Wednesday, February 29, 2012

Horrid Little Woman

Megan McArdle has a long post up explaining how income loss really only matters when it happens to the riches. In what she seems to think is a QED moment, she appends this from a "bankruptcy attorney":
Another factor I've noticed with my bankruptcy clients is that a very rich person whose income takes a sudden precipitous drop to a still-pretty-good income can actually wind up in more financial trouble, faster, than a very poor person whose income drops to zero.  If you were making $300k a year and spending $200k of it on fixed expenses, and your household income drops to $125k a year, unless you have substantial liquid savings or are able to sell your house and your car and your boat yank your kids out of private school REALLY fast, you're going to wind up in bankruptcy in a fairly short space of time.  A person who was making $18k a year and suddenly finds themselves making nothing, as a practical matter, can often break their lease and move in with mom and get on food stamps until a new job materializes and wind up with only a couple thousand dollars in debt.   Not that it's not still ultimately much better to be the rich person, but the rich person does get hit with a more panic-inducing financial calamity in the short term.
Having fallen so far, the riches have it much worse, even thought they still earn 125k per annum, because of panic induced by not having 200k per annum anymore. Meanwhile, our poor is home with her family plus her husband and kids but that dislocation doesn't matter because? And what if the parents live month to month in one bedroom apartment? Where do the poors go? What if only one of the poors loses their job? 36k with two kids to 18k with two kids say. Somehow or another staring homelessness and food deprevation in the face is less panic inducing than structured bankruptcy and a decent life on 125k?

Actually and to be fair, the bankruptcy attorney seems to think that poors are single and so they don't have to worry about kids, which is totally bullshit and emblematic of the horribleness of the defenders of the  riches.

It's not a case of no sympathy for the riches when things go bad; it's the case that the poors need help now while the riches have a whole system in place to protect them from the "creative destruction" of a neoliberal economic system come undone.


  1. Megan mccardle may the daughter of David brooks and Maureen dowd.

  2. Maureen Dowd, I stopped reading her when it became increasingly obvious that she is the neoliberal version of Ann Coulter.