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  It was probably pretty obvious but there is a damning report out yesterday that paints a stark picture: the collapse of the housing bubble has created a savings and retirement crisis for millions of Americans who face a bleak future.

  The report (which you can get here) comes from the folks at the Center for Economic and Policy Research (CEPR). Why should you believe it? If the policy wonks, talking heads, politicians, economists and the rest of the people who ignored the housing bubble's expansion had listened early on to CEPR's Dean Baker, one of the co-authors of the current report, we might likely have been able to act to prevent the bubble's inflation and save the implosion of the financial markets.

  Baker was one of the few voices warning of the dangers of the housing bubble--but, back then, the traditional media had no interest in sounding like a downer in the go-go enthusiasm for the torrent of cash unleashed by over-inflated home values, and few political leaders wanted to "talk down" the housing value "boom" because, in some respects, it gave cover to the grim reality that no one was seriously dealing with the assault on peoples' wages and standard of living by corporate America. And bankers like Robert Rubin, who inexplicably still maintains his perch as economic statesman in the Democratic Party, were happy to inflate the bubble because their financial institutions were, in theory, building huge holdings (well, we know how that turned out).

  So, what do we learn now from CEPR? Baker and his co-author, David Rosnick, looked at three scenarios: real housing prices remain at current levels, real house prices fall by an additional 10 percent, or real house prices fall by an additional 20 percent. The first scenario is highly optimistic--no one seriously believes housing prices will not fall further. Either way:

In all three scenarios, the vast majority of these families will have little or no housing wealth in 2009.

  And because people made assumptions based on housing wealth:

...tens of millions of families likely ended up saving less than they would have considered prudent, had they recognized that their wealth was temporarily inflated by bubbles in the stock or housing market.

  Now, some scolds will wag their fingers at people who did not save more money. But, the fact is the lack of substantial wage growth, the rising cost of health care, the rising cost of caring for elderly parents, the rising cost of school tuition, the rising cost of food and other necessities, and the lack of real pensions (more on that in a moment) made it impossible for most people not in the upper income brackets to save. (note to ABC's Charles Gibson: we are not talking about people making $250,000 a year)

  CEPR's study is devastating:

The huge increases in house prices seen during the boom years, followed by the bust of the last two years effectively, took homeowners on a gigantic roller coaster ride. While many homeowners were far wealthier than they could have anticipated at the peak of the bubble, now that the bubble has largely deflated, they find themselves with much less wealth than they expected at this point in their careers.

Unfortunately, they do not have the option to reverse the saving and consumption decisions made in prior years. Older homeowners in particular will have little opportunity to make up for years in which they saved little, or not at all, under the assumption that the wealth in their home would be enduring and possibly increase further as house prices rose even higher.

The decline in house prices since the middle of 2006 has lead to the loss of more than $4 trillion in real housing wealth, more than $50,000 for every homeowner in the country. Real house prices are now dropping at close to a 2.0 percent monthly rate, which translates into a loss of almost $350 billion every month.[emphasis added]

  Wanna know what that means by age group, assuming the relatively modest scenario that housing prices will drop 10 percent more:

  If you are in a relatively young household--that would be 35-44 years old--the CEPR folks figure you will have in 2009 just $31,300 in wealth.

"This is 63.2 percent less than the wealth held by the median family in 2001 and 44.8 percent less than the wealth of the median family in 1989, twenty years earlier."

  If you happen to be 45-54,

"the fall in housing prices is projected to lead to a reduction in wealth of 34.6 percent in 2009 compared to the 2004 level for the median family in this age group."

  And if you are in the 55-64 age range, egads:

Median wealth is projected to drop from $275,400 in 2004 to $138,700 in 2009, a decline of 43.1 percent. While the median wealth in this age group is still projected to be 56.6 percent above its 1989 level, much of this gain would be eliminated if the decline in defined benefit pensions was included in the analysis.

  Which leads to an important point. As the authors point out, in some respect their study understates the crisis facing most people. If we had a real pension system in the country, things would not be so scary. By real, I do not mean a 401(k), which is a phony pension. By real, I mean a defined benefit pension system that provides security for the vast majority of people who do not gamble in the stock market: a pension that you can count on delivering a secure amount of money to you each month.

