credit cards, on all kinds of spending smart and not. We rightly give the drug dealer a stiffer sentence than the drug user, but the same social expectation doesn’t hold around debt yet. I hope it will.

    That’s not to say that I equate the letter writer to a drug user: far from it. We’ve created a society in which only debt can allow those on the edge to make it for another month, rather than the alternative of good jobs at good wages. The 25 year slide into mediocrity will take years to reverse, but I think Churchill said that Americans will do the right thing after having exhausted all the alternatives. Hope he was as right about America as he was wrong about India.

  35. forcible overthrow

    Sometimes an industry turns malignant and consumes everything in sight. Tobacco has been that way for a long time, at least since it became a staple government-issued means of social control in WWI. In the old days a simple litmus test for malversation was a politician’s support for the tobacco industry – nothing any politician could do made up for that proof of corruption. Now the FIRE sector has turned malignant, also due to having been used as a social control mechanism (as traditional debt peonage by slave-state politicians, and in industrialized states as a trap for labor compliance or palliative for wage suppression.) So FIRE is predatory, parasitic and out of control and we now have a new litmus test for malversation. Does the office-holder support the FIRE sector? Then he is irredeemably corrupt. Problem is, every pol flunks it.

  36. Andrew

    Interesting set of posts, and in the main, some respectful and constructive discussions.

    I think T Rex Bean and I may come at things from the same direction. I teach decision theory in investment decision making, using decision analysis. A fundamental precept of decision analysis is that good outcomes don’t necessarily follow good decisions: in the long run, maybe, but of course Keynes had something to say about the long run.

    Decision analysis allows us to look at the potential impact of decisions and uncertainties on the set of potential outcomes, and on the “expected” (in a probabilistic sense) outcome. However, most humans don’t do this in any systematic sense – very often, they focus on a desired outcome, even though there may be a much higher probability of a much less desired one (Edward Andrews’ “Busted” is a very good account of a couple who fell into this trap).

    What I’ve observed over time, though, is that there’s a correlation between people who profess to be conservatives and people who believe that their (or others’) decisions have the biggest impact on outcomes, and that liberals tend to assign much greater weight to uncertainty – or, put another way, good or bad luck.

    Someone like Rick may or may not have been lucky (there’s no way to tell from his account), but he and many others genuinely believe that what separates them from the unlucky people profiled in your posts is good choices. Some go further and equate this with moral virtue – bad things don’t happen to good people, so….

    I think good decisions help, but luck plays a big part. I just learned today that a guy I regularly play doubles with was laid off a month ago. There but for the grace of God…

    1. run75441


      Somewhere in Dr. Elizabeth Warren’s presentation “The Coming Collapse of the Middle Class” she sums it up nicely. In most cases, a loss of choice is one paycheck away or as Dr. Elizabeth Warren said, “one lay off away for one of the two breadwinners needed to meet the bills in the 21st century that were easily taken care of by one breadwinner in the seventies.”

      Most people also believe they have healthcare insurance also; but, we will that issue for another time.

  37. Charles


    from what I read from the victim own words (yes, that is the correct word)
    “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 won’t remove any words of what I said, and she is actually quite close to my position.

    The only thing that baffles me is the description of her tight budget together with high credit card balances. I would be interested to know the outstanding amount for the last 10 years, together with the amount of interest/fees that were paid. I would bet that the excess spread over treasuries or LIBOR she paid over the years to the credit card companies is higher than the current outstanding amount on her card. If such computation could convince her that defaulting is not an immoral thing to do (she may have paid all her money back actually !), that would be great progress. The best way to “crack down on the credit card companies” is to avoid credit cards !

    At the risk of repeating myself, the first thing modest households need is to be debt-free.

  38. Skippy

    Wow, can not believe I escaped being oakum-ed for my part in that fracas, Yves must have a special hell awaiting me.

    This family does not deserve being the focal point of this discussion, for many are even in worse shape, they have a house and jobs still, shed a tear for the people of the street if you must and the best help you can give is with the sweat of your back and not back pocket (everyone trying to fix problems remotely, afraid they might be infected up close), search out those close to you if you really care (love thy neighbor).

