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Fallout: The Financial Crisis

Welcome to debt!

Bob Moon Jul 2, 2008
Fallout: The Financial Crisis

Welcome to debt!

Bob Moon Jul 2, 2008


Bob Moon: As if you couldn’t tell already by the other stories in our lineup today, the economy continues to tread on shaky ground. Seems everybody’s hurting and though the rich aren’t exactly getting richer, it’s poor and middle-class families that are really feeling the pinch as food costs rise and credit gets tight.

Author Barbara Ehrenreich once went undercover to find out how the working class got by — or, as she states, did not get by — in America. That book was called “Nickel and Dimed.”

Ehrenreich’s written several others on the topic of the have’s and have not’s in this country and she’s got a new collection of essays out. It’s titled “This Land is Their Land.”


Barbara Ehrenreich: Hi, glad to be with you Bob.

Moon: You’ve written about the economically downtrodden for years now. Why this book at this point?

Ehrenreich: Well, this is just a harvesting of all sorts of blogs and columns I’ve written in recent years that tend to be on these issues of economic inequality, economic injustice, and I didn’t design it to come out just as the economy was tanking, though.

Moon: Well, you write a letter of sorts to young people entering college, sort of telling them what to expect. Can you read a few lines of that for us?

Ehrenreich: OK, this is just a little sample that I say called “Freshpersons, Welcome to Debt!”:

Many life-changing things will happen to you in the next four years. You will make lasting friends, including perhaps the love of your life. You will drink more than you ever thought possible and bitterly regret it in the morning. You will lose your virginity, if you happen to have brought it with you. Our stellar faculty ardently hopes that along the way you will be amazed by calculus and charmed by the tipsy conversation between Alcibiades and that wily old radical, Socrates. There is also a general expectation that you that you will come out of here with some hazy notions of spelling and grammar. But never forget that your real purpose here is to shake off the pointless freedom of youth and assume the burden of debt.

Moon: Now, OK, let’s pull you out of the satire and have you tell us where do you think the preparation of young people for fiscal health stands in this country?

Ehrenreich: They’re not doing a very good job. We’re told that you have to get a college degree to enter into the white-collar work force, but those college degrees are going to leave you with an average of over $20,000 in debt, so that’s not a good start for a working life or for a successful life of any kind.

Moon: We just heard that consumer confidence is at an all-time low. What are you hearing from people out there that you’re talking to?

Ehrenreich: A lot of alarm, approaching almost panic and this is of people doing quite well, who have been quite affluent all the way to people who’ve been struggling all along. It’s just coming from too many directions at once. I mean, it’s the retired couple who was counting on selling that house, but now there’s no equity in that house or less and less. It’s the young people right out of college who have this big debt, but can’t find jobs. I talked to truck drivers who’ve been involved in recent protests about the cost of diesel fuel. It’s just getting worse and worse and worse for them and we depend on them to bring us 70 percent of the stuff we consume.

Moon: In all the research that you’ve done and talking to people, did you see this coming? How long has this been developing?

Ehrenreich: Well, I guess you could say… I’d like to take credit, OK; I saw it coming. But for a long time, people said “Alright, we’re a very unequal society, we’ve got a huge amount of wealth at the top, we’ve got all this poverty, insecure middle class… So what? That’s just how it is.” Well, it turned out that it doesn’t work and the reason it ultimately didn’t work as of a year ago and all the problems that have ensued since the credit meltdown is that you have so many poor people, they cant’ buy stuff, they can’t pay their debts and when they started defaulting on houses in August of ’07, you know, that set off global economic, financial turmoil anyway. It caught up with us. We found out that having this degree of inequality is in fact a liability and not just from the point of view of the poor.

Moon: So where do we go from here do you think? Is it just going to get worse or is there any ray of hope out there?

Ehrenreich: Well, first of all, things will get worse, probably for a while. But the ray of hope for me was that we had, certainly on the Democratic side this spring, three candidates who were speaking quite truthfully, I thought, about economic issues, about the growing inequality, about the real crisis for the middle class and those were Obama, Clinton and Edwards. And that was not true in ’04, that was not true in ’00. That says to me there’s been a sea change.

Moon: Barbara Ehrenreich is the author of the new book “This Land is Their Land.” Thanks for joining us.

Ehrenreich: My pleasure, Bob.

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