  Thanks to the screw-you-once-we've-used-you-up philosophy in corporate executive suites, since 1978, the number of defined-benefit plans plummeted from 128,041 plans covering some 41 percent of private-sector workers to only 26,000 today, according to the independent Employee Benefit Research Institute. The Bureau of Labor Statistics estimates that only 21 percent of workers in the private sector have defined-benefit pensions. In 2005, only 55 percent of full-time and part-time private sector workers worked at firms that sponsored a retirement plan.  Of those, only 45 percent participated in an employer-sponsored plan. This compares with a 60 percent employer sponsorship rate and 50 percent employee participation rate in 2000.

   And, by the way, the pension crisis you often read out about is not the fault of average working Joes and Janes. As I pointed out sometime ago, General Motors, General Electric, Bell South, Exxon, IBM, Bank of America, Pfizer and many big corporations have pension funding problems because of executive pensions, not rank-and-file workers' pensions.

For those of you who think that the stock market will make up the wealth loss, think again:

While stock ownership has become far more widespread over the last two decades, it is still the case that the vast majority of families own little or no stock, even when including holdings of mutual funds through defined contribution retirement plans.

  There is a silver lining, sort of. The housing bubble collapse and the destruction of wealth makes it crystal clear why we have to move boldly to protect and strengthen Medicare and Social Security. And revive the idea that real pensions are not a luxury or a benefit that corporate executives can decide to toss aside but a right in a civilized society.

Originally posted to Tasini on Thu Jul 10, 2008 at 05:47 AM PDT.

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Comment Preferences

  •  Even those who have saved... (16+ / 0-)

    Have lost lots of money just this year because of (1) the 20%+ drop in the markets year-to-date, (2) trusting brokers to manage their money, (3) not understanding that the markets are no longer for investing, but for trading, and (4) watching the freaking alternate reality shows on the Fox Business Channel.

    Notice the change in tv commercials, too. Not as many "use your house as an ATM" commercials, but lots more "reverse mortgages for seniors - let your house pay you back" commercials.

    •  Excellent points. (3+ / 0-)
      Recommended by:
      ladybug53, Sharon Jumper, JG in MD

      not understanding that the markets are no longer for investing, but for trading

      That one struck me as especially wise.

      There are, in every age, new errors to be rectified, and new prejudices to be opposed. -Samuel Johnson (1709-1784)

      by slksfca on Thu Jul 10, 2008 at 07:30:02 AM PDT

      [ Parent ]

      •  So what does that mean? (0+ / 0-)

        What do you consider the difference between investing and trading?

        Seems to me the difference is one of time. Investment is what you do over the long term. Buy a good solid stock when you're young and hold it for more than five years, maybe reinvesting dividends.

        Trading is either the act of buying or selling that stock, or a much shorter-term process. Trying to time the market and get quick profits, which seems to me more speculative, more like gambling.  The professional traders have more information than you, and going against them is like playing Texas Hold 'em in Vegas with a high roller named Doc.  The only people urging this are brokers who get commissions with every trade.

        Most of my stock holdings are Dow Industrials and other blue chips. Some of them, like Royal Dutch and IBM, have actually made money even during this year's meltdown. Others, like the big financials, have plummetted, but I'm not selling. 20 years from now, they'll have come back and then some.  At least that's how I'm betting.

        People who didn't sell and held on through the great depression made money in the long run.  Those who will need to draw their investment money before the end of Obama's second term--they're the ones most screwed by Bush.

        "...And I woulda got away with it, if it hadn't been for that meddling Kos!" ---attributed to Tom DeLay

        by AdmiralNaismith on Thu Jul 10, 2008 at 09:53:34 PM PDT

        [ Parent ]

  •  Thanks for posting this. Part of the problem (16+ / 0-)

    in this country is that the wealth distribution is even more unequal than the income distribution. By allowing almost all the income gains that have occurred in the past 25-30 years to go to the wealthiest Americans, we have now created a situation where the wealthiest Americans control most of the wealth. Add in the fact that a house is the single most valuable asset that most middle class folks own, and the values of our houses have declined sharply in the past 2 years, and many of us are screwed, especially those without defined benefit pensions. Plus a lot of us in the 55+ age group are still caring for elderly parents who are now in their late 80s and 90s.

