Reviewed this past week in the Times: High Wire: The Precarious Financial Lives of American Families, by Peter Gosselin
One of the most memorable lines from George W. Bush’s convention speech in September 2004 introduced the concept of an “ownership society.” “Ownership brings security, and dignity and independence,” the president declared.
The line was memorable not just for its soothing cadences, but because it arguably marked the high point of the Bush era. Within six months, Bush would win re-election and unveil the centerpiece of his ownership agenda, Social Security privatization. Six months after that, not only was Social Security privatization dead: its staggering unpopularity had weighed down the entire administration.
Peter Gosselin probably didn’t set out to explain the collapse of the Bush economic agenda in “High Wire: The Precarious Financial Lives of American Families.” But his trenchant book could easily be read that way. An economics reporter with The Los Angeles Times, Gosselin demonstrates that Bush’s ownership agenda completely misread the economic zeitgeist. Americans have seen their financial situations grow far less stable over the last few decades, he reports. Against this backdrop, the prospect of assuming still more risk, as Bush proposed, gave many of them agita.
Scouring the data, Gosselin finds that the income of a middle-class family in the early 1970s typically rose or fell by no more than 17 percent in a given year; today, that range is plus or minus 26 percent. And it’s not just the middle class who’ve seen their incomes fluctuate wildly. The most affluent tenth of the country saw a slightly greater rise in volatility.
The cause of this increased turbulence, Gosselin says, is a changing labor market and a decades-long erosion of the corporate and social safety net. A generation ago, when unemployment relief was more generous, when companies provided liberal health and pension benefits and private insurers weren’t as stingy as they are today, a serious illness or the loss of a job usually wasn’t devastating. Now, such a setback is much more likely to bring economic ruin.
Do you feel like your financial life is precarious these days?