Now that we have avoided sure and near-term economic disaster by not extending the debt ceiling, pundits are pondering whether or not the deal that was passed was fair. Did it cut spending enough/just right/too much? Are we heading to another crisis by not stimulating the economy/spending too much/not raising revenue enough? Does this deal help/hurt/none of the above Obama in the next election?
I'm reading all the links in my RSS feed and none of it sticks with me like the conversation that I had with the secretary at the moving company.
I'm preparing for a big move at the end of the month. As I drive around doing errands, Ian tags along with his drawing book, pencil, and pencil sharpener. Yesterday, we went to the Barnes and Noble on Route 17 to sell old books. Today, I took him up to Mahwah to drop off a deposit check with the moving company. Because Ian is so sweetly quirky (and has red hair), I get into lots of conservations with strangers. After I explain why Ian is so quirky, people tell me their stories. People can be extremely nice, if you lower your guard first.
When we were at the moving company, I marveled at their calendar on a huge dry erase board, which was packed with moves. I asked the secretary, if it was always that busy. She said no. I asked these were mostly local moves or were people going long distance. She said that some of the moves were local, but mostly people were getting out of the area. They were going to North Carolina or Pennsylvania, where the homes were cheaper and the taxes were lower.
She said that she and her husband don't make that much money and can't afford a home, so they live in a trailer park a few miles away. They would like to move, but they are afraid that they won't find work elsewhere.
Trapped in a trailer park.
I'm not sure what the answers are, but I have A LOT of sympathy for this woman. This woman is my bottom line and is always my bottom line. Show me how to make this woman's life better, and you have my vote and my allegiance.
Apt. 11d 
At least NJ doesn’t get many tornadoes.
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“where the homes are cheaper and the taxes are lower” and the salaries are lower and there’s little chance of getting a job on Wall Street, and nothing is open at 10:00 on a Tuesday night.
I’m not sure I have a point, but there’s something wrong with a world living in a mobile home means you are less mobile.
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“Now that we have avoided sure and near-term economic disaster by not extending the debt ceiling…”
We may be starting a double dip recession right now. Here’s Larry Summers, late of Obama’s economic team:
“On the current policy path, it would be surprising if growth were rapid enough to reduce unemployment even to 8.5 percent by the end of 2012. A substantial withdrawal of fiscal stimulus will occur when the payroll tax cuts expire at the end of the year. With growth at less than 1 percent in the first half of this year, the economy is effectively at a stall and facing the prospects of shocks from a European financial crisis that is decidedly not under control, spikes in oil prices and declines in business and household confidence. The indicators suggest that the economy has at least a 1-in-3 chance of falling back into recession if nothing new is done to raise demand and spur growth.”
http://www.washingtonpost.com/opinions/moving-forward-after-the-debt-deal/2011/08/02/gIQAMWP7pI_story.html
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“I’m not sure I have a point, but there’s something wrong with a world living in a mobile home means you are less mobile.”
From a personal finance point of view, that’s one of the major objections to mobile homes as a purchase. They’re actually relatively expensive to buy new and they depreciate sharply, so it is easy to get stuck in them and be unable to sell. Hopefully Laura’s contact is renting or owns an old one.
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One political party favors programs that would help her. And it’s not the Republicans, who don’t give a damn about unemployment, unemployment benefits, health care, consumer protection, or anything else that could help her.
Take back the House and this hostage-taking at the expense of the poor will be put to an end. Meanwhile, good luck getting anyone confirmed to head an agency charged with protecting consumers in their financial affairs, let along funding the FAA.
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Well, Arcie, I’m not that sold: it is the Demmies who favor open borders, which drive down the cost of labor, the Demmies who struggle against Walmart, which provides cheap goods and jobs to poorer people. It’s my understanding that the mass of Tea Partiers are middle- to lower- middle class, so unless you think they are stupid and deluded and can’t identify their own interests, the Reeps must be doing SOMETHING for them.