    •  One better (0+ / 0-)

      How about not just parents in their 80s but a great aunt who is 102?

      Many friends of mine around 60 are also "sandwich." They have both parents and grandkids to take care of.

    •  Every Bubble Heavily Skimmed (0+ / 0-)

      Started with mutual funds and 401k plans being offered to a lot of wage earners which coincided with the tech dotcom boom.  Billions of dollars flowed into the markets from middle class people who would never in their right minds buy individual stocks.  The market went crazy and the top 1% reaped incredible wealth while clamoring for deregulation.

      Naturally, it all crashed down and while all the real players grabbed and ran, their puppets were screaming "Hold for the long term!"  "Dollar cost averaging!" while the markets continued to tank.

      With no wage growth, increasing cost of living, and skepticism of wall street (e.g. The Enron, WorldCom, Citibank, Salomon Smith Barney cabal), there was less 401k and other investment money.  What's a greedy bloodsucking tick to do?

      Tap into housing value!  Happy days are here again!  Deregulate more, lower interest rates, make it ridiculously easy to get mortgages and what happens?  Housing prices skyrocket beyond any rational limits.  Package these crap mortgages and throw them into the fiancial market casino, then grab and run with as much as possible again before the inevitable crash.

      Now that housing is tapped out and skimmed, what's a bloodsucking tick to do?  

      Raid Social Security and grab and run with as much as possible before the next inevitable crash.

  •  Old age? (6+ / 0-)

    Hell I'll be lucky to make it through middle age alive. I'm in the automotive industry and if you think real estate is a mess....well. Good luck everybody

  •  Here in the heart of the Midwest, I would like... (15+ / 0-)

    to know how you are supposed to save, buy a house, not have debt, live in a safe/decent neighbor for your kids, drive a 1/2 way decent car to get you to work and put your kid through college on $40,000 a year.  This by many standards is a great salary here.  Then you are also supposed to save for your retirement because your company does not have a pension plan.  It is very disheartening.  Thanks to the diarist.  Tipped & Rec'd.

    •  You can't, of course. (2+ / 0-)
      Recommended by:
      jdmorg, Cassandra Waites

      So, we now have the situation where most women with children HAVE to work. If you're lucky you can make somewhat more than you have to pay the babysitter.

      It is certainly the czse that many families in the 1940s and 50s lived in much less space, with many fewer luxuries than we expect now.

      We're heading back that way pretty fast. The age of lowered expectations for most of us, and unlimited expectations and luxury for just a few.

      That's the way old Great-grandpa Bush would have wanted it.

    •  Those things are for Republicans, only. (0+ / 0-)

      You greedy, bad person! Don't you know your station?

      Coffee is for closers.

      "...And I woulda got away with it, if it hadn't been for that meddling Kos!" ---attributed to Tom DeLay

      by AdmiralNaismith on Thu Jul 10, 2008 at 09:55:58 PM PDT

      [ Parent ]

  •  I agree with all of the above... (3+ / 0-)

    but there does have to be some degree of personal accountability for people who spent the past 30 years living beyond their means, and are only now first noticing that might not have been the best idea...

    credit cards and home equity loans have given this generation of retirees opportunities to destroy their retirement options in ways that previous generations did not have...

    •  I'd Like to See Some Statistics (2+ / 0-)

      showing people who lived beyond their means compared to people who actually needed to use credit cards for a middle class life.

      There was a time when anybody who had a TV and a microwave was considered by the neocons to be wasting their money. These can now be had for six bucks at any thrift shop.

      Definitions change, expenses change. Life is what happens while you're making other plans.*

      Not that you're wrong, EF, but the "their own fault" meme rhymes with "welfare queen" for me. And I could be wrong. That's why I want more information.

      *I leave out "busy" because of the cadence. It's better without.

