The Dim-Post

May 26, 2009

Busted

Filed under: books,finance — danylmc @ 7:23 am

You might remember the article I linked to a couple of days ago about a New York Times economist about to default on his mortgage, although chances are that you don’t, because of the thousands (possibly millions!) of people who read this blog only 63 of you clicked on the link. For shame.

Edmund Andrews announced that he was publishing a book about his experience, advance copies were sent out and Andrews recieved rave reviews for his candour and insight, with one economist writing:

Through his reporting, Andrews definitively makes the case that Wall Street’s insatiable hunger for mortgages of any quality — in fact, the worse the better! — that could be bundled up into securities and then resold, provided the critical incentive encouraging the subprime mortgage sector to explode to such huge dimensions. As individuals, we do not deserve all the blame for living beyond our means — we were encouraged to do so and seduced into doing so by a host of characters, from Alan Greenspan to the biggest Wall Street bankers to the incorrigible telemarketers who never stopped calling.

But Andrews reputation for candour took quite a beating last week when Megan McArdle, a blogger at The Atlantic revealed that Andrews wife was a serial bankrupt, a detail he ommitted from the book. McArdle has Andrew’s response and her response to Andrews response up at her blog.She concludes:

I think this matters because the story Andrews told was basically about the subprime crisis, and the book casts him as a sort of everyman, lured in by cheap credit and a likeable scoundrel of a mortgage broker.  That may be what happened to many, or most people in the mortgage crisis–but the back to back bankruptcies strongly suggest that this is not what happened to Andrews.  That said, I think the story told with the bankruptcies included would still be a story well worth telling.

Andrews claims to be upset by the intrusion into his private life and that of his wife, so aside from being interesting in of itself I think this debate is germaine to l’affair Christine Rankin: if Andrews book was about almost anything else I think his wife, her past marriages and her financial mistakes should be off limits, just as Rankin’s should be if she’d been appointed to almost any other public service position other than the Families Commission.

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8 Comments »

  1. But from his article he admitted that even when they dicovered that they cannot afford their outgoings, his wife refused to make adjustmnents to their live style:

    “Patty ….. refused to scrimp on top-quality produce, Starbucks coffee, bottled juices, fresh cheeses and clothing for the children and for me. She regularly bought me new shirts and ties to replace the frayed and drab ones in my closet. She thought it wasn’t worth agonizing over nickels and dimes.”

    So yes, I am sorry, if most people start to run out of money, they start cutting everything to the bare bones. Her taste is obviously beyond what she can afford, but hey if she runs out of money it must be someone elses fault.

    Her refusal to adapt to a livestyle that is in line with what she can afford is extremely relevant to this discussion and not of limits.

    I think that cutting her slack because she valiantly refuse to cut back is an insult to hundreds if not thousands on people who wear the frayed shirt instead of bying the new one and who drink water rather than coffee, because they can no longer afford it.

    It is in the end about taking some responsibility and some ownership for your situation. Yes life deals different hands at different times, but you work with the hand you’ve got.

    Comment by cj_nza — May 26, 2009 @ 10:38 am

  2. cj_nza, I couldn’t agree more. I’m tired of those who point the finger of blame at others for the situation they’re in, rather than accepting they need to be a freaking adult and take responsibility for their decisions – which is so much harder than being a picked-upon victim.

    Comment by Ataahua — May 26, 2009 @ 11:46 am

  3. “Patty ….. refused to scrimp on top-quality produce,”

    Seems like a plea for help, to me: for the wife. Why he just doesn’t cut her credit card up I don’t know.

    Should the wife’s past be off limits? I think the story is at best “incomplete” without the info. A bit like answering “no” to the question “did you shoot him with your rifle?” because you used your mates rifle.

    Comment by Clunking Fist — May 26, 2009 @ 1:30 pm

  4. And I was one of those who read the article, then printed it and gave it to 4 others. It was such a scary read: because of the wife. I’ve not lived with anyone with addicition, but I suspect Andrews does.

    Comment by Clunking Fist — May 26, 2009 @ 1:32 pm

  5. ‘Scary’ is the right word. But scarier still is the fact that spending more than you earn is a common addiction.

    Comment by Zoo Neeland — May 26, 2009 @ 3:22 pm

  6. I’m overwhelmed about how old a person(Patty) can get, and still not internalise that money problems are problems, guess that is how you become a serial bankrupt. It is part of the story, so revelations about Patty are fair game.

    And, on a side note, I’m overwhelmed by how old a person (Andrews)can get and still borrow money from his mother.

    Comment by Sean — May 26, 2009 @ 4:42 pm

  7. The Egyptians discovered that farmers in debt work harder. Governments like us to work hard so they encourage us to have a “reasonable” level of debt.

    Comment by John — May 26, 2009 @ 7:57 pm

  8. Aye, that’s probably why gummints don’t like us saving and taking an early retirement: we cease to be a productive unit.
    You think they DO want us to save? Then why do they keep destroying our savings through inflation?

    Comment by Clunking Fist — May 27, 2009 @ 11:14 am


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