So you didn't dare link to McArdle
Didn't dare is a far cry from 'didn't want to invite more hostile analysis of a friend'. Disagreeable on matters of substance is one thing, but there's no need to get generally snippy.
The article's interesting in itself -- I don't find myself sympathizing with the guy much, mostly given that I can't figure out what he thought was going to happen. Buying a house was going to be the free money tree?
1 - I didn't even know McArdle'd blogged it when I wrote the post.
DeLong blogged this as well, though he didn't add any commentary.
Buying a house was going to be the free money tree?
He really, really, really wanted it to be true. It had been true for ten years, and true in disproportionate ridiculous ways for three or four years.
1- Ahh, McCardle:
WE are brave and take risks to do what we love.
THEY make stupid and irresponsible choices and should be disciplined by the market.
It's a good article, he writes very well.
I found myself sympathizing with him, even while horrified at his improvidence. He really is a poster boy for irresponsible borrowing.
I suppose it's not so much the house I'm judging -- that's a reasonable mistake. It's the not noticing he was in over his head. Net negative cashflow over the course of a month should be a noticeable event, and a couple of months in a row when you're spending more than is coming in should be a signal that "this can't go on" (this judgmentalism is limited to people who are or have been used to making enough that living within their means is possible. If you can't make ends meet every month, you know there's a problem). The waking up only after his bank account is empty is messed up.
The fuck? McArdle: "Writers are, as a class, extraordinarily at risk. They spend their twenties, and often their thirties, living paycheck to paycheck." The author of the article is salaried at $120K. His financial problems have nothing to do with his occupation.
But writers as a class are risky, ham-love.
That's an interesting use of the word "class".
He really is a poster boy for irresponsible borrowing.
Naw. He's borrowing in ways that tap into human weaknesses. The un-amended default became borrowing, when the bank went and got $100 from his credit cards without his doing anything. He didn't want to face ugly budget conversations with his new wife over stuff that is generally thought of as within an upper middle class lifestyle, like clothing purchases at the Gap. The default shifted under him and he kept what had been reasonable expectations his whole life. Now he would have had to take affirmative action (change bank accounts to ones that don't draw from credit cards, move out of a house and neighborhood). That's a hard uphill climb, with denial pulling against you.
I'd guess there are much more irresponsible borrowers (profiled on the Irvine Market Housing Blog) who went straight to fast cars and blow.
And them I would have sympathized with, because hey, cool car.
7
It's a good article, he writes very well
He may write well but to really understand what happened you need a few balance sheets and lists of yearly expenditures.
... He really is a poster boy for irresponsible borrowing.
I believe many of the currently defaulting mortgages were even worse loans.
That's an interesting use of the word "class".
Not really, no.
12: "He's an irresponsible borrower" and "He's borrowing in ways that tap into human weaknesses" are not necessarily contradictory, nor mutually exclusive, statements. I'm more sympathetic about the credit card stuff that came later, when they were in way over their heads. But the initial house purchase was crazy. After paying child support, he had a take-home pay of 2700 per month, and he took out a mortage that required a monthly payment of 2500. How did he think that would work?!
Thought his wife was going to start bringing in a larger income than she did?
Articles like this make me really scared of marrying. The root of the problem here is his desire to live a normal middle-class suburban life after divorce and being hammered with alimony and child support.
He thought that would work by his wife getting a job. Of course they should have squared it first. But I still think he had understandable expectations that had previously worked for two decades. It takes a lot of confronting facts to combat those.
I am now coming up with a concept about how the default switched from combatting denial to taking advantage of denial. I will polish this in public over many threads, until PGD comes back to politely tell me about the well-known book on the topic. I don't suppose anyone wants to clue me in faster?
WHOA! He's already here! PGD, what am I talking about?
15: No? It seems like it's conflating some vague sense of "class" with class in the narrower sense of "people of similar financial status", in a way that's a little fishy. I don't think the financial issues McArdle or her friends face are at all similar to those Andrews is writing about (as H-L said), and I suspect throwing a word like "class" around so easily is related to this sort of sloppy thinking. But maybe not.
Well, what killed him wasn't marriage, it was ending up a primary breadwinner for two families simultaneously. If his first wife had been employed at a salary comparable to his, and he'd had joint physical custody of his kids, that (at least plausibly) would have cut his child support to nothing. And if his second wife had been employed at a salary comparable to his, his problems wouldn't have been nearly as bad.
The problem wasn't living one middle class life, it was having to live two middle class lives on one salary.
17: That's what he thought/hoped. But that was magical thinking right there. His wife didn't yet have a job, and he had 200 dollars left over after paying the mortgage, barely enough, probably to pay for homeowner's insurance and other home-related expenses. He should have seen that his wife's salary would have to go toward groceries, gas, clothing, etc, and basically be the salary they lived on after paying the mortgage. So his wife, who had been out of the workforce for quite a while, would have to land a very high-paying job right away in order to justify that mortgage. Totally crazy, as he himself now acknowledges.
19: I don't know! What are you talking about? It sounds interesting!
Bear in mind that no one is worse at remembering proper names (including book titles) than I am.
BTW, I have been working all week on the California budget crisis, and it SUCKS. Depressing shit. I also have to cooperate in the process of lecturing California for its irresponsibility when I work for a government that has borrowed way more than California ever could or would. But we can, you see.
Shorter 22: Patriarchy hurts men too.
Also, sorry for the OT, but California residents -- vote for the damn initiatives next week.
Come to think of it, I wonder what the financial input of the second wife's first husband was. Shouldn't they have had child support coming in as well as going out?
But that was magical thinking right there.
But it's not irrational to make decisions based on our best prediction of the future. It's irrational not to.
How irrational was it to expect that house prices would continue to increase for a few more years, and his income would increase, and his wife's income would increase? I'm not sure that those are so obviously bad predictions.
I object to the New York Times putting the Magazine online before I get it. In fact, I object to the whole Sunday-supplement-in-Saturday's-paper shenans.
I'm not going to read the article until Sunday brunch, after which I may add some informed comment to this thread. Until then, watch out.
24 - Really? More than once you've come in and(very nicely) pointed me to better and more researched framings of stuff I've been trying to say. I was making up a story that loaning practices have shifted to shaft customers. I'm wondering if I can categorize that whole shift from a previous practice of combating human denial (down payments, paycheck verification, turning down bad loans) to assisting and encouraging human denial (assurances it will be OK, secret fees, secret rate changes).
It makes me so sad that those initiatives are our best shot.
I'm wondering if I can categorize that whole shift from a previous practice of combating human denial (down payments, paycheck verification, turning down bad loans) to assisting and encouraging human denial (assurances it will be OK, secret fees, secret rate changes).
I like this.
I didn't really say "loaning". Of course I said "lending".
The last page was very interesting, connecting the companies failing, the kids happy in their neighborhood, and 8 months without a house payment. Read between the lines.
Got a NoD today. Joy.
California residents -- vote for the damn initiatives next week
Really? Out of something other than pure self-interest (my pay is likely to be cut if they fail)? Because I'm this close to thinking that forcing a real crisis on the state is the only way we're likely to see actual changes in the budget process, which simply has to be reformed. Still, self-interest will probably carry the day. It usually does.
That's been my thinking, Ari, although I'm a little insulated from direct self-interest (I'm not paid from the General Fund).
I wish I was going to live long enough to read all the memoirs of kids whose parents are going through all this right now. It would be interesting to see how it all turns out. Sadly, that's probably about 40 years in the future, and I have not lived my life in order to be an old man.
It does feel as if none of them deserves to be passed into law on the merits, yet the argument for voting them down isn't much better than nach Hitler uns. If I felt that Courage Campaign was going to put together a real campaign for a majority budget, I wouldn't hesistate to vote no all the way. Since I don't felt, I am would hesistating.
Has anyone seen polling? Is there even a chance they'll pass?
I have not lived my life in order to be an old man
This is not part of the Officially Narrated Minneapolitan Persona, as far as I've gleaned. Do please tell.
38: We're not paid from the general fund, either. But they're* going to cut our salaries -- or impose furloughs, I guess -- out of solidarity with the other state employees. On equity grounds, it's the right thing to do. On "please don't take my money, you worthless, held-hostage-by-Republican fucks" it's probably not. Anyway, some subset > 0 of the initiatives is going to fail, so we'll see what comes out in the wash.
* The Regents of the University of California, aka The Man.
"Sadly, that's probably about 40 years in the future"
I don't think so. The world economy is under extreme stress, and I don't think Geithner will be able to maintain the superglue and baling wire even long enough to get the insurance company bailout health care reform thru. I ain't feeling sorry for Obama, he could have looked to FDR or Truman rather than Reagan for a model.
So fuck him when the re-crash comes next spring.
The kids will have stories alright.
The article says 8 months in the house without a house payment. AFAIK, he has months more after receiving notice.
There are many modes of revolution. The bankruptcy bill and the refusal to pass cramdown (and Obama's lukewarm support)...well, all-in-all, I think a debtor strike is called for.
All-in-all, a debtor strike is always called for. Who will bell the cat?
I was handing over $4,000 a month in alimony and child-support payments. That left me with take-home pay of $2,777, barely enough to make ends meet in a one-bedroom rental apartment.
That is rough.
LizardBreath is right in 22. This is what killed him.
He is in a bad position, but if he loses the house, he can still rent something.
he can still rent something
Sadly, rental prices haven't really fallen, at least around here, although housing prices have. He's going to have to accept a significant drop in standard of living, I'd think.
Taking the house on the bet that he would continue to keep his job, his wife would soon get a high-paying job on which they would live, and the house he wanted to buy would increase in value, are none of them bad presumptions - especially when he had a cushion of money in the bank to keep buying groceries with for several months.
The point at which I lost sympathy was when it became clear that neither he nor she had sat down and figured out "What can we afford to buy given that what we are living on till I get a job is that cushion of cash"? And yes; when living under those circumstances, a Starbucks latte becomes a once-a-week treat not a daily allowance, and there are no beach houses or expensive clothes unless replacing for-work-only costume.
32 -- _The Great Risk Shift_? I haven't read it, I just like the title. No idea if it covers the change in risk-tolerance on the part of creditors (nascent thought; if the creditors go under when they discover that charging fees to bankrupts is not a sustainable profit plan, does anyone profit from that risk shift? Was it intentional?)
It's all _Late Victorian Holocausts_ to me.
According to the article, his take-home was $2700, and hers was $2400. The $2500 mortgage doesn't sound like the biggest symptom of the problem.
What he doesn't say is whether he's applying the money he's not using to pay his mortgage to his credit card debt. Eight months of that, even if he could only spare half the payment, ought to really help get out of the hole when the next turn of the wheel comes around. I suppose that's covered in the book version . . .
We were both building up grudges. "You can't keep second-guessing me," she told me angrily. "It's small-minded and petty, and it's not very attractive." I was beginning to wonder whether she had any clue about how money worked.
So, so familiar.
Ah yes, the book version. I hope he makes enough with the book to get things straightened out.
I do have sympathy for him, btw. But I think he took out a "reckless mortgage" (as he himself calls it).
he's not using to pay his mortgage to his credit card debt.
If he is foreclosed, will he retain any credit rating even if he pays down his cards? Does he have any credit anymore, and will he have any in the future (or 7 years), without a chapter 7?
Think like a businessman. Where's his upside?
What he doesn't say is whether he's applying the money he's not using to pay his mortgage to his credit card debt.
I wondered about that too. I'd assume he would be. I wouldn't have minded seeing something about how he and his wife have decided to cut out the clothing expenditures and the expensive groceries. Hate to say it, but I could see the marriage breaking down if she doesn't agree to that.
Longer 22: This guy cannot afford two wives.
32/24. Do you deny that banks denying loan applications deny human denial ?
12: The Irvine blog stories of living on the MEW make Mr NYT buying a house for lt 4x salary.
56: Good sell! call on the NYT stock.
Longer 22: This guy cannot afford two wives.
32/24. Do you deny that banks denying loan applications deny human denial ?
12: The Irvine blog stories of living on the MEW make Mr NYT buying a house for lt 4x salary.
56: Good sell! call on the NYT stock.
Longer 22: This guy cannot afford two wives.
32/24. Do you deny that banks denying loan applications deny human denial ?
12: The Irvine blog stories of living on the MEW make Mr NYT buying a house for lt 4x salary.
56: Good sell! call on the NYT stock.
It's hard to say without looking at all of their finances, but if they're $3000 in the hole a month, it's probably not the sort of hole that they could dig themselves out of by refraining from buying lattes or buying the store brand cheese instead of the nice cheddar. (cf., it's not someone's Netflix subscription that stands between them and financial solvency, etc.)
59: True, but even if they get out of the hole somehow, continuing with those kinds of expenditures, along with, perhaps, monthly cell-phone and cable tv bills, along with the clothing bills, is going to put them right back in it. I can't find it making any sense at all for them to think that since cutting those things out won't solve their problem at this time, there's no point in them cutting them out.
57 and 58 are redundant.
For another disappointing (?)debtor example, look to Richard Henry Lee 'Troubling Mantra: In Debt We Trust', NY Daily News.
57 and 58 are redundant.
Gosh! Really?
60: I suspect we are just going to disagree on this point, because it doesn't strike me that nibbling around the edges (or worse, blaming his wife for not nibbling around the edges) is going to help. (I mean, the guy had no idea what was in his checking account, yet $0.50 when he happens to leave the office past peak fare is his idea of being thrifty? $10 a month, maybe, if he leaves late every day?) They shouldn't be living beyond their means, but it's not at all obvious to me that eating cheap produce and cheese and leaving work late are going to do anything worthwhile (or something that wouldn't be negated completely by one overdraft fee), or that it's the gruyere or the rush hour fare that put them over the edge in the first place.
His furniture and house were falling apart after two years? Or was he just trying to find a metaphor for his financial situation?
Not that they shouldn't look at their overall lifestyle, income twenty pounds, expenditure 19 6, result happiness, and all that, but the specific examples he gives strike me as not representative of what is keeping them from financial security.
I'm glad you blogged this, Becks.
What I thought was most interesting about the article was the relationship piece. I kept trying to imagine getting into a second marriage -- with kids on both sides, yet! -- without having super-clear discussions about money and spending habits and what could be afforded. But if his account can be believed, they didn't have good systems in place for talking about that stuff before getting married, and once financial strain sets in it's hard for anyone to GET good at talking about money.
I think the article is pretty admirable in its forthright tone and relative lack of excuse-making, but it certainly left me thinking that the problem wasn't debt so much as lack of mature discussion and communication about mutual expectations and what was reasonable. It's not like failing to find a high-paying job immediately was unusual -- even in a good economy, a cross-country move and a reentry into the job market after years away are not easy to do.