  •  I disagree..... (2+ / 0-)

    Housing is just that, housing.  It represents basic shelter that we all require.  It matters little if it is an apartment, condo, or house.  Financial means and objectives govern your ability to chose.

    When we retire, the basic need for shelter still exists, and the only way to 'mine' that investment is to liquidate it, trade down, or extract it's value through loans of some type.

    For anyone to utilize housing as their prime investmet vehicle is as myopic and risky as any other investor becoming 1 dimensional with any investment.

    As far as 401k's; why are they 'phony' pensions?  Again, why would anyone want to rely on an employer or rely on the requirement of employment to provide for their own security? Don't we have too much dependence on employment with our health insurances?  That hasn't worked out so well, has it? The only frustration is the disparity between personal IRA's and 401k.  Why should I only be limited to $3k in an IRA, but can contribute $17.5k to a 401k.  It does nothing but chain me further to a job.

    Even if all employers were required to provide mandatory pensions for their employees, where do you think they, as trustee, would invest those funds?  The same place you and I invest them. Believing that employers will fund pensions from future earnings is way too dangerous to fathom......we have already seen that movie.

    I prefer to insure my own future, not depending on anyone or anything as the fiduciary guardian of my well being.

    "Virtus Junxit Mors Non Separabit"

    by Fuzzy5150 on Thu Jul 10, 2008 at 06:37:30 AM PDT

    •  Your statements are wise (1+ / 0-)
      Recommended by:
      yoduuuh do or do not

      but how exactly do you "insure your own future?" Buy gold?

      •  Well.... (2+ / 0-)
        Recommended by:
        yoduuuh do or do not, fallina7

        I am not sure if what I am doing is always the correct thing, but simply try to keep things in very simple perspective, limit risk, and walk my own path.

        We live an incredibly frugal life.  I have no expectations other than what we can create or provide for ourselves.

        I believe that our culture is far too swept up with consumerism trends, to the point that if we don't have all of the things that are pumped at us each day as 'a normal life' we externalize the blame for unhappiness.

        I strongly believe that businesses need to be reined in, and have fallen very short of decent social fiduciary responsibilities.  I believe that every person should have a fundamental right to have accesses to affordable, high quality health care independent of a job.  I believe that we should provide for the poorest of the poor within our society.  

        Beyond that, my only 'expectations' is a level playing field, as I stated with savings limits for tax qualified accounts.

        The rest is up to us.

        "Virtus Junxit Mors Non Separabit"

        by Fuzzy5150 on Thu Jul 10, 2008 at 07:12:49 AM PDT

        [ Parent ]

      •  Gold is the biggest ripoff of all. (0+ / 0-)

        Do you get one thin dime of interest on gold?

        If you're already rich and have a diversified portfolio, it might make sense to squirrel away not more than 10% of that into gold as the rich man's inflation hedge. Or if you're really betting that civilization will collapse for good.and stores stop accepting regular money and we have a Mad Max/Parable of the Sower existence. And even then you're better off joining the SCA and learning to fight with swords and make medieval crafts.

        Otherwise, invest only assets you know you won't need for at least five years and leave them alone to ride out the bad times and grow in the good.

        "...And I woulda got away with it, if it hadn't been for that meddling Kos!" ---attributed to Tom DeLay

        by AdmiralNaismith on Thu Jul 10, 2008 at 10:02:04 PM PDT

        [ Parent ]

    •  half agree (3+ / 0-)

      I don't quite understand how this housing wealth is supposed to be available to a retired person. As collateral for loans? That doesn't make any sense, why would you take out a loan you could afford to pay off and blow part of your money on interest rather than just using your income for whatever purpose inspired you to take out the loan?

      So the only way the wealth is really available is if you sell your house and buy something cheaper, but then your inflated asset has to coincide with a deflated asset for somebody else.

      Don't agree that any stock market based retirement program is equivalent to what a pension used to provide. As many people will find out in the next few years, the market is all about timing. If you happen to want to retire when the big boys are crashing things (so they can acquire the assets of the rubes at a bargain rate), you stand to lose your principal never mind any gains.

      The trouble is that there are few savings vehicles that give you a better return than the real rate of inflation, because the real rate of inflation is substantially higher than the manipulated measure that is given out to the public nowadays.

