if these limits may, at any time, be passed by those intended to be restrained?"
-- Chief Justice John Marshall, Marbury v. Madison, 1803
Whining Our Way To Prosperity
by Hal_10000
CNN’s marquee story right now is about the awful plight of a woman who was making $70,000 a year, lost her job and is now going to a food bank.
I don’t mean to be a jerk here, but reading the details doesn’t exactly fill me with sympathy. She’s in the middle of a marital breakup, which is always a financial catastrophe. She’s “burned through” her savings in a few weeks, which indicates they weren’t very big in the first place. She has a $2500 a month interest-only mortgage. Many people who lose jobs can survive for a while on their credit cards. That she can’t hints that they were already run up.
I don’t mean to jump on Ms. Guerrero, who seems like a nice hard-working person who has hit a bad stretch. But I’m getting awfully sick of the non-stop incessant middle-class whining that masquerades as news and opinion these days. It’s been noted by others that we now have a generation of Americans who have never known real suffering. Our recessions have been incredibly mild and short-lived. Our war is being fought by a tiny tiny minority. AIDS is the closest thing we’ve seen to an epidemic and has yet to take out as many as a bad flu year used to.
We are the richest, happiest, healthiest generation in human history. And we’re spoiled rotten. Our house gets foreclosed on and it’s the end of the world; we lose our job and no one knows the trouble we’ve seen. If we can’t have the biggest car, the biggest TV and the biggest house, our lives our worthless. And our stupid worthless media is fanning this self-pity by telling us “tales of woe” about someone living in a half million dollar home. You want to see real suffering, CNN? How about some reporting on Zimbabwe, with its 200,000 percent inflation. How about right here in our own country where inner city kids are having their futures destroyed in the government school gulag?
I would throw up my hands and give up except that I know this whining and bitching is from a vocal minority. Tens of millions of Americans do appreciate how well they’re doing and are behaving responsibly. If that weren’t the case, the whole system would have collapsed years ago. I just hope this recession smacks some sense into some people about debt.
Comments
$2500/month on an interest only while raising kids?
Newsflash for you - you couldn’t afford that house WITH your $70K/yr job....
I’m guessing when she bought the house, her husband was bringing in some money. It looks like the martial breakup was the tipping point.
But still. I may be out of work in two months. Since I’ve known about that, my wife and I have been frantically cutting expenses and trimming debt. I’m still driving the car my parents gave me for graduation 14 years ago. We bought a smaller house than we could afford on a 30-year fixed precisely to avoid any bad situations. And we have a baby and may have to travel to Australia to visit my wife’s family. But we’re now at the point where we can survive on just my wife’s salary.
Our friends down the road have one spouse out of work for maternity and another one in a low-paid internship. They’ve cut off internet and cable and are doing baby-sitting to make ends meet.
It’s called sacrifice. Millions of Americans are tightening their belts right now. It’s they who will see us through this mess. I’m tired of all the attention being paid to the people who aren’t.
Fantastic post, Hal. I agree with every word.
As bas as this is.. my sister is almost just as bad. She finally got divorced last year, and she got the house, but had to actually pay him some for that… and my mom actually talked to me at one point about coming up with several grand to help, which I wouldn’t do (though I was able to make it look like I just couldn’t afford to at the time). There was no way in hell I was going to basically give away a fairly large chunk of money when the smart thing would’ve been to get out of that house and move to a more affordable one. I’ll help family and friends, but I won’t just piss away good money after bad.
My sister cannot afford that house… and won’t face reality. Unfortunately she’s basically dragging my parents slowly down with her, because my mom won’t confront her about it and keeps wanting to help, mostly because of the kids.
When my sister bought a new LCD TV (granted it was a fairly cheap Vizio from Costco) and then dropped a few more $100 on a mounting rack… I knew there was no way she was going to be smart and control spending to maybe keep that house.