    The military thought me this much, the difference between long range intel and reality are on the ground, the problem solving happens at the point of contact and not at HQ, HQ is just a division of labor mechanism (efficacy modulator)and not the actuator.

    To me, the reality is the dream of America vs its true self from the very start. The fictional history most adhere too, the revolutionary spirit, pioneering spirit, the saviors of the free world during WWI/II/COLD WAR, the send us your poor and tired(can we have some cheep labor please), the cult of personality (Carnegie, Rockefeller, JPM, GS, popular artists film/literary/TV etc), even Presidents, for they are just ideas and people fraught with defect, yet we seem to bow down and worship them as things immutable.

    The Continent of North America was the last mid-northern latitude of untapped resources and that is the *real story* of America not its people or their beliefs, its remoteness in times of world conflict, its speed of industrialization, its condition compared to others after WWII (the birth of the post nuclear middle class), the stigma of being numoro uno in the present (see Samantha Power’s book), the for profit attack on the populations mindset, the implantation of science for profit with out due diligence with regards to future outcomes(immediacy outweighs pragmatism moving forward), political gaming/success before husbandry of the population, its creation with the advent of fossil fuel as a supplement to labor (40k man hours a barrel), a public reduced to voting for moneyed interests(can’t play if you can’t pay) I runith out of breath!

    We have created a visceral world and we persist in applying our standards and not the law of the universe aka simple physics, mass and energy and the sums of that equation with regards to our activity’s and by the time we learn that hard lesson whom will be…when will the snap back occur, our technology vs the will of the universe, physics, environment et al, do we think we can really compete with that..really…billions of years of effort mindlessly moving forward and we come along and with only our will change all it all..really?

    We need as a republic to reexamine our priority’s, put down our holy writs and find solutions out side the political, idealogical, mystic solutions, contend with the hard reality of an empire in decline, a world bursting with us, constantly threatened by our actions and the needs/wants of the few over the many.

    Skippy..mea culpa!!! I was part of the problem, but hope my actions here and other wise add one grain to the scale in righting the ship that is us, humanity.

  39. Freethinker

    I’m glad to see that the original story and its resultant commentary was revisited. I hope that the deeper we dig to find the underlying ethics of economic beliefs and behaviors, we are further empowered to make more rationale decisions. It is refreshing to see the sophisticated ethical reasoning displayed by many in this re-visiting. I hope it leads more readers to search for and act up on the widespread violence that the dominant economic systems promote and sustain.

  40. Jim in MN

    Thanks for the update, Yves. We can all hope and/or pray for this intrepid family’s fortunes. Surely we can all do that.

    For there but for the grace of God goes I…and those of us with jobs and ‘normal’ financial profiles still have very big waves coming our way.

    I hope everyone out there can find a moment’s peace and see within their hearts to become more prepared, more committed, and reach for higher ground. And if that includes helping your neighbors, physical or virtual? well then, surely no one else’s judgemental spite can take that away.

    It’s going to be a long winter. Don’t be a bitter turnip.

  41. David

    There was a third kind of advice in that long list of comments, that I think was the best of all. Hardheaded financial advice. How to help these people survive, without enriching their bankers. Which bills to pay, which not to.

    We’re all stretched now. We want our help to go to the right place. Millions for defense, not one cent for tribute!

  42. Tamara Holmes

    To maximize the amount of money your debt is reduced by and to lessen the risk of a scam, don’t just choose any debt settlement company; choose on that belongs to a relief network. The individuals in charge of these networks do not let anyone in; all companies must undergo testing that determines their performance, record of accomplishment, and quality of serviced provided.

  43. run75441

    For those of you who made a donation to this family and had it turned away, I would encourage you to donate the same amount to your local Food Pantry. They are extremely hard hit with the growing number of people, including former middle class members, turning to them for the basics.

  44. Nick

    We are at war with the big banks and their government pimps.

    The best weapon we have is to repudiate all our credit card debt. This should bring them to the negotiating table with hat in hand.

    Letter writing to congress critters, etc, is futile.