Also, a really frightening level of passivity. If a bank ever even blinked in the direction of linking my checking account to a credit card like that, I'd be out the door so fast their heads would spin. With probably a few choice words for whoever was trying to sell it to me. Seriously, who signs up for that? Do they not have valid baloney detectors or what?
Sorta on-topic. I've been reading about the ability of the slope of the yield curve to predict recessions. It's uncanny. Whenever the yield curve starts sloping down, we get a recession. The only time it was wrong was during the run-up to the Vietnam War (it forecast a recession that never came). The only problem with it is that the lag between the yield curve can be really long. This time, it started signaling a recession 15 months before the recession actually started.
To me the fact that there's such a long lag make it even weirder. What kind of process can cause the yield curve to slope down, and then 15 months later trigger a recession?
(The yield curve is the graph of yields on Treasuries of different maturities. It slopes down when the interest rate on 3-month Treasuries is higher than on 10-year Treasuries. Normally, the interest rate on 3-month Treasuries is lower, presumably because your money isn't locked up for as long.)
Another mystery is that apparently it only works for the United States, and not other countries.
Also, I probably need better hobbies than reading about recession forecasting.
How many more years does this guy have making $120k? How many more years will the NYT be able to afford it? And what is so wrong with renting? He probably could have saved almost $1000 month by renting that house.
Also, I probably need better hobbies than reading about recession forecasting.
Nonsense. If anything you need to be reading more about recession forecasting.
It appears to me that this guy's bad decisions may have been motivated by misguided efforts to prove things to his former wife. As in: I can find another woman, I can buy a nicer house than you have, I can make our kids like me better than you. Divorce makes lot of people nuts.
If Zillow is to be believed his house was worth 550-600k at the time he refinanced so he could have sold and been fine.
Also according to Zillow his house is currently losing value at the rate of about 5k a month so the bank's delay in foreclosing is costing much more than the missed payments.
59 / 63: Sure, refraining from buying designer lattes and always taking the cheap train home won't get you out of a $3000-a-month negative income: they were going to be living on negative income until she got a job. But the attitude you have to have when living on negative income (I've done it myself once...) is to ration your luxuries - not to resolve to do without them entirely, even the tenement family in A Tree Grows In Brooklyn enjoyed the luxury of hot coffee - but to figure out what luxuries you can afford, and to stick to that - and everything else is "basics only, and only what we need".
66 is also right: neither one of them talked about the financial situation they were in until they were so far into the hole that talking about it gave them anxiety attacks.
LB @ 22: If his first wife had been employed at a salary comparable to his, and he'd had joint physical custody of his kids, that (at least plausibly) would have cut his child support to nothing. And if his second wife had been employed at a salary comparable to his, his problems wouldn't have been nearly as bad. The problem wasn't living one middle class life, it was having to live two middle class lives on one salary. [...] Shorter 22: Patriarchy hurts men too.
Shearer: It appears to me that this guy's bad decisions may have been motivated by misguided efforts to prove things to his former wife.
Witt: I think the article is pretty admirable in its forthright tone and relative lack of excuse-making, but it certainly left me thinking that the problem wasn't debt so much as lack of mature discussion and communication about mutual expectations and what was reasonable.
Yeah!
As an economics reporter for The New York Times, I have been the paper's chief eyes and ears on the Federal Reserve for the past six years. I watched Alan Greenspan and his successor, Ben S. Bernanke, at close range.Translation: he was gulping the Koolaid.
As for me, I had two utterly compelling reasons for taking the plunge: the money was there, and I was in love.Not so fast, Spunky!
But each of us would go through bruising two-decade-long marriages, and we felt that sweet spark of remembrance and renewal upon meeting again in middle age.She's cute. However, the phrase 'trophy wife' is wandering through my head.
Having separated from my wife of 21 years, who had physical custody of our sons, I was handing over $4,000 a month in alimony and child-support payments. That left me with take-home pay of $2,777, barely enough to make ends meet in a one-bedroom rental apartment.While I grant that DC has a very high cost of living, I also know that Silver Spring ain't exactly the Cheapoville of the DC area either. And if you're shelling out 4K a month in alimony (2/3rds of your salary!), if you have any sense at all you will be moving to Cheapoville.
"Who am I to tell you that you shouldn't do what you want to do? I am here to sell money and to help you do what you want to do. At the end of the day, it's your signature on the mortgage -- not mine."AHA! There's the tell on the con! There's always one (usually more) tell during the setup, and the suckers blithely pass over it.
My lenders weren't assuming that I was an angel. They were betting that a default would be more painful to me than to them.No, they were betting they could unload the crap loans on somebody else, leaving Sucker #1 (you, O economics writer) owing Sucker #2 (cautious investors seeking ultra-safe returns) and cutting Bob & Friends out of the middle except for collecting lots of grease on the transaction.. And as it stands, that trick worked, thanks to the effort and industry of an army of lobbyists who went out and bought themselves a shitload of congresspersons.
"Ed, the underwriters say that your name is on another mortgage," he told me. "That means you're carrying too much debt." The mortgage was on my old house, which I had turned over to my ex-wife. As part of our separation agreement, she accepted full legal responsibility for making the payments. But the separation agreement also spelled out exactly how much I had to pay each month to my ex-wife.Then you didn't do the divorce agreement right. You may well have deserved to be taken to the cleaners, but you could have, for instance, worked a deal to refinance Mrs. The First's house so only her name was on it, and you (and her!) got some cash. That would've been a win-win since you would've been out of her hair, and she would've been out of yours. You could have even have asked Bob to do it.
"Don't worry," Bob reassured me, saying what almost everybody else in real estate was saying at that moment. "The value of your house will be higher in five years. You'll be able to refinance."One more time! You could've refi'ed the first home at a low low low fixed interest rate and probably made an upfront profit off of spiraling house prices. Hell, Mrs. The First probably would have appreciated the cash cushion to protect herself in the event you lost your job. Or like, married a trophy wife. Particularly since I strongly suspect you had insisted that Mrs. The First be June Cleaver and so Mrs. The First probably had the same employment issues as Mrs. The Second. You could have used the cash you got for the refi to help pay for the trophy house!
Despite my nagging anxiety about the gamble that Patty and I were taking, I had whipped through the pile of loan documents in less than 45 minutes.I would bet dollars to donuts you're one of those people that uses your bully pulpit to lecture about returns to scale and left-handed widget makers and efficient markets and shit.
I had a bad feeling about what the A.T.M. would reveal about my balance, but I was shocked when I looked at the receipt: $196. We were broke. [...] We didn't have enough cash to cover more than a week's worth of groceries and gasoline.You can buy a hell of a lot of rice for 100$.
Patty had spent much of the two previous decades as a stay-at-home mother in Los Angeles.[...]"I feel as if I am finally at home," she exclaimed as soon as we moved into the house. She could settle down and do the things she had always been best at: making a new home, nurturing her children and loving me.Troooppppphhhhyyyy. Wife. As LB said, I am wondering what happened to the child support coming from Mr. The First, but I am thinking maybe Mr. The First had a good lawyer.
My fantasy was that Patty would become an ambitious go-getter. "This can really be an exciting new chapter of your life," I kept telling her.[...] Patty spent little on herself, but she refused to scrimp on top-quality produce, Starbucks coffee, bottled juices, fresh cheeses and clothing for the children and for me.You can buy a lot of pasta for 100$.
She regularly bought me new shirts and ties to replace the frayed and drab ones in my closet. She thought it wasn't worth agonizing over nickels and dimes.You made her a bunch of promises you couldn't keep to induce her to move east, and she bought it, since she wanted to remain a stay-at-home mom. She was willing to go along with the delusion that she would be other than she was. You basically promised her the easy life of a stay-at-home mom if she worked real hard for big bucks every day, and she promised to be a happy stay-at-home mom if you paid for it. You were a replacement part for Mr. The First, and she was a replacement part for Mrs. The First. True love!
We were both building up grudges. "You can't keep second-guessing me," she told me angrily. "It's small-minded and petty, and it's not very attractive."I'm guessing Mr. The First was exactly the same way, which is why they got divorced.
I was beginning to wonder whether she had any clue about how money worked.Do you have any clue?
We were approaching $50,000 in credit-card debt alone, and it was amazing how fast and how deeply we had dug ourselves in.I will repeat the line from SNL: 'Do not buy things you cannot afford.'
In the previous December alone, we charged $2,845 on the Chase card for Christmas gifts, food, gasoline, clothing and other expenses. The charges included almost $350 for groceries, $700 in clothes from J. Crew, $179 at GapKids and $700 for airplane tickets for two of Patty's children to visit their father in Los Angeles.Nickels! Dimes! Mere pocket change!
$1,600 to rent a beach house the previous year for us and all the children. Granted, the beach house was an embarrassing mistake. But given that Patty had landed a solid job, it seemed like an indulgence we could work off later.You forgot the previous indulgences.
Why had I tried to keep up the image of a conventional suburban family man, when nothing about my situation was conventional?Because, at heart, you're just as big a conartist salesman as Bob the Ecstatic Mortgage Broker. (I'll bet he is a member of a local congregation of the Church of the Powerball.)
How could a person who wrote about economics for a living fall into the kind of credit-card trap that consumer groups had warned about for years?Because you, of course, are Good Person and those other suckers are
"My inclination is to just raid my 401(k) account to pay off the cards," I told Bob. "I know we'd be paying huge taxes and penalties for withdrawing money before retirement, but it's not as bad as paying all that interest to the banks."Opportunity is a quiet, mousey person, who knocks on the back door at midnight and then scampers off...
"No!" Bob interrupted fiercely. "You don't want to do that. You'll be paying a basic tax rate of 28 percent, and they'll hit you with another 10 percent penalty. You'd be giving up 40 percent in taxes. There's got to be a better way."...disaster is an 18-wheeler crashing through the front window of your living room.
This really is an excellent summation of the last thirty years. Avoid (and reduce taxes) at all costs so that instead people can pay the taxes to the finance companies...who can then use the money to buy your company and liquidate your job!
The frosted-crystal shade on a beloved Italian floor lamp was cracked. The dog had gnawed the leg on her Biedermeier chair.I'd break out the violin but I've been too busy playing it for people with tough lives.
"You lied to me," she told me as I got coffee. "You said that what I saw on the outside was pretty much what you were. But you're completely different. If I had known what you were really like, I would never have come out here."She's got a point, dude! There's no blaming her for doing what you promised her she could do. The whole Pygmalion thing is kind of gross.
We started listening to each other.If only you had done that in the first place.
Edmund L. Andrews is an economics reporter for The Times and the author of "Busted: Life Inside the Great Mortgage Meltdown," which will be published next month by W.W. Norton and from which this article is adapted.Maybe you'll get paid a bunch of money for the Hollywood-style confessional. Purged of your sins, you can go back to explaining how we how should cut taxes, reduce the deficit by cutting spending and 'fixing' Social Security and Medicare/caid, and trust the markets. A platform McArdle can endorse!
max
['Binge. Purge.']
p.s. I may be being overly harsh here... on Mrs. The Second. It took some guts to change coasts.
max, did you just ... 'fisk' the article? Ah, takes me back.
Zillow is never right, IME. Grossly overstates, in our area at least.
I saw an ad yesterday on the Metro, comparing the costs of payday loans, and two other short term cash solutions, with bouncing a check, and concluding that bouncing a check is the most expensive way to get cash fast. I didn't look at what it was an ad for -- seemed a sign of the times.
||
DC folks, the Dragonboat Festival is today. See you there?
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I didn't look at what it was an ad for
It's apparently a sly ad for payday loans masquerading as a PSA.
The ads direct you to Econ4U.org, which is run by something called the "Center for Economic and Entrepreneurial Literacy". Turns out this is a front group for a PR firm, Berman & Co., that represents a number of large corporate clients.
So he put down a $50k down payment, but then took that out in the refi. And then maybe another $25k in free rent. So he's made money on the whole transaction, although I assume he'll have to pay taxes on the free rent.
I was handing over $4,000 a month in alimony and child-support payments. That left me with take-home pay of $2,777, barely enough to make ends meet in a one-bedroom rental apartment
Pardon my ignorance on this, but is that $4,000 post-tax? So it's just more than half his salary going to the wife and kid? Is this sort of thing common?
I mean, I understand the child support being somewhat high. Kids are expensive and need to be paid for. But it just seems pretty incredible that someone can lose over half their income to a family that they already split from in a non-deadbeat sort of way. How do some people ever get around to more than one marriage if this is the case?
What I really hated was when the cheapest rent I could get was about $600 plus utilities (the town over would have been cheaper but that would have required owning a car), and I had to pay about 50% of the costs of my prescription drugs about $300/month. I think that left an extra $100/month, assuming that you got paid for your summer job. Most people expected to work for a judge or the u.s. attorney's office for free that first summer. I was also supposed to buy books and food. I actually didn't eat much. And I got some help from my dead grandmother. It would not have been possible otherwise. There really isn't cheapville in Davis. I bought some used clothes, but really I was starting to look bad.
But it just seems pretty incredible that someone can lose over half their income to a family that they already split from in a non-deadbeat sort of way.
I'm confused by your formulation here. Aren't the kids still his family?
84: Yeah, sorry, that sounds quite different from what I meant. I really just meant that the family seemed to split in a semi-agreed-upon fashion, so the rates of payment should probably be determined from a reasonable "cost-and-contribution from both sides" sort of way.
The kids are certainly still his family, and that'll be a pretty big cost. I just didn't see how the kids could sustainably be like 1/2 of his income, because if they were, why would anyone ever have kids? (Unless he's including college costs in that bill or something, which would blow this argument out of the water)
I also hadn't really read the article, so I didn't notice there were more than one kid (I assumed one younger kid for some reason). And if he was married for 21 years, they're probably older and more expensive, so it makes more sense.
I dunno, I don't really have any frame of reference for this. I just saw more than half the money gone and went "Whoa, really?". I mean, seriously, how do other people ever end up getting married multiple times if this is typical? It seems unaffordable to even have a 2nd family at this rate. If this isn't typical, what could have happened to make this particular person's alimony and child support payments such a large percent of pay?
But the attitude you have to have when living on negative income (I've done it myself once...) is to ration your luxuries - not to resolve to do without them entirely, even the tenement family in A Tree Grows In Brooklyn enjoyed the luxury of hot coffee - but to figure out what luxuries you can afford, and to stick to that - and everything else is "basics only, and only what we need".
