This is not a diary about the bailout bill in its various incarnations, except peripherally. I really don’t give a damn if the richest 5% lose a little spending money or have to sell one of their many houses. I don’t care if CEOs who make more in half a day than their average worker does in a couple of years, are in a cash bind. I do, however, care about the average family, of which mine is one. People who don’t have tons of money who own one home and are struggling to pay the bills, who sometimes have to choose between gas (a necessity for those of us who live in areas where public transportation is not an option because there isn’t any and who still have to get to work every day), and a gallon of milk, who are one lost job or serious illness away from losing everything.
There have been a few diaries here who blame the current economic debacle not on the fat cats and stock manipulators and oil speculators, but on greedy middle and working class people who bought houses they couldn’t afford, had kids they couldn’t afford, bought huge TVs and SUVs on credit they didn’t deserve, and generally behaved irresponsibly. One diarist, in his ( I don’t know if the diarist is male so I am using the general "he" here) diary and in comments on other diaries, patted himself on the back for making the right choices—living in a tiny rathole apt. (his words, not mine) when he was between school and employment, not buying on credit, not having children because he couldn’t afford them (since he didn’t mention a spouse, I presume he didn’t have someone with whom to have children and didn’t want to produce them outside of a committed relationship, about the only thing I felt admirable about his or her comments)—unlike those irresponsible, greedy folks who bought homes, used too much credit on luxuries, and generally behaved like the Capital One Huns on a spending spree. There was an arrogant and inexperience with reality in his comments which made me furious, and a lack of compassion for those who are being hit the hardest.
I’d like to share a little bit of my 58 years of experience with him.
People have to have a roof over their heads. I’ve lived in ratholes myself at times. Some of those ratholes was extremely substandard military base housing during my husband’s 23 years in the Navy. We chose to live in them because at the time the BAQ and VHA didn’t begin to cover the cost of rent plus utilities (in Maine, heat alone can cost you three hundred a month for six months of the year). When he retired, there were no jobs available except one in TX which was a a one0year contract position. Because he knew the problems with the firm and the fact that his job would be contingent on government contracts being renewed, never a sure thing. He turned it down—and he was right to do so, because they lost a crucial contract. . Had he taken it, we’d have been stuck in Texas, with no hope of employment. Instead we came down to GA, where we stayed with his mother, and he got a not-so-hot job as a CAN at a nursing home, to see if he actually liked the medical field—with an eye to returning to school and getting a nursing. degree. In 2005, we had no choice but to ask my MiL to let us live with her. The nursing home was sold to a huge chain, and they fired everyone within two months. Despite being qualified in 3 fields, and answering any ad and cold-calling companies and trying to get an in via local contacts, he still couldn’t find a job, and his unemployment ran out. I had already given up on job-hunting—I’m over-educated and too old for what’s available, and not physically capable of doing the sort of work that is. He went back to college and then had to drop out to help with my Dad who has Parkinson’s and early stage Alzheimer’s; he expects to return either this January or next fall. We exist currently on his pension and Dad’s money
We could easily have been one of those families who bought a modest home. It would have made sense. In our area NE of Atlanta, rents aren’t cheap. A decent, safe apt. with one bedroom in an area that doesn’t come with free drive-by shootings and drug dealers and which isn’t a firetrap, costs $700 a month. No utilities are included. Your other choices are unsafe places in bad areas or subsidized housing if you qualify. People with kids do their damnedest to avoid those other two choices, and scrimp on small luxuries like the occasional dinner out and a movie. With that kind of cash outlay every month, I can understand why a family would opt for buying a house instead of renting. Every month 700 to 1,000 bucks goes out to a management company which makes the profit. The renters build no equity. Their rent is, in many ways, a losing proposition. Their rent is also about the same as a mortgage payment for a nice but hardly luxurious home if they buy a little further out and trade a longer commute for a chance to at least get something back.
Buying a home, for most families, made a lot of sense. They were actually building equity, and not spending more than they were when they were renting. They’re in a safe area, and they have some privacy. Their kids can play in the back yard, not a public playground or in the parking lot. And for the last 40 years, house prices have gone up. Did some of them get rooked by a fast sales pitch from a mortgage lender who pushed them into a sub-prime variable rate mortgage? Certainly. Was it smart? Not really. But first time home buyers who can’t save because rent is too high leapt at the chance of ownership because it meant they weren’t throwing away a good chunk of their income every month ( people tend to spend at last 1/3 of their salary on rent; in some places, it’s more like half).
