Archive for the ‘Stupid Advice File’ Category

If You’re Poor, Forget College

Ok, I haven’t done one of these in a while, but I was browsing through my Google Reader today and in comes this post from Frugal Dad.  It’s a post about student loan debt, which I can agree with the author is too high. However, the guy actually says this nonsense:

Do you need to go to college? A college degree not only doesn’t guarantee a job, but it also doesn’t guarantee a high paying job. Before you go to college because “it’s expected of you,” or “that’s what the cool kids do,” you should take a few minutes and try to determine your career goals, what is required to achieve those goals, whether or not you need a college degree, and if it is worth the expense. Many times college isn’t the answer and taking student loans while you try to determine your career goals is a recipe for disaster.

Well, instead of throwing a bunch of opinion out there without any facts to back it up, let’s take a look at some hard numbers. The unemployment rate for those with no degree is 10.1% as compared to only 4.5% for those with a bachelor’s degree. The numbers don’t lie. While the author is correct: a college degree doesn’t guarantee you anything, it just may make finding work a little easier for you. You need every edge you can get these days!

Here’s another fact: many jobs that previously did not require a college degree now require one. For example, an entry level manager trainee position at Enterprise Rent-A-Car, which really is a glorified sales position, requires a college degree.  Not having a degree can seriously limit the number of jobs available to you today.

What troubles me more than the stupid platitudes espoused in this post as well as many other similar ones I have seen since the economy went into the ditch is that we now seem to be “ok” with telling people with humble backgrounds that they need not even try to reach beyond the station to which they were born. Think about what posts like these suggest: you should not go to college if you cannot afford to pay for it yourself, or if your parents cannot afford it. Furthermore, you ought to evaluate any degree you do pursue by its dollar value, not by personal interest or by the desire to look at a career as more than just a way to make money.

Look, I am not going to suggest that college is the answer for everyone or that it can guarantee you anything, because it isn’t and it can’t. However, if you want to go to college and you need to take out a loan to do it, then you ought to be able to do so, regardless of the cost later. Student loans need to be reformed to be in line with what they used to be: an investment in the future. Investments may not pay off and that’s the risk the banks take in loaning the money. Furthermore, repayment terms need to be made easier and interest rates capped. Half the problem with student loans today is how onerous they are to pay back. You shouldn’t have to indenture yourself to the banks for the rest of your life for a chance at a piece of the pie.

Finally, I just want to say that employers also need a reality check. Is it really necessary to require a college degree for a job that pays $30K? Do you really need to limit your pool of qualified employees to those with college degrees? A bit of common sense here would be welcome about now.

Blaming Fannie & Freddie: Taking The Easy Way Out

“Will Obama Slay The Fannie and Freddie Beast?”  is the headline of one story appearing in Newsweek today. Basically, it appears that instead of doing anything to the major players that actually caused the economy to collapse, you know, those fat cat Wall Street CEOs with their stupid, blow-up-the-housing market schemes, once again the easy target gets the blame: poor people who shouldn’t have been able to buy homes in the first place.

The Obama administration appears to be suggesting — very subtly — that homeownership isn’t a God-given right. That the American dream has morphed into an American entitlement. That millions of people who should not have been homeowners in the first place ended up paralyzed by unsustainable debt as a result

The American Dream is indeed powerful and one of its major tenets is owning your own home. Why is that such a tenet, though? Because for years, owning a home was the only asset any except the top five percent of Americans could claim.  Having said that, homeownership has never been an entitlement and the idea that giving poorer Americans the ability to purchase homes led to this crisis is completely incorrect. It is par for the course, however, as it is easy to blame everything on those least able to represent themselves. Poor and working class Americans  don’t have a powerful lobby like Wall Street does.