    •  Glad it works for you, but (5+ / 0-)

      If we all require basic shelter, why is homelessness such a problem? Just because people need shelter, doesn't automatically mean they get it. The housing crisis means we're about to have a lot more homeless people and empty foreclosed homes. Do you really think the banks are going to give shelter to people who have no money? There's only so far people can

      liquidate it, trade down, or extract it's value through loans of some type.

      if they don't have income that keeps up with cost of living. For most people, myself included, this is the reality. (Boondad and JermeyAParis have put out lovely charts in diaries showing this.)
      Now, 401k & IRA: biggest f***ing scam on the workers. "Be responsible for your own future" is a republican sound bite to heap the blame elsewhere. Most people are NOT skilled or knowledgeable enough about investing to figure out the plans. Nor do they have the time or means to get educated. And plan managers have loaded fees into many plans that at today's low returns, mean no real growth in the plans. They, like any financial institution, have no incentive and no requirement to make this clear.
      Pensions are managed be PROFESSIONAL investors. Someone trained, paid and interested in understanding the market. Something I am NOT. Give me a damn pension any day over a 401K or IRA. I have 3 401k's and they all suck because I am not financially minded. I do not want to be. If I was, I'd have a different career. I, like many others, NEED someone to be a "fiduciary guardian."

      -7.50/-7.90 Everyone knows I'm out in left field.

      by WiseFerret on Thu Jul 10, 2008 at 07:50:54 AM PDT

      [ Parent ]

      •  You're kidding, right? (0+ / 0-)

        "Most people are NOT skilled or knowledgeable enough about investing to figure out the plans. Nor do they have the time or means to get educated."

        I have had about as much of 'PROFESSIONAL investors' as I can stomach.

        If you're comfortable letting someone else decide how you will life in retirement, hop to it.

        No one 'automatically' gets anything.

        BTY, I am not a Repug schill......just believe that when you look in the mirror, that's where the 1st line of responsibility occurs for what you have/don't have.

        The permanent homeless/poor will always be among us, and should be cared for by a compasionate society.  There have been many times in the history of this country when others have moved into, and out of this catergory....like my grandfather and father.  

        "Virtus Junxit Mors Non Separabit"

        by Fuzzy5150 on Thu Jul 10, 2008 at 09:36:36 AM PDT

        [ Parent ]

      •  I'm not 'dogging' you.... (0+ / 0-)

        I didn't mean to come across harsh.

        I really just try to break it down very simply.

        I want to retire at 60.  If I'm lucky, I will live 30 more years.  I know exactly what it takes to power my life now.  If what I have saved does nothing more than pace inflation, it becomes simple math how much I need the day I hang up my spurs.

        I have done, and will continue to do whatever it takes to accumulate that 'magical' amount.

        If I can't/don't make that goal, then I either work longer, live smaller now or later.

        It has not been easy.  I was 'displaced' at 32 years old (1989) when I picked up my family and moved off a family farm after 9 straight years of drought.  Over the course of the next 2 years, I had a $30k tax bill on the little stuff I sold at auction, because it was all paid for.  So, I was in the bottom of a hole looking up.  The only job I could get was driving a truck for a grocery distributor. That is where it started over.

        We have moved 8 times in 19 years (Montana, Alaska, Missouri, Kansas and Nebrasks) because of work, raised 5 children, of which 3 went to college, 2 have masters degrees, 2 are professional (career) soldiers, and one is a full time mom.  It has meant living small.  We live in a house built in 1918, our newest car is 8 years old with 174k miles on it, we go on a 'date night' once a month, we eat all of our meals at home, pack our lunches, and save 47% of our gross wages in permanent savings, ranging from 401k's, Roths, Stock Market, Money Market, and CD's.  We also have zero debt.

        I don't write this to impress you, I am not a brillant person...I don't have a college degree, but rather to impress upon you that if someone like me....from such humble and plain roots can do this.....so can anyone.

        I am not without compassion and care for others who fall on hard times. But I also believe there is most always a path back, and again, that starts by looking in the mirror.  

