Interesting piece on the credit crisis, written by an economics reporter for the Times who ended up with a subprime mortgage and massive debt.
Unusual in being so unpitiable -- most stories I've read about people who get into debt situations involve automatic sympathy-getters like people with little financial understanding getting played by brokers, medical bills that pile up, educational debt, etc.
With this guy, I think, "You bought a home in full consciousness that you couldn't afford it, and your wife thought she could still shop at JCrew and Whole Foods on an income of less than $3k a month. Your problems are unfortunate but unsurprising."
There's probably much more of this kind of upper middle class magical thinking ("regardless of my actual take-home income, I am The Kind of Person Who Owns a Home and Buys Good Chese") than I realize. But it still manages to surprise me, I suppose because my parents were just the opposite -- they never developed a taste for the upper middle class lifestyle until they had so much income that they could afford it easily. (E.g. they didn't fly for a vacation to which they could drive until they'd built up comfortable college funds.)
I suspect people like my parents tend to be scorned by the taste-first-money-later sort as nouveau riche, but there's a lot to be said for being cheerily unaware that there's anything better than domestic beer, Wal-Mart groceries and staying with family or friends for every vacation.
However, it is probably an innocence that can exist only for people who grew up with little money and who live in rural areas where almost no one has better stuff to be envied. I can see how someone who lives near D.C. and works in the media would have trouble realizing that he doesn't have the money to live like his colleagues.
May 15, 2009 at 10:37 AM
PG, I agree... except for the last paragraph. Almost everyone around me growing up had - and spent - more money. But my parents just insisted that we didn't need it those things and that we'd live well within our means. It kind of sucked at first, but I got used to it, and now I am very grateful for it.
Another note about that article.... after child support, alimony and taxes, that writer was taking home less than 28 cents for every dollar he earned?
May 15, 2009 at 08:53 PM
Such unsympathetic characters in the piece - especially the entitled second wife. It seems though that he was rescued in part by a book contract/advance but is still living in the house without paying a mortgage and waiting to be physically evicted. I don't expect reporters to be specialists, even those who write about finance, but is it asking too much to hope that they be decent people? He fails spectacularly on all counts
May 16, 2009 at 01:36 AM
I enjoyed this read. I like how he's actually taking responsibility for putting himself in the position he's in and explaining how it was fairly easy for it to happen. He doesn't doesn't expect sympathy like so many others in the same situation.
He must have had a pretty bad divorce, I mean, geez, that is some crazy alimony and child support. Remind me never to get divorced, or to at least higher a better attorney than he did.
May 16, 2009 at 08:45 PM
$4k a month in alimony and child support isn't that strange -- he's supporting one person on almost $3k a month while his ex-wife is supporting herself and their two children on just over $1k more per month. At that level of alimony, I'm guessing his first wife stayed at home and his second wife anticipated being able to do the same. One middle-class man cannot afford to support two families if neither mother contributes to income. (I'd consider helping with the family business, as both my mother and my mother-in-law did, to be contributing to income, but there's not much that can be done to help with a reporter's work.)
In other words, it's not a matter of what kind of divorce you have so much as what kind of marriages you have. If you have a long marriage in which one spouse was primarily responsible for domestic work (childcare, etc.) and the other for wage work, then in a divorce the domestic worker will get custody of the kids and half the wage worker's income. If you've divided responsibilities in a more complicated and egalitarian fashion, such that both spouses have both wage and domestic responsibilities, then the divorce will be more complicated and equitable as well (more likely to have joint custody and no alimony).
May 20, 2009 at 10:44 AM
I found this article just... stunning. And after thinking about it for a while, I've concluded that his situation is due to a moral failing. He understood personal finance. He understood how to budget and that he should do it. He just chose not to. He chose to buy the house, rent the vacation house, buy JCrew, and buy good cheese. He's put his family in a horrible position for no discernible reason...
May 20, 2009 at 01:15 PM
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