For nearly two years the US economy has been battered by a recession brought on by _________________.I would guess most semi-informed people would mention the housing bubble and mortgage backed securities (unless you are so completely incompetent as to not know about the $8 trillion dollar housing bubble!). Somewhere in the discussion one would hope to hear about the sub-prime lending spree that hugely profited unscrupulous mortgage brokers and victimized many borrowers. Right?
Not if you're Liane Hansen chatting with Marilyn Geewax (get out the Q Tips!); according to Hansen the recession was brought on by "excessive borrowing - millions of people took on far too much mortgage debt or maxed out their credit cards." Yep, it was all those foolish Americans frivolously maxing out their credit cards and buying houses willy-nilly. At this point you hopefully gave NPR one of its well deserved Dial-away™ moments and switched to some other station, otherwise you were subjected to even more astute economic insights about Americans and their savings.
After Geewax explains that a study found that "about half of all Americans said they couldn't scrounge up $2000 even if they turned to their relatives for help," Hansen asks, "Why do so many people live on the financial edge?" A reasonable question. You might expect to hear something about depressed wages, exhorbitant health insurance fees, predatory lending, skyrocketing college expenses, union busting, etc. or as one of the commenters on the NPR site writes,
"This was a very poor presentation of the issue by NPR. Despite an introduction, followed by an interview, not a thing was said about American wages. They mention how generations ago, we had a greater savings rate, never mind that back then, families could live well on one income."Geewax is not about to answer the question, but continues on with scolding the current generation of Americans,
"We've just sort of step by step, generation by generation, gotten more accustomed to this idea of easy credit...has lead to a kind of financial illiteracy, we don't read the fine print, we don't really think about compounding interest and so people kind of lost track of the financial risks..."If all this weren't bad enough, Geewax and Hansen then turn the whole story into a condescending commercial for NPR. Geewax explains that to save up $2000, all a couple has to do is each "put $20 in a cookie jar every time they listen to Lianne Hansen on Sunday mornings, by the end of the year that couple would have $2000." Wow why didn't I think of that? Better yet, if everyone put a dollar in the cookie jar every time they heard something stupid on NPR news, we'd all be millionaires by years end!
15 comments:
Bravo, mtw! Way to smash that cookie jar and expose the kooks. Her name was really Geewax? That's the kind was that gets in your ears and makes you say "gee" when the stupid starts squawking.
"was" = "of wax" geez
Yeah, a couple of years back, I realized that my blood pressure would be much better if I turned off the radio on Sunday mornings. It doesn't get any worse than Liane the Loathesome.
Pat in Texas
if everyone put a dollar in the cookie jar every time they heard something stupid on NPR news, we'd all be millionaires by years end! "
It would be much easier to simply put a dollar in every time I heard something smart on NPR news [sic], although, admittedly, I'd probably have only a couple dollars by the end of the decade (including compounded interest)
And actually, simply NOT contributing to NPR is probably the best way to save. Money wisely not spent.
I especially love Beeswax's comment about 'financial illiterates". I'm sure Adumb Davidson and David Kestenbaum can relate.
Nomi Prins (who actually knows something about wall Street, unlike the dimwits at NPR), bursts the "poor folk done it" myth here
I don't know why the idiots at NPR think they somehow know more about this stuff than anyone else.
It just makes them look like the quacks and fools that they are.
"Before becoming a journalist, Nomi [Prins] worked on Wall Street as a managing director at Goldman Sachs, and running the international analytics group at Bear Stearns in London."
Geewax explains that to save up $2000, all a couple has to do is "put $20 in a cookie jar every time they listen to Lianne Hansen on Sunday mornings, by the end of the year that couple would have $2000."
No they wouldn't, they'd have only half that in one year.
$20 x 52 Sundays = $1040
To save $2000, they'd each have to put 20 in ($40 total per Sunday).
I think they did say "each." But it is so deprecatory and parental: you bad Americans have been paying too much attention to the avalanche of advertising we've poured over you - "don't be such suckers that you work all week just to buy the Baby Einstein DVD so you won't have to be with your kid"...they might be saying. That would make more sense. But no, Bruce Kluger was highlighted on NPR advocating Baby Einstein and disputing the study showing that infants a harmed by this consumer product, and by implication, suggesting that people spend their money on this crap.
Yes, she did say "each" and I corrected that...sorry.
This stuff is so sickening. Remember the CitiBank "Live Richly" ad campaign? When was that, two years ago? Right when the bubble was about to burst?
I leave it to some enterprising psychology student to write a dissertation on that thing, but the point seemed to be, "don't get paid enough money to buy that thing you want or take that trip you want to go on? Don't worry – just charge it! It will make your life so much better." Granted, advertising lies – that's the whole idea – and no one should believe it. Still, how many millions did Citi pour into that campaign? To even pretend the average American is on a level playing field with the credit card industry is to abandon all journalistic integrity, not to mention basic human decency.
Probably the only thing adults raised on Baby Einstein have in common is that they actually believe they are geniuses (since their parents probably told them they were a million times)
I would not be surprised if a lot of the announcers on NPR were baby Einstein babies.
"We've just sort of step by step, generation by generation, gotten more accustomed to this idea of easy credit...has lead to a kind of financial illiteracy, we don't read the fine print, we don't really think about compounding interest and so people kind of lost track of the financial risks..." -- Geewax
That is oversimplified to the point of being vacuous.
As Elizabeth Warren says:
I am a contract law professor, and I cannot understand some of the fine print. Even people who try to understand their contracts and who do their best to live up to their side of the bargain fall into traps and get stuck with well-hidden risks.
The following is from Congressional testimony Harvard Law School's Elizabeth Warren , appointed by Harry Reid to monitor TARP (the best she can, given that Geithner/Summers/Obama won't even give her all the information she needs to do a proper job):
Elizabeth Warren:
"Tricks and Traps Pricing
I’ve been around long enough to remember the old model of banking. It’s a model that most of us grew up with, as I did in Oklahoma. The model was simple and effective: consumers shopped around for products and terms, and lenders evaluated the creditworthiness of potential borrowers before making loans.
Today, the business model has shifted. Giant lenders “compete” for business by talking about nominal interest rates, free gifts, and warm feelings, but the fine print hides the things that really rake in the cash. Today’s business model is about making money through tricks and traps.
There are three problems with this new model.
The first problem hits consumers directly. Plain and simple, consumers cannot compare financial products because the financial products have become too complicated. In the early 1980s, the average credit card contract was about a page long. Today, it is more than 30 pages. It would take hours to parse these contracts, and even then, I’m not sure what the customer would know. I am a contract law professor, and I cannot understand some of the fine print. Even people who try to understand their contracts and who do their best to live up to their side of the bargain fall into traps and get stuck with well-hidden risks.
I neglected to give the link to the Elizabeth Warren testimony above.
Then again, why should I give a reference to back up what i say here on a blog? Everyone -- at least everyone in management at NPR (and that includes ombudsman Alicia Shepard) -- knows that blogs are simply "shouting matches".
NPR never does. They simply quote "un-named sources" or "many experts" or some such rubbish.
Mytwords,
That last sentence cracked me up and made my day! Thank you. May I borrow it for my email signature?
Yeah, it's our fucking fault we're out there propping up Wal-Mart with our plastic... For not getting into investment banking...
Post a Comment