        "Virtus Junxit Mors Non Separabit"

        by Fuzzy5150 on Thu Jul 10, 2008 at 10:01:37 AM PDT

        [ Parent ]

        •  But (0+ / 0-)

          But you have to realize, Fuzzy, that you did this in a generally rising economic climate.

          We ain't a gonna have that any more.

          And if you drove a truck, were you union? If you were, you were very, very lucky. Union jobs often will allow people to really retire. The rest of us may not be so lucky even if we lived small.

          I raised two kids, I worked full time and got my college degree at night, but I have no pension and only my own savings. I just sold a 1989 car and my "new" one is a 2000.

          It will still be tight and I'm not retiring at 60.

          •  VA.... (0+ / 0-)

            My truck driving job was union, but only did that for 2 years and was 'promoted' to a manager's position.

            The economy did not really turn around until the mid-90's, and crashed again big time in 99-2000.
            So why do you believe that we will not have a rising economic climate again?

            "Virtus Junxit Mors Non Separabit"

            by Fuzzy5150 on Fri Jul 11, 2008 at 03:39:14 AM PDT

            [ Parent ]

      •  I greatly recommend (0+ / 0-)

        Vanguard, who have very low fees. Diversify as much as you can among stocks, bonds, cash(3-6 months of living expenses), commodities, real estate, put about 10%-15% in each category, or use index funds for each category, and you will be able to at least sleep at night. (That strategy is exactly what pension funds do.)

        I had a VERY bad year this year but I'm still only down about 10% overall.

    •  Utilize Housing as Their Prime Investment (4+ / 0-)

      It was a set-up. The rich got a chunck of money after 401(k) investments in the dotcoms crashed. Then houses were the way to invest. And now the big players got the money out of that crash. The government bails out the big financiers / gamblers. There was nowhere to put your money. The government kept interest rates so low that normal savings lost against inflation, low as it was. They set it up so people were forced to go to the only place where they could get a return on your money - a house. Same with 401(k)s in the dotcom bubble. The stock market and housing are no longer investing. They are a form of gambling. And the big money boys always win because the game is fixed.

      "To know even one life has breathed easier because you have lived." Emerson

      by dbrog on Thu Jul 10, 2008 at 08:42:23 PM PDT

      [ Parent ]

      •  You answered your own question.... (0+ / 0-)

        ...or at least you have helped explain better some of what I said.

        Folks need to stop following the followers, and stop chasing the trends.

        By the time the small investors 'smell' the next hottest trend in investing, it is already too late.  They end up being the last sucker in a ponzi scheme.

        Interest rates were low....but also you didn't lose principal.

        Trust me, not all of our choices were winners.  We had our 'Krispy Kremes' and our 'XM' radio decisions that burned us.

        "Virtus Junxit Mors Non Separabit"

        by Fuzzy5150 on Fri Jul 11, 2008 at 03:46:47 AM PDT

        [ Parent ]

    •  Housing may not be a "prime" investment (0+ / 0-)

      But owning a home is still an investment for most and the largest investment many will ever make.

      As is usual in most bubbles, people have simply forgotten that what goes up must come down. Still, it hurts. And for many, particularly the baby boomers, the timing will be unfortunate.

      •  Housing..... (0+ / 0-)

        I do not consider my house an investment.  Yes...I had to 'invest' cash to buy it, but I do not consider it an investment in the classical sence.

        When I retire, I can't 'convert' this investment to cash.  I will always have to have a place to live, so considering it part of my liquid assets is silly.

        For that reason, my house only ranks 3rd in value of my individual 'investments'.

        "Virtus Junxit Mors Non Separabit"

        by Fuzzy5150 on Fri Jul 11, 2008 at 03:49:47 AM PDT

        [ Parent ]

  •  Excellent diary John. (2+ / 0-)
    Recommended by:
    vicki, slksfca

    The American people have been screwed.  My fear is that the future holds nothing but more getting screwed.  They could at least kiss us or something.

