Times Promotes Me-too Personal Credit Crisis

personal-credit-crisis-edmund-andrews The New York Times has gone Oprah! Remember last year when she fronted her magazine O with the big “How could I have let myself go” headline? The Times is attempting the same cheap populism with its personal finance focused magazine this past weekend.

One article that stood out and subsequently got a lot of attention was a personal credit crisis “confessional” from one of its own economic reporters.  He has a book to promote, so naturally, the paper is there to serve as the springboard.

Many bloggers have applauded the “insight” and “braveness” of the writer, while heaping a string of other nauseating superlatives to the lengthy excerpt.  I cannot share the same sentiment.

First of all, the irony of an economic reporter having financial difficulties is just screaming for a movie deal, right? Oh wait, the movie had already been made, it was a box office bomb called Confessions of a Shopoholic. Granted, the story in this case is slightly less vapid, but equally inexcusable.

As far back as the early 2000s, Andrews had been reporting on the economy, including alarming signs of predatory lending practices emanating from the housing and mortgage industries.  In June 2004, a mere two months before his purported new chapter in life kicked off with an unaffordable mortgage, Andrews wrote the following gem titled “The ever more graspable, and risky, American dream”. Summarized by the Times in its archive, it says:

Array of mortgages for people with little cash or overstretched budgets has enabled families of modest income to take on debt once beyond their reach to buy homes, spurred by low interest rates and confidence that house prices will continue to rise. Some experts worry that recent first-time buyers will be squeezed by rising interest rates on adjustable-rate mortgages, possibly causing housing prices to wobble in some high-price markets on East and West Coasts.

With access to knowledge and information that an average house-buyer could only dream of, if anyone was aware of the leery waters of borrowing beyond one’s means, it should have been Andrews.  While most might’ve been in the dark on the prevalence and the extent of fraudulence of certain mortgage brokers and their lending practices, this guy had all the information one would ever need to make good decisions.

But he didn’t.

Instead, forgetting lessons learned from all the interviews he conducted and the reporting that followed, he “walked out of the settlement office with my loan papers, I couldn’t shake the sense of having just done something bad . . . but also kind of cool. I had just come up with almost a half-million dollars, and I had barely lifted a finger. It had been so easy and fast. Almost fun.”

It gets worse from here.  Upon discovering he was broke in early 2005, instead of leveraging down his mortgage and settling into a more modest and affordable dwelling, Andrews decided to do what millions of broke Americans resorted to: credit cards. Clearly lacking basic mathematics skills required for rudimentary budgeting, he asked his guileless wife “How the hell could we have run through so much money so quickly?”

The tragicomedy continues with him listing his wife’s frivolous consumption habits.  That, combined with his inability to grasp the financial obligations of supporting 6 children (God bless them) and two households, leaves me dumbfounded. They should have gotten billig forbrukslån for a loan.

You must wonder what went through his head as reports on the mortgage industry became more eye-catching. In fact, in 2005, in his own piece on the industry, Andrews quoted a banking commissioner addressing consumer complaints on predatory lending. The commissioner advised, “Today, none of our complaints are about denial of credit. They are all about what happened after the credit was given.” So needless to say, unless the articles were written by someone else, and unless he’s the thick sod that he’s made himself out to be, the much belated alarm must’ve rang by then.

Yet he did nothing.

Even when fortune smiled upon him and gifted his new wife with a $60,000 job, their expenses kept piling up on the credit cards. This shopping list does not sound like everyone who is scared shitless about their financial obligations. It is one utterly out of touch with reality. If you sniff hard enough, you might catch a whiff of, boasting?  I guess in the era of reality-TV, even financial train wrecks carried out by Times prodigies are the stuff of pride. And books.

In the previous December alone, we charged $2,845 on the Chase card for Christmas gifts, food, gasoline, clothing and other expenses. The charges included almost $350 for groceries, $700 in clothes from J. Crew, $179 at GapKids and $700 for airplane tickets for two of Patty’s children to visit their father in Los Angeles. Our balance climbed from $14,118 to $17,135, and in January 2006 we maxed out at our $19,000 credit limit. And there were other expenses on other cards: $1,200 in dental work for Patty’s son Ben; $1,600 to rent a beach house the previous year for us and all the children. Granted, the beach house was an embarrassing mistake. But given that Patty had landed a solid job, it seemed like an indulgence we could work off later.

Now, to what really grates me in this whole dumbness. For a dual-income family pulling in just under $200,000 a year; with high, but predictable financial obligations to his previous family, budgeting is hardly rocket science.  Should he had found himself in the hole due to unexpected medical emergencies or other crapshoot that life dumped on him, that’s a different story.

But in this case, we have a member of the media elite who was more informed about the mortgage industry and its fraudulent lending practices than 99% of the population.  Yet despite his privileged position, he fell prey to the same wishful self-delusion and narcissism as the rest of the country.

And now he’s selling a book that chronicles his fall from financial grace, possibly to prevent foreclosure on the home he’s squatting on.  The writing is buffoonish and gratuitous, and I am not sure what emotions he is trying to elicit from his readers. Disgust? Sympathy? It’s one thing to have been financially irresponsible, it’s another to write a book in an attempt to capitalize and justify those actions.

At this point, you might stop me and say, wait, this financial responsibility stuff is hard.  The guy just wanted to get married, and have the life he wanted.  Yes, and I just want to wake up with Bill Gates’ bank account balance.  It’s high time that everyone realizes that we need to stick to the life that we can have (read: afford), not the life that we wish we could have (read: borrow).

One last thing.  Why is the Times tolerating such populist me-too sentiments? Is this an attempt to make its readers feel good about their shambled finances? Is this ritual of public atonement meant for the big guy to say to the small people: it’s ok you got shit-faced with debts, even our best and brightest succumbed to those temptations?  That’s like a personal trainer getting fat along with his clients to make them feel better when they fail to lose weight.

Sometimes you can be inspirational, sometimes you can be a crowd pleaser.  There are times when you can be both.  This is not one of them.

And one wonders why the Times is in trouble.

picture source: loosa23

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