Sunday, October 01, 2006

Hey, Reuters! 
Can your financial desk possibly be any more of a whore?

Here you are running a Center for American Progress press release as news:

WASHINGTON (Reuters) -- The typical double-income family is worse off financially than ever, a study released Thursday said, warning that few Americans have saved enough to brace for financial setbacks.

Really? Worse off financially than EVER? Worse off financially than they were during the Great Depression? The malaise recessions of the 1970s? The 1981-82 recession?

Hell, no, you morons!!!! No financial/economics reporter worth his salt would think about swallowing a line like that without raising the obvious questions, or calling "bullshit" outright.

Middle-class families are struggling to pay for a home, health insurance, transportation and their children's college with wages that have not kept pace with higher prices, according to the study by a think tank headed by a former top aide to President Bill Clinton.

Translation: Middle class families are able to buy homes in near record numbers, are receiving the best health care in the history of mankind (though it costs), and more of them are sending their children to college than ever.

"In our estimates, it's becoming harder for families to afford what we consider a typical middle-class lifestyle," said economist Christian Weller of the Center for American Progress, the political think tank headed by John Podesta, a former Clinton chief of staff.

Translation: This is nothing more than a trumped up political hit piece drummed up by a Clinton Flack to provide Democrat talking points in the weeks leading up to an election. Don't bother looking for actual data in the news story. You won't find any. None. Zilch.

Reporters like this - and editors who tolerate them, should be fired.

Weller cautioned that while Americans are taking on more debt to cover higher costs, wages have not kept pace.

Translation: Middle class access to credit is greater than ever before. And no, wages have not kept pace with spending. Wages will NEVER keep pace with spending when access to credit is increasing. Never never never!!!! It doesn't matter who's in office.

But except in a few special needs cases, the decision to take on debt and allow your wages to fall behind your lifestyle is entirely voluntary. It's called living beyond your means.

According to the study, less than a third of all American families have accumulated income equaling three months of their wages. The trend is particularly pronounced among the 60 percent income distribution that makes up the middle class: those with dual incomes earning from $18,500 to $88,030 a year.

Wow. It takes 18,500 dollars for two incomes to make it to the middle class lifestyle? How expensive can it be?

There are all kinds of problems with that. First of all, many Americans CHOOSE not to accumulate 3 months income in an emergency fund, preferring instead to rely on tapping home equity. A household with two steady jobs may not feel the need to accumulate an emergency fund, if they have other assets that may be tapped. (The reporter, incompetent moron that he is, didn't bother to check to see if 401(k)s, which you can borrow from in a pinch, are included or excluded.)

A family may decide to fund a 529 plan, or invest in a business. Or the Bank of Dad may be a viable option for them. When unemployment is 4.7%, many families may genuinely have a better use for 3 months income than putting it under the proverbial mattress, since they are reasonably confident of being able to find employment.

Not that that's always a brilliant idea. There are good reasons not to rely on home equity loans for emergencies, and good reasons not to borrow against a 401(k) in a declining economy or where your job is uncertain.

There is a lot more to this picture. Just don't look to Reuters to help you understand it.

To maintain day-to-day consumption, families have taken on a record amount of debt, equal to 126.4 percent of disposable income in the first quarter of 2006, according to the study.

The idiot reporter again doesn't bother to break this down between consumer debt, education-related debt, and home mortgage debt. But according to CardWeb.com, the average level of credit card debt was just north of $9,200 or so last year. Don't know what's meant by "disposable income" here. But if you choose to live in a giant house and take on a big mortgage, your disposable income in most metrics becomes artificially small. THere's a lot of ways to slice those figures to suggest anything you want. But this study's rotten to the core.

As is this news story.

The clincher: Not one dissenting voice was even interviewed!!!! THis dumbass reporter didn't even bother to pick up the phone.

Oh, he made one call: To a freaking LABOR UNION HEAD!!!!


Maybe Reuters should go back to photoshopping news images. At least it was less transparent than this pathetic smoke and mirrors job.

Splash out,


Comments: Post a Comment

This page is powered by Blogger. Isn't yours?

Site Meter

Prev | List | Random | Next
Powered by RingSurf!

Prev | List | Random | Next
Powered by RingSurf!