The New York Times has a human interest piece on a lawyer, a partner in a reputable firm, who has fallen on hard times. “According to his petition, he had $400 in his checking account and $400 in savings. He lives in a rental apartment at 151st Street and Broadway. He owns clothing he estimated was worth $900 and his only jewelry is a Concord watch, which he described as ‘broken’”.
How does a man earning $375,000 a year fall to the clothes on his back and a busted wristwatch? The answer is expenses. The NYT describes how difficult it is for a man of a certain stature to make ends on such a meager sum. Someone else might think that $375,000 a year was a lot of money — but they wouldn’t understand.
How far does $375,000 a year go in New York City? Strip out estimated income taxes ($7,500 a month), domestic support ($10,517), insurance ($2,311), a mandatory contribution to his retirement plan ($5,900), and routine expenses for rent ($2,460 a month) transportation ($550) and food ($650) and Mr. Owens estimated that he was running a small monthly deficit of $52, according to his bankruptcy petition.
The emphasis of the piece is on the new vulnerability of professionals. In former times no one had to live on such a comparatively small amount. But economic pressures have forced law firms to increasingly rely on “nonequity” partners who are essentially employees. The security of the past is gone. Whereas the distressed lawyer might in former times have expected a much higher income he has been compelled by circumstances to accept the smaller sum. And how can a guy live on that?
“It’s sad to hear about this fellow, but he’s not alone in being in jeopardy,” said Thomas S. Clay, an expert on law firm management and a principal at the consulting firm Altman Weil, which advises many large law firms. “For the past 40 years, you could just be a partner in a firm, do good work, coast, keep your nose clean, and you’d have a very nice career. That’s gone.”
In a way the travails of the lawyer are simply those of the country writ small. Jim Geraghty of the National Review reports that whoever used the world “affordable” in the Obamacare act didn’t know what “affordable” meant.
A non-smoking woman, age 30, buying the plan with the lowest possible premium in the state of Virginia would pay $564 per year, or $47 per month. Affordable! . . . Until you realize the deductible is $7,500. That’s how much she has to pay out of pocket before her insurance pays anything. Maybe in a terrible year, full of ailments, she’ll hit it in autumn.
And that’s a bargain compared to some other states. In Vermont, a 30-year-old non-smoking woman can find a plan with a monthly premium of just $56 per month! Except that the deductible is $100,000, according to the GAO report. Sure, you can get a plan with a $3,500 deductible . . . for $292 per month.
Who has that kind of money laying around? Or more to the point, who thinks that people have that kind of money laying around? How can you not know what “affordable” means? Maybe the problem with all things money is that it is measured by our personal yardsticks.
Ask Daniel Garza of Detroit who believes the designers of Obamacare never understood what Hispanics could pay, especially because most of Hispanics are young and overcharged by Obamacare. And secondarily that money doesn’t buy value because Obamacare networks are so narrow that Hispanics can’t actually find doctors they can talk to.
Unfortunately, our options are limited by the fact that only 5 percent of doctors are Hispanic. Yet that’s where Obamacare kicks in and makes things worse. Because the law imposes so many expensive mandates and regulations on health insurance, the most affordable health care plans no longer include the large networks that give us the most choice.
Something has been lost in translation. Some of this misunderstanding may be due to context: the possibility that Garza’s constituency reads “affordable” as “free” whereas the lawyers who drafted the Obamacare may regard $7,500 in deductibles as “affordable”.
It recalls the perhaps apocryphal story of a hobo who approached a titled English lady at the height of the depression with the plaint, “I haven’t eaten for days!” to which the lady with the best of intentions answered, “my poor man. There’s a nice restaurant just down the block, I’m sure you can eat there.” That wasn’t the question the hobo was asking, but then the rich, F. Scott Fitzgerald once wrote, “are different from you and me.”
They’ve forgotten what it was like to be poor.
Charles Murray observed that by the late 20th century, in order appear wealthy in America you above all had to give the impression of never having known any other kind of life. It was not enough to have money. It was necessary to live and act as if money had always and would always be there, a condition of nature. That was the key. And for many it was not necessary to act, for the belief that the good times would always roll was entirely sincere. Murray wrote:
What makes the new upper class new is that its members not only have power and influence but also increasingly share a common culture that separates them from the rest of the country. Fifty years ago, the people who rose to the most influential positions overwhelmingly had Hank’s [a successful small businessman's] kind of background, thoroughly grounded in the American mainstream. Today, people of influence are characterized by college education, often from elite colleges. The men are married not to the girl next door but to highly educated women socialized at the same elite schools who are often as professionally successful as their husbands. They were admitted to this path by a combination of high IQ and personality strengths. They are often the children — and, increasingly, grandchildren — of the upper-middle class and have never known any other kind of life.
The American upper class entered the 21st century with the unshakable belief that money was no problem. If more were ever needed then the Fed could simply print it. And in the context of this cornucopia it would be completely reasonable to offer education, universal healthcare and open the border to all; to supply foreign aid without limit and embark on the unfettered use of the US military to prevent any ethnic cleansing or bigotry anywhere in the world. In such an ideal world only the the lack of compassion would be grounds for refusal. It only remained to convince the narrow minded men mired in the narrow world of car repair shops and lumberyards to see things the right way.
The unarticulated question raised by the New York Times article is ‘what if times have changed?” Suppose the downturn in tenured professors, equity partners and book publishing isn’t temporary but permanent? What if — gasp — we have to live on less than $375,000 a year? Then what on earth shall we do?
What shall we do if we got it wrong? What shall we do if men in the lumberyards and car repair shops are after all right? Suppose money is not forever and … well what now? As the nation — like the lawyer writ large — ponders possibility of bankruptcy it must be said that maybe the world does look different with only the clothes on your back and a broken watch.
And yet for many, even in the depths of rueful acknowledgment, the mystery will remain: when was the fatal moment? They went to the correct schools, settled in the approved city, punched the right tickets and now — this? Where exactly did it go wrong?
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The War of the Words for $3.99, Understanding the crisis of the early 21st century in terms of information corruption in the financial, security and political spheres
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