The fact is that the financial crisis was NOT caused by making loans to poor people to buy homes. It was NOT caused by the CRA or Fannie and Freddie. It was caused by greedy Wall Street bankers knowingly creating financial products that were doomed to fail from the very beginning.  The Center For Responsible Lending and others have done studies which have  revealed that risky borrowers weren’t the problem;  it was the terms of the loans themselves .  In fact, the majority of people who received “subprime” loans could have qualified for conventional mortgages, with a much lower default risk.  Furthermore, most of the loans made were not loans to first time homebuyers: the majority were refinances and loans made to homeowners moving from one house to another.  

It is deeply saddening to me that the Obama Administration appears to be buying into the Republican talking points, given to them straight from Wall Street, that the cause of the crisis was government intervention to try and help people get a leg up when true cause was the absence  of government in making sure that the mortgage products that were being peddled to the American people were safe and sustainable.

Saving America’s Middle Class? Or Drowning It In Austerity?

Today’s post on Frugal Dad was written by a guest blogger pimping his own site,, a site that claims to be about middle class survival during these hard times.

I read the post on Frugal Dad and I see that the author is using statistics gathered by Elizabeth Warren. Going to his site, he even has a category for her and he’s put up some of her videos. However, he takes her statistics and completely misinterprets them to continue to put forth the “overconsumption myth” which Warren has also gone to great lengths to debunk.


Getting More Income To Pay Debt

Frugal Dad wrote this article on his blog today about how the most important thing you can do to get out of debt was to bring in more income to put solely toward paying off that debt. I can’t argue with with his logic. After all, if  you develop a plan to bring in more money and you also commit to putting those funds towards your debt, well, you’re going to reduce your debt load more quickly.

Having said that, I do take issue with some of his suggestions as to how you should get more income. For one, he suggests that you need to work 70 hours or more a week. While getting out of debt quickly is good, it is not worth the health costs associated with overwork.  There are other costs to think about, and health is the most important. After all, if you lose your health, then all your income will be gone and then where will you be? 

Furthermore, Frugal Dad does acknowledge the weak economy as an impediment to finding “more work” but then dismisses concerns about the economy as “your excuse to staying in debt, limiting your opportunities and stifling your dreams of financial independence.”  I don’t know where this guy has been living, but most people these days would be happy to settle for a life where they can earn a secure, if, modest living. Financial independence is something few ever attain and it is just part and parcel of that stupid Horatio Alger myth that so predominates American culture.

Frugal Dad, newsflash! We’re in a depression. Yes, I said depression because that’s what you call it when there are millions and millions of people out of work and there are five applicants for every one job that exists out there. For those who are lucky enough to remain employed, (and are scared to death that their job may disappear at any time,) their hours are being CUT. If their hours are not being cut, then their WAGES have been reduced, so that even if they are working more HOURS, they aren’t seeing any net increase in income. Please! Optimism is fine, but at some point, you’ve got to face reality.

Frugal Dad has other suggestions on bringing in more income, one of which is blogging. He blogs himself.  While blogging for a living (I do the same thing) is a decent way to make money, it does take time to pick up steam. It can take a solid year before you see any appreciable income from your blogging efforts. You can’t expect to start a blog, throw up some content, and watch the cash start flowing in. To give FG credit, he doesn’t suggest that this is the case, either, but at the same time,  he does make it sound like a panacea for debt.

Look, I understand where FG is coming from, I just think that at this juncture in time, with the economy as bad as it is, his post just comes across as pollyanna-ish and smug. I don’t know about you, but I am finding that my patience has been worn thin with useless platitudes and smarmy tough talk.

Rebuttal To’s “7 Great Things About Unemployment…”

I understand what the author is trying to do here, and he’s got the right idea on some of his points, but in the areas where he is wrong, he is so widely off the mark and out of reality, that the article is a major miss.

The Author’s Good Points

Staying physically fit: Yes, the unemployed have more time, so spending some of it on losing weight and getting fitter is good advice. Besides being better for your health generally, exercise and staying fit benefits you mentally as well.

Family time:  Certainly it is a positive message to encourage the unemployed to catch up on family time . A trip to the park with the spouse and the kids is the kind of thing that can invigorate the lagging self-esteem that comes from being out of work and can do wonders for family relationships as well.