Sure. What I'm resisting is not sensible budgeting (been in graduate school for a few years, etc.), but the guy's contention that he is being responsible in his attitude toward debt because he skips a $7 lunch at work, but she's not, because she buys organic produce. Their problems are bigger than that, and would require a serious scale-back in lifestyle and attitude towards money.
I'm also resisting the line of thinking that would sneer at the tenement family for having hot coffee, when really, they shouldn't be using any more gas that it would take to get it lukewarm if they were truly frugal. It's the wrong kind of thinking.
82: Two kids, I think. Alimony is a little surprising, esp. if she's remarried, but one does have to support one's kids.
But it just seems pretty incredible that someone can lose over half their income to a family that they already split from in a non-deadbeat sort of way. How do some people ever get around to more than one marriage if this is the case?
The children he fathered are still his children. You can't really "split from" your own children without being a deadbeat. Which this guy is not.
Zillow is never right, IME. Grossly overstates, in our area at least.
For our area too (the area we're about to move to, that is). The prices seem to be based on pre-crash sales.
85: If she'd quit her job to raise the family, he's essentially reimbursing her now for his career. I expect that figure is including college expenses.
87.1: Absolutely. But still, a number greater than half of salary, by a fair bit, just struck me as pretty surprising. I'll happily admit that I've got not idea of costs though.
88: Yeah, I thought about that too, and that makes it a bit more understandable. I couldn't really figure out what sort of income that alimony/child payments assumed the ex-wife would make, but it certainly seems reasonable to expect a lower contribution from her since she gave up umpteen years of career development for the family.
If the $4k includes college costs, everything makes a lot more sense to me. No argument there, that shit's expensive. In which case, what's he doing not waiting the 3-4 years until his kids get out before locking himself into a house payment?
And I got some help from my dead grandmother.
Spooky.
In Illinois, child support is statutory based on number of kids -- 20% of income for 1, 28% for 2, 40% for 3 (give or take) -- though the court can deviate if circumstances warrant. It's not just costs of schools, activities, etc., but housing them too -- for example, sans Rory I wouldn't even consider staying in my current house, but I suck up that extra housing cost for her benefit. Um and pass along a portion of that cost to UNG, who pays a modest amount of child support. So part of that $4000 is dad paying for his kids' housing costs, part (as Cala notes) is reimbursement for wife sacrificing her career for the family.
Divorce is financially painful and yet this guy is not the only guy ever to spend beyond his means in the wake of it -- which I think is certainly a psychological "I'm going to prove how much better off I am," which I think men are particularly vulnerable to as the expected breadwinners.
Alimony is a little surprising, esp. if she's remarried, but one does have to support one's kids.
Yeah, these things do generally get drafted to terminate alimony upon remarriage I thought. But as part of a comprehensive property settlement, maybe he got more of the retirement plan in exchange for her getting a fixed number of years of alimony. Or it may be characterized as unallocated family support which has tax implications that I don't actually understand (alimony tax-deductible, child-support not).
So is the economic recovery plan for the Times to become all "Modern Love" columns all the time?
Child support, in my totally ex recto opinion, is responsible for 90% of the acrimony in post-divorce rearing of children.
The other 90% comes from the underlying issues that led to the divorce in the first place.
Presumably there will be more detail in the book. I don't think that his teenaged sons are in college -- at least at the start of the tale. He buys the house in Silver Spring in order to be near them, and it seems they still live at home with their mother. One also wonders if the new wife is paid child support for her children. Or perhaps she waived it in order to move with the kids to the other end of the country? CA is not generally keen on allowing parents to move out of state in such circumstances.
CA here is the fine state of California, not the ruggedly handsome Mr. Oudemia.
I was thinking the terms might have him contributing to a college fund on top of living & feeding expenses.
98: Ah yes! Entirely possible! Of course I have next to no idea of what I speak. Where is will?
Issues related to the integration of new partner is worth a healthy 90% as well.
91, 92: Ok, that's pretty helpful. I didn't know that alimony was tax-deductible.
I did a quick calculation, assuming 30% of post-tax income going straight to the kids for child support (which is certainly fair, especially given the very real housing problems of the person who has to carry just as many bedrooms as the pre-divorce couple in order to house all the sprats).
Once you take that out, the remaining post-tax, post-kids income is pretty much being split 60-40 between the ex-husband and ex-wife. When you count in the tax-deductibility of alimony, a bit over a quarter of that money going to the wife would not have gone to the husband anyway (since it would've been eaten up by extra income taxes), so the post-tax, post-kids split is actually something like 2/3 for him, 1/3 for her. That sounds within the realm of reasonable. It's just kind of shocking how everything adds up to produce this incredible final number.
And with that, I'm off to brunch with my own undercover partner (who finishes law school tomorrow! in the worst job market in decades! lucky her!).
||:
A walk for breast cancer is going by my house right now. (At least I assume that's what it is, from all the pink.) Hundreds of women decked out in workout gear, all walking by my house at a slower pace than I walk to the grocery store. Sweatbands, water bottles, the whole nine yards. To stroll down the street. So odd to watch.
||>
Oops. Make that a pause, rather than a repeat.
I do tend to think that McM is correct that "status-income disequilibrium" may have contributed to this. However, it does not really engender much sympathy in me as I think the same phenomenon contributes greatly to the fawning sycophancy of political and economic journalism. Basically what max says.
And while searching to find the original source of the term I came across this great example (from just before the crash):
"'Face it, we have no status,' says an Am Law 100 [i.e., one of the one hundred most profitable law firms in the U.S.] partner of the pecking order at his sons' private school. 'We go to these school functions, and this well-heeled group looks right through you. They won't give you the time of day. You're just one step ahead of the doorman.'"
Part of the child support problem is that it's significantly more expensive to raise kids in two cooperating households than in one. I said above that his problem was that he was trying to maintain two middle class lives on one middle class salary, but in a real divorce that's almost inevitable: in a two parent, two kid house, if one parent moves out, the household expenses are barely going to drop. Housing stays the same, utilities stay the same, food goes down a little, but probably not a whole 25% unless there's a real effort to make that happen, clothing and entertainment the same. So the custodial parent and kids, if they're going to maintain the same lifestyle, need almost all the income they did when the parents were married. And then the non-custodial parent needs to live someplace, and not just a studio apartment, but someplace where the kids can come stay, and needs money to live on as well.
Divorce with kids is almost inevitably going to be a serious standard of living drop on both ends, if the pain is shared fairly, which is part of the reason why there's so much animosity about it.
82
His base pay from the NYT was $120000/year or $10000/month. So alimony and child support was 40% of that. It appears according to the Maryland child support guidelines for three kids that about $2000/month was child support leaving the other $2000/month as alimony.
Taxes (federal, state, payroll) on $120000/year for a single guy will be roughly $30000/year or $2500/month. So his remaining income should have been around $42000/year or $3500/month.
The difference from the $2800/month he reports is $700/month or $8400/year. This is 7% of his base salarly. The guy had a 401k, perhaps he was contributing about 7% of his salarly and not including this as part of his take home pay.
Which is why people should just divorce without the kids. Much easier all round.
Divorce with kids is almost inevitably going to be a serious standard of living drop on both ends, if the pain is shared fairly, which is part of the reason why there's so much animosity about it.
Not just anger, but grief and shame and the whole bucket.
3000 sq ft on 3 acres when I was ten, such wealth not to be seen again anywhere in the split family in 45 years. It was too much house, and contributed to the breakup.
Optimism and miscalculations can provide tragedy for generations, reversing social mobility, creating family cultures of failure that can manifest in any variety of ways. Overcaution or profligacy, oh just all sorts of pathologies.
This "recession" is going to destroy a lot of human capital. Can't hate Republicans or oligarchs enough.
(I just realized that Weeds, about a widow, is also about downward mobility.)
107 - I'm guessing there may also be deductions for employee contributions towards employer-sponsored health care plans, other insurance programs, etc. Much of that 7% could have been going there instead of a 401(k).
Divorce with kids is almost inevitably going to be a serious standard of living drop on both ends, if the pain is shared fairly, which is part of the reason why there's so much animosity about it
I will say, though, that I've been surprised to find myself maintaining basically the same lifestyle, even with the paycut from going part-time. Still can't quite figure out where all the waste was.
111: The waste I believe was ugly and naked.
111: IIRC, which I may not (that is, I remember enough to say what I'm going to say, and to have a vague sense that there were changes over time that make it wrong) UNG wasn't working for pay for at least some of the time before the divorce. If I've got that right, I'm not surprised that his moving out wasn't a major financial impact. (And if I'm wrong, and he'd started salaried work before the divorce, I figure you guys had nonetheless stabilized on a lifestyle that only relied on your income, and his was gravy.)
Oh, wait, paycut from going part time. Guessing about law firm pay structures here, and also guessing that you went to 80% rather than further down, did that cut your salary more than ratcheting it back to a couple of years ago? If your take home now is at a level that was enough two/three years ago, it makes sense that readjusting wasn't too painful.
He was salaried at least a year before I filed, maybe two. And yet, we had zero savings when I filed. Now I have actual savings, and buy myself nice things when I feel like it. I suppose not paying for tremendous amounts of therapy (couples and solo) is a big chunk. But my sense was that a lot of small luxuries (lattes, lunches) really did make a noticeable difference.
$700 for airplane tickets for two of Patty's children to visit their father in Los Angeles.Ouch. Makes sense of course--you move across country, you pay for the kids to see Dad---but it's gotta sting, especially when Mr.TheFirst doesn't seem to be making another other financial contributions to their upbringing.
At some level, it sort of makes sense that divorce is going to cause this much financial pain. Marriage has always been, in large part, about two together being more economically advantageous than apart. If, once married and reproduced, a couple falls out of love, it makes much more sense economically for them to maintain separate lives within the same household--both looking after the kids and making their usual respective contributions to the raising of those kids. It's a route considered anathema given our general conception of marriage, but it also strikes me as potentially less destabilizing.
But my sense was that a lot of small luxuries (lattes, lunches) really did make a noticeable difference.
Yep. I took a huge pay cut last year, and I've been surprised at how low-impact it's felt. Now, I finished paying off debt the same month my income dropped, and Buck's making a little more than he was, but there's still a sizable difference in cashflow, which has been surprisingly easy to budget around. I have the sense I must have been frittering an awful lot of money on inconspicuous stuff that I wasn't terribly invested in.
116: You know, economically it makes some kind of sense, but I've seen that attempted a couple of times, and both times there was a palpable miasma of seething hostility in the house. I think if you're going to stay together for the economics of it all, you're emotionally better off (not well off, but better off) not admitting that the marriage has ended.
I agree most emphatically with 118. Most emphatically.
If the new wife moved, her child support might be essentially eliminated by her paying for the transportation costs.
In Virginia, a court cannot require one to pay college expenses.
Cala is correct that child support is the root of much acrimony. Both parents have to have an appropriate place for the kids. Both parents end up spending money on the kids.
People get into fights over visitation simply to protect the numbers of days that they get with the kids because it impacts money. Many would be much more flexible without the money issue.
Relocations are my least favorite cases. Nasty criminal cases are often easier.
Relocations are often necessary. Yet, if the relocation is allowed, one parent's ability to be a participant in their child's life is substantially eliminated.
The most important time with your kids is the every day time. Getting up. Going to bed. Eating meals. Being at their practices. Doing school work with them. Making them bring you another glass of wine.
In Virginia, a court cannot require one to pay college expenses.
The real screw of this is when a college's financial aid calculations are unable or unwilling to account for this. I have one friend who financed her entire undergraduate program with expensive private loans, and another who alternating between semesters at school and working to make money for a decade, both because their respective noncustodial parents were wealthy but not contributing a dime.
Financial aid is such a crazy system.
Byt, many non-divorced parents do not pay for college.
It was too much house, and contributed to the breakup.
My childhood, too. Yet it means so much to my dad to have given us that house. It makes me sad.
122: I knew various folks with this problem, but they solved it by moving out and working for a year -- at which point they were adults responsible for their own damn selves and their parents $$$ wasn't used for aid calculations. This worked at least in MD.
125: As my brother learned to his sorrow, it didn't work in New Jersey. He had to wait until he was 25 before he could go to college.
111
... Still can't quite figure out where all the waste was.
I guess people react differently. When I got laid off one of the first things I did was figure out exactly where I had spent my money for the previous 3 years. But then I find working with numbers comforting.
But then I find working with numbers comforting.
When my sister and I were teenagers, my dad went through a phase where he would use our Wal-Mart receipts to figure out how much money our household had spent on various items each quarter. Not really because he thought we should be spending less, just to know where the money was going. He then would drop these figures into conversation for the next several days. "We spent $34 on tampons this quarter!" Uh, thanks dad.
128
Slowly. This is not a great time to be an unemployed 50 something professional. One potential employer is paying for me to get a security clearance but was rather noncommittal about what if anything they would offer me if and when I get one. And the fact that I could sort of decide I've retired has reduced my motivation a bit.
I guess people react differently. When I got laid off one of the first things I did was figure out exactly where I had spent my money for the previous 3 years. But then I find working with numbers comforting.
And, in fact, I did. Ran every conceivable spending report on Quicken, pored over statements, engaged in tearful shouting matches with UNG (pre-divorce) over how it was possible that we'd added a full income and hadn't gotten an inch closer to financial security. Hell, I even (eventually) harbored angry suspicions that he must be squirreling it away somewhere -- but I found no sign of that or any clear, unreasonable expense. Maybe if I went back now, with a clearer and less emotional head, I'd make more sense of it. But it hardly matters anymore. Still, I can totally understand how the article guy found himself so far in the hole without noticing -- it can creep up if you're not paying attention.
131: Huh, that is weird. I admittedly never tried too hard to figure out where I was saving the money, but I'd assume that it'd show up if I put in the work.
(I had a funny relationship with money when I was in the Peace Corps -- all the volunteers got paid the same, but people stationed in the city had stuff to spend it on. I was out in the woods and had a grocery shopping bus trip once a week, and a bar I could bike a couple miles to but didn't most nights, and no place else to make a purchase. So my salary tended to accumulate, and then I'd go into the city for long weekends and spend like a sailor; buying drinks for people, paying for the groceries to make dinner for a bunch of people at the house I was staying at, and so on. I had a tendency to come back after weekends like that and think "I must have lost a bunch of money, I can't possibly have spent that much." And then I'd go through the weekend in order, counting up expenditures, and at the end of it would realize that the pocketful of change I had left was exactly as much as the amount I should have left.)
I admittedly never tried too hard to figure out where I was saving the money, but I'd assume that it'd show up if I put in the work.
