The View From Your Recession

A reader writes:

Our household’s recession started a couple years earlier than the one now affecting the world economy.  But it was a microcosm of the problem facing the US now.

My wife and I had a relatively brief courtship, maxed out a few credit cards, and headed off to Vegas to get married. Because my moderately high paying IT job was working me to death (still does, actually), we could only get one weekend off for the wedding.  So we spent like sailors knowing that a proper honeymoon would not be in the cards for us.

We get home and a few months later, my new bride starts experiencing various health issues – expensive health issues that require lots of expensive tests.  Eventually, she’s unable to keep up with her hectic nursing job and has to quit.  Our credit is maxed, our income is roughly halved, and we have crippling medical expenses piling up.  But, in true American fashion, we press forward without a dramatic altering of our living expenses or adding income. No sacrifice necessary, I tell myself, this too shall pass.

Only it doesn’t. It takes well over a year before she’s even able to think about work again, and her health won’t allow her to go back into the field she left. The debt continues to pile up and we default on most of our credit cards and various lines of credit. We actually get hooked on payday loans. Our credit is ruined and bankruptcy is not even an option, since my wife filed for it before we even started dating.

As a child of addicts, I’ve been around a lot of people in recovery programs. They always talk about needing to find your “rock bottom” before you can acknowledge you need a change. We had hit ours.  So about 6 months ago, my wife is finally able to find work, making less money, but at least it’s something.  I find a 2nd job on craigslist, down the street at a liquor store in the evenings and on weekends (and yes, business is great in a recession).  We wring every little expense possible out of our budget and actually find a way to move into a bigger place for less money where we can live more efficiently and learn how to live on my primary income alone.  All other sources of income go to savings and debt payments.  When our stimulus checks came last fall, we socked them away.  Same with our tax returns and we’ll do the same with all future windfalls.  My wife will be back in nursing school this fall, after which she’ll probably make more money than I do.  I’ll be updating my skills along the way also.

In other words, fiscal sanity has been restored and we have a plan for the future.  It’ll be long, hard, and will pretty much suck.  But we’re just now 30, so we’ve got plenty of time to fix this and still do everything we planned to do with our lives.  We’re in well positioned industries, IT and Healthcare, to ride out this recession.  Hell, even my 2nd job is remarkably safe given people’s penchant for the sauce in tough times.

We never had a mortgage, but it’s hard not to see our attitude towards credit, spending, and general fiscal responsibility reflected in the rest of the country’s behavior.  I don’t know where everyone else is in there journey, but we finally have our plan and are in the process of digging out. I think we’ll be looking great in 2-3 years. We’ve already learned how to live entirely without credit cards. A habit we intend to continue even after we’ve repaid our debts. We’ll be more educated, make even more money, have substantial savings accounts built up, and be in the habit of frugality. That sounds to me like America as a whole emerging from the Great Depression and WWII.

While I know we’re not the only ones with stories just like this, I really hope we’re not the only ones who feel like we’re on the road to recovery.

The View From Your Recession

A reader writes:

I work for a small, 5-year old non-profit arts organization in Illinois.  A couple of our usual big donors have indicated we should be prepared for smaller donations this year, and possibly none in the next couple of years.  The are mentioning Obama's tax plans and their need to save money now in anticipation of that.  A lot of my colleagues in the not-for-profit world are really scared right now, and we are not happy with Obama.  We hear the rhetoric that the government is going to have a reserve to give to non-profits that will make up for some of the lost donations, but the fact is, we have never received federal aid, and likely never would (assuming the organization could even make it that far).  Organizations are going to be killed under Obama's plan.  I may have voted myself out of a job, and voted a whole community of kids out of art-making opportunities.  Frankly, this sucks.

The View From Your Recession

A reader writes:

I am a small town lawyer in a two-person, general practice firm.  My firm has been doing very little of the work we did quite a lot of two years ago (business formation, real estate transactions, construction defect/warranty litigation).  On the other hand, our criminal defense and family law practice has picked up.  And my partner, who does personal bankruptcies, is doing at least 3-4 new consultations a week. Two years ago, he would have that many in a month, if lucky.

The View From Your Recession

A reader writes:

I work as a credit analyst for a big bank. I work in a call center and take calls from people who would like to lower their interest rates or increase their credit card limits.  Yesterday, I talked to a man in California who for the past five years worked as a "sandwich artist" at Subway.  His salary–and his only source of income?  $18,000 per

year.  His recently foreclosed mortgage?  $380,000.

The mortgage was individual, meaning no one else was legally or, more importantly, financially responsible for it.  He had no down payment for the mortgage.  The down payment was an additional $70,000 mortgage loan, also foreclosed.  I assume he had someone living with him, who was able to help with the interest-only payments at least for a while until they reset to include the principal. But in the end he was given a total mortgage 25 times his income with no down payment.

Did he lie about his income and not provide documentation?  Possibly.  But the man was immediately frank with me about how much he made and what he did for a living.  So assuming he was honest with the mortgage lender–who gave him the loan–as he was with me, their recklessness and greed become clear.

The View From Your Recession

A reader writes:

I'm a technical writer, 58 years old. I was laid off December 31 from a tech writing contract because the startup I worked at couldn't afford me anymore. Though I can outwork and outthink and outperform most people in their 20s, 30s, and 40s, the hiring people won't know that, and won't take a chance on me.

I may never work in a real job again, I realize, if the economy doesn't come back relatively quickly.

I'm getting unemployment for the first time ever in my 37 years of working. I still have the teeny-tiny feeling that unemployment is welfare (though I know it's not).