Catching  up on sleep: Absolutely a good idea. Since most Americans are chronically sleep deprived, the ability to sleep in when you want is a huge boon to one’s health and emotional well-being.

Where The Author Veers Into Fantasy Land

World travel:  On what universe is this guy on that he thinks anyone can afford to travel the world on an unemployment check? Even off-season rates are far too expensive!  Furthermore, there’s that little caveat  that in order to collect unemployment, you actually have to stick around to look for work. I’m sure the government  would take a dim view of the unemployed using their unemployment checks to travel to Jamaica, or wherever this guy thinks you can travel on meager UI checks. Congressional Republicans and some conservative Democrats are already being stingy on UI benefits because they think that the long term unemployed aren’t looking hard enough for work. This piece certainly gives them ammunition, even though it is so far from reality as to be a fairy tale. 

Doc me up: Ok, the idea that most of the unemployed can even afford Cobra benefits, which are very expensive and unaffordable to most people collecting UI checks is beyond laughable. Seriously, I’d like to know that this guy is smoking and where I can get some.

Dead end job: I am 100% certain that if you ask someone who is unemployed whether they’d rather be in a dead end job or unemployed, they’d choose the dead end job. No one likes being unemployed and looking for work. It is a soul-defeating endeavor and most people would choose the security of a steady income rather than be at the mercy of the schmucks in Congress who now find it necessary to cut the deficit at their expense.

Theme parks: Really? Has this guy checked the prices at the local theme park any time recently? It can cost $300 or more, when you take into account the price of tickets and food. Annual pass? Who would spend their meager unemployment benefits or any portion of their savings on such a frivolous expense?

What The Author Should Have Said Instead

Along with the good points he made, if he’d left off his ludicrous ones and instead replaced them with these, he would have a cogent and well written, helpful piece:

Maintenance: Performing routine maintenance on your home that you’ve deferred due to time constraints. Not only is this a good use of your extra time, it will also give you a sense of accomplishment and will save you money in the long run

Learn new skills: Take a class at your local community college that will teach you new skills or improve your current skills. This will look great on your resume as employers like to see you doing things with an eye to the future and to making yourself more valuable.

Again, I understand that the article is trying to paint unemployment in a positive light to help people feel better, but you have to do so with a modicum of sense. The way this article comes across, the guy sounds kind of snide, like even he doesn’t believe half the things he is saying.

Strategic Default = A Free Rent. Really??

I am sick and tired of posts like this one. It is yet another moralistic, snide view point from a person without an ounce of common sense.

The Times story features Alex Pemberton and his mom, Wendy Pemberton, who both live in St. Petersberg, Fla., and who both pay an attorney $1,500 who says he does “as much as needs to be done to force the bank to prove its case.”

That $1,500 these homeowners are paying in lawyers fees is considerably less than what they’d pay to keep up with the mortgages. So they pay the lawyer and justify their defaults by saying that this is simply business. And nowadays, homeowners finally seem more apt to approach homeownership in a cold, even ruthless business manner

I have two major problems with the above statements: For one, how does the author know that paying on the mortgage would cost less than the $1,500 that these homeowners are paying the attorney? Moreover,  where in the story does it say they pay the attorney $1,500 per month?


David Frum: Wall Street Didn’t Cause Financial Crisis- It Was China!

I had to laugh when I read this editorial by neo-con David Frum on CNN today.

To his credit, he acknowledges that Americans did not take out mortgages to buy homes they knew they couldn’t afford or that they borrowed too much because they wanted big screen TVs in every room.  He gets it right when he says that Americans were borrowing because incomes have not been keeping pace with the cost of living, but from there, he shifts into “alternate universe land.”