I think the problem was I was always looking for some big splurge. There really weren't any. Or not enough, anyway, to explain away an entire second salary.
One potential employer is paying for me to get a security clearance but was rather noncommittal about what if anything they would offer me if and when I get one.
Once you have it, it's yours, which might make finding similar work easier.
Many would be much more flexible without the money issue.
Right. If Dad is paying $900 a month, and the kid needs new shoes, who should buy the shoes? If Mom buys them, then Dad never gets to do things like buy his kid new shoes; if Dad buys the shoes, that's on top of the child support obligation which can build resentment.
If Dad is paying $900 a month, and the kid needs new shoes, who should buy the shoes?
In our case, any new shoes (or clothes or books) that Dad buys stay at Dad's house. I buy the new shoes that she gets to wear when she's with me. Now, it does make sense to me that there is a basic supply of stuff at both houses, so shoes etc. need not constantly be schlepped back and forth. And it hardly seems so unjust for Dad to buy new shoes, regardless of child support, since I mostly conceive of child support as covering basic housing costs (mortgage/rent, utilities). That Rory has to change into Friday's clothes before I pick her up on Sunday so that [gasp] clothes that Dad bought don't wind up at my house seems horribly awkward and just a little absurd, but I am reasonably confident this is not a norm.
130 - Shearer, I'm not sure if this is helpful given your location, but when I was in the DC area doing at least vaguely similar work to what I believe you're looking at, having an active security clearance was basically equivalent to guaranteed employment. Granted, this was 2000 to 2004 and therefore not an exact analogue, but I can't help but think it'll be helpful for you even if your prospective employer doesn't have an immediate use for you/it.
132:
I'm a current PCV and my cashflow is pretty much exactly how you describe it here. Or rather, I have places I can spend money in my village, but the grandmothers end up giving me so much free food that I have no reason to spend money on anything substantial. So it all ends up getting burned on weekends visiting other volunteers.
IIRC, your post was somewhere in the pacific, right LB?
134 137
Yes I was thinking along those lines.
76: max, did you just ... 'fisk' the article? Ah, takes me back.
Well, no, actually, what I did is what I usually do when I've kinda lost my temper. Many years after I started the practice some person named Sullivan, I believe, came along and dubbed the practice 'fisking' like it was some freakishly new concept. These kids these days, I tell ya.
86: but the guy's contention that he is being responsible in his attitude toward debt because he skips a $7 lunch at work, but she's not, because she buys organic produce. Their problems are bigger than that, and would require a serious scale-back in lifestyle and attitude towards money.
See, I saw the article quoted on DeLong's blog with a mention of the writer as having 'moral courage'. I didn't read it; then I saw it on Yggles blog. Then I saw it here and started to read the comments, saw Shearer's link to McArdle's post and read that. Everyone was going on about how brave and wonderful this dude is, so then I read the article. While the man has clearly got problems, in no way is he in hell, and in no way do I see any demonstrations of moral courage. Rather the opposite. In fact, the entire article sems to be written in the Key of ME!: utterly self-centered first person narrative. Yet, weirdly enough, everything that happens in the article happens TO him, but he doesn't seem to do anything other than remain a passive(-aggressive?) moral agent.
The guy put a lot of effort into getting himself in very very deep, and he was determined to drag as many other people in as he could. He says he's 'like a crack addict', but it doesn't seem to occur to him that he's not like anything, he's just an addict. The whole thing sounds similar to the buildup in the life story of a addictive gambler, except we don't get the part where he sucked it up and went to the 12-step group. So I am not really seeing moral courage even though he is obviously somewhat impressed with himself.
Unfortunately, I fully expect the tsk tsk reaction followed by lots of noise about how it's OK, he deserved that but he's one of us, so we'll take care of him, unlike those deadbeats who work for, say, GM.
105: However, it does not really engender much sympathy in me as I think the same phenomenon contributes greatly to the fawning sycophancy of political and economic journalism. Basically what max says.
McArdle digs the torture; McArdle digs saving the bankers. McArdle cries real tears over people who live in DC and write about economics and she knows because, darnit, it's just not fair that writers only get paid 120K a year, because they can't maintain their middle-class (!!!) lifestyle.
Q: 'It's such a shocking surprise... how DID we get into this huge financial mess???'
A: Uh, we're ruled by mental and moral midgets?
max
['I'd have had a lot more sympathy for the SOB if he'd bothered owning up to anything important.']
140 is important in that it highlights what (to some) qualifies as moral courage: Revealing personal financial details in the pages of a major national news magazine.
Americans don't feel comfortable talking about their money, let alone their debt. This is particularly true among socially upper class people, which NYT journalists are likely to be.
I firmly believe that at least 15% of the human cost of this meltdown could have been avoided if more people had known, bluntly, how financially stretched their friends and neighbors were -- to the dollar, not just "I'm feeling poor" -- and what creative and illicit solutions they were resorting to to keep up the image.
116, 118: A couple I know, but only slightly, got divorced because he had a serious gambling problem & had spent their combined savings at the racetrack. But once she could garnishee his paycheck for child support, they went on living together.
I wonder how they're doing... they both had middle management jobs with Big 3 auto makers.
I should mention that I laughed pretty hard at this: it must be a cosmic accident or something. Asteroids. Dinosaurs. Solar flares.
My security clearance is personal to me -- doesn't depend on my employer, and when I switch employers this summer, it won't be affected. A bunch of folks I work with, though, had clearances that had been obtained through their employers. And when they switched jobs, poof: no clearance. I have never looked into the arcana of how it all works, but this is the sort of thing you might keep an eye on.
105 -- It's so quaint that someone would ever have thought that partnership in an AmLaw 100 firm would carry some real social status. One might be (and is basically guaranteed to be) in a pretty high income group (top .5% min), but that money comes from working. In a supporting role.
I firmly believe that at least 15% of the human cost of this meltdown could have been avoided if more people had known, bluntly, how financially stretched their friends and neighbors were
Or how much of the lifestyle was financed on credit. It's hard not to keep up with Joneses, but it might be easier if we knew they couldn't afford it either.
136: That Rory has to change into Friday's clothes before I pick her up on Sunday so that [gasp] clothes that Dad bought don't wind up at my house seems horribly awkward and just a little absurd, but I am reasonably confident this is not a norm.
I dunno, growing up I knew multiple kids whose divorced parents insisted on arrangements of this kind. Awkward and absurd, certainly, but it seemed to represent one way in which acrimoniously divorced parents could avoid totally freaking out at each other about who should be buying stuff for the kids. (Inevitably they found other stuff to freak out at each other about, though.)
I didn't have to worry about anything like that, because my own divorced parents set some kind of all-time record for lack of acrimony. I'll always be amazed that such a thing was possible.
138: Hey, PCV! I was in Samoa, 93 and 94. Where are you and what are you doing?
(Further to 147, I'm pretty sure it was always one parent or the other who really insisted on such an arrangement, with the other one going along with it to avoid freakouts, as you suggest it is in your case too.)
146: I always wonder about this -- we seem (while doing just fine) to be spending less than people who I think are unlikely to be making more. I'd love to know whether that's living on credit on their part, or incompetent shopping (Unfogged: born to pay full price!) on ours.
Re the California initiatives: the crisis occurs whether they pass or not. It already is occurring. The question is how deep it is.
I think the state needs a constitutional convention, and IMO that's what politically active folks should be organizing to do on the local level. But there's the problem of getting through the next 18-24 months without overly much damage. Also, Prop 1A introduces several reforms to the budgeting process within the existing constitutional framework.
(Unfogged: born to pay full price!)
Oddly enough, I just bought a turtleneck and a jacket at a sidewalk sale, and I think the guy at the register gave me one basically for free. (The table didn't actually say how much the turtlenecks were, but I'm willing to bet they were supposed to go for more than $10.)
118: Oh, I'm sure, I'm just wondering if it would easier if it was more of a norm and less of a crazy thing to do.
I do agree that if more people were willing to talk about their financial disorganization, more people might be able deal with. I can be terribly disorganized, and I'm always terrified of asking anyone for help or advice b/c it's so acutely embarrassing when everyone seems so completely on top of things. It reminds me of the impostor syndrome that so commonly plagues women in science.
141: 140 is important in that it highlights what (to some) qualifies as moral courage: Revealing personal financial details in the pages of a major national news magazine.
On this basis, I announce my support for the No Pundit Upper-Class Person Left Behind Act, to institute mandatory testing to improve the understanding of moral standards. NB: not actually aimed at an improvement of said standards, merely improving the grasp of what those standards actually are.
This is particularly true among socially upper class people, which NYT journalists are likely to be.
Maintaining privacy is perfectly understandable. Going in the whole for 50K and then covering it up and then doing it again to maintain an illusion is just goofy.
I firmly believe that at least 15% of the human cost of this meltdown could have been avoided if more people had known, bluntly, how financially stretched their friends and neighbors were -- to the dollar, not just "I'm feeling poor" -- and what creative and illicit solutions they were resorting to to keep up the image.
Absolutely. Part of the whole scam; the muckety-mucks were doing their best to downplay all that, and people like this guy had the moral courage to go along with it like meek and submissive poodles, until well after the horse had got out of the barn. (In the story, the part where he goes 50K down on the plastic and then gets the loan to bail himself out occurs in 2005, pre-bankruptcy bill. He could have said something to his readers.)
max
['Watch out for that tree!']
in no way is he in hell
The bill collectors start calling every morning at 8 am, he can't sleep for the stomach-churning anxiety of it all ...sounds pretty hellish to me.
I'm standing firm on the notion that he did a crazy, stupid, irrational thing in taking out that mortgage. I don't think it's true that he doesn't take responsibility for that, though. He says that nobody duped him, he admits that he and wife succumbed to "magical thinking," he speaks of feeling ashamed for trying to live a lifestyle he couldn't afford. What more do you want?!
I'm a bit baffled by your anger, frankly. While he obviously (as he readily admits) participated in the housing bubble/mortgage binge, he's not personally responsible for the whole mess, for god's sake.
Well, he is a financial journalist. I don't know how much housing market cheerleading he was doing, but there's a shot he's got more responsibility for the mess than Joe Foreclosure off the street does.
I too am baffled by Max's anger and seeming resentment.
... meek and submissive poodles ...
As someone presently negotiating with a view towards a standard poodle puppy, I resemble that remark.
As someone who foolishly let their retirement accounts drift up to 40% equities (having meant to keep them at 30%), I'll admit to some defensiveness when I hear things like "magical thinking" and "hoocoodanode?"
I'm not Paul Krugman. I took a couple of econ courses many decades ago and I read a lot, and I'm naturally skeptical, but it's damned hard to see the future. I was expecting the real estate thing to collapse, and I can remember telling someone about what would happen if the real estate collapse were to depress consumer spending. But I sat there watching the mutual funds go up 15%, 20% or more each year, and it was hard to say "I think I'll let all this free money pass me by."
A lot of what I was reading was saying 'this can go on forever." I didn't really believe it, but it's easy to think that having gone on several years longer than I expected that it would continue to go on another year or two. Or three. At 27% per year. That's a lot of money.
So I do have some sympathy for people who got caught. On the other hand, in my own defense, I'm still debt free and it was only 40% in equities, and nothing in real estate (except my house which I've lived in for decades and expect to stay in).
But on the gripping hand, I'm well and truly pissed at financial writers (especially people like Cramer) who were getting paid to pump the market so people like me would lose a lot and they would win a lot.
Not trying to speak for Max here, but I'm not seeing resentment. Withering sarcasm and exasperation verging on contempt, yes. Resentment? Where?
Huh. I took the rebellious step of taking a look at his archive listing filtered by the word "mortgage," and I have to say--I'm not sure he's that responsible for this mess. It's true e wrote a pro Bush tax cut article in October 2003; he seems to have covered criticism of Freddie Mac and Fannie Mae in late 2003 as well. In the fall of 2004 he wrote an article talking about stagnating wages and the pinch being felt by the middle class. This article from May of 2004 (just around when he was considering his own big adventures) seems to be exemplary: cautious and nagging in syntax (people are doing crazy things! never seen before! so risky!) while fundamentally encouraging in effect. (you too can do these crazy things!) This article from late 2004 first plays stenographer to Greenspans bland dismissals and then piles on the criticism from thinktanks and Goldman Sachs. His summer of 2005 articles seem quietly critical of Greenspan et al not backing up caution with action.
I think the take home message from his normal corpus is fairly realistic about the riskiness of the situation with some encouragement to partake in the gamble by focusing on the apparent winners.
I'm not sure that's his fault so much as the fault of the genre's conventions and our national bad habit of not knowing how to weigh risk; his own reporting on the riskiness is right there front and center.
Also, I was amused to note that an article about people in Southern California doing crazy things for investment properties was probably written while couting Patty.
Also, he wrote an article in 2005 detailing (and critiquing the presentation of) a Federal Reserve study on the discrepancy between mortgages given to black people and mortgages given to white people.
Ah, memories: "Bernanke Not Worried About Market Drop ", complete with a quote from Geithner about the US economy's resilience. March 2007. Nothing revealing about Andrews there, I don't think - just a foreclosed home on memory lane.
Poodle puppies have their place, but American Masculinity demands that sooner or later you'll have to have a real dog.
Skimming headlines, he seems to have done a lot of reporting on people in the Interior Department giving all kinds of favors to oil companies. Also reporting on oil company lobbying and the Bush admin not auditing oil companies as often as previous admins.
I was out in the woods and had a grocery shopping bus trip once a week, and a bar I could bike a couple miles to but didn't most nights, and no place else to make a purchase.
This is similar to my situation here. Nothing to buy (well, except books) and sixty miles to town. It was pretty easy living on a tiny stipend for six months, and I got very good at living frugally even when I would go on those occasional shopping trips. Then they hired me on for the summer. The same work, but now I'm getting paid real money. Remarkably, so far I've been able to keep to the same frugal spending habits, even managing to hold off on buying books, so I've already saved up a lot and will likely continue to do so.
It'll be nice to have that cushion when I go to school in the fall, although I suspect most of it is going to end up going to rent.
||
I have spent all day writing something that bores even me (despite my interest in the research behind it) and that there is no real demand for and which I am not halfway done with but which needs to be finished relatively soon, probably at the cost of the whole weekend, which is my last weekend here. I should have proposed to do something much more limited.
|>
140: See, I saw the article quoted on DeLong's blog with a mention of the writer as having 'moral courage'. I didn't read it; then I saw it on Yggles blog. Then I saw it here and started to read the comments, saw Shearer's link to McArdle's post and read that. Everyone was going on about how brave and wonderful this dude is, so then I read the article.
Max, you are not going to get me to read those other blog posts about this guy! So cut it out!