    If debt repudiation doesn’t work, then we’ll have to take to the streets.

  45. Geoff

    Surprised no one has posted this here, but if you are interested in what life is like for the unfortunate who cling to the bottom economic rungs, I highly recommend David Shipler’s book “The Working Poor.” Clearly, from my reading of the comments here, it would really open some eyes. You could also check out Barbara Ehrenreich’s “Nickel and Dimed” for similar info. Once you realize how a good chunk of this country has to scrape to get by even in good times, you’ll probably have a bit more compassion for people in general. And no, not everyone is an unfortunate saint, but for many, the system is designed to make poverty nearly inescapable.

    1. Skippy

      May I add DIRT CHEAP by Elisabeth Wynhuausen, she personally takes the journey see:

      More than one in four Australian workers are casuals, pining for ‘perks’ like job security; one in three part-time workers want more work than they have; two thirds of young people have no choice but to enter the labour market as casuals.

      When Elisabeth Wynhausen took a year’s leave from her job as a journalist to join the ranks of the minimum-wage workers, her friends and family told her she was crazy. That didn’t stop her. Soon, she was one of the casual workers, travelling in search of work and learning what it was like to work long hours for low pay and no respect.

      As a journalist, Wynhausen had often written about the working poor. Now, she decided, she would join them, working alongside them and trying to live on the wage they earned. She wanted to see what it was like working menial jobs for low wages – and trying to live on earnings below the poverty line.

      This is an offering which is, on the surface, entertaining. Wynhausen’s skill with words draws you into the story, almost allowing you to forget that this is not a fictional tale, but real life. She experiences boredom, injury and fatigue, along with the frustrations of having work doled out on a seemingly adhoc basis. She exposes the difficulties of living on minimum wages and on being treated as both dispensible and insignificant by bosses and employers who look to cut costs at every opportunity.

      By joining the workforce in this way, Wynhausen offers a unique viewpoint of life from the shop floor in several industries – including retail, hospitality, cleaning, aged care and manufacturing.

      An eye-opener.

      Dirt Cheap, by Elisabeth Wynhausen
      Pan Macmillan, 2005

  46. Jim

    One thing Elizabeth Warren mentions in ‘The Two Income Trap’ that I have seen played out in my own SC county is the prison industrial complex driven by the unemployable who don’t pay their child support. This county could not run without them. They sort the trash, man the animal shelter, and do all the dirty work that keeps the school buses running for next to no pay. The Fair Labor Standards Act doesn’t apply to them (this has already been through the courts). Rumors are that the federal government pays the county so much per head. Can you say Gulag?

    Now of course these people should pay their child support. Many of them would if they were employable. But due to changes in the economic and demographic make up of the country, they’re not. The stopgap jobs that anybody could get a generation ago are no longer available.

    And this doesn’t only apply to men. I knew an upper middle class woman with a Masters in English–another derelict English major–who was sent to jail for non-payment of child support. She stayed her entire six months writing letters for the other inmates and generally causing trouble through her literacy. I don’t think she found a job and started paying once she got out, but the system didn’t want her back.

    To Jeff’s point above that tech degrees are a defense against poverty: the problem is that one’s knowledge becomes obsolete without constant re-training and updating. Once you calculate how much time and money you spend re-training, you might not be making as much money as an English major.

    1. David

      The system has worked actively and continuously to destroy the job security of tech majors, by importing Indians, Chinese and others. It’s very important to Bill Gates that his programmers not feel comfortable and that they have to compete with every other tech major in the whole world.

  47. Anon

    “Yves: it’s your blog and you have every right to decide how to handle comments on it but you have my full support if you decide to delete offensive ones such as the two you posted above. In my opinion, those who presume to know and pass judgment, without any direct knowledge, on what has transpired in the lives of Americans who are living with little are not worthy of representation on your fine site.”

    Yves, Please do not delete comments, unless they are downright mean-spirited and vulgar. The comments give me idea about how different people are thinking.

