what went wrong blog

What we're reading - Oct. 7, 2011

Friday, October 7th, 2011 

Here's what Kat Aaron, What Went Wrong's project editor, was reading this week:

Portrait Kat Aaron

This week, like everyone else who covers economic issues, I was reading the new "We are the 99 percent" tumblr. The site features photographs of handwritten messages from people struggling with the Great Recession. It's incredibly diverse in age and circumstance, although as far as I can tell, most (although not all) of the people on there are white. 

Here's some excerpts from today:

My name is Allison, I’m a 13-year-old 8th grader. I only get a few hours of sleep at night, but I don’t tell my parents because they don’t need to know that I need sleeping pills. I’ve been showing symptoms of schizophrenia but we can’t afford for me to go see a doctor about it. My parents get really scared when they have to pay the mortage (sic) because it really cuts down on our money. I’ve stopped eating a lot so there’s more food for everyone else.

My parents don’t know that I know we’re the 99%. 

And another:

I am a teacher.

My family’s health insurance depends on my job.

My state govt. is out to cut my retirement benefits like health care.

My kids owe a quarter of a million $ in student loans.

My friends in their 60s keep working because they can’t afford to retire, so those jobs are not available to young people.

We are the 99%

occupywallst.org

This site, affiliated with the growing Occupy Wall Street movement, was set up about a week ago and now has more than 60 pages of posts. 

I got a sharp reminder of just how close to the bone people are from an item in the Wall Street Journal this week. The piece by Hannah Karp reports that people are cutting back on diapers, because they can't afford them. Karp notes that "Spending on children has traditionally held steady in times of recession, including the most recent one, with parents sacrificing other items rather than scrimping on their children's hygiene or happiness." Now, that's changed:

Meantime, sales of diaper-rash ointment have increased 8% over the past year, according to market-research firm SymphonyIRI. Analysts and pediatricians say the higher sales likely reflect either less frequent changes or a shift to lower quality diapers.

Most pediatric clinics don't keep statistics on benign conditions like diaper rash, but doctors in poorer areas say they see the long-stumbling economy starting to take a clear toll on children's health.

Anjali Rao, a pediatrician at Northwestern Memorial Physicians Group in Chicago, says she has seen a 5% to 10% spike in diaper-rash cases this year. Daniel Taylor, a pediatrician at St. Christopher's Hospital for Children in Philadelphia, says he and his colleagues have heard from a growing number of parents that they must choose between buying diapers and paying for food and heat.

"We're definitely seeing major effects of the economy: Diapers are very expensive, and the longer you sit in a dirty diaper, the more likely the chances of an infection," Dr. Taylor says.

Diapering a child six times a day costs about $1,500 a year, according to diaper makers, so it isn't hard to see how it could become a burden on families dealing with chronic unemployment or struggling to cover rising costs.

While the economy did add jobs last month, according to this morning's job creation numbers, that chronic unemployment isn't going away any time soon. The high jobless rates are likely a major factor in the dropping homeownership rate, too. The Census Bureau reported this week that the homeownership rate dropped by more than 1 percent between 2000 and 2010, the largest decrease since the 1930-to-1940 decade. That said, the overall homeownership rate is the second-highest on record, behind only 2000. As this Chicago Tribune piece points out, though:

The most recent decade-over-decade drop, however, only tells half the story.

Home ownership during the 2000s "was really high in the middle of the decade, up to almost 70 percent at one point around 2004," said Ellen Wilson, a survey statistician with the bureau.

The crash from that peak was more than 4 percentage points in just about five years — a far more dramatic decline than the 1.1 percent drop over the 10-year period.

And of course, whether the homeownership rate ticks up or down in the years ahead remains to be seen. Mortgage rates are at historic lows, but with so many people out of work, and many more fearing job loss, it's not clear how many people will be willing to take on a 30-year mountain of debt. 

 

 

 

 

What Went Wrong

Donald Barlett and James Steele are revisiting America: What Went Wrong, their landmark 1991 newspaper series, in a new project with the Investigative Reporting Workshop. Over the next year, the project team will examine how four decades of public policy has shaped America's ongoing economic crisis.

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