I know that she’s going to lose that house eventually.. but unless my parents finally make a stand, they’re likely to suffer more then she will, and that’s driving me crazy. I’ve talked to my mom about that, telling her that outright.. and she basically agrees, then continues to help anyway. I don’t think my sister has any savings at all.
Oh, and child support doesn’t help much at all, because the dad (who was a jerk but not stupid) convinced 1 of the 3 kids to move with him to NY.. so he only has to pay 1 child’s worth of support. Thankfully she finally wised up and dumped the complete loser that was just leaching off her that she’d picked up a few months after the divorce too.
I just hope this recession smacks some sense into some people about debt. NOT a chance, THEY are entitled to those loans and money! their senator congressman and elective representatives told them so.
Over at Sports Illustrated, Peter King puked out this disgusting plea:
With $4-a-gallon gas around the corner (I hear it’s already here for premium in California), I have only one question: Where’s the outrage? Why are our elected officials doing nothing—nothing that any of us can see—about it? I can afford gas, but how about the people who cannot? I can’t believe we just let things like this happen in our society.
I don’t want to hate on King too much, because he just got back from a USO trip to Afghanistan, but this is ridiculous because it embodies everything that’s wrong with the progressive mindset--a complete ignorance of facts and economics in favor of populist rabble-rousing and the promotion of the idea that the government should “do something” if life isn’t the wonderful utopia desired. You would think King would count his blessings after being in a part of the world where just having a car is a fantastic luxury.
It’s going to be the same thing with this recession. There’s going to be calls hither and yon to “do something,” forgetting that “doing something” usually makes things worse, not better.
I want to meet the bank who gave a loan to this woman. I calculated the house price at 480,000 bucks. Her take home pay from 70K is approx 54,000
2500 per month payments represents over half (55%) of her take home pay. That leaves her less than 100 bucks per day to feed herself ( she’s a big girl) and her two kids, pay for health care, utilities.
Totaly irresponsible. I have no pity at all.
Kudos on a great post, Hal. Bravo.
I want to meet the bank who gave a loan to this woman. I calculated the house price at 480,000 bucks. Her take home pay from 70K is approx 54,000
2500 per month payments represents over half (55%) of her take home pay. That leaves her less than 100 bucks per day to feed herself ( she’s a big girl) and her two kids, pay for health care, utilities.
Totaly irresponsible. I have no pity at all.
To be fair, para, the article indicates she was married when she bought the house. But that still means her husband had to making at *least* as much as she was. She’s now in a position where she can’t sell the house because of the market and can’t pay it because of her estrangement.
I smell a deadbat dad somewhere in here.
However, that having been said, my wife and I set our home price range so that we could still afford it on one salary. Responsible people don’t set themselves up so that the loss of a job equals financial catastrophe.
However, that having been said, my wife and I set our home price range so that we could still afford it on one salary. Responsible people don’t set themselves up so that the loss of a job equals financial catastrophe.
I think you hit the nail right there--rather than getting a house that required two incomes, they should have purchased a house that could still be paid for if one of them was out of work. It could have just as easily been the ex-husband who was saddled with that crippling mortgage after the divorce.
However, that having been said, my wife and I set our home price range so that we could still afford it on one salary. Responsible people don’t set themselves up so that the loss of a job equals financial catastrophe.
When we moved to the DC area in 1994, we had to make a hard choice where to live. My wife is in BioTech, and her entire industry is in the Maryland suburbs north of DC (lots of spinoff companys from NIH, etc). My industry is in northern Virginia. Unless we lived near the DC beltway, one or the other of us was gonna have a horrible commute.
When we lived in NJ before moving here, my wife commuted 55 miles each way on the Garden State Parkway. When we moved there, I had a job and she didn’t. Since her industry was both in Princeton and in North Jersey, so we decided to take an apartment near my job and cope. When we bought a house there, we looked into moving closer to where she worked, but, well, you really don’t want a house in north Jersey.