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Then there’s the penny ante stuff, like bringing (admittedly with GWB’s help) on the era of the $5 light bulb. That is achieving a number of things.
1. It makes a hitherto inexpensive household product expensive (and CFLs don’t have huge energy saving utility in colder climates–you need to heat your home anyway).
2. The last major US incandescent bulb factory has closed. The CFLs are being manufactured abroad.
http://www.washingtonpost.com/wp-dyn/content/article/2010/09/07/AR2010090706933.html
Then we get to stuff like the NLRB’s activities. They recently forbade Boeing from opening up a second production line in South Carolina, saying that by doing so Boeing was attempting to punish unionized NW workers.
http://articles.latimes.com/2011/jun/15/opinion/la-ed-boeing-20110615
With that kind of intrusive micromanagement (in an extremely competitive international industry), it shouldn’t surprise anybody if Boeing offshores more production. It would be amazing if they didn’t. We all wring our hands over the departure of manufacturing jobs, but honestly, are we giving those companies any reason to stay?
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I’ve got more.
1a. Thanks to Cash-for-Clunkers, hundreds of thousands of affordable used cars were taken permanently out of circulation. Combine that with the natural effect of the recession on purchases and resales, and it’s much harder to get a cheap bottom tier car than it was four years ago. Cash-for-Clunkers was only partly responsible, but it did its part in putting basic transportation beyond the reach of many low-income Americans. And the stuff about mileage and fuel economy is bogus–people who drive 15-year-old cars don’t usually drive them hundreds of miles a week. The more expensive it is to drive your car, the less you’re going to drive it.
1b. Cash for Clunkers reintroduced a lot of Americans with paid-for cars to car payments (a 15-year-old car probably would have been paid off). Car payments are to broke people as kryptonite is to Superman.
2. The $8k housing credit lured a lot of marginal buyers into the market who should have waited, but couldn’t resist all that “free” money.
Really, the only way to manage this worse would be to send out millions of postcards advertising federally funded 600% a year payday loans.
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Speaking of the $8k homebuying credit, there’s reason to believe that each of those homebuyers has now lost $15k in home value (and $20k for early participants).
http://www.smartmoney.com/spend/real-estate/how-the-8000-tax-credit-cost-home-buyers-15000-1304981110838/?zone=intromessage
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Hmm, neither gay marriage nor tax cuts for the rich seem likely to make this woman’s life better, so neither political party is offering her much. In fact, it’s hard to think of a high salience issue among the chattering classes that would affect her much.
“Not that they starve, but starve so dreamlessly./Not that they sow, but that they seldom reap./Not that they serve, but have no gods to serve./Not that they die, but that they die like sheep.”
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Increases taxes for the wealthy to fund programs she might use (rather than gay marriage) might help her more than tax cuts for the wealthy. I’m pretty sure that a wholly democratically controlled congress would let the Bush tax cuts expire.
Spending government resources paying lawyers at Justice to defend DOMA most certainly doesn’t help her. Extending unemployment benefits might not help (since she’s employed), but the payroll tax holiday does help her, especially if we can fund it by closing the hedge fund manager tax loophole & taxing higher wage earners.
I think its reasonable to ask what the policies of the parties would do for this woman, but that an automatic assumption that it’s one party, without talking about specific policies. I don’t think Dems do support open borders (though they do support treating the people who are already here differently than the Repubs do). On the other hand, Walmart does depend for its low prices on “low priced labor” — the labor is just paid outside our borders, though.
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…fund programs she might use (rather than gay marriage)
She might be much happier married to a woman. You never know.
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“On the other hand, Walmart does depend for its low prices on “low priced labor” — the labor is just paid outside our borders, though.”
Are we quite sure that Target (for instance) has more US-made stuff than Walmart? I do see American-made stuff at Walmart, for instance Nordicware baking stuff.