  48. The real a

    The only certainty in this crisis is neither inflation nor deflation – it’s that Americans will get poorer. The only choice boils down to *which* Americans will get poorer. The powers that be have seemed to have made the choice that it won’t be the rich. And the powers that be are not just the usual suspects; every time Krugman plugs stimulus, rather than taxing the rich to pay for work programs, the outcome will be that the rich get to stay rich. It’s not just the politicians; and it’s not just the rich; it’s the entire elite class looking after for themselves, because they have constructed an ideology which justifies it (we’re brighter, therefore we deserve it). Either the non-rich will accept it, and things will go on smoothly (so to speak); or they won’t, in which case everyone loses (revolutions aren’t pretty). There just aren’t pretty alternatives when a world power descends.

    – a

  49. Anonymous2

    I have a dear friend who exemplifies the weird schizophrenic self sufficiency paradigm of many posters who heap vitriol on those who have stumbled. This friend is a sole breadwinner with a very good upper management position in a high-tech industry. He and his wife live in a recently purchased $500K 5 bedroom 3 1/2 bath home with their severely disabled only child. The child is sent to a top of the line school which specializes in her disability. The cost to my friend for the $30K annual tuition, zero. The government pays for the child’s education, her medical needs (medicaid) and many of the significant expenses related to her disability which are not covered by the good health insurance he enjoys from his employer.

    When I ask my friend how he justifies his fiercely libertarian political stance with the nearly $80K per year of government support his family receives, he simply says that he believes that governments should help the helpless. He sees absolutely zero reason why he should do something like move into a `1 bedroom apartment with his wife (not that I would ever suggest such a thing) and support his disabled child and his wife with his own salary instead of living the good life on the backs of the taxpayers. He has nothing but disdain for those who are underwater on their mortgages or people in credit card debt.

    He is a good man, my friend and a very smart person. He is completely comfortable with the notion that although he deserves all the help he can find, the people who clearly (to him) made poor decisions should not receive a dime of government assistance. After all he deserves his high salary and living in a beautiful home because of all his hard work, his “bad luck” of having a disable child not withstanding. I love my friend and know that his child’s disability is a constant source of worry and heartache. His attitude towards others who have not had the good fortune that he has had in education and job training, just stuns me. I am going to hazard a guess that there are many good people like him who espouse one belief as it applies to others and lives a life in direct conflict with that belief.

    1. Dave Raithel

      One of the funniest things I learned about Robert Nozick (“Anarchy, State, and Utopia”) is that he was living in a rent-controlled apartment and when the owner tried to break the rent controls, Nozick resisted…

      As to your report: What state is this? I cannot imagine that Missouri’s Medicaid rules would not require greater asset spend-downs before it supplemented the private insurance. Our Dem gov just cut another $32 mill from the Medicaid budget because state revenues fell another $250 mill or so more than expected. I don’t dispute you, but there’s some detail here, or about the child’s disability, the needs more accounting.

      1. Anonymous2

        I purposely left out the state since I am blathering about another person’s personal circumstances and struggling to understand it myself. I am only aware of what he has stated in our conversations. His attitude towards others who are economically struggling seems quite incongruous with his own circumstances. My comment was intended as an example of how people can be quite unaware of the dissonance between their expressed views and their lifestyle. I certainly know that I am guilty of the same, although in different ways. I strongly suspect what others have mentioned is in play. That is, that we want to feel we have control over our circumstances and criticizing others for their lack of same gives us the comforting illusion of control.

    1. Dave Raithel

      I agree. I say real men protect their own borders and enforce their own contracts. I get ripped off, I’ll exact my own justice, thank you very much. Those people in the Twin Towers should have thought of a way down before they took jobs there. I’ve had my fill of traffic lights, speed limits, and sanitary oppression. You don’t like air pollution, get a gas mask. If you show me a word that ain’t in the Constitution of the United States of America, it means nothing to me….

      1. Tim in Sugar Hill


        You wrote: “Those people in the Twin Towers should have thought of a way down before they took jobs there.”

        I’m not sure what you mean by this. I worked in the Twin Towers for over 15 years. I can tell you with certainty that we DID think of a way down. Several ways, in fact.