Seriously, I appreciate Max's willingness to be frank about his responses to the story and the way it's received.
Quit flirting, this is serious.
160-61: I am hypothesizing resentment as a potential motivation for the outpouring of "withering sarcasm", since I can't really see much of a motivation based on the article. I do agree with Max that there is no real moral courage in this article, it's a pretty standard confessional. The guy seems quite ordinary in his mix of standard human failings with a vague sense that he is immune to standard human failings.
so the post-tax, post-kids split is actually something like 2/3 for him, 1/3 for her. That sounds within the realm of reasonable.
It's in many ways an individual's choice as to whether they'll be a stay at home parent. Given that, I don't see why the working parent paying an additional one-third of their income after child support is taken care of is the right way to handle things. If you want to create flexibility for parents to move in and out of the workforce, or to stay out altogether, I think this should be handled through social institutions and not the divorce process. It seems like a different situation than child support.
It's in many ways an individual's choice as to whether they'll be a stay at home parent.
It's also in many ways a professional and economic benefit to a working person to have a stay at home spouse -- the years in which one partner works and develops their earning potential while the other does the support necessary to allow them to work unimpeded by sick kids and school vacations and grocery shopping and so on amount to a transfer of potential future earnings from the stay-at-home spouse to the work-outside-the-home spouse. Every situation's individual enough that you can't be sure of the justice without knowing the details, but some alimony doesn't seem to me to be presumptively unjust.
Thinking about it: resentment is subjective, and so are the potential reasons for it. Andrews does seem to have a sense of entitlement. But it's a pretty standard middle to upper middle class sense of entitlement -- the things he wants aren't outrageous, not Style-section stuff. Really, he just wants to live a pretty typical suburban DC middle class lifestyle and be a bit of a romantic protector / savior to an old high school sweetheart who he has fallen in love with. He's quite self-aware about the trouble his sense of entitlement to these things has gotten him into.
He could have lived differently and avoided all this -- rented, told his lover that he really couldn't support her and her kids economically (which I suspect would have broken up the affair), etc. -- but I find it hard to be annoyed over that given that he is clearly aware of this and doesn't make excuses.
Sort of to PGD's 176, but also based on an offline conversation with my dad: Part of my own reaction to this story is not on the human "This coudla been me" level, but on the coldbloodedly practical What should people with public podiums be saying now? level. In that way, I think he failed with this article, and the NYT in general has failed much more significantly. (Not hard to predict, given the "biting the hand that feeds them" phenomenon.)
I'd like to be seeing a great deal more in the mainstream and financial press that is not just postmortems, but actual autopsies, with very specifics who-did-what-when-why-to-whom and what we can do now to structurally avoid such events in the future. I'd also like to be seeing a wholehearted push for financial literacy among all levels of society, but especially among teenagers and newly marrieds. Why isn't some enterprising consultant out there selling "Magic anti-divorce financial communications counseling"?*
Also, you want resentment? If this is even half accurate, I'm plenty resentful about this:
At DeMotte, Mr. Goetz is bracing for a steep increase in a crucial overhead cost: the bill from the Federal Deposit Insurance Corporation, which is basically an insurance fund underwritten by banks.
Last year, DeMotte paid $42,000 into the fund. This year, because of failures in other parts of the country and particularly among national banks, that sum will rise to $500,000 or more.
Yo economist types, is this functionally true or is it selective reporting?
*Do not read this as a comment on the causes, prevention, or morality of any individual person's divorce.
that house he bought, the brick Fauxlonial box with the stop-sign-shaped "window"......ugly. he deserves everything that happened to him! and to have his children taken away!
what we can do now to structurally avoid such events in the future.
Have you watched that Moyers episode with Simon Johnson? It's good.
177:Yo economist types, is this functionally true or is it selective reporting?
It is my understanding, yes. I just read the blogs.
Yo economist types, is this functionally true or is it selective reporting?
The housing bill that passed last week included a massive increase in the FDIC's authority to borrow from Treasury. The FDIC has promised to use that additional borrowing authority to reduce the fees on community banks which have low risk levels (i.e. did not contribute to the crisis), and stretch crisis-related fees out over time so they don't create too large a burden during the recession.
I think the regs imposing large current fees across the board may have been a way the FDIC used to goose Congress to act. THe FDIC's promise to reduce them didn't include details, but if they aren't changed sufficiently there will be a huge outcry.
I sympathize with community banks in lots of ways, and think our finance system would ideally be regulated to reduce the size of the giant money center banks. But before you cry too hard for the community banks remember they were important in blocking mortgage cramdown.
Wasn't there a story recently that the FDIC had failed to collect fully from the bigger banks for a while? Or am I confused with some other ridiculous banking system story.
Also, I think I should throw away my California ballot since it's probably too late to mail it now. Four elections in just over a year - efficient use of funds, California!
176: Andrews does seem to have a sense of entitlement. But it's a pretty standard middle to upper middle class sense of entitlement -- the things he wants aren't outrageous, not Style-section stuff. Really, he just wants to live a pretty typical suburban DC middle class lifestyle
Perhaps the idea is that the pretty standard upper middle class sense of entitlement is a function of a junkie mentality according to which any normal person should be able to have these things, and will go ahead and have them even if he and his family can't afford it and ultimately become ill because of it. His only error was in supposing that the financial house of cards that had supported the delusion for so many people would remain in place.
I'm entirely sympathetic to Witt's call for suggestions about what we can do structurally to avoid these things in the future, but I also think that people need to make a change in their class-related expectations. I am putting this as mildly as I can.
It's also in many ways a professional and economic benefit to a working person to have a stay at home spouse -It's also in many ways a professional and economic benefit to a working person to have a stay at home spouse -
This is true. Alllow me to offer my services: I compulsively clean up after my cooking, which consists mainly of southern style breakfasts and sichuan or Pueblo style dinners. I can also bake baltic style bread, and am profiicient in the basic french sauces. I am the very model of a modern trophy husband.
181:PGD more current than I. Sigh I don't read enough blogs.
But the rage against the moneycenter banks and the administration(s) that are protecting them at the expense of us all is still justified. Goldman Sachs is taking advantage to grab marketshare, after having essentially driven the community banks from the mortgage markets. If locals are trying to prevent cramdown, it is because the market has re-opened for them.
President Obama for Goldman-Sachs. Buffett knew what Geithner and Summers and O had in mind.
I aspire to trophy husbanddom. It seems like a job I could do.
125: In California you can emancipate yourself, but I'm pretty sure that the girl I knew who did it had been abused, possibly sexually by one of her parents.
184: I don't like blaming individuals for widespread systemic/social failures. You don't have to go very far with your argument before it starts to look like the arguments the banks and investors use against bailing out homeowners ("we didn't make them take those loans! They should have been smart!").
His article is part of the process of changing social expectations and beliefs in the way you suggest, so he's starting to become part of the solution. Granted, as a reporter he didn't blow the whistle sufficiently, but that again makes him entirely typical.
But the rage against the moneycenter banks and the administration(s) that are protecting them at the expense of us all is still justified.
didn't suggest it wasn't.
It's also in many ways a professional and economic benefit to a working person to have a stay at home spouse -It's also in many ways a professional and economic benefit to a working person to have a stay at home spouse
sure, and in the old days when the marital division of labor was strongly backed by social expectations and institutions full alimony made a ton of sense. But now that it's more of a choice to stay at home, the
184: I don't like blaming individuals for widespread systemic/social failures. You don't have to go very far with your argument before it starts to look like the arguments the banks and investors use against bailing out homeowners ("we didn't make them take those loans! They should have been smart!").
His article is part of the process of changing social expectations and beliefs in the way you suggest, so he's starting to become part of the solution. Granted, as a reporter he didn't blow the whistle sufficiently, but that again makes him entirely typical.
But the rage against the moneycenter banks and the administration(s) that are protecting them at the expense of us all is still justified.
didn't suggest it wasn't.
It's also in many ways a professional and economic benefit to a working person to have a stay at home spouse...a transfer of potential future earnings from the stay-at-home spouse to the work-outside-the-home spouse.
sure, and in the old days when the marital division of labor was strongly backed by social expectations and institutions full alimony made a ton of sense. But now that it's more of a choice to stay at home, having the marital contract fully reimburse the stay at home partner for all the economic costs of their choice seems more questionable to me. Basically, the people who choose to stay at home now are getting substantial consumption value from their choice, so viewing it as all transfer to their partner and making it risk-free for them seems more problematic. But sure, it's a complicated question.
PGD and Linda Hirshman, sitting in a tree...
189.1: I don't like blaming individuals for widespread systemic/social failures. You don't have to go very far with your argument before it starts to look like the arguments the banks and investors use against bailing out homeowners
Absolutely, and I didn't by any means intend to be making such an argument. The guy's article unfortunately lends itself to an interpretation according to which he wasn't as much a victim as a willing participant, which is probably why some become impatient rather than reading it as a tale of woe.
I bet PGD just heard his creditors knocking at the door.
Link to Moyers episode mentioned above, for those who might be interested but not interested enough to track it down.
182 - Yeah. For what it's worth, that one seems to be directly Congress's fault rather than the FDIC or even the banks -- the FDIC's kitty was fully funded due to the extraordinarily low level of bank failures, so I believe the FDIC wasn't legally permitted to keep collecting money. Someone (possibly Calculated Risk) dug up some contemporaneous quotes from the FDIC saying that this was probably a bad idea, but Congress (shockingly) never got around to raising the limits or allowing for rainy day funds.
since I mostly conceive of child support as covering basic housing costs (mortgage/rent, utilities).
Both parents have to incur these same expenses. He has to have a room for her as well. Now, maybe, he doesnt have to live in as a nice a school district as the custodial parent.
Your food, clothing, and utlitilies should be slightly higher than his expenses. And, he doesnt have the same limitations on work that you do, since you have more child obligations. (ie he can work later hours and doesnt have to take off time for the kid.)
My kids have clothes in both places and the clothes end up going back and forth. We generally try to wash and exchange clothes, but stuff ends up in a hodge podge of places.
I'm entirely sympathetic to Witt's call for suggestions about what we can do structurally to avoid these things in the future, but I also think that people need to make a change in their class-related expectations.
And how. I was trying to get to this in my 141 and 177.22, but wasn't totally clear.
192: Yay Blume!
Why isn't some enterprising consultant out there selling "Magic anti-divorce financial communications counseling"?*
Witt?!?!?!? Why must you attack me like that?
177.22
We're now marking sections of comments off by the word number? That's going too far.
Conclusions: neb is a non-cheerful trophy househusband. Foolishmortal's culinary range is specific, but cleanly. PGD is opinionated, and dates a lot. Witt is circumspect. Max is not. McManus is mad at Obama.
eb is interesting and perpetually in transition, it seems.
189.1: I don't like blaming individuals for widespread systemic/social failures.
I do! I more than like it, I love it!
For this one, I blame Alan Greenspan.
204: Well, I should fucking hope not! A little frightening, that would be. NTTAWWI in its own way. I .. think.
(cue freaky thoughts of sports cheerleading teams jumping up and down for and against, on their respective sides, alimony and its abolition)
It's so quaint that someone would ever have thought that partnership in an AmLaw 100 firm would carry some real social status. One might be (and is basically guaranteed to be) in a pretty high income group (top .5% min), but that money comes from working. In a supporting role.
I know someone who did that and got a huge amount of status, but he's very active in the charitable world, was managing partner of his firm at one point and founded a mutual fund company, so he's rich. Rich enough to have given an endowed chair to a law school.
162: If the NYT could reference content like that, it might have a viable we business.
BG, there are plenty of status people in AmLaw 100 firms. They bring their status to the firm, not vice versa.
That's not completely fair. In certain venues, my position confers real benefit on the client -- most notably immigration court. There's almost a presumption that someone like me isn't going to be doing run-of-the-mill asylum cases for fakers, and so the judge is waiting to hear how deserving the client is of our help. (Long ago, I had a very embarrassing moment in DC Super Court arising from this sort of thing while standing in for a colleague on a pro bono case. I'm surprised to see that I haven't written about it on my little blog -- maybe I'll take it up over the next week.)
177
Yo economist types, is this functionally true or is it selective reporting
It is true that premiums are going up a lot. As others have pointed out this is mainly because they were too low for years. I doubt the small banks were complaining about that.
193
... The guy's article unfortunately lends itself to an interpretation according to which he wasn't as much a victim as a willing participant, which is probably why some become impatient rather than reading it as a tale of woe.
What's unfortunate about it? The guy got a loan which he isn't planning to repay that allowed him to live above his means for several years.
Excellent, eb's link in 196 leads to a transcript. Elizabeth Warren for stagemaster!
175
It's also in many ways a professional and economic benefit to a working person to have a stay at home spouse -- the years in which one partner works and develops their earning potential while the other does the support necessary to allow them to work unimpeded by sick kids and school vacations and grocery shopping and so on amount to a transfer of potential future earnings from the stay-at-home spouse to the work-outside-the-home spouse. Every situation's individual enough that you can't be sure of the justice without knowing the details, but some alimony doesn't seem to me to be presumptively unjust.
On the other hand the working spouse has been transfering current earnings to the stay at home spouse all along. So it is unclear that there is an ongoing obligation.
As for justice I would be tempted to try to look at whose fault the divorce was and adjust the settlement accordingly. I understand the practical problems involved so if that is out of bounds I would try to divide the income so that both parties suffered equally initially so as to give both parties an incentive to stay married.
177
... what we can do now to structurally avoid such events in the future. ...
Require 20% down. No teaser rates. Require disclosure of all fees. Get rid of fannie mae and freddie mac. Prohibit rating CDO pools.
in the old days when the marital division of labor was strongly backed by social expectations and institutions full alimony made a ton of sense. But now that it's more of a choice to stay at home, having the marital contract fully reimburse the stay at home partner for all the economic costs of their choice seems more questionable to me.
These are still decided individually, not globally; it's not automatic that the spouse gets alimony. It wouldn't make sense not to pay alimony to a stay-at-home mom because some other woman kept working after marriage.
On the other hand the working spouse has been transfering current earnings to the stay at home spouse all along.
Sure, but it's not payment (as in, it's probably household funds, not hers), and more importantly, the stay-at-home spouse isn't building up her (or his, but generally her) own career, so will have to overcome a long gap in her work history, which after 20 years could be significant.
I'd also like to be seeing a wholehearted push for financial literacy among all levels of society, but especially among teenagers and newly marrieds.
Along those lines, I'd like to kill marketing credit cards to underemployed college students.
I'd like to kill marketing credit cards, period.