That said, I confess, one of the scariest phrases in the English language is “Walmart Chinese shrimp.”
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I’m not an economist but I suspect that neither tax cuts nor traditional government spending will help this woman, because we’re in the midst of a huge shift in our economy. Old ways of making a living no longer exist either because of competition, technical advances, or union decline. Only the flexible will make it through. While traditional government won’t help, I do think that smart gov’t spending could help society make this transition. And smart cuts, too. Like most of you, I would be happy to ditch the Bush tax cuts.
Dave – Polls show that tea partiers are higher income than most voters. Also, while Republican leaders may say that they are tough on illegal immigrants, Republucan business owners are happily employing them to pick their grapes.
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While traditional government won’t help, I do think that smart gov’t spending could help society make this transition.
I’m fairly certain that Jersey Shore is a government program to reduce unemployment in New Jersey by driving people away. It only started after the crash had been in place. Kind of like how the government created the Andy Griffith Show to make it easier to pass civil rights legislation by portraying the South as having only white people.
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“Dave – Polls show that tea partiers are higher income than most voters. Also, while Republican leaders may say that they are tough on illegal immigrants, Republucan business owners are happily employing them to pick their grapes.”
Illegal immigration is unpopular across both parties in the rank and file (the elite of both parties tends to be squishier–see the Comprehensive Immigration Reform Act of 2007). The difference between the parties is primarily that illegal aliens are a Democratic interest group.
I’m still not seeing what “programs” will do for this particular lady at the moving company. If she and her family are hoping to leave for the South, it may be that she’s just giving up on the high tax/high inequality/high cost of living/high government service NE model (and believe me, I totally understand!). The Southern model is probably less nice for the bottom 10-20% of society, but if you are a moderate income person, you can have a much more comfortable lifestyle (and who cares if nothing is open at 10 PM on a Tuesday night besides Walmart–the kids are in bed and there’s school the next day).
I suspect that $5k-$20k in cash would make this woman’s problems go away. With money in that range, she and her husband could probably get rid of the trailer and make a few long job-hunting expeditions to the area that she likes.
Also, Dave Ramsey’s Financial Peace University is always a good choice. It’s about a $100 bucks for a 13-week class, and it helps a lot with giving people financial street smarts and helping them plan for their futures.
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“Old ways of making a living no longer exist either because of competition, technical advances, or union decline. Only the flexible will make it through. ”
I agree with this, and would add that both flexibility and risk-taking will be required. But, I think that human beings, on average, are not particularly well-designed to shoulder risk individually. And, I think, we are not really willing to accept the brutality of a social structure in which individual risktakers are allowed to starve and suffer (even if through their own choices). Some who are comfortable with the new model engage, in my mind, in magical thinking where individual safety nets arise out of the absence of “programs.” I don’t doubt that some parachutes will appear, but I also think we’ll have to tolerate a lot more people hitting the ground with a thud, than we do when there are communitarian (government provided) safety nets.
Mind you, I don’t think things were better in the good old days — only that there were other negatives outcomes: segregation, seniority, employer control, suppressed entrepreneurship, closed borders to both goods and services, . . . .
But I do think we need to decide what kind of society we want — because i do believe it’s changing.
(I also agree that 20K could help out that woman a lot. The problem is, and even I, a flaming liberal, see the problem, that the 20K won’t necessarily be spent in the opportunity expanding way we hope she could use it).
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If she were my relative (and I were a lot more flush), I’d offer her a $100 match for every $100 she saved toward her get-out-of-Jersey fund–with the usual trust-but-verify caveats. If she really wants to get out, she might need only a fraction of the full $20k.
I can’t find the link now, but a few weeks ago I posted a link to a program that has been very successful with accountability groups for poor people (accompanied with payments for doing desired activities). Something like that might be helpful for Laura’s moving company lady. There’s a certain fraction of financial problems that can be fixed by thinking hard about them (and picking up a little extra money).
