Do Your Fiscally Responsible Parents Just Not Get It?
It’s not possible to get by on mere fiscal responsibility anymore
Ever talk with your parents, or anyone else in the generations above yours, and think:
You’re just not getting it.
This never used to happen to me as much, because, as my husband points out, I’ve always had the soul of a sixty-eight year old woman (many, many years before I’ll turn sixty-eight). Mostly I get along with older people very well and always have.
But today I saw how fundamentally people of a certain age do not even have the basic framework to understand the country’s current economic picture.
I live in a very desirable area, mostly because I was born here and never really left. It’s a small city that touches a bigger one, with a large university and several large hospitals, butt on. If I drive fifteen minutes one way, I’m surrounded by farm fields and I have ready access to beautiful county and state parks. If I drive fifteen minutes the other way, I can get to restaurants and museums and those aforementioned hospitals (which are, sadly, the only amenities of my nearby big city that I use anymore).
In recent years it has become impossible for young people or families to afford even a starter home in my suburb. I bought a modest house (think one-car garage, ranch, 1 bathroom) here twenty years ago, and it was a stretch for us even then. If I’d had to buy at today’s prices? I couldn’t afford it.
Lately I have been looking around, thinking, why are house prices so out of control? Where are all of these people coming from? Hadn’t rural Wisconsin already emptied out years ago, or are people still streaming to the state’s bigger cities from its small towns? In short, what is going on?
One day I talked to a neighbor who lives behind me, who was telling me about the last person who had lived next door to her. He had been a renter…living in a house that someone from one of the much richer neighborhoods in town had bought for cash. (Or, as my neighbor put it: “A dentist from that ritzy neighborhood up on the hill swooped in and bought it for cash last time it sold.”)
So then I looked around at a lot of other small houses in my neighborhood that were also, I would start to learn, houses for rent. And of course, they were not cheap. Their owners were asking more in rent per month than my initial mortgage payment had been on my house.
So I thought, okay, the top twenty percent income class is buying all the real estate as an investment, and making it impossible for people to buy their own homes.
And even that’s just a very small part of the picture. As Lauren Elizabeth tells us, our system “allows Wall Street and investment firms to compete with everyday Americans to buy homes.” She goes on to cite a horrific article in the Wall Street Journal that explains how pension funds and other institutional investors are buying, not just homes, but entire neighborhoods, as a way to diversify their portfolios.
It’s what’s happening in my neighborhood, with my rich neighbors buying houses around me to rent out at exorbitant prices, only writ much, much larger. Who can compete with a pool of rich people when trying to buy their first home?
If that’s not disgusting enough for you, consider reading this article about how private equity firms are buying up mobile home parks — yes, mobile home parks — and driving up the rents and ignoring maintenance, all just to make a quicker, bigger buck. Off of people who have used their life savings to try and purchase a mobile home of their own.
It’s gross, but you need to go read it. Right now.
So today my Mom and I were talking about the housing market and economics (I was trying to take her mind off her upcoming cataract surgery) and I was trying to tell her about the travesty that is private equity firms buying up housing and then renting it back out to people at ridiculous rents. And this is what she said:
“Well, people should just save up their money better.”
So I tried again, because I know where she’s coming from. I really do. She was raised on a farm and so was I. We had plenty of food but we didn’t do anything and we didn’t go anywhere and mostly we just worked and saved our money. But I said,
“No, Mom, that’s not even the point anymore. No matter how much I save — unless we’re making hundreds of thousands of dollars a year — it just isn’t possible to catch up with people who do make that much. Just enough people in this country make SO MUCH MONEY that there is no way you can save yourself into their ranks.”
And then I told her a story about a friend of mine and her husband, who both hold managerial level jobs at pharmaceutical companies, and even they can no longer afford to live in my friend’s home town of Oakland, California. (They recently moved to North Carolina so they could stop putting every last dime they had into their house.) When managers with science degrees can’t afford California, I figure, something is way, way wrong.
She still didn’t get it. She remains convinced that if you just worked as hard as she did, and denied yourself everything she did, you can still pay for your own college and buy your own house and get by. And if you can’t? It’s all your own fault.
If there’s one function I think I fulfill as a Gen Xer, it’s that I can see how generations on either sides of me are all real assholes.
I joke. But I’m also a little bit serious. I am sick to death of clueless Boomers who bitch about the price of health care, when really they already lived through the golden age of American medicine. My mother is a case in point for that as well: When I was ten I cut my head, and she called our local doctor, who met us at his office at 11 p.m. and stitched up my wound. She paid him in cash (because they had only disaster insurance, another way they saved money), and everybody went on their way.
Can you imagine a) a doctor meeting me at 11 p.m. anywhere?!?!? and b) paying for any kind of medical care in cash? It would be expensive to have a kid’s head stitched up, I would guess, as any time I set foot in a doctor’s office for basic blood tests or ultrasounds, it costs my insurance company thousands of dollars.
I am also somewhat tired of Millennials complaining, because to my GenX eyes, it looks like they got everything shiny and new and their parents took care of everything for them. When I went to college? I packed my own car and moved myself and when I did move, I moved into very basic dorms or very old houses that were in terrible shape because that’s how landlords in my college town made money. Have you seen some of the new luxury dorms they’re building these days? It’s hard not to be a little jealous of the kiddies who get those amenities. I know I didn’t.
But, because I’m a slacker Gen Xer, I’m also willing to let my anger at other generations go. And once I’ve done that, my question becomes, how do we explain what is happening to our parents, who mostly just don’t get it? And how do we explain it to those younger than us, who may have had it good, but who are also all of a sudden finding that they’re only allowed to rent, never to own, their luxuries?
How do you explain it, so we can begin to change it?