Of course, I'd also like to abolish lottery advertising. And end nuclear stockpil--oh, the president's working on that? Delighted to hear it.
I also wanna pony but I'd hafta pay cash.
when the marital division of labor was strongly backed by social expectations and institutions
I know PGD is gone now, but seeing this again reminded me: It's really important to acknowledge that in many segments of society there is still immense pressure to continue this. Both on women to stay home, and on men to be "good enough" providers that their wives can stay home.
Individual choices are not made in a vaccum.
The Credit Cardholders' Bill of Rights is a big deal, I hear. It's been introduced in a few Congresses in a row, passed the House last year by a large margin, passed the House again this year by an even larger margin this year (Sandlin was the only Democrat to vote no, which might be totally unrelated to usury court rulings involving her home state), and Obama seems to be pushing for it, more than for cramdown anyway. I've seen it referred to as the most important consumer credit legislation since the truth in lending act. Who knows if it still will be like that once the bankers' affiliate committee Senate gets through with it. Last year I don't think they touched it.
Oh, wait, the ruling wasn't about South Dakota. South Dakota has just taken advantage of it for their usury laws. I have no idea why I follow credit card news, actually.
I'd like to kill marketing credit cards to underemployed college students.
They should learn, or we should teach them, not to succumb to the marketing. Honestly, the notion that people are helpless in the face of the marketing launched at them makes me squirm. Really? College students are admittedly not in the best of positions to judge things, and I know they're subject to an awful lot of peer pressure to keep up with the Joneses, which is a horrible amount of pressure that anyone would submit to in the absence of government regulation to control this preying upon them, but .... Yeah, let's go with some general financial literacy, then.
Both parents have to incur these same expenses. He has to have a room for her as well. Now, maybe, he doesn't have to live in as a nice a school district as the custodial parent.
Every situation is different, of course. Some arrangements make child support more or less appropriate than others.
My kids have clothes in both places and the clothes end up going back and forth. We generally try to wash and exchange clothes, but stuff ends up in a hodge podge of places.
Yeah, this makes total sense to me.
This thread has made me look in at Credit Slips, which I haven't read for a while. This is probably way more than you wanted to know about credit card securitization, Witt, but you did ask on some other thread.
As for justice I would be tempted to try to look at whose fault the divorce was and adjust the settlement accordingly. I understand the practical problems involved so if that is out of bounds I would try to divide the income so that both parties suffered equally initially so as to give both parties an incentive to stay married.
Believe me, you do not want to make it a legal necessity for angry, bitter people to argue over whose fault it was.
As far as dividing the pain equally, that's more or less the way alimony is designed to work. It's rarely a permanent thing; more typically a way to get the formerly at-home spouse a chance to get back on her feet and into the workforce. The point of child support, of course, is to try to spare the kids the suffering.
Let's not regress on divorce.
He doesn't make much money, only five thousand per
Some judge who thinks he's funny says, You'll give six to her
The man says Judge, what if I fail?
He answers Bud, right into jail!
You'd better keep her, you'll find it's cheaper
Than making whoopee.
Believe me, you do not want to make it a legal necessity for angry, bitter people to argue over whose fault it was.
Di, don't argue with Shearer. I do have a question: as you probably all know, I've never been married. Are married people who split up more likely to be angry and bitter over it than non-married people who split up?
That answers itself, doesn't it?
230: You're right, you're right. I know you're right.
I'm only one data point, and have certainly been plenty angry and bitter over splits with non-spousal partners. I think the divorce process and particularly the fighting over how to divide finances exacerbates the anger and bitterness quite a bit. I imagine it is possible that splits are less acrimonious were there is nothing to fight over. I think kids, sadly, can also contribute to the lingering bitterness because co-parenting means that even by divorcing that jerk of a spouse you still can't get him out of your life.
231: Of course. Having kids means the relationship doesn't end, and that may well suck (I mean that among some couples the divorce is not awfully acrimonious, so the dual childraising relationship doesn't suck as much). On the financial end, of course there would be anger and bitterness if things were felt to be drastically unequal going in.
They should learn, or we should teach them, not to succumb to the marketing.
And that so far leaves the average college senior with $3K in credit card debt, last I checked. The colleges are often active partners with the credit card groups, which to me seems extra heinous given the colleges' role in loco parentis. There's teaching your children well, so to speak, and then there's putting the loaded gun on the table and saying "well, I told them that they weren't supposed to shoot each other, perhaps we should have some general gun safety education."
On the financial end, of course there would be anger and bitterness if things were felt to be drastically unequal going in.
I suspect that alot of people see drastic inequality whether it's there or not. As so many have noted above, divorce is almost inevitably a financial hit and when you are reeling from that hit and looking for someone to blame...
233: I don't know what to say. Should college students be required to have parental co-signers to be approved for credit cards? There'd be something about the age of majority or something, wouldn't there? Age 21? Age 18? What do you think, age 18 seems too young to be responsible with credit. 21, then?
Or maybe just a so-called charge card, like American Express (which I think doesn't carry an ongoing balance) or basically a bank Checkcard, that's paid off monthly and can't accrue interest. Until age what?
The ideas I've seen mostly involve better labeling laws. This applies to much more than marketing for college students, of course.
Not to speak for Cala, but I think her main concern here is less with imposing new restrictions on the ability of students to get credit cards and more with ending the active participation of the colleges in marketing the cards.
237: Ah. I didn't really know the marketing was so aggressive, such that college students were so routinely duped by it that there was now an average of $3,000 in credit card debt by senior year.
At least if the colleges stopped pressing these things, there might be fewer students prone to this behavior. You don't think other business enterprises might not step in? Ripe market, after all. What's in it for the colleges to be in collusion like this, by the way?
I didn't get a credit card in college, and after college had a rough time getting one, since apparently you can't get a credit card without a credit rating and you don't have a credit rating without a credit card. (I was able to get a really shitty one through my bank, but I was confused about how it is that college students can be broke and in debt and get approved for cards, when I couldn't get one with no bad credit history.)
239: I had the same problem. My parents had to co-sign because my job wasn't good enough for the card companies. When I finally got around to getting an independent card, I was denied the first time and when I looked up my credit history it turned out that none of the years of paying off every balance on the co-signed card had been credited to me. It's not clear who got it; maybe it just went into my parents' records.
Anyway, I somehow managed to get 3 credit cards a few months later. Two put me in the same sort of "we can't approve you, we need to evaluate you" situation as the card that denied me, but then I applied for a low limit student card - I was then in grad school - from the bank that had the co-signed card, which presumably had its own record of my credit history. They approved me overnight and then the other two cards came in a little later. Both those cards quickly upped my credit limit after a few months, but the student card is the same as it always was. I only use one of them regularly.
I got a shared card with my mom, which I myself hardly ever used, in high school, precisely in order to have a credit rating.
Or rather, I was made to get. I certainly didn't have that much foresight.
I also applied for a card with the student credit union but the e-mails they sent me were incomprehensible enough that I told them I wasn't interested in pursuing things any further. They offered me something that was described as a credit card with no credit, if I remember correctly. It might have been a "secured" card - which was really a pre-paid cash card where you put money into the account and then draw it out and then they judge your behavior to decide whether to give you a real credit card, just like your social betters have - but I wasn't interested in finding out.
My credit card deal was much like 240.2: I wasn't exactly trying to get a credit card, but eventually thought it would be convenient, and wound up with some kind of limited card in grad school, which was probably when you guys were in undergrad, and it worked its way up from there. None of it was part of a desperate plan to build credit.
I recall that when I first moved here for grad school, at age 25, I had to get my mom to co-sign somehow or other to set up a phone line here. That I found rather absurd.
Hey, parsi, I'm thinking of starting a used bookstore in a hugely underserved market (Cambridge-Somerville, MA).
a)Is this insane?
b)How much capital do you think it would be wise to allocate?
I'm not parsi, but I am related to someone who's worked a long time in the bookselling business.
a)Is this insane?
Yes.
b)How much capital do you think it would be wise to allocate?
More than you have.
OK, smart guy, why is there a green apple in SF and not in Cambridge? Why is there a Moe's? etc.
What makes you think I wouldn't have said starting Green Apple was insane, back when it was started?
And, what I'm willing to lose in terms of capital is about a hundred grand. If that won't set me up with a bookstore then fuck it.
Well, what are rents like? How big a store would you want, both spacewise and stockwise? Green Apple and Moe's are institution-like places; on the other hand, if I thought SF were lacking in used bookstores, the existence of Bibliohead wouldn't be much of a salve, nice enough though it is. Would you stock any new books? Rare books? Would you want "nice" shelves or would you build them yourself or what? Would you be of general interest or specialize in something? (There seems already to be a scholarly one and I would guess from the name that this has a similar sort of clientele.) If the Harvard bookstore sells used books (apparently so), they presumably buy them, too, and are presumably the most convenient to Harvard. Does the bookstore of Yendor sell used books?
Isn't Cambridge kind of small? How's Boston for used bookstores?
Hey, parsi, I'm thinking of starting a used bookstore in a hugely underserved market (Cambridge-Somerville, MA).
Sweetheart, is Cambridge/Somerville underserved? Write me off-blog if you like. Immediate answer, yeah, it's insane. I have no idea what you know about the used book trade. I mean, it's a lovely idea, but realize that used bookshops with multi-decades histories have closed shop in that area recently. It really depends on how much you know about used books.
I know some dealers with connections with that area who would know more.
Furthermore, while there are four Dunkin Donuts within a square mile, noone will sell me actual good coffee. It's a swipple wasteland out here. I propose to remedy that. How could betting on white people go wrong?
252: Rents are very reasonable. I've has my eye on a space in Magoun Square for some time. It's a bit off the beaten, but the price is right.
253: All I know about the trade is from a consumer's perspective.. Part of that is being shocked that there is no physical market for books north of the river. McKinnon's is gone, and for good reason, but there is no successor.
228
Believe me, you do not want to make it a legal necessity for angry, bitter people to argue over whose fault it was.
Sure, just saying once you abandon judging fault you are giving up on justice in some cosmic sense since the bad spouse and the good spouse will get the same financial settlement.
As for arguing, perhaps you don't want them arguing over who would be the better parent and deserves custody either.
Also a fair amount of what Ben said in 251.1. Those are questions that need to be asked and answered.
Really the first question is where you expect to be getting your stock. Used (rare, out-of-print, collectible, as the case may be) books? From where? It's a fair guess that 50% of used bookselling is gathering stock, at least until you reach a critical mass, which takes a while.
It's an intriguing idea, though challenging as hell in that area, which is pretty damn rife with knowledgeable booksellers already. Rents are steep; probably with a hundred grand, I'd look to smaller towns, toward western Mass. Pioneer Valley! Relocate. If that's a possibility for you.
Sure, just saying once you abandon judging fault you are giving up on justice in some cosmic sense since the bad spouse and the good spouse will get the same financial settlement.
But (a) often there's no absolute good or bad spouse, and (b) I suspect that the current systems is scarcely better anyway.
(scarcely better at working out which is the good or bad spouse than just assuming equal fault on both sides; and current system means the general apparatus of justice, short of investing in a time machine and some mind reading kit.)
256 crossed with 254.
I've never heard of Magoun Square, and I used to live in Cambridge!
All I know about the trade is from a consumer's perspective.
Okay, let's talk. Off-blog, probably. I haven't used the address linked to this identity for a while, but I assume it's still active.
230
... Are married people who split up more likely to be angry and bitter over it than non-married people who split up?
Longstanding serious relationships are more like to generate anger and bitterness when they end than short term or less committed relationships so you have to adjust for that. And the legal system may make things worse in some cases.
245
Hey, parsi, I'm thinking of starting a used bookstore in a hugely underserved market (Cambridge-Somerville, MA).
a)Is this insane?
b)How much capital do you think it would be wise to allocate?
Sounds kind of crazy to me. Don't brick and mortar used bookstores have trouble competing with the likes of Ebay, Alibis and Amazon?
If you specialized in used for-Kindle books you could minimize you real estate costs.
In LA, we have some OK but not great used bookstores but, as far as I know, exactly one decent new-book bookstore. Perhaps you'd like to come out here to serve our underserved, literate, second-largest-city-in-the-country market?
(Someone told me once that the local stocks of used bookstores in LA come largely from the studios, which would buy huge stocks of books for research/book optioning and then sell them off. No idea if that's true, but fascinating.)
Should college students be required to have parental co-signers to be approved for credit cards? There'd be something about the age of majority or something, wouldn't there? Age 21? Age 18? What do you think, age 18 seems too young to be responsible with credit. 21, then?
I didn't say they shouldn't be permitted to apply for credit, but that they shouldn't be so aggressively marketed (sign up for a credit card, get a free t-shirt.) I think it's a good thing to have a credit card in college if used responsibly, but I don't think the current situation does anything to promote responsible use.
Who knows if it still will be like that once the bankers' affiliate committee Senate gets through with it. Last year I don't think they touched it.
The Dodd bill that cleared Banking in the Senate was a whole lot tougher than the bill the House passed. The Dodd/Shelby compromise that reached the Senate floor and will likely pass on Tuesday is still significantly tougher than the House bill. So I'd be more conerned about it getting watered down in the House. Dodd is on a born-again populist kick because he's extremely concerned about reelection.
The main areas the Dodd/Shelby falls short of the ideal, in my opinion:
--interest rate increases on existing balances still allowed for cardholders who are 60+ days late on their payments for that card. However, if the cardholder makes on-time payments for six months following the increase, the interest rate increase must be rescinded. (House bill is 30 days late and no way to return to lower rates).
--effective date of the bill is set at nine months after enactment, giving the credit card companies nine months to raise interest rates on everyone in the country before the new regime kicks in. (House bill is effective 12 months after enactment).
Hey, parsi, I'm thinking of starting a used bookstore in a hugely underserved market (Cambridge-Somerville, MA).
Underserved? Huh. McIntyre & Moore in Davis Porter Square (the web tells me it moved a year ago or so?), Raven Books in Harvard Square (not huge, but a great selection), the used book portions of the Harvard Bookstore (not the Coop).... If that's underserved, then I have to wonder what better-served area you're used to? (I realize the situation was better in the past, but it still seems better than most of the U.S., in particular the university town where I live now that has no used bookstore, aside from a small selection of used books here [which is, however, an excellent place for new books].)
Also this little store, around the corner from my new apartment.
263: Halford...huh? Are you excluding Pasadena? There are very good new and used bookstores there. (I can't think of another good new bookstore as big as Vroman's, though Skylight is very good for its size and, remarkably, expanded last year.)
Cambridge is underserved? Really?