Having made the decision to not repeat that mess in DC, we had to pay for location (property near the beltway is obviously at a premium). When we bought our house in 1994, we were right on the razor’s edge. I was working for a startup; she was working for a small but stable biotech. We couldn’t afford the house on one salary. We sat down and had a long heart to heart about whether to do it or not, discussing fully that if one of us were out of work for more than a few months, we’d likely lose the house.
We went ahead and did it anyhow - take the risk for the quality of life improvement of both of us having a 20-30 minute commute. But we went in eyes open. Now 13+ years later we owe $250,000 on a townhouse we could sell for $650-700,000 (it was higher before the housing bust, but it’s still high because of the location a mile from the beltway).
We went ahead and did it anyhow - take the risk for the quality of life improvement of both of us having a 20-30 minute commute. But we went in eyes open. Now 13+ years later we owe $250,000 on a townhouse we could sell for $650-700,000 (it was higher before the housing bust, but it’s still high because of the location a mile from the beltway).
You’ve been pretty lucky, dwex--I don’t know if I could take that kind of risk given how the tech field can fluctuate. I just got a job with a small data storage company about 30 miles from my apartment, and it’s probably going to be a while before I actually buy a house unless I move over to a more stable company like Raytheon or ADT. My cousin lost his job with Avaya last year, and the only thing that saved his ass was his girlfriend with her large inheritance moving in with him (he found a job about eight months later).
I’m not married and probably won’t be for a good long while, so I have to be pretty judicious if and when it comes time for me to buy a house. It sounds awful to say, but I’m hoping the housing market here in Denver stays depressed for a while longer because I won’t be able to afford anything around here otherwise.
The good thing about this depressed housing market it that it (hopefully) dissuaded people from impulse buying. Much like an accelerated stock market, people feel they gotta get in no matter where or they will miss out on the gains. This should convince everyone that houses will always be there and yes, I think its a safe bet that for several years the housing market will fluctuate, but nothing spectacular up or down. Getting your own financial house in order is necessary before even considering a large purchase.
A few years ago I read this post from Tom McMahon, about his 23-year old disabled son, and what he’s learned in the 15 years since his son’s brain injury. I still go back and read it every few months...but this section seems apropos:
Some folks would be horrified not to take an airplane trip vacation at least twice a year. While that’s very nice, it’s not a Minimum Daily Requirement for a Happy Life. People re-define extravagant luxuries as the bare necessities of life, and whine like a two-year-old when they don’t have every last one of them. Keep the two categories straight and you’ll be much happier.
The whole thing ought to be required reading for almost everyone in this country who whines about how bad they have it.
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Yeah, I saw that article and found it hard to generate any sympathy for her. I’ve been going through my savings, too, and relying on my credit cards—but that’s because I just switched from a tip-based income in Baltimore to a salaried position in DC and I’m going to be going about two weeks from when I delivered my last pizza to when I start getting paychecks.
I’m highly in debt: comes from going back to school later in life. Even working full-time and taking a full load of classes, I still wound up over-reliant on credit cards. Add to that a deer collision in December that left me with a new car (and a car payment) and I’ll be in shaky financial shape until probably the middle of May.
She makes 70k a year. (Well ... did). Where’d it all go? Did she have any savings at all? I understand raising kids is expensive—albeit not from a first hand experience—but I really do think that it’s clear that she was living a lifestyle not keeping with her income. It’s one thing if you’re a single adult playing fast and loose, but with kids, I really think having the safety net of a few thousand bucks in the savings account is a very important thing.
So I’m commuting an hour and fifteen minutes to Bethesda every day. I just got a part time job in downtown DC, which means I’ll be working about sixty hours a week and getting home exhausted every night only to look forward to a 5am alarm clock wake up. It’s going to be a while until I’m on steady financial ground. It’s going to be a while until I can support myself with one job. And assuming I ever am in a job that pays me 70,000 a year, that’s going to be a while too. I just hope that when I’m making bank, I’ve learned my lesson well enough to have dough in my savings account.