        If the planes had crashed into the ground on Fifth Avenue, would you argue that those pedestrians should have thought of a different place to shop or have lunch? No matter how many escape routes you have, a determined enemy can find a way to block all of them and seal your doom.

        I appreciate that you’re angry and fed up. I am too. But don’t take it out on me. I just work(ed) there. ;

        Tim in Sugar Hill

  50. Neevah

    I’m glad to see Yves and the subject of the article put up their dukes in response to the vitriol that was splattered across last week’s comments page.

    Empathy isn’t a dirty or political word. It isn’t a sin. It isn’t a failing. I wish some readers would stop acting like having empathy for someone is worse than not having it.

  51. ricoSUAVE

    Don’t know these people…But I do know that when I’m driving in traffic I see 90% BRAND NEW cars. I also know that when I go to the mall on any weekend day, it’s still packed out with ‘millionaires’ buying everything in sight.

    Hmmmm…What could it be? Why is everyone broke…just can’t seem to figure it…

    Pay no attention to all those shiny new cars & $400K mansions, nothing to do with it…Clearly there is some mega-political multilevel conspiracy & the system is being rigged by a secret board evil corporate overlords..
    yeah…that’s the ticket

  52. Goodrich4bk

    Advice? Go see a bankruptcy attorney (most offer free consultations) and listen to their advice. You can wipe out your debts, but you will then need to pay for everything with cash until you can establish new credit (which will take a few years). It can be done, and within a few years you will be much better off. 30% interest rates for somebody with your income is a permanent debtor’s prison. Bankruptcy is the key to you cell — use it!

  53. Tim in Sugar Hill

    Our media feeds us a steady diet of rags to riches stories. And always the hero prevails alone, by himself, against all odds. But these stories are only part of the American experience and rather recent to our history. If you look farther back into our history, you’ll discover long forgotten examples of entire communities looking after each other in times of need. If your barn burned down, the community rallied and built you a new one. As a result you often were much better off after the fire than before.

    When your barn burns down today, it must be your fault. You didn’t work hard enough. You should have installed a sprinkler system. You should have bought barn insurance. Whatever. It’s your problem because it’s your fault.

    I’m not sure exactly when, but Poverty has become America’s Mortal Sin. And it appears to be unforgivable.

    Consider the number of prominent celebrities advocating forgiveness for Roman Polanski. His sin is the rape of a 13 year old girl over 30 years ago. Child molestation is pretty bad, but nearly so sordid and distasteful as being unable to pay your bills.

    Tim in Sugar Hill

    1. craazyman

      I can’t believe this woman is still hanging around writing emails to people for advice.

      There is one solution to her problem. She should declare herself a bank holding company and borrow from the Fed at 0% until she can find a way to get a bailout. After all, her only problem is a duration mismatch between liabilities and income. Wink Wink.

      That’s how they do it in New York. If she insists on being a fly-over-person sheep, then what can I do but take as much of her money as possible. Ha ha ha ha ha.

      -Jolly T. Bone Banker, CFA, MBA, PhD, LLC, LLD, INC., PDA (but not with wife!) and all around SOB.

  54. T. Rex Bean

    This is making ripples in the blogosphere. James Kwak, at Baseline Scenario, weighs in:

    “Even if differences in outcomes were entirely due to differences in abilities and effort (which they’re not) — would that make it OK? I think most people would say that it’s fine for smart people to make more money than other people. But why? Why are smart people any more deserving than anyone else? It’s true that in many jobs being smart can make you more productive and valuable, and as a result for many high-paying jobs being at least somewhat smart is a prerequisite. But the fact that a capitalist economy functions this way doesn’t make it morally right that the “winners of the genetic lottery” (a phrase I picked up from some basketball announcer talking about Tony Parker) have better outcomes than the losers.”

    Here’s the link:

    1. T. Rex Bean

      O, and a reader at Baseline Scenario mentions Malcolm Gladwell’s “Outliers,” whch is all about the role luck plays in success. Been meaning to mention that.

    2. DownSouth

      T. Rex Bean,

      If you like the technical/scientific, you might find this paper interesting:

      It never ceases to amaze to what extremes the paladins of selfishness and greed, like Price and Dawkins, will go to justify and celebrate selfishness and greed, to make them immutable and virtuous.

