What the meltdown means to me, a 37-year-old East Coast renter
Filed under: Recession
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When it comes to dealing with the personal impact of economic forces, I'm a little out of touch. For most of the last ten years, I lived in the comforting, semi-socialistic embrace of academia, which means that I was able to pretend that ups and downs in the market didn't really matter to me. As an instructor at a state-funded university, I enjoyed a great health care plan, free schooling, discounted books, free public transportation, and a pretty decent retirement fund. Of course, I wasn't paid all that much, but the birth of my daughter cost us less than $500, including all prenatal and postnatal care, so I couldn't really complain.A little over a year ago, I moved to New York and, in January of this year, I began working as a freelance writer. While this has gone fairly well so far, I'm still in the "building my brand" stage of growth, which is a nice way of saying that I'm probably making only a little bit more than the average McDonald's employee. Luckily, my wife has found great jobs in the New York office employee milieu, and has more than picked up the slack from my decreased income. She is currently working for an engineering firm that designs environmentally-sustainable building systems. Her company is in great shape, and has a full slate of ambitious, lucrative projects on the table. If the New York real estate market continues to do even moderately well, then their next few years should witness record earnings and growth.
Unfortunately, the American building industry greatly relies on credit. While New York floor space is at a premium, new buildings are built on credit, renovations are made on credit, materials are purchased on credit, and contractors are paid on credit. If credit dries up, so will the building jobs and so will the salaries, including my wife's.
Last night, I put her on a plane to Dubai, where she is going to a building conference as a representative of her company. A year ago, many New York architectural and engineering firms were turning down Dubai contracts; today, they're courting them. I don't know if my wife's firm is going to open an office in Dubai, but I do know that she is a hell of a saleswoman and there are a lot of people in the UAE with money to spend on new buildings. At the moment, there's a pretty good chance that I'll be celebrating my next birthday on the shores of the Persian Gulf!
Read how the financial crisis is affecting other WalletPop bloggers.
Bruce Watson is a freelance writer, blogger, and all-around cheapskate. He tans up really nicely and will probably look totally hot in a keffiyah.
Reader Comments (Page 1 of 1)
10-09-2008 @ 6:30AM
Betty said...
Well, I am a 61 3/4 year old working woman. My husband will be 63 next April. He is a paid by the hour engineer who was putting in 60 hours a week and works for a multinational company. His overtime has been cut and he just lost his retirement he had through his company. We banked our retirement through his company's plan. My job is still there but very slow because our customers are finding it hard to pay for their orders to us. If either of us get laid off our chances of finding another job will probably be zero. We will retire if we can and live off from Social Security. I am diabetic and we will probably wind up on the welfare program.
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10-09-2008 @ 6:45AM
Mario Vega said...
I am the owner of small moving & delivery service and I am 50 years old and I don't have health insurance. Business is very slow and If I don't get some business soon I will be in a very difficult situation,However I still believe in the dream this financial mess have to be fix yesterday. I am voting for Obama
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10-09-2008 @ 8:03AM
Fla Joe said...
If you think NYC rents are high, go looking in Dubai. A small apartment for expat types can easily go for $3000 a month. Prices are supposedly dropping, but I haven't see it. Things will go on for a while in the UAE, but if things go global there will be problems and projects will stall. Unlike here they are spending billions on infrastructure, in particular mass transit which will go on for another decade or so and a new 6-runway airport,
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10-09-2008 @ 8:54AM
Bobby said...
The irony of your logic amazes me, it amazes me that all Americans can't figure this out.
You speak of New York & Dubai as the answer to your problem but they are the basis to everyone's dilemma. They have soaked up an incredible amount of wealth from the world with their greed & outrageous pricing & standard of living.
New York & Dubai produce little of nothing, yet they take a hundred times more than their fair share of the globe's wealth through inflated real estate pricing, corrupt business dealing & one of the primary causes of this whole disaster, oil pricing inflating cost of living worldwide.
I have no sympathy for either of those regions, you are synthetic & have caused much pain for the good people of the world. Offer a real service at a reasonable price & you will have done your part to curtail the greed of the world. Other than that, you are the problem!
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10-09-2008 @ 9:10AM
Bruce Watson said...
Bobby-
As a resident of New York, I definitely share your disdain for the Wall Street crowd that got us into this mess. In fact, being in a position to see their greed, profligate spending, and incredible selfishness first hand, I probably have a lot more anger and irritation than you can imagine. That having been said, viewing New Yorkers (or Dubai dwellers) as a generic/monolithic group is not only inaccurate; it's dangerous.