Fortunately, my condo is paid off, my car is paid off, I have no cell-phone plan, no cable TV, no expensive health-care problems, no credit-card debt (no debt of any kind).  I've always lived below my means and have been financially conservative all my life. And since I expected some kind of crisis before the Bush years were over, I invested most of my retirement money in Treasuries, so I still have about 95% of my retirement money.

I realize I'm better off than most laid-off baby-boomers. But still, if things don't improve soon, I'll have to start dipping into my retirement money in February 2010, long before I had planned to.

The View From Your Recession

A reader writes:

My father is 4 years from retirement after spending a lifetime working in parks and public works. With the state budget in crisis, and the falling property tax revenues, the city was forced to make cuts. 

After 33 years of constant employment, my father was laid off on Monday.  He is now in the position of looking for work in the public sector, so that he can receive his retirement benefits from the state's PERA retirement fund, and he's finding hiring freezes at several levels of government across the board.  The only jobs that are open pay half what he was making – basically entry-level wages for kids just out of college – and he's ridiculously overqualified.  If my mother loses her job, insurance will be pretty hard to come by … here's to keeping our fingers crossed.

The View From Your Recession

A reader writes:

I am a quality engineer at an automotive trim supplier in Michigan. Since our customers are 95% domestic, we have been hit quite hard by the automotive downturn. Due to rotating layoffs and pay cuts, I am now making less than I was in 2000. I have a house in Flint which is in foreclosure after being on the market for 4 years. I'm 35 with a 4-year degree and an MBA, but I feel powerless as I watch my career and wealth

disintegrate.

I can't seem to react fast enough to these rapidly changing times. Do I ride it out, or do I uproot my family and start from scratch someplace else. It's a very difficult decision to make.

I understand your disapproval of the automotive bridge loans, and I don't disagree with the business reasoning of letting the market weed out ailing industries. Most people in Michigan support the loans for purely selfish reasons. Automotive manufacturing is the only thing some of us have ever known. Would the current economy be able to absorb the fallout if one of the Big 3 failed? I'm not convinced that it could. I fear things will get worse before they get better.

The View From Your Recession III

A reader writes:

I’m a third year at a law school in Boston. Basically, everything we’ve dreamed of and been promised by our advisers/professors is no longer available.

Job offers already accepted have pushed their starting dates back from September to January.  Students are receiving surprise rejections for bar study loans, and I know a few who literally cannot afford the bar exam application fee ($820) because of it, let alone the bar prep courses.  For the first time in any professor’s memory, students received offers for clerkships in the Massachusetts Superior Courts contingent upon funding to be established this spring. I hope to work in a government job with an agency or attorney general’s office, but am finding that there are literally no entry-level positions available, even for students from highly-ranked schools such as BC and BU.

I myself worked at the Massachusetts Office of the Attorney General for the past nine months and interviewed for a really exciting fellowship. I received a call from the AGO’s HR Director:  I was third in line for the position, but they were cutting the number they were hosting from three to one.  In four other positions I’ve interviewed for, I’ve received word that the position itself was canceled, or would not be filled at all this year.  There’s also a state-wide hiring freeze in Massachusetts, and a lot of established attorneys suddenly on the market after record layoffs in Boston law firms.

I am extremely flexible in terms of geographic location (no kids, I don’t own property), and I’m being very aggressive in my search.  But it’s slow going – I fully expect to have nothing lined up when I finish the bar exam at the end of July.  The thought of having nothing, absolutely nothing, to do on August 1st petrifies me. 

Without a job, I will not be able to afford malpractice insurance on my own and would not risk practicing law without it. I’ll have over $130K in debt from my law degree. Thankfully, I live in Massachusetts and can utilize MassHealth – anywhere else in the country, I would have to do without health insurance (I have no pre-existing conditions, but the quotes I’ve received are so high as to be ridiculous).  If I stay in the city, I do not know what I'd do for rent.  I’m 26 years old, and am frightened to death I will have to move back to Ohio and away from my gay community, and live with my parents.  With a law degree.  I feel like a chump sometimes.

The View From Your Recession

A reader writes:

I'm writing you as I fill out my unemployment insurance application, online and in Michigan. Until roughly today at

noon I worked in the automotive repossession industry.

Specifically my company performs the investigative leg work (thankfully behind a desk,) that tracks down seriously delinquent automotive loans and recovers the collateral for the legal owners. In short:  I found your car, and stole it back for the bank.

I've spoken to, and recovered cars from people in every state of the country who have been hit by this economic situation. There are many reasons for a person to default on a car: often health-related leading to a personal financial crisis. There are so many people who have lost homes, living with relatives and in apartments with their entire family, all throughout the country. I repoed endless pickup trucks from contractors and sub-contractors from everywhere, except ironically for New Orleans – mainly because a lot of the city still needs to be rebuilt since 2005. There is fraud in some of our cases, but most are regular people.

Business had been booming in 2007 and all throughout 2008 as the beginnings of the mortgage crisis cracked through the foundation of Wall Street and defaulted the cars of the subprime homeowners. But then somehow, an enormous bag of shit was heaved into the proverbial "Economy" fan. By the time the Big Three went before Congress, we had already lost one of them as a client a week before. A major foreign auto maker dropped the following week. Then our crown jewel client started sending less and less work. For some employees it was an almost 50% drop in business from one client.

Long story short, there were 20 of us this morning. Now, there's 18 of them.

If you've lost your job, or home, or have an anecdote that might help make this crisis more tangible to others, drop the Dish a line. I'll try to offer a smattering of real life as this depression deepens. Please keep them short and salient and concrete.