      In their world, as was also the case for earlier New Atheists like Ayn Rand, altruism is a four letter word.

      1. DownSouth

        I might also add that, in regards to the various categories cited by Gintis/Henrich/Bowles/Boyd/Fehr, it can be quite difficult to determine whether someone is:

        ► A free-rider (or in the case of corporate America, one of their paid defenders and apologists)

        ► An altruistic punisher, or

        ► Someone operating out of a taste for retribution

        I also think that those who are free-riders (greedy and selfish) or seeking retribution (bitter and filled with hatred) will frequently try to mask their motivations or behaviors as altruistic punishers.

        So it can be a rather tricky game to sort out what truly motivates people.

        1. DownSouth

          That second-to-last paragraph should have read:

          I also think that those who are free-riders (greedy and selfish) or seeking retribution (bitter and hate-filled) will frequently try to mask their motivations or behaviors as altruistic punishers, which can entail projecting their own greed and selfishness, bitterness and hatred onto others.

        2. T. Rex Bean

          Very interesting, that, DownSouth. Thank you. I wish Gintis, et. al. had expanded their research to other countries, however. Note the strong “moral” opposition to single mothers receiving welfare.

      2. DownSouth

        Another important conclusion one could draw from this study is that, if one wants to turn people against the social welfare system, the most effective way is not to talk about its cost, but to 1) cast its recipients as undeserving and 2) to paint welfare as something that “encourages people to adopt the wrong lifestyle and values.”

        This provides a significant motivation for the selfish to soft-peddle their true agenda, which is to save money, and instead embellish and accentuate the moral shortcomings of the welfare state.

        Could there be some of that going on in these comments?

        1. T. Rex Bean

          More on support/opposition for redistributive programs:

          “…in drawing on a wide range of data like population surveys and patterns of municipal spending, researchers have found ample evidence of how ethnic and racial diversity has undermined support for spending on social welfare in the United States.

          “In a study in 2001, Erzo F. P. Luttmer, an associate professor at the Kennedy School of Government at Harvard, reported that the percentage of people who say they support welfare spending decreases as the share of local recipients from their own racial group falls. His report was based on data from the General Social Survey, a social-attitudes poll conducted across the United States nearly every year since 1972.

          “In another study, published in 1996, James Poterba, a professor of economics at the Massachusetts Institute of Technology, found that public spending on education falls as the percentage of elderly people in a given area rises. The reduction, he found, “is particularly large when the elderly residents and the school-age population are from different racial groups.”

          “In a 1997 study, Mr. Alesina, along with Reza Baqir, an economist at the International Monetary Fund, and William Easterly, an economics professor at New York University, looked at the relationship between social spending and ethnic diversity in 2,700 cities, counties and metropolitan areas across the United States.

          “They found that in more diverse cities and counties, the share of local government spending on public goods — in this case, roads, sewage treatment, trash clearance and education — was generally lower than it was in more homogeneous localities. “Our results are consistent with the idea that white majorities vote to reduce the supply of productive public goods as the share of blacks and other minorities increases,” they wrote.”

          This from a 2007 NYT article. Link:

          Interestingly, the report notes that California and NY are exceptions — highly diverse and highly taxed. However, it says, it appears that racial and ethnic tensions have eroded support for public spending in California (it cites white support for anti-immigrant measures). NYC, it says, is a special case — so diverse that no one ethnic or racial minority controls the public purse.

          1. DownSouth

            T. Rex Bean,

            Placed within a historical context, these findings are not at all surprising. As Peter Turchin has observed:

            For the period of human history between the Axial Age and the Industrial Revolution I operationalize cultural dissimilarity with a scale of four levels: (1) subethnic groups within the same ethnic community, (2) ethnic groups within the same metaethnic community, (3) metaethnic communities: a metaethnic, but not a steppe frontier, and (4) agrarian and nomadic communities on a steppe frontier. Both the amount of cultural variation and the intensity/lethality of conflict increase from (1) to (4).