First off, I'd disagree with your claim that New York produces nothing. Among other things, it helped produce this blog post, which you apparently read and which inspired you to write a response. I'm not going to put myself on the H.L. Mencken pedestal here, but my words struck, angered, and motivated you. They pushed you to consider a problem in a certain way and inspired conversation. If that's not productive, then I don't know what is.
New York, for all its loss of manufacturing, is still a major producer of music, literature, periodicals, television, film, and other cultural ephemera. Most of the national news programs are filmed here, as is the Daily Show. While I hardly agree with all of the perspectives that this city generates, I am glad that they are out there.
While we're on the topic, the UAE produces oil and Dubai is one of the leaders in worldwide shipping. While you might not think twice about how oranges, oil, and spices get to your doorstep, the fact is that Dubai probably had something to do with all three.
Your assertion that New York is synthetic suggests that your awareness of the city doesn't extend much beyond Times Square. This place has ethnic neighborhoods that are over a hundred years old, with food industries that are among America's most storied. I don't know what your definition of authenticity is, but I've lived around the world and have found as much authenticity in this city as anywhere else I've been.
I know you want to blame someone, and I completely understand that perspective, but you might want to be careful to keep the blame where it belongs, not spread it around haphazardly!
10-09-2008 @ 9:45AM
Herman smith said...
Well ok what ever is going on is very bad and i only see it going down hill for a long time. I have a pool store in Florida and you would think i was ok but not true at all.I wiil have to close up till the spring and hope it is better.I have to go out and find a job not good i almost just want to give up and give in and just live off the streets just to many biils to keep up with no money coming in and know help from my bank. So if any one has a job can travel willing to work in the clean up in TX but can not find out who to talk to at fema. Can anyone out there help me out with this. Thanks
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10-09-2008 @ 9:58AM
Bobby said...
Bruce, I'll take your points seriously when you tell me what New York does to control cost. Throw in all the other metro areas in the country suffering from the same inflated standard of living that offer little outside the "entertainment" standard.
I'm not playing the blame game but sooner or later you have to tie pricing to tangible cost. New York & Dubai are "synthetic" in that respect.
Your real estate there alone is highest in the country, where does this money come from? How do people pay for a $2,000 per ft. penthouse that cost a tenth of that or less to produce?
All the things you acknowledge that NY produces primarily don't feed or house the masses. One cannot live off the opinions or artistry of others. The necessities of life are in the forefront now, those are what people are concerned about.
Every single item in NY & Dubai are inflated & someone down the line pays the tab for those services, make sense to me brother...
This is why the financial institutions have failed, they lost sight of what the rest of the world is about, your response lends to you losing that sight as well......
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10-09-2008 @ 10:24AM
Bruce Watson said...
Bobby, you seem a little confused. Are you blaming New York the city, New York the citizens, or New York the financial capital of the United States? These are, honestly, three very different entities and you seem to be moving back and forth between them without any rhyme or reason.
You seem upset about rents, but I'm not sure why it really bothers you all that much. For those of us who are actually paying inflated rents because of rich hedge fund managers who drive up prices, it's a real problem, but we weigh the costs of big city living against the benefits and decide where our priorities lie. For somebody that's not paying them, however, it shouldn't be much of an issue.
In other words, you're right about inflated costs in New York. I'M paying them, not you, so I'm not really sure why you seem to want to make it your problem.
Here's something that New York does to control cost: public transportation. For every full subway car, 100 people aren't driving cars. In 2006, this worked out to 1.8 billion gallons of oil that were saved. New Yorkers foot the bill for this, both in taxes and in fares. It doesn't cost you a penny and helps keep your fuel costs down. How much gas did you burn this morning?
Obviously, I have a different perspective than you when it comes to arts and entertainment, but I would remind you that, while many things help us to live, art reminds us WHY we live. However, if this perspective doesn't make sense to you, there is little that I can do to correct your view.
How about this: New York is a leader in the development of green architecture, blackwater systems, green roofs, and other sustainable living tools that are currently being used around the country. It is one of the architectural capitals of the world, and is home to a wide range of industries, including insurance, banking, and engineering.
Cities, for all their shortcomings, are more sustainable, environmentally conscious, and potentially more cost-effective than any other living situation. Having lived in the suburbs, in small towns, and in rural America, I can honestly say that I have never lived in a place where I felt as connected to the productive lifeblood of my country.
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10-09-2008 @ 1:42PM
Rich said...
Why does someone pay a million dollars or more for a home on the water in Florida, an estate in Connecticut or a ski house in Aspen? What justifies prices in those places?
Because to some people it's great to be there and worth every dime.
Why do some people chose to live in NYC,pay high rents and endure a much higher cost of living?
Because to some people it's great to be there and worth every dime.
It's all about demand.
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10-09-2008 @ 2:30PM
Bobby said...