    "The truth shall set you free - but first it'll piss you off." Gloria Steinem

    Iraq Moratorium

    by One Pissed Off Liberal on Thu Jul 10, 2008 at 06:48:09 AM PDT

  •  Tipped and rec'd. Well done. (2+ / 0-)
    Recommended by:
    slksfca, JG in MD

    There are 10 kinds of people in the world. Those that understand binary, and those that don't. -8.25, -6.21

    by Jacques on Thu Jul 10, 2008 at 06:52:25 AM PDT

  •  Stock Market Gave Up All Gains Of Last 8 Years (7+ / 0-)

    It's basically down from when Bush took office.

    Remind me again why it was so important to privatize Social Security?

    Oh yeah, to prop up their crazy house of cards.

  •  Hoping this does not scroll off. T and R. nt (3+ / 0-)
    Recommended by:
    blue jersey mom, slksfca, JG in MD
  •  It's all their own fault! (1+ / 0-)
    Recommended by:
    JG in MD

    They're grasshoppers and we're ants!  How dare they come crying to us for handouts when they spent their working years looking for work instead of actually working, and having uninsured medical expenses and blowing their paychecks on luxuries like rent and food.  How dare they!

    Didn't they listen to Suze Orman and the Motley Fools?  If they had just put 30% of their pay into retirement accounts (all right, in most of their cases it would have had to be more like 70% to meet the costs of retirement), instead of blowing it on "just getting through the bills" they could have bought Enron stock and been safe.

    I have no sympathy for them. None whatsoev--

    Wait. Is this Daily Kos?

    Sorry. I was looking for RedState.

    I. Have. To. Be. Going. Now. Bye. Bye.

    "...And I woulda got away with it, if it hadn't been for that meddling Kos!" ---attributed to Tom DeLay

    by AdmiralNaismith on Thu Jul 10, 2008 at 09:38:03 PM PDT

  •  Egads is right (3+ / 0-)

    The worst effects are going to hit on those who are closest to retirement and have the least time and chances available to make it up.

    If you're 60, 62, 64, and you haven't taken the equity out of a house you've owned for 15-20 years or so, your equity "savings" are draining away because of the foolish greed of those who did to create the bubble.

    If you're 60 and a blue collar worker who's tired of hard physical labor, good luck finding a retirement job to supplement your income, as Starbucks (etc.) is laying people off left and right, and working for dimes matters more than intelligence and experience. Trt getting told you're too experienced 30 times or so. It means "too old."

    In the few years between 60 and Medicare, you have no idea how much you could have to pay for individual medical insurance. A king's ransom. If you have a pre-existing condition, good luck finding any at all.

    Even if you do own stock at 60, look at the market. Dividends are down, too. If you're 60 and have a "defined contribution" pension as most of us were switched to (from defined benefit) twenty years ago, you're watching even well-allocated and relatively conservative investment funds shrink, losing five years of gain/interest in a quarter. Don't believe me, look at the "retirement target" asset allocation funds. You can't dollar cost average if you're having to sell to pay your health insurance or medical bills.

    These aren't frivolous people. They aren't mired in debt, but the ground is getting soft under them all the same. They've followed the rules, but the game left the rules behind. A few unscrupulous people have drunk the financial blood of the many. Look at the Amex Platinum magazine "Departures." Look at sales for Lamborghinis, or condos in Dubai. Those multi-billionaire vampires aren't hurting.

    I knew when I saw pages of foreclosures start appearing 18 months ago that it was going to be bad, but no one I knew knew what the &*^%# for ordinary people to do...other than to reduce debt, go to all cash. But the dollar's plunge has even stolen from anyone who did that.

    The incredible arrogance of McCain and his economic Bush-league cronies, the limousine set, the Amex card lunch set, flying first class, the ones who've never had to worry about finding affordable child care or paying the electric bill or tracking the rising price of hamburger. The ones who haven't filled their own gas tanks in decades, if ever.

    The ones who hear about how ordinary people live only in the 1-minute conversations they have with their servants.

    They make me sick. Every day people like Bush, Gramm, McCain, Cheney, drive through working class and middle class neighborhoods in Washington DC and never even look out of the windows at the people they are destroying.

    It is class warfare. First it was the "welfare mothers." Even the middle class is the target now.

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