The problem is, not only did home values start to fall, but the economy tanked after 8 years of strength under Clinton. Thanks to NAFTA and some tax breaks from the BushCo types, it became more profitable to close American factories and ship jobs overseas—and not just factory jobs, but technical jobs which require a college degree. People lost their jobs, and the replacement job often paid less and had fewer, if any, health benefits. And as house prices fell, the variable rates rose. And people who had done all the right things, and made choices that were based on common sense, are now losing their homes. They were also faced with massive increases in the cost of food, energy, and other necessities while wages stagnated. The corporations made out--and ordinary people tightened their purse strings until there was nothing left to tighten. Sometimes they bought on credit to pay everyday living expenses, not to buy flat screen TVs or fancy cars, praying the market would get better or they'd get a raise. With the Bush bankruptcy bill, they lose everything and gain little or nothing, especially not protection from credit card debt.
The husband of a good friend of mine worked for the same company for 23 years, a major financial company. He got excellent reviews because he is not only competent but has excellent people skills, and rose steadily. They live outside major a NE city where home prices are high. They saved up a down payment, and, after the birth of their first child, bought a small, very non-luxury home twenty years ago, opting for a less nice home in a town with good schools and a hope of resale value. They bought modest cars, nothing lavish, and certainly not a luxury SUV. They never overspent or OD’ed on credit cards. They saved. They now have three children, one who graduated from college a year ago, one in college, and one who just started elementary school (she was a "SURPRISE!" baby, unplanned but not unwanted). My friend chose to be a SaH Mom because , when they added up the cost of her commute to a secretarial job, plus work clothes and childcare, it didn’t make economic sense for her to work. They did everything right.
Along came a new boss who made it clear to the husband that he didn’t like his management style—this guy ruled by intimidation, not competency or people skill. Last January, my friend’s husband was laid off. He got a nice severance package, but that won’t last longterm, and they still have all the same expenses, and soon will have to fork out money for insurance. My friend recently has outpatient surgery for skin cancer (not melanoma, and she is expected not to have it recur)We suspect that the real reason he was fired was not just because of a clash of management styles, but because within a couple of years, he’d be eligible for early retirement. They can hire a guy straight out of college for a lot less—and not have to pay for the husband’s retirement. He has a 401K, but the downturn has devalued that greatly. And he still hasn’t found another job. AT 50, with all those years of experience in the financial sector, he isn’t likely to. Their story could be ANYBODY’S story.
THESE are the people far too many folks here are losing sight of. I tend to think that people like the arrogant diarist close their eyes to this ugly truth because they don’t want to face the fact that it could happen to them. THEY could lose their jobs or get sick.
This isn’t about Wall Street. It’s about real people with real financial pain. I don’t feel competent to comment on the bailout bill—I have read and listened to the opinions of people on both sides of the issue and end up even more confused than when I began. But like most Americans, I think the people who should be bailed out aren’t investment banks and rich investors and people who bought McMansions they really couldn’t afford—but the average guy who did all the right things, and now faces foreclosure or bankruptcy under laws which favor lenders over ordinary people. I want a Trickle Up plan, one that helps people. The only reason I can see to save these fatcats is that, unfortunately, the failure of these companies can and does affect people like my friends. If a company tanks, they fire their workers, which makes unemployment rise—and many of these new job seekers will end up permanently jobless or employed at jobs which pay far less than their old one. Their 401 K plans and IRAs will lose value (my father has a small amount in very safe investments and he’s lost half of the income from that money). Student loans dry up when there’s a credit crunch, as do car loans and mortgage loans—an that only intensifies the housing mess. I guess the whole point of this diary is simple: because you hate Wall Street speculators and banks which made bad loans using deceptive practices, don’t forget that the people DO matter.
P.S., I am probably not gonna respond to many comments today—don’t have time. But I felt that the fates of average people were being overlooked by many, and that there was a certain amount of blaming the victim occurring on the part of a few who seem to be able to shrug off other people’s pain easily as a necessary part of stabilizing the economy. I believe we can stabilize without screwing the people Bush’s Trickle Down Economics has pissed on for 8 years. I think we need to invest money in infrastructure—a New Deal that will fix broken bridges and decaying schools—not supporting the rich. Oh, the rich will benefit, but the goal has to be helping ordinary people, and any bailout has to make THAT its main concern.