Bruce, you take my comments personally against your city, your state.
My posting was primarily raised against the excess of the central financial hub of the country, Manhattan & all that goes along with it.
If you feel you've got a good grasp that all the concentrated wealth in that area is obtained & confined within the borders of New York City then that's your opinion. I say it's unfairly taken from the rest of the country through commerce in all forms derived from central hubs. Outrageous obvious pricing has to have a basis from which it comes, that wealth didn't originate in NYC!!
I'm of the opinion that great wealth comes from many different areas in this country. You speak of advertising, where does the high cost of that come from? The consumers my friend, all over this country. Where does the wealth of Los Angeles come from? Entertainment that's jacked up whereas we all pay the high price while only a few (celebs) enjoy the wealth from it. The little guy chips in 35 bucks a pop x's millions of viewers. It's all funneled to one area.
The basis of money & finance flows like a river throughout this great country, the problem is most of it lands up in the hands of the few who abuse it & only want more. Dubai, as a foreign example are buying an economy & infrastructure based on stealing petro dollars worldwide. They spread misery while making their lives better. They'd be a wasteland if it wasn't for natural resources pouring out underneath their feet. Spare me that they're this great hub of productivity.
All the nonsensical speculation & overpricing is a burden to all but is the result of abused authoritative power much as the CEO's who've squandered others wealth & security. This is centralized to metro living outside the realm of normal life for millions of others. Those millions I'm speaking of are normal Americans who are foreign to paying exorbitant pricing but help pay for those multi million dollar penthouses.
Take this personal if you wish, but it's the highly concentrated abuse of power I speak of which exists in your area, not smaller rural or urban areas who pay the price of excess.
This is where you & I have a disconnect my friend. Art's wonderful but it isn't what sustains life for those who pay the high price of those who appreciate it so much. Check the millions being paid at Christy's for wall art, who paid for that??
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10-10-2008 @ 11:37AM
Bruce Watson said...
Bobby-
First off, I do tend to take your comments as attacks against my home because, frankly, that's how you have framed them. For that matter, you chose to respond to Rich's problems by attacking Rich personally. Honestly, if this is the approach that you choose to use, you really shouldn't be surprised by the fact that people take it as a form of direct attack.
Second, your understanding of wealth and value simply doesn't mesh with mine. Value is, ultimately, a matter of market. While a block of gold might be considered quite valuable, it isn't worth much in room full of starving people. Yes, New York is a center for wealth, but it is also a major market, as well as the center of numerous industries that generate markets. In other words, without trade companies, many of which are based in New York, much of the wealth that you cite wouldn't exist.
Third, you seem to believe that the only form of wealth is composed of things that are created by the functions of the human body, i.e. finished products, commodities, etc. The truth, however, is that mental products are also creators of wealth and commodities in their own right. If these products are the primary exports of New York, then it doesn't mean that the city produces nothing, but rather that the city's products are not entirely physical.
This might be pretty complicated for you, so let me put it this way: penicillin, disk brakes, nuclear fission, and knee replacements are all tangible, measurable commodities. However, they are also based in research and intellectual concepts. Without these underlying concepts, they would not exist. While atoms aren't split in the city, the idea underlying fission was largely developed here. Yes, the uranium might come from the country, but the idea is the thing that makes it possible for you to have electricity.
Fourth, while I appreciate your anger at wealth consolidation (hell, just check out the rest of my posts!), I don't think you can blame the whole problem on the people who are smart enough to take advantage of it. Yes, it's unfair that George Clooney is powerful enough to generate millions of dollars merely by smiling at the camera. However, is it really the fault of his agent, or the studio, or even Clooney? If your neighbors and friends didn't buy tickets to Ocean's Eleven, Clooney wouldn't have that power. If Middle America chooses to be led by the nose, it can't necessarily blame everything on its leaders.
The same goes for Wall Street. I would love to see Dick Fuld, Hank Greenberg, and the rest of these guys strung up. That having been said, homeowners also have to take some responsibility for their situation. A couple of years ago, my wife and I seriously considered buying a house on a variable rate mortgage. We decided against it, as we realized that doing so could put us in a very difficult position. Four years ago, it was already apparent that this mortgage crisis was brewing, yet lots of people chose to overextend themselves. Although Fuld is a scumbucket, he didn't hold a gun to these people's foreheads, and they need to accept some blame.
Fifth, regarding Dubai, it was a hub for international trade long before it found oil. Currently, it is using its oil revenues to establish itself as a world financial center in the hopes of finding a way to survive when the gas runs out. Again, I understand your rage, but it is seriously misdirected. I think that, if you look a little deeper, you'll find that Dubai is doing exactly what we would want them to do.