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Trapped in a trailer park is indeed teh suck, so it’s worthwhile thinking about what, systemically, is keeping her there.
Is it the mobile home itself? Amy P noted that they’re notoriously bad ways of buying a home. Are they so inherently predatory that they ought to be zoned out of existence? Wouldn’t help her specifically, but going forward that might help people like her.
Is something like health care keeping her tied to this particular job? We got a lot of portability with the Affordable Care Act, I think, so this is something that will get better with time. (Moving and/or changing jobs in Germany is a nuisance, but no one worries about health care in that context; it’s a big net win for society. Also, small business owners and other entrepreneurs don’t have to worry about coverage for themselves and their employees. Based on my experience in the States, that’s a gain of at least 20% of the founder/boss’ time, which is huge in a growing business.)
Thanks to the internet, finding work from a distance has never been easier. If they really want a change, the route is find work then move. Systemically speaking, the situation is hugely better than it was 10 or 20 years ago.
The really hard problem, as far as I can tell, is if a secretarial job plus a blue-collar job (my assumption about her husband’s work) simply can’t buy housing in the NJ area. In the early 1990s (by way of example) UPS moved its headquarters from CT to GA because, at least in part, everyone in the organization could get twice as much house in the Atlanta area as they could in CT. In an integrated national economy, those kinds of disparities are hard to support.
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I don’t see how zoning trailer parks out of existance will help somebody whose problem is that they can’t buy housing unless we’re talking about areas with a great shortage of land.
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“The really hard problem, as far as I can tell, is if a secretarial job plus a blue-collar job (my assumption about her husband’s work) simply can’t buy housing in the NJ area.”
Right.
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As with homelessness, though (and I know the problem is complicated), aren’t trailer parks part of the choice (just like GA buying 2X as much house)? Are trailer parks really cheaper than other housing choices, or do people chose them because of other characteristics they want in a home (i.e. not being attached to their neighbors house, ruling out many urban solutions, wanting to keep pets, again, ruling out many apartment solutions, . . . .). I see trailer parks in rural areas in my wide-open state, and in some cases, those parks must be driven by an unwillingness to build permanent structures in those places. But New Jersey isn’t like that, is it? What housing could be purchased for the same amount, in the same working commute?
“In an integrated national economy, those kinds of disparities are hard to support.”
I think these are the kinds of things that are the real changes in the world — and we can’t go back. I think, though, that we do need to think about how we go forward because I think the integrated economy with technology allowing true nationwide and worldwide competition, that our social structure will have to devolve to the least common denominator. I think some conservatives (and I refuse to believe that they are heartless) believe that we’ll resurrect the family/tribe/village (depending on where, and using tribe with and towards religion, too). I don’t think that’s how it’s going to go, though. I fear the class-bound dystopia where the rich build gated communities in the sky and the rabble fight in the streets and want to think of pragmatic solutions to fight that vision.
Pragmatic solutions recognize, though that we may have to give up some good that comes of unfettered competition, technology, and globalism (like wallmart & target & potentially Google and cures for cancer) because we’ll be disinventizing the serious risk taking some of those ventures entail.
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(Tried posting this earlier: it got eaten.)
This old guest post at Ezra Klein’s has some interesting ideas at what smart, original policy for helping us out of the unemployment morass might look like. It’s been a year since this piece was posted, and nothing like it has happened yet.
(As an aside, the book of interviews with the author is phenomenal.)
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I fear the class-bound dystopia where the rich build gated communities in the sky and the rabble fight in the streets and want to think of pragmatic solutions to fight that vision.
The rich gating off themselves may be a problem in certain parts of the country, but you still hit a similar problem just between the poor and the middle class. If you want to pay civil servants well and have a lot of them so you have good services, you need to either find a way to raise tax money from non-residents, find a way to get wealthy residents to stay despite being able to pay lower taxes elsewhere, or you need to find a way to exclude residents who can’t pay much in taxes. Most places have to pick option 3 and they accomplish this with zoning laws because it is the only legal way to do it.