            But as Turchin goes on to point out, for societies to survive and not come apart at the seams, mechanisms had to be found to overcome these ethnic differences within the group, which has been successfully accomplished in the past.

            Black intellectuals of the 60s were of course aware of the dynamic Turchin speaks of:

            The Negroes of this country may never be able to rise to power, but they are very well placed indeed to precipitate chaos and ring down the curtain on the American dream.
            –James Baldwin, The Fire Next Time

            But the more effective civil rights leaders made it known this is now what they wanted:

            The American racial revolution has been a revolution to “get in” rather than to overthrow. We want a share in the American economy, the housing market, the educational system and the social opportunities. This goal itself indicated that a social change in America must be nonviolent.

            If one is in search of a better job, it does not help to burn down the factory. If one needs more adequate education, shooting the principal will not help, or if housing is the goal, only building and construction will produce that end. To destroy anything, person or property, can’t bring us closer to the goal that we seek.
            –Martin Luther King, Jr., “Nonviolence: The only road to freedom”

            And American history seems to bear out Turchin’s assessment that war plays a role in overcoming conflict between ethnic groups within a metaethnic community:

            Social conflict and national crises provided the necessary impulse for the decline of old race arrangements. World War II, in particular, initiated dramatic changes on the domestic front. The need for soldiers and workers, and for positive international relations with Latin America, meant that the counterproductive and embarrassing customs of Jim Crow had to be shelved, at least for the duration of the emergency. In more lasting terms, the war created a generation of Mexican American veterans prepared to press for their rights and privileges. The cracks in the segregated order proved to be irreparable.

            The cracks did not rupture, however, until blacks in the South and Mexican Americans in the Southwest mobilized to present a sharp challenge from below in the 1960s…

            The war had…exposed Mexican American soldiers to a world of greater freedoms and equalities, an experience that had become especially important on the return home.
            –David Montejano, Anglos and Mexicans in the Making of Texas, 1836-1986

            War also seems to play a role in overcoming class differences:

            Marx may have said that the proletarian has no country; it is well known that the proletarians have never shared this point of view. The lower social classes are especially susceptible to nationalism, chauvinism, and imperialistic policies. One serious split in the civil-rights movement into “black” and “white” came as a result of the war question: the white students coming from good middle-class homes at once joined the opposition, in contrast to the Negroes, whose leaders were very slow in making up their minds to demonstrate against the war in Vietnam. This was true even for Martin Luther King. The fact that the army gives the lower social classes certain opportunities for education and vocational training naturally also plays a role here.
            –Hannah Arendt, Crises of the Republic

      3. samb

        Dawkins celebrates selfishness? Where? Certainly not in ‘The Selfish Gene’. Quite the opposite actually.

        I suggest you read it.

        1. DownSouth

          samb, you need to get up to speed about what this debate is all about.

          Dawkins very much reminds me of George Gaylord Simpson, who in 1943 wrote a vehement attack on Alfred Lothar Wegener’s theory of continental drift.

          G.G.Simpson’s influence was so powerful that even in countries previously sympathetic towards continental drift, like Australia, Wegener’s hypothesis fell out of favor.

          But despite Simponson’s stature in the scientific community, his penchant for dogmatism and his fierce attacks of anyone who disagreed with him, Wegener eventually prevailed, because he had truth on his side.

          Time has not been kind to the “science” of the New Atheists like Rand and Dawkins. In the decades since Dawkins published The Selfish Gene (1976), new discoveries have been made, new research has been conducted, and the little piece of ground he and Rand stood upon has slowly been eroded away.

          Dawkins’ reaction has been rather sad and pathetic as, as made manifest in this presentation he gave to the Science Network in 2006 (beginning at minute 40:00):

          If the Science Network conferences are any indication, the influence of the New Scientists is vanishing rapidly. In the 2006 conference, they made quite a display of themselves, and their dogmatism, belligerence and hypocrisy were put on display for all to see. As a result, by 2008 their detractors—Peter Turchin, David Sloan Wilson, Jonathan Haidt, etc.—had captured the field, and Sam Harris was the only prominent New Atheist that was invited to speak.