He says, and I kid you not, that China’s growth caused the financial collapse because it was buying up US debt like crazy in order to keep its factories fully staffed with workers, and of course, the largest source of American debt was U.S. mortgages. Wall Street, seeing the Chinese demand for U.S debt created the vehicles to produce more of it: mortgage backed securities. They were just the middle men.  Ergo,  it wasn’t Wall Street that increased the demand to the point that mortgage brokers were peddling risky loans doomed to fail, it was the Chinese hunger for American debt!

A Rebuttal To “Jobless pay is a privilege, not a right”

In this post entitled “Jobless pay is a privilege, not a right,” Ruben Navarrette argues against extending unemployment benefits, essentially saying that paying people for “doing nothing” is counterproductive.

Far from being counterproductive, unemployment benefits are a critical safety net that prevent people from becoming homeless and unable to feed themselves and their families in times of economic distress.  If you’ve lost your job through no fault of your own, then yes, jobless pay is your right as an American and a human being.


Really, Big Banks? Really?



Even before the ink was dried on President Obama’s signature on the credit card reform bill, the banks were already on the hunt for loopholes in the law to exploit in the name of profit.  In the absence of loopholes, they wanted to find new ways to generate the same amount of profit as they had before the law took effect.

An article on, which is a subsidiary of the Wall Street Journal and certainly no friend of Main Street,  predicted that banks would stop offering free checking accounts.  Probably the single most laughable comment in the entire piece is this shining gem:

Already cash-strapped banks anticipate declining revenue from credit cards as rules from the CARD Act take effect, says Hank Israel, director of Novantas, a financial services consulting firm in New York.

If the banks are so cash-strapped, then how can they afford to give their top executives such large bonuses? It is true that the new law will cost the banks revenue, and recent action by the Federal Reserve to limit overdraft fees starting this summer will cut those profits even further. Let’s be clear here: the new law won’t bankrupt the banks…not even close! The banks will still bring in revenue, and plenty of it. It just won’t be quite as much.

That said, those profits that the banks are trying to reclaim can be fairly characterized  as “ill-gotten,” and complaining about their curtailment is a bit like a bank robber complaining that he can’t rob any more banks after he is caught. Further, finding new ways to make the same sorts of profits is akin to that bank robber switching to robbing armored trucks.

“The banks need to make up the lost profits due to the law in other ways,”  whine bank cheerleaders and apologists, with the inference being that but for passage of the law, the banks would not resort to such tactics.

Don’t get me wrong: there is nothing wrong with making money. There’s nothing wrong with making a lot of money. The wrong lies in how that money is made. It is just as wrong for banks to make 80% of their revenue from 20% of their most vulnerable customers as it is for someone to make his money by thievery.

Instead of whining about being regulated after years of massive deregulation that precipitated the financial crisis in which we now find ourselves, the banks should be looking at new ways to make money that add value.  No one would complain about paying for  a service that is helpful and actually does something.

Judgmental, Much?

This post, in response to this one is yet more evidence that the sanctimonious “live within your means” and “pay your bills no matter what”  hyenas have no empathy.

Obviously, Abigail has never taken a financial misstep in her life, so much so, that she feels she is eminently qualified to sit on her high horse and shake her proverbial finger at everyone else.

My heart goes out to Emily, the author of the original post. I can’t imagine how hard it has been for you, losing a child,  while facing your financial difficulties. I want to thank you for sharing your story and I hope that you and your husband make the most of the second chance that bankruptcy affords you.

Now for my response to Abigail’s post:


Yes, thank goodness those creditors won’t get more things to help make up for the losses they’re taking on your debts. Nothing but gratitude that those vultures — they want you to pay back what you spent! — don’t get your stuff to make up for taking a chance on you and losing. Suck on that, people who expected you to live up to your responsibilities!

Aside from the fact that credit card companies and banks encourage people to take on debt, even when it may not be in their best interests to do so, no one ever borrows money without intending to pay it back. Defaults are just a cost of doing business for these “creditors.” Please don’t make it sound like there are actual “people” who are being denied their due, much less being hurt by the fact that someone who got in over her head took advantage of bankruptcy protection afforded by the Federal government.


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