Out here, I am still mourning the loss of Cody's and have taken to triangulating (polygonating . . .) my affections* between Diesel, Pegasus, Moe's, Other Change and Mrs. Dalloway's.
*Ah spring, when the not so young bibliophile polygonates her affections . . .
o I'd be more conerned about it getting watered down in the House. Dodd is on a born-again populist kick because he's extremely concerned about reelection.
I guess doing something "just to get re-elected" can be a good thing. Anyway, interesting to see the Senate be the tougher side on this one.
Are there any good used bookstores left in Long Beach? I assume Acres has finally closed. Also, what about the UCLA area?
Wrongshore: I have very happy childhood memories of hours being lost in Vromans. But besides the lovely selection, the other thing that was incredible about them was their. . .. price stickers. Very long and rectangular, they would slowly turn grey---and after about 3 months, come off perfectly and easily, no mess at all, leaving behind a beautiful book. I wish everything had price stickers like that.
This is not a great time to start a used bookstore in the Cambridge area (in addition to those mentioned, there's also Rodney's in Central Square).
also, back on topic---it occurs to me, after reading a comment at DeLong's (does anyone think it is a bit odd that a bank that is being sold to us a basically sound can't even get around to talking to a couple that is EIGHT FRIGGING MONTHS behind in their payments?) to wonder what the net effect of this article on Chase will be (more customers? lowered stock? angry regulators?) and how they will have to react now that this particular customer is out in public. Will they have more or less mercy on him? And does it not matter b/c his book advance will pay off the mortgage?
I don't think Chase has to worry about more customers. They seem to be absorbing my various bank and credit card accounts at the rate of one a month.
(in addition to those mentioned, there's also Rodney's in Central Square).
I mentioned that.
Step 1 of deciding to start a small business: check out who would be your competition.
See? I was all over that shit. I also went to bed thinking about how he was going to acquire is stock. I would make a great dissuader of bookstore-starters. It can be a sideline while I'm stay at home husbanding.
274
From the NYT article:
... That left me with JPMorgan Chase, one of the few big banks smart enough to sell off most of the subprime loans it financed. It still serviced my loan, but it wasn't on the hook if I defaulted.
and you ask:
... Will they have more or less mercy on him? ...
The guy has given up, it just a question of how much free rent he is going to get, there is no case for trying to keep him in the house, it is hopeless. So perhaps Chase will move faster.
You have to be cheerful and positive to be a stay at home husband, neb. No high-powered career woman wants to hear negative things or complaints when she comes home tired from her day. Just make the cocktail, have dinner on the table, and be bright and chipper. Also, she's not going to want her grammar corrected.
If I've been otherwise to you, PGD, well, I haven't been trying to land you.
I have doubts about being a house-husband, but I'd like to think I'd be a good trailing spouse.
278: In exchange for cooking, cleaning, yardwork and general handyman services, you can nove in tomorrow. Actual husbandry not required.
Out here, I am still mourning the loss of Cody's and have taken to triangulating (polygonating . . .) my affections* between Diesel, Pegasus, Moe's, Other Change and Mrs. Dalloway's.
I want to like Diesel, I really do, but goddammit they don't stock anything I want to read. The Borders in Emeryville is still the best bookstore I've found in the East Bay, but I give it 6 more months before it shuts down.
Also, she's not going to want her grammar corrected.
She may want you to proofread her dissertation. And cookies.
Diesel in Rockridge? It's not very good.
I've never even been to Other Change and Mrs Dalloway's, not having known they existed.
I would make a great dissuader of bookstore-starters.
It's a little like dissuading people from going to grad school in philosophy.
But not so fast! If Foolishmortal wants to think about this, he should think about it. Maybe he can start a combination bookstore-cafe, since the coffee in his area sucks so much, and since drinking coffee makes people buy books.
TRUE FACT: I have never seen a combination bookstore-cafe that was much good as either.
290: They exist, but damn it takes hard work, from what I hear.
I just like fm's thought because we've sometimes missed having an open shop. We throw away books that are unsaleable online that would be saleable in an open shop. It's a pity.
280: cocktail an dinner, good. Bright and chipper? After a long day, bright and chipper will likely result in a bitten-off head.
I left a profound, yet pretentious comment to close off the "At Last" thread. I cited Weber and made a reference to "vulgar common sense".
My small-business dream is to open a cinema-cafe, like Grand Illusion in Seattle. Are there any others? I think the theater seats about thirty tops.
Throw them away? Couldn't you at least haul them to a used bookstore in the area that does have a shop?
My small business dream is to open a cafe / Platonic academy. People would come, drink coffee and eat scones, and listen to me pontificate about the meaning of life and my opinions. My acolytes would do the food prep, in their down time from fundraising.
You would pontificate about your own opinions?
294: Is the Alamo Drafthouse anything like that?
Kramer's in DC is a bookstore-cafe that at least succeeds reasonably well as a bookstore. I don't like it as a cafe, but others clearly do, as it seems to do a hopping business.
Doesn't Oakland have a theater like that? Or at least did, about 10 years ago.
285,287: Really? I've had very good luck there. I've found random small prize-winning novels in the staff-picks section that worked out quite well (We Need To Talk About Kevin creeped me out thoroughly), a great local author of math-adventure books for teens, and a perfect gift--a Banksy collection.
Other Change is short for Other Change of Hobbit. It's on Shattuck, two doors down from Comic Relief, and it specializes in science fiction and fantasy.
Thanks for the tip on Borders closing, as I have a large gift certificate to spend there.
There used to be a nice cafe/bookstore in Ashland back in the mid-90s. . .nothing has lived up to my expectations of the cafe/bookstore since then.
294: The Oakland Parkway Speakeasy just went out of business and its El Cerrito Art Deco cousin is about to go out too. So sad.
297: I would pontificate about all kinds of other thinkers as well. About my own opinions of them.
299: The food is crap, but the beer is good.
298: That looks more like Chicago's Brew 'n' View, which is awesome, but different. A full restaurant and bar would probably be more lucrative, but I'm not in this dream job to make money.
Foreign Cinema is only a cinema secondarily, but it is a full restaurant and bar.
302: First the UC theater and then this? Fuck.
Anyway, I could tell you why the various "used bookstores" around here don't really merit the name ("Harvard" bookstore is seriously overpriced, McIntyre has six shelves of lit crit and .5 of SF, etc...), but really, it's a fantasy. I'm spoiled, I used to live 13 blocks from green apple, and I'd walk by five coffeeshops to get there. I just want to bring a little civilization to MA, but it probably doesn't want it. I think I'll go back to my other dream of teaching barefoot Bolivian children how to program, and then exploiting their labor.
295: Throw them away? Couldn't you at least haul them to a used bookstore in the area that does have a shop?
There aren't many who want them; they're either stocked up already and just don't want more stuff, or it's not their subject matter, or it would require them doing a lot of sorting (and then tossing themselves) which they don't have time for. Occasionally we bring them to the book place that gives away books for free, but we know that they also throw half of it away and are already overburdened with donations of mixed cheap crap. We do our best not to acquire the stuff in the first place, and in all honesty, we have to balance the public service aspect of bookdealing with the business end. It takes time to sort through and lug dozens of boxes of unsaleable stuff all over town.
I shouldn't have mentioned it.
I just now realized who nosflow is.
McIntyre has six shelves of lit crit and .5 of SF
Well, this is Cambridge after all.
Funny story about that bookstore: A fellow student in my department was browsing there one day, and found a copy of his advisor's first big book, a poststructuralist study of Goethe. Looking inside, he found the entire thing covered in scathingly critical marginalia. In the handwriting of the other Goethe scholar from our department.
307: but really, it's a fantasy
I'm having a hard time letting go of your fantasy, and I feel badly if we've smashed it. What you would want to do if you wanted to do it would be to buy out some other store that was closing its open shop and selling its inventory wholesale.
310: Wait a minute, really? Sigh, this blog is so confusing if you have to leave for a while.
312: It was smashed to begin with. And you're right about buying out another store; I shall be as a vulture, circling McIntyre.
A fellow student in my department was browsing there one day, and found a copy of his advisor's first big book, a poststructuralist study of Goethe. Looking inside, he found the entire thing covered in scathingly critical marginalia. In the handwriting of the other Goethe scholar from our department.
I think I told the story here before about someone I know ordering a used copy of a good friend's recently-published book --- based on their dissertation --- and, when it arrived, finding the copy warmly inscribed to the dissertation's advisor.
If I were an advisor I'm not sure I'd want to read the same stuff again either. On the other hand, selling it? You could at least let it sit on a bookshelf for a few years.
I once sold a copy of The Discovery of Heaven with my plane ticket home marking a particularly pithy quote.
Lesson: Do not give a warmly inscribed copy of your published dissertation to your advisor, unless the person asks for it.
paranoid android, the advisor was just ditching a bunch of unwanted books in a group purge. That kind of thing is (or was, once) gold in the academic used book trade: an academic dumping stuff, presumably University Press books.
Nosfloratu?
Translated, "for decking us with flowers".
I will be at Green Apple within a week!
It's so awesome when an academic in that situation offers the books to grad students first. Or other things: a friend got an album collectiona few years ago from a now-dead Lieder expert. It included dozens of Dietrich Fischer-Dieskau records.
From a different about-to-die professor, the same friend got a full set of gold-rimmed Harvard Faculty Club barware, all with the Veritas seal on the side. I would like to think that the faculty who were issued this kind of thing in the 60s drank from them with as much irony as we do now, but I'm afraid that is not the case.
That friend gets all the good stuff because he sticks around Cambridge in the summer, when everyone cleans out their basements.
I still haven't read that biography of Casimir Pulaski.
That friend gets all the good stuff because he sticks around Cambridge in the summer, when everyone
Based on the previous two examples I thought you were going to say "dies".
|| How come nobody ever told me that Green Day developed into a truly great band? They're like the American version of the Clash. ||>
Veritas barware! Just what I always wanted!
Hanging around dorms at the end of spring semester is a great way to score good stuff. Kids these days, they throw out all kinds of things. (I had friends who stuck around to work 'dorm crew' at the end of the semester specifically for this reason, but you can also get good things just out of the alley, non-dorms, but places where students tend to live. If alley finds don't gross you out.)
Further to 329: That's to say that I got a free canoe about 10 years ago. Now it's behind my house and can't really be repaired any longer, unforrtunately.
Wayyyyy back to WS in 270, Vroman's is awesome but is AFAIK the only good new bookstore in the entire city. That's a lot of underserved people! I love Skylight, but their selection is (as it's been for 25 years) small and eccentric.
Am I to understand from the East Bay folks that both the UC Theater and Cody's are gone? What the hell is going on up there?
Am I to understand from the East Bay folks that both the UC Theater and Cody's are gone? What the hell is going on up there?
The new economy.
(We've talked about Cody's a few times before. I for one don't miss it at all.)
They're like the American version of the Clash.
So awesome.
Hanging around dorms at the end of spring semester is a great way to score good stuff.
Try being in charge of locker clean up at a ritzy but scholarship-laden private school. The rich kids, too lazy to take stuff home or even sort for recycling, dump everything directly from their lockers into the trash (and I mean everything--clothes, books, school suppies, headphones, memory sticks), and all the other kids carefully pick through it and distribute it amongst themselves. One senior later told me, after returning from a year of college, he didn't have to buy paper, notebooks, binders or pencils--he got through freshmen year on the discards of his classmates. Even I ended up scoring a couple of clearly unread novels. So in some ways it's sort of efficient redistribution. We have a policy where the kids take their locks home and get issued new ones at the end of the year---if I had a dollar for every senior who plaintively asked me what on earth they would need a combination lock for in college, I would have paid annual gym dues. It's a depressing baring of the economic realities of the school--nice note to end on.
316: I once bought a used copy of a book which included a handwritten note from one of the two translators, a junior academic whose translation was judged by the original very eminent author as inadequate (hence the second translator). From his note it seemed that, because of the individuals involved, this episode might have had a completely disastrous effect on his career.
328: I pissed on the foundation of Billy Joe's house once. I think it helped.
The on-topic part of this thread played havoc with my expectations. I assumed that James B. would be holding forth on Mr. Andrews' failure of personal responsibility - perhaps using a link to McArdle to back his argument.
Then, I figured, you'd have folks like max dispute James, describing the understandable and emininently human mistakes that people make, and emphasizing the role of the con artists who offered the loans.
My own takeaway from the story was that regardless of the author's responsibility for his outcome, he did an honorable and excellent thing by writing this story. More provocatively, I feel the same way about Robert McNamara. Coming clean about fuckups and war crimes doesn't merit forgiveness for the original offense, but it is, in and of itself, a good thing.
I pissed on the foundation of Billy Joe's house once. I think it helped.
I first read this as "Billy Joel's house", and was disappointed to discover my error.
This kind of story pisses me off. No one I know played that kind of game. I've spent decades hating on self-serving, conceited, cargo cult free-market morons like that guy (see my URL for the latest), and they've been hating me right back and flinging the best insults at me that their creepy little minds could concoct.
And now their stupid house of cards has collapsed, but most of them will land on their feet, while a lot of people I know are almost certain to be hurt: my son, my ex-wife, one of my sisters, and one of my three brothers (and his wife and two daughters).
For three years during the period when the shithead criminals in finance were shoveling out bogus mansion loans to insolvent zombies, my brother was trying unsuccessfully to refinance disadvantageous loans on his business, which would be triumphantly successful if it weren't for the high-interest loans. Now credit is almost certainly going to dry up, even worse than before, and while he may not go out of business, he'll continue to have trouble gaining any equity and might end up spending the rest of his life working for the bank.
Populists don't have to be dirt farmers in overalls. They can be the "owners" of wonderful coffee shops.
Talk of populists reminds me of my dad's story about the lawyer who was representing a farmer against the railroad. When the trial opened, the lawyer walked to the bench and handed the judge $20. When the judge objected, the lawyer pointed out that he was too poor to match the gift of the railroad (at the time, free travel for all judges and other state officials), but he'd see if he could get another $20.
337
My own takeaway from the story was that regardless of the author's responsibility for his outcome, he did an honorable and excellent thing by writing this story. More provocatively, I feel the same way about Robert McNamara. Coming clean about fuckups and war crimes doesn't merit forgiveness for the original offense, but it is, in and of itself, a good thing.
But has he really come clean? Few people are willing and able to be objective about themselves.
The bit about "I felt like a sophisticated player who could lay hands on big money" is a near-classic con story, isn't it?
re: 316
Yeah, I bought a used philosophy book a couple of years back to find it inscribed from the book's author to Isiah Berlin. And I regularly picked up books in Glasgow that had been sold by one or other of the lecturers in the department.