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“Pragmatic solutions recognize, though that we may have to give up some good that comes of unfettered competition, technology, and globalism (like wallmart & target & potentially Google and cures for cancer) because we’ll be disinventizing the serious risk taking some of those ventures entail.”
I don’t think that any solution that involves losing Walmart, Target, Google and cures for cancer is going to be a winner in the democratic process. Plus, it’s quite possible to not have that stuff and to live in a much less pleasant and functional society–i.e. Somalia or Afghanistan or North Korea. I don’t think we get to choose between living like happy, peaceful hobbits in a steam-free Shire and our actual early 21st century life.
My happiest thought is that we are in a period like the industrial revolution that was messy and wrenching at the time, but that ultimately brought undreamed of material comforts to the masses.
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“we’ll be disinventizing the serious risk taking some of those ventures entail”
Another debate entirely, but many of those ventures function with ginormous subsidies or implied subsidies through publicly-funded research, direct public spending or very favorable tax treatment.
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Public spending invented the internet, but it took the free market to make it easy to find the best pictures of Alyssa Milano.
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“find a way to get wealthy residents to stay despite being able to pay lower taxes elsewhere, ”
It’s not impossible, you know. Wealthy people like services. They want their streets to be clean; they want foreign language classes in their schools; they want swimming pools; and, even if for purely selfish reasons, they don’t like to have to step over desperate people lying in the streets.
In a democracy, one’s ability to get those things without cooperating with others are limited (even if one was willing to find gated communities that provided them by keeping out the poor people.) If you really want to exclude the riff raff without their cooperation, you have to go to the extremes of oppression. Rich people rely on functional government and have a lot to loose (I’m paraphrasing somebody, aren’t I? Carnegie?)
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BJ, I know it isn’t impossible, but it is difficult since all it takes is passing “No more than six houses per acre” for a zoning code and you can have the nice services plus lower taxes.
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(I’m paraphrasing somebody, aren’t I? Carnegie?)
I think you mean Richard Florida. He left town.
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Rich people can hire Pinkertons.
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“”No more than six houses per acre” for a zoning code and you can have the nice services plus lower taxes. ”
Yes, but that only works when the people don’t storm the gates and st up tent on the lawns of the six houses/lawn. They don’t do that if you have an oppressive government or you have to palate the masses (who get to vote, in a non-oppressive government). They can vote, for example, to disband their school system (as in Memphis) and storm the gates of the better schools you’re trying to get for less money.
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“Rich people can hire Pinkertons. ”
They can’t really, unless they want to live in a society vastly different from the one we live in, sending their children in armored cars to their playdates (like the upper echelons do in Pakistan and Mexico). It’s an ugly way to live.
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“Yes, but that only works when the people don’t storm the gates and st up tent on the lawns of the six houses/lawn.”
The bus lines aren’t going to run to those neighborhoods, so no riff raff. (I’m not sure yet how the nanny gets to work.)
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Yes, but that only works when the people don’t storm the gates and st up tent on the lawns of the six houses/lawn.
That’s why they stick the poor in places like rural Georgia.
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High-tax, high-service areas (like the tri-state area where both our hostess and I live) don’t have trouble holding on to rich people. But they seem to have trouble holding on to middle-class people who don’t work for the government, e.g., our friend the moving company secretary who wants to move, the salesmen and small business types who make up the tea party, etc. That sort of person doesn’t seem to like the blue state model, so you end up with a hollowed out social structure, like we have here on the Upper West Side.
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Shiny, yuppified urban areas are a lot more fun to live in with money, and lots of it (especially if you have kids).
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At the current rate of houses moving through the system, New Jersey has 49 years worth of foreclosures.
http://www.thebostonchannel.com/r/28767638/detail.html
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