Posted by: Rodger Jacobs | March 26, 2009

Dazed and Confused

It’s difficult to imagine anybody being “broadsided” by the loss of personal fortunes or jobs as the economy continues to slump and sag. But that’s part of the reason we’re in the mess we are in: for far too long in this culture, folks have just been merrilly chugging along, heads stuck in the sand, embracing the status quo, and never, ever asking vital questions like Can we really afford this house? or Can I get by on that three million Uncle Walt left me when he died or should I play Mr. High Roller and invest the whole bundle in the stock market?

From the LA Times:

Most middle-class applicants are not interested in Medi-Cal, Social Services staff said — they need food stamps and cash to pay the mortgage.

“They come in because they’re at their wits’ end. They’re already beginning to lose things, and they want to make sure they can feed their children. This is really a last stop for them,” said Carlos Perez-Carrillo, an eligibility supervisor in the Panaroma City office. “These are career people. You can tell by the way they dress. They have been working all their lives, and they’re coming in here broadsided, just really confused.”

Really confused? Why? How? Were they not paying attention? With the exception of the assistance I’ve been receiving from Social Security Disability since 2003, I have, as I have written about here in the past, been living off the grid for a good 20 years now. Living off the grid generally means no 401K plan, no health and dental benefits, no annual vacations to Disney World. It means living close to the ground, developing a finely tuned ear to tell you whether that rumbling you hear on the tracks is the sound of an oncoming train. In short, I, and many, many more people like me, heard this derailment coming a long time ago and we are neither dazed nor confused.

The aforementioned Times article concerns the vast number of middle-class families in L.A. who are being denied state and federal assistance because of income requirement caps. People are petulant and upset because their $1,200 a month in unemployment benefits is too much income to qualify for food stamp assistance; in short, the attitudes of entitlement that have had a stranglehold on our culture for far too long continues to endure even in this crisis:

Most of the middle-class families Perez-Carrillo has seen turned away are receiving more than $500 a week in unemployment benefits. When they get denied, they get upset.

” ‘I’ve paid my dues.’ That’s what they say, ‘and you don’t want to help me,’ ” Perez-Carillo said

It’s not about you, people, this is the way the system works. That’s the way it worked for me in 2007 when I had to apply for food stamp benefits and was offered $10.00 a month because my Social Security income of $800 a month at that time was “too much income.” But now that the head-in-the-sand lemmings of middle-class America are being affected, everyone is clamoring for social service reform. I guess this is what it takes for true change in this nation. Consider the following:

Sabey, who had a sheltered childhood and never before experienced financial distress, was surprised that the referral list she got from Social Services included a homeless shelter for single mothers. She had no idea such places existed.

“Why are we allowing single mothers to get to that point?” she said. “Why aren’t we doing something?”

This woman never knew that homeless shelters for single mothers exist? I think that about says it all and now I truly am dazed and confused.


Responses

  1. Well said, Rodger, well said.

  2. Thank you, Geoff.

  3. About thirty years ago, someone won the Nobel Prize in Economics—I think his name was Negroponte—for a theory about how a person’s spending habits are determined when they are young and really do not evolve much over the arc of their life. The baby boom has simply never been able to stop spending, and it figured it wouldn’t until someone took all the charge cards away.

    When I was on the trust side of banking, one chart really made an impression on me. The chart had one line that reflected an average person’s debt over the course of their life, and another line reflecting their assets over a lifetime. When you enter adulthood, debt is high and assets are low, but the two trendlines move steadily towards each other. The lines crossed—debts and assets were equal—at age 43. From there, debt declined and assets increased.

    It especially made an impression on me because I was hitting 40 and took the chart as an invitation to try to beat the average myself, as any reasonable fool would, I think. And indeed it’s important to think in those terms in one’s late 30s and early 40s: generally, after about six years in the workforce, you should progressively shy away from debt and work to grow assets. But staying away from debt is far more important between the two.

    I think if banks would just show people this chart, instead of using it against people to sell them as much debt as they can “afford”–both people and banks would be better off.

  4. Joseph, I read a study the other day that said the average American parent(s) continues to support their children substantially from the age of 18-24 to the tune of something like $48,000 in loans and cash gifts. Interesting how that dovetails with the chart that you cite.

  5. Great post. It’s sad and pathetic that people think they are so elite. Then when real life slaps them in the face they can’t handle it. At the same time — and don’t hold this against me — it makes me emit incredulous waves of laughter. What world do these people live in? That’s not where I live. 500 dollars a week in unemployment? I wish I could make that much employed.

  6. 500 dollars a week in unemployment? I wish I could make that much employed.

    My point (or one of them at least) precisely, Randy. After rent/mortgage, $2,000 a month in temporary assistance won’t carry you far in L.A.’s cost of living index. But before the post-war boom, many Americans were readily mobile, not tied down to a mortgage, owning few possessions, prepared to move to whatever city offered a sustainable living.


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