316, 343: I have a couple Oxford Classical Texts whose covers are specially gold-embossed with the seals of fancy British public schools and whose flyleaves have been carefully dipped in to proclaim such-and-such now famous (to classicists) classicist the winner of the school's Greek Prize. I'd be far too sentimental to part with such a thing, but then I will also be found crushed under the weight of piles of collapsed books and newspapers like the Collyer brothers.
301 - a great local author of math-adventure books for teens
Do share, Ile?
people I know are almost certain to be hurt: my son, my ex-wife, one of my sisters, and one of my three brothers (and his wife and two daughters)
Hmm... sounds like six negatives against one positive, so this is very likely to be a bad thing, on net. Of course we'd need to know the magnitude of each hurt to be sure.
No one I know played that kind of game.
Quite possibly so. One point made above, though, is that people don't like to talk about it. On the downhill side, anyway.
I don't see the opinion online, but several years ago, I had a case that arose from con men, and a ne'r do well son, talking an elderly couple into refinancing their house to buy bonds from the island of Nevis, which bonds would more than make the house payment, even after the son took out a substantial chunk of cash. It was just a Ponzi scheme, but I bet the people in charge had a pretty good run.
Oh I want to know, oudemia.
Eliot House had a Loeb text of all things that was inscribed by Cedric Whitman to John Finley. I think it was Antigone.
(I actually was assigned a Loeb edition for two classes, because it was the best edition: Propertius, and an Aristotle/Longinus combo.
Speaking of classical texts. I hate the Teubner editions so much, because they are so friggin expensive. My beloved CPS assigned one for a class on Ovid's Metamorphoses, but the evil Schoenhof's was out, and it took the Teubner people 3 1/2 months to get some over.) I borrowed a different edition. I think that they costed over $50 for a paperback without helpful student notes. OCTs are more like $20 something.)
BG, I've been out of the loop for decades. What happened to the two Teubners (East and West) when the wall came down? Did they merge again? Did they retain the pretty communist format or the cheap looking western one?
349: I'm sure that you're pulling my leg, OFE. Was there more than one company? I was, as I'm sure you know, referring to the different books they sell. My knowledge, however, is 14 years out of date.
350. No, until 1989 there was a Teubner imprint in Leipzig (where the firm originated), which published rather cool looking fabric covered books with gold lettering on the cover, and one somewhere in West Germany (can't remember where), which had relocated when the iron curtain came down, and which published books that contrived to look as if they were bound in naugahyde.
I know this because I worked in a specialist classics book selling department, and we used to order from both. I'm just curious as to how they faced re-unification.
Polifootball @ 337: Then, I figured, you'd have folks like max dispute James, describing the understandable and emininently human mistakes that people make, and emphasizing the role of the con artists who offered the loans.
Well, I did point in a coupla places that the story let Bob off the hook way back there. The problem is, is that Bob was essentially more helpful to this dude's family than the dude in question. Obviously, I need to clarify here.
Scheider @ 159: As someone presently negotiating with a view towards a standard poodle puppy, I resemble that remark.
The standard term of endearment for Tony Blair was 'Bush's poodle', I do believe.
MC @ 156: I'm a bit baffled by your anger, frankly. While he obviously (as he readily admits) participated in the housing bubble/mortgage binge, he's not personally responsible for the whole mess, for god's sake.
PGD @ 158: I too am baffled by Max's anger and seeming resentment.
More sighing here. I know that my parent's combined income has never gotten anywhere near 120K. I'm pretty certain my grandfather (the well-off doctor) never had an income over 100K. For that matter, I am pretty sure my great-grandparents (Edwin P. Fi/sher of NY/NJ and Julia Ral/ston (as in Rals/ton-Purina) of Boston) never had an yearly income like that, even though Julia inherited from her father and relatives so many excellent market positions that they could afford to take their eight kids and summer in the beach house in Cape Cod in the middle of the Great Depression. The beach house with custom-built bowling alley in the basement. The GGPs may have been weird and dysfunctional but they weren't utter fools. Same with my grandfather who did, in fact, lose a bunch of money in the market in the 60's, but certainly never came anywhere near losing everything.
The way I read the story, he had a midlife crisis, and instead of doing the sensible thing and buying a Porsche and having a fling with a co-ed, he decided to go all in. And now that's he desperate and needs to pay the rent, he's willing to admit that the MMF multi-level marketing scheme he was participating in conned him as well. 'Buy my book.' In a technical sense, his story is useful. But writing about one's own cluelessness isn't any kind of feat, moral or otherwise. He's desperate, so he's willing to do a little bit of the right thing and commit a very small act of bravery. Woo. I feel sorry for his first wife, and his kids, or his second wife (even though she might be a trophy wife).
Meanwhile, the people (like McArdle) who have been going on and on about how terrible those foreclosed losers and union members are, are going to wind up cutting this guy lots of slack. He's going to fail upwards, just like everybody else in his crowd. Those people being the same crowd (no partisan id here) of clueless fools who couldn't fight their way out of a wet paper bag, can't run an economy except into the ground, and can't maintain the law/social order. (Those areas things being the Big Three of governance; get those three right and you get your face on Rushmore. Get them wrong and your country has a revolution, civil war or gets conquered.) They are the best educated, most well-off, and most powerful de jure aristocracy in the history of the world, and they could fuck up a two-car parade. Shit, they could fuck up a one-car parade.
If I were in charge, I would totally write his mortgage down, because I would write everyone's mortgage down. (And the story makes a final piece in the story that conclusively convinces me that the homestead exemption system for bankruptcy is better than the non-recourse system, even though, maybe especially, because the banks hate that.) I would still think exactly the same things about him.
But the idea of this being comparable to the case of someone like Rosa Parks, or that girl in the famous picture who walked past a crowd of screaming racists to get into an Arkansas high school, or even an evangelical Bush supporter who volunteered for Iraq and got killed (or didn't, even, to pick someone who is probably unpopular around here), kinda makes me sick.
max
['And tired.']
BTW:
James A. Fry: I put away an innocent man
03:06 PM CDT on Thursday, May 14, 2009
When I prosecuted Charles Chatman for aggravated rape in 1981, I was certain I had the right man. His case was one of my first important felony cases as a Dallas County assistant district attorney. Chatman was convicted in a court of law by a jury of his peers. They, like me, were convinced of his guilt. Nearly 27 years later, DNA proved me - and the criminal justice system - wrong.
That's a little bit further in the direction of courageous.
max
['...']
351: Teubners -- to my eye -- look cool and cloth, if very plain in that continental manner, and not the least naugahydey. They look rather like Budés, really.
Ah, so by implication they merged and kept the Leipzig format. Good call.
The all-too-common stories like 354 are some of the most haunting, sad things I can think of. IIRC, Dallas has been found to be particularly egregious/racist about wrongful convictions.
That whole 'split into two companies' thing in Germany seemed pretty common.
Carl Zeiss did it, too. So there were Carl Zeiss companies trading on either side of the Berlin Wall.
No surprise that lovely books come out of Leipzig. They have a fabulous book arts program at the art school there.
I would have liked Fry's piece to get closer to his heart. Why did he believe so firmly? Which of his biases did the case confirm, so that he didn't have to think too hard about it? How soon did he begin to doubt? Never, until the DNA results? What were the stepping stones that led to the outcome, so some can be corrected?
The editor dude who fucked up his money did a better job detailing those, which I find helpful. That way I can speculate wildly on blogs about approaches to correcting the problem. (Step 1. Decide whether a proposed revision enhances or combats denial.)
I can understand frustration with this guy. Seems to me that the comparison matters a lot. If you're comparing him to Orange County fucks who were buying outrageous things, trying to maintain an upper middle class lifestyle is not so offensive. If you're comparing him to actually responsible people (and figuring out who will bear the burdens of the middle class lifestyle he couldn't afford), then it is hard to understand him. Either way, the numbers caught up with him.
max--That seems a little misleading. In the 70's $100k bought you a lot more in terms of house and the like---even if people didn't have computers and airbags.
My great grandparents had an income of $30,000, but in 1905 that was income tax free, and it got you a house in DuPont circle and a fancy summer house in the Newport of the North, both of which were staffed by 5 or 6 servants.
Otherwise, I absolutely agree with the gist of all of your other comments about this guy.
339- John Emerson returns!
Even though I don't know JE from Adam, I was getting concerned. The blogosphere just didn't seem the same with out his comments everywhere.
On topic. I was annoyed by the article, not because of the author himself, but because of the way it frames the whole mess: "the subprime meltdown happened because consumers were splurging on beach houses and $700 shopping sprees at J. Crew."
Here in Cleveland, entire neighborhoods (mostly African American, what a surprise!) have been wiped out be the subprime fiasco, and not because people were buying beach houses. They were offered the prospect of owning modest homes in OK neighborhoods and hoodwinked by the fact that everyone from Alan Greenspan on down was insisting that these non-traditional mortgages were perfectly OK.
I don't know JE from Adam
Emerson and Kotsko look nothing alike.
As I remember, the inflation multiplier since 1960 is 7, so my father's $12,000 was like $84,000 today. I was upper middle class until I was 21.
360: I'm sure the DA never thought twice about the conviction: he had an eyewitness identification. There's good research that eyewitness identifications of strangers are wildly unreliable, but it's very hard to make people believe that.
I saw a heartbreaking Op-Ed in the NYT once, maybe ten years ago or more: a rape victim, who had during the assault devoted herself to memorizing the guy's face, because she was going to get him put away. And she identified a defendant, he was convicted, and spent years in prison before he was cleared by DNA evidence. She was horrified by what she'd mistakenly done.
Questioning eyewitness identifications sounds like a good place to start, but even so, I find that I cannot provide wild blog-comment speculation on all the problems in the world. Despite my preliminary musing, I am going to have to specialize. I leave the justice system to others to fix in this thread.
365: I think I may have seen a Frontline (or similar) with this woman. She was clearly devastated, since she knew intellectually that the fellow she'd ID'd could not have done it, but admitted that after all these years it was now this innocent man's face permanently embedded in her memory of the event.
Despite my preliminary musing, I am going to have to specialize. I leave the justice system to others to fix in this thread.
This somehow makes it sound like you're six months away from putting on a superhero costume to fight crime inefficient water usage.
Dude, I wander the streets at night in my weightlifting singlet, adjusting sprinklers. You want more from me?
She's got the superhero outfit.
The bait just sat there for twenty minutes, then we noticed it simultaneously? I am always pleased when I do the same thing as LB. I find it very reassuring.
357: IIRC, Dallas has been found to be particularly egregious/racist about wrongful convictions.
Dallas Co. has been horrible like that period. Under Wade (80's, some 90's) they had a 98+% conviction rate (highest in the nation). In one year in the early 90's, Dallas had 155K cases sent to the grand jury, and like 7 (or some such very low number) were no-billed. And then, on top of that, out of all the capital murder cases sought in 80's, Wade sought the death penalty for all of them.... while not seeking the DP for any white defendants.
When it comes to exonerations, the DAs in the area always stonewall, and never admit error, even after someone has been freed. They certainly do not come out against the death penalty or anything like that. So I'm surprised they didn't title the op-ed 'Hell Freezes Over'.
360: If you're comparing him to Orange County fucks who were buying outrageous things, trying to maintain an upper middle class lifestyle is not so offensive.
Well, my friend M, who lives in SD, got a little bit of the house fever herself. So M's friend X convinced M to 'invest' in a partnership in some houses with an eye towards (somehow) winding up owning one. M signed on the dotted line. About a year later, it turned out that X had skipped. So I was coaching M a bit through what to do. Turns out that what X had done had been to get these houses, and then forge M's signature on HELOC loan apps. Multiple HELOC's on each house. So then X took the money and blew it all on drugs. When the game was up in 2007, X headed off to rehab, presumably paid for by the mortgage money. Eventually the mortgages were declared deliquent and only then did the various financial companies got in touch with M.
Turned out that M officially owned like four houses, each of which had three or more liens against them, even though she had signed one piece of paper. I figured out that X had a partner inside one of the mortgages companies and that person would OK each HELOC in return for a big kickback. M declared limited bankruptcy and got out from under, with her credit ruined for seven years but otherwise OK.
So M was foolish there, but in this case the NYT guy reminds me more of X.
361: max--That seems a little misleading. In the 70's $100k bought you a lot more in terms of house and the like---even if people didn't have computers and airbags.
It was intended that way, in a sense. Even in uninflation-adjusted nominal terms 120K was (and still is, even for the wealthy) a lot of goddamned money, AND the guy writes about this stuff. So the article makes me want to question his ability... with 4th grade arithmetic. Of course, I suppose you could say he convinced himself that he was rich, so he had to keep up or something... and even then, it still seems like he's related to Heebie's favorite student.
max
['Inflation hasn't brought us the 100$ dollar cheeseburger quite yet.']
MAX! The dollar sign goes in front of the figure!
Dude, I wander the streets at night in my weightlifting singlet, adjusting sprinklers. You want more from me?
I should start following the Sacramento papers to see when this gets noticed. . .
Look, neb, Max is just going to wear his sneakers to the graduation, okay, so there's no use in fretting about it.
It was kind of you not to point out that the word "dollar" is redundant when one has already used the dollar sign, at least.
I was too blinded by rage even to notice the second trespass.
This is not Forth!
It's not /bin/sh either goddammit!
I was too blinded by rage even to notice the second trespass.
Yep, that was redundant. Sorry about that.
max
['kill -s SIGHUP 378']
So, what, you want my aneurysm to reread its configuration and start over? Thanks a lot.
352
If I were in charge, I would totally write his mortgage down, because I would write everyone's mortgage down. ...
Whatever for? And what would you write his mortgage down to?
And what would you write his mortgage down to?
Arrogance, stupidity and greed.
It makes perfect sense to be angry at this guy. As someone who is at least somewhat financially responsible and wanted to buy a house with real money, this dude screwed me on the way up by bidding up prices using funny money, and then screwed me on the way down by blowing up his bank that then got bailed out by the taxpayers (i.e. me).
And he didn't even do it in any dramatic cause; no Lamborghinis, no co-eds. Just lots of new shirts and ties, and credit card service fees.
McArdle has another post with more details from the book.
Andrews's wife was entitled to $700/month in child support but it was not always (ever?) paid. Andrews and his wife broke up their respective marriages to be together.
I think their problems are more properly seen as a cautionary tale about divorce than mortgages. Their mortgage problem is easily solved by defaulting. The problems caused by their divorces are not easily solved.
387
More from McArdle about Andrews's wife who it seems has now declared bankruptcy twice.