Sixth, in terms of Art, you're missing the point. I'm not talking about Robert Rauschenberg or Vincent Van Gogh; rather, I'm talking about art in a broader context, including everything from the pictures on greeting cards to the shows that you watch. An outsize percentage of these are created in New York, and that constitutes a significant cultural heritage.
Finally, your refusal to acknowledge my points about public transportation, architecture, and so forth is stunning. I assume that you don't have a response?
10-10-2008 @ 7:47AM
Bobby said...
Rich, you're just stupid.
Those millions you said people don't mind paying for are a result of false equity jacked up in housing over a short period of a few yrs.
They're also a result of liquidity being pumped into the marketplace that's basically gone up in smoke because of those inflated prices that are coming home to roost now in the way of declining values.
If you feel so damned good about living lakeside now for a million bucks, the sky's the limit buddy, go out & invest in a country full of "steals" in the real estate market. How do all those people feel now that invested at "top pricing" about their investments?
I hope you can hit the "bottom" based on true costs instead of what your desires tell you is a good price.... What a joke!
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12-01-2008 @ 12:07PM
Bobby said...
Bruce,
it seems as though you're trying to employ a misguided sophistication about wealth.
First of all, I'll qualify my beliefs as endearment to a free market society. I've gained my security in life as an advocate of that for the past 30 yrs of my life. I turn products for a "fair" return while giving steadfast value to my customers. My actions or job description aren't inflated & they justify "real growth" in an economic cycle that can exponentially pass growth later on to a purchasing customer.
I'm sure you can come up with numerous accounts where you live that pass that same value along. You totally miss the point in your eagerness to defend New York City & the likes of Dubai though.
I have no qualms with concentrated wealth. The issue I have with the results of that wealth is when it causes inflationary standards & false equity. New York City along with other metropolitan areas such as Las Vegas, San Diego, Los Angeles & Palm Beach have squeezed as much liquidity out of primary real estate markets to the tune of killing the entire countries real estate market. It borders on corrupt when you play musical chairs by taking a product that costs only "x" amount of dollars to produce & increasing that product's price tenfold when the norm for "real growth" is an anticipated 4-5% annual growth (appreciation) rate. I'm speaking of real estate primarily but the nation's wealth has been accumulated & held (hostage) or in trust in market centers such as where you live in NYC.
Hence, the terrible downfall of the stock market we're all witnessing now. Who's wealth is that, NYC's? Defend your area as much as you like but don't tell me that trust hasn't been breached to the tune of millions of innocent Americans paying the price for your multi million dollar style of living.
I'll debate you all you like on what real growth is my friend. Real growth is tied to time, effort & appreciation at a reasonable level. NOT AN OVERNIGHT KILLING BY CORRUPT CROOKS! Irrational exuberance always ends up with the little guy paying the price & leads to future instability.
This is what the hell's wrong with people detached from reality. That's why I jumped in Rich's shit with his stupid comment because people can afford it & it's all about demand.
Well, we had a certain demand for oil as we always have, was the price of it fair though? Was an escalated annual exponential 100% increase fair for a product essential to the very being of our country or was it geopolitics at its worst? Speculation of some chump ass money manager who was drunk on numbers sitting at his computer trading more wealth in a day than he'd aquire in a hundred lifetimes? That same chump wanting to rack up a nice bonus by peddling someone else's hard earned dollars. Call it trickle up or trickle down, those actions have affected people all over the world. People who can't buy a bag of rice now because of some greedy punk at a computer dealing in billions daily for his own self satisfaction.
Wealth is recognizable by those who achieve it on a fair basis Bruce. I've defended the oil companies right to make as much profit as they can as long as they deliver product to market on a "fair market value". Sidenote: the price of crude has dropped 45% but in my area gas at the pump only 15% maybe, is that fair or are the rich still sticking it to our asses?
Like I said, you & I have a disconnect on what we perceive as fair. I saw a piece on tv tonight where traders in DUBAI were manipulating the stock market with all their hard earned funny money. I assume you think they made it in a fair fashion, I don't.
Final part of my argument is when the vulgar rich manipulate to a point they throw the entire country into a financial crisis the summary is they unjustly unhinge stable market areas that abide by fair market practices. Where I live is suffering because of the stupidity of those where you live. Like it or not, cause & effect are far reaching & you guys are the main culprits....
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10-14-2008 @ 11:42AM
Jen said...
Bruce and Bobby
Perhaps you should both be running for President.
The debates we are watching would be much more interesting, and 100 x more informative
Thank you both for your interchange.
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10-16-2008 @ 12:14AM
KC said...
In the middle east they are fond of decapitation. I would never go there. I simply don't trust the people from that part of the world. I do hope your wife didn't take your child with her.
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