Bad Decisions: Not Just For Poor Folk!

I've pointed out in previous posts that nearly every article I read about people in horrible financial straits contains obvious hints -- if not outright confirmation -- that colossally bad decision making underlies the problems.

I get the sense, sometimes, that people think I'm picking on poor folk when I do this. That somehow, poor folk are forced into making bad decisions by the immutable facts of their lives and it is somehow bad form to point out that if they had made better decisions, they would have had a better outcome.

Well, today I saw an article in the NY Times written by one of their economics writers about how he has descended into a pit of debt. Reading the article one sees, as always, that his situation is the result of terrifically poor decision making. Perhaps because he is not a middle-class writer trying to tug heart strings about the plight of the poor but rather confessing his own problems, these bad decisions are not concealed and glossed-over the way they tend to be in sob-stories focusing on the poor.

At any rate, I thought I'd just take the moment to point out that if you repeatedly make bad decisions, they will lead you to penury just as surely whether you make $120,000 a year (as the author of this piece does) or $30,000 per year (as the unfortunates in one of my previous posts on the subject did). Sure, you'll probably get to the poorhouse faster on $30K but the fall will seem much more calamitous from $120K.

The other thing to note is the perhaps obvious point that people who make $120,000 are probably less likely to make enough bad decisions to ruin their lives. If they were the types who were relatively incapable of logically forecasting the results of their actions, after all, it's unlikely they would make it through the requirements to get jobs at $120,000. (Education, working-your-way-up, etc.)

I came to the article through Megan McArdle, one of the professional bloggers at The Atlantic. In her post she acknowledges the courage it must take for a professional economics journalist to admit to having fallen into the state he's in and then goes on to talk about how difficult it is to make ends meet as a journalist, particularly b/c you tend to be well-educated and friends with upwardly mobile professionals in industries that pay much better and probably aren't teetering on the verge of extinction.

Of course, she also points out that she finds it "obvious, unembarrassing, and uncontroversial" to admit that her household (with her and her unemployed journalist boyfriend) must cut back. Here we have an example of good decision making. This is why she is unlikely to fall into the truly dire straits in which the NY Times fellow finds himself. If, on the other hand, she found it unremarkable to live on credit card debt while maintaining a lifestyle that neither she nor her boyfriend could afford, then disaster would follow as surely as night follows day. And it would not be the choice of poorly-paying career -- or rather not primarily that choice -- that led them there. It would be the logical end result of the repeated bad decision to not live within their means.

Quote of the Day

George Will on the Obama administration: "The administration's central activity -- the political allocation of wealth and opportunity -- is not merely susceptible to corruption, it is corruption."

True.

What 12-year Old Girl's Basketball, TE Lawrence and Computer War Games have in Common

I'm still under the gun with work-related stuff until next Wed., so posting will be fairly nonexistent until then.

I did just want to point out that Gladwell's latest piece in the New Yorker is stupid and approaches self-parody.

I don't have time to go through it point- by-point illustrating its manifold stupidities, so I'll leave that as an exercise for the reader.

I'll just tease it by saying that one of his main arguments is that men's college basketball way under-utilizes the full-court press. His primary support for this is that a parent-coach had a lot of success with it in his 12-year old daughter's league.

No, seriously.