theatlantic | In my house, we have learned to live a no-frills existence. We halved
our mortgage payments through a loan-modification program. We drive a
1997 Toyota Avalon with 160,000 miles that I got from my father when he
died. We haven’t taken a vacation in 10 years. We have no credit cards,
only a debit card. We have no retirement savings, because we emptied a
small 401(k) to pay for our younger daughter’s wedding. We eat out
maybe once every two or three months. Though I was a film critic for
many years, I seldom go to the movies now. We shop sales. We forgo
house and car repairs until they are absolutely necessary. We count
pennies.
I don’t ask for or expect any sympathy. I am responsible for my
quagmire—no one else. I didn’t get gulled into overextending myself by
unscrupulous credit merchants. Basically, I screwed up, royally. I
lived beyond my means, primarily because my means kept dwindling. I
didn’t take the actions I should have taken, like selling my house and
downsizing, though selling might not have covered what I owed on my
mortgage. And let me be clear that I am not crying over my plight. I
have it a lot better than many, probably most, Americans—which is my
point. Maybe we all screwed up. Maybe the 47 percent of American adults
who would have trouble with a $400 emergency should have done things
differently and more rationally. Maybe we all lived more grandly than
we should have. But I doubt that brushstroke should be applied so
broadly. Many middle-class wage earners are victims of the economy,
and, perhaps, of that great, glowing, irresistible American promise
that has been drummed into our heads since birth: Just work hard and
you can have it all.
If there is any good news, it is that even as wages have stagnated, a
lot of things, especially durable goods like TVs and computers, have
been getting steadily cheaper. So, by and large, has clothing (though
prices have risen modestly in recent years). Housing costs, as measured
by the price per square foot of a median-priced and median-sized home,
have been stable, even accounting for huge variations from one
real-estate market to another. But some things, like health care and
higher education, cost more—a lot more. And, of course, these are
hardly trivial items. Life happens, and it happens to cost a
lot—sometimes more than we can pay.
Yet even that is not the whole story. Life happens, yes, but shit
happens, too—those unexpected expenses that are an unavoidable feature
of life. Four-hundred-dollar emergencies are not mere hypotheticals,
nor are $2,000 emergencies, nor are … well, pick a number. The fact is
that emergencies always arise; they are an intrinsic part of our
existence. Financial advisers suggest that we save at least 10 to 15
percent of our income for retirement and against such eventualities.
But the primary reason many of us can’t save for a rainy day is that we
live in an ongoing storm. Every day, it seems, there is some new,
unanticipated expense—a stove that won’t light, a car that won’t start,
a dog that limps, a faucet that leaks. And those are only the small
things. In a survey of American finances published last year by Pew, 60
percent of respondents said they had suffered some sort of “economic
shock” in the past 12 months—a drop in income, a hospital visit, the
loss of a spouse, a major repair. More than half struggled to make ends
meet after their most expensive economic emergency. Even 34 percent of
the respondents who made more than $100,000 a year said they felt
strain as a result of an economic shock. Again, I know. After the job
loss, the co‑op board’s rejections, the tax penalties, there was one
more wallop: A publisher with whom I had signed a book contract, and
from whom I had received an advance, sued me to have the advance
returned after I missed a deadline. (Book deadlines are commonly missed
and routinely extended.)
In effect, economics comes down to a great Bruce Eric Kaplan New Yorker
cartoon that was captioned: “We thought it was a rough patch, but it
turned out to be our life.”