          1. DownSouth

            oops, that last paragraph should read:

            If the Science Network conferences are any indication, the influence of the New Atheists is vanishing rapidly.

          2. DownSouth

            Another important change between the 2006 and 2008 Science Network conferences was the framing of the debate. In the 2006 conference, the New Atheists were able to make it a debate about religon vs. science. By the 2008 conference, however, the debate had become one of science vs. science.

  55. craazyman

    The More things Change . . .

    I don’t plan on retiring Jolly Banker as a character. He is too rich (no pun intended) with creative potential. But to give credit where it is due, the great American folk singer Woodie Guthrie made him famous in the first Great Depression. The lyrics are as telling today as then. How the fools and moral midgets and intellectual clowns in Washington managed to ignore the history of the 1930s and dismantle the edifice of sound regulation that kept the banking system in tact, more or less, for decades, is a tale that history will not look kindly on. Anyway . . . . Jolly Banker from the wonderful sad voice and truly “talented” guitar of the American lyricist/singer/genius — Woodie Guthrie ca. 1930s Okie Dusbowl blues . . .

    My name is Tom Cranker and I’m a jolly banker,
    I’m a jolly banker, jolly banker am I.
    I safeguard the farmers and widows and orphans,
    Singin’ I’m a jolly banker, jolly banker am I.

    When dust storms are sailing, and crops they are failing,
    I’m a jolly banker, jolly banker am I.
    I check up your shortage and bring down your mortgage,
    Singin’ I’m a jolly banker, jolly banker am I.

    When money you’re needing, and mouths you are feeding,
    I’m a jolly banker, jolly banker am I.
    I’ll plaster your home with a furniture loan,
    Singin’ I’m a jolly banker, jolly banker am I.

    If you show me you need it, I’ll let you have credit,
    I’m a jolly banker, jolly banker am I.
    Just bring me back two for the one I lend you,
    Singin’ I’m jolly banker, jolly banker am I.

    When your car you’re losin’, and sadly your cruisin’,
    I’m a jolly banker, jolly banker am I.
    I’ll come and forclose, get your car and your clothes,
    Singin’ I’m jolly banker, jolly banker am I.

    When the bugs get your cotton, the times they are rotten,
    I’m jolly banker, jolly banker am I.
    I’ll come down and help you, I’ll rake you and scalp you,
    Singin’ I’m jolly banker, jolly banker am I.

    When the landlords abuse you, or sadly misuse you,
    I’m jolly banker, jolly banker am I.
    I’ll send down the police chief to keep you from mischief,
    Singin’ I’m jolly banker, jolly banker am I.

  56. Boots

    Regarding the wealthy family with the disabled child who needs very expensive (government provided) educational and healthcare, government pays because the federal Individuals with Disabilities Education Act says so. Local school districts MUST provide services to the disabled, from birth to age 21. If a local school cannot provide the free, appropriate, public education that a child needs, then the school district must secure an outplacement and provide free transportation to the new school, in a school bus or even in a private taxi. Approximately 15% of America’s school children are classified as ‘special education’ and require additional services. It’s a specialty area of law, with some firms concentrating on education law exclusively. Your friend’s child is not alone in receiving these services.

  57. Muzzig

    These two posts regarding “Debt Stress in Middle America” are incredible. I’m overwhelmed at my emotional response that I can only describe as humbling empathy and astonishment. What seems lost in so many of these callous responses is that the person describing her family’s current situation is American to the core, the person the founding fathers envisioned in writing our great Constitution. What I mean by that is that she’s not looking for subsistence or handouts. Quite the contrary, she’s just looking for a fair shake from the entities from whom she borrowed money because she believes so strongly in her individual responsibility and capacity that she knows she can get herself out of this jam. She’s willing to make the personal sacrifices to do what is right and fair. She reiterated that she was only looking for advice!

    What I find even more admirable about this person is that even in the face of incomprehensible behavior on the part of BoA, she still sends at least a few bucks each month to demonstrate her continued commitment. This gal’s integrity and resolve leave me feeling tightness in my chest and a measure of shame at not being able to demonstrate the same level character.

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