Back: Scott Winship versus the Middle Class

Back! I should have mentioned I was going on vacation before I left, instead of after. But I’ve spent a productive two weeks traveling. I stood up to my good friend Ed’s wedding, with helping to arrange an appropriate bachelor party beforehand: Tom Collins were drank on a boat (note: unopened PBR cans float in a lake, so they can be thrown into a lake from a boat and you’ll find them), a wide variety of sausages were driven in from the southwest side of Chicago to be grilled and rented AK-47s were shot at Don’s Guns. I visited Chicago, and Big Star Tacos are as good as the hype. I went to celebrate the 75th anniversary of Social Security at the new FDR Presidential Library special exhibit. And a bunch of other things.

Catching up: This Edward Luce piece on The crisis of middle-class America was discussed recently by Scott Winship in A More Productive Path than Self-Immolation, which starts “Seriously, it’s discouraging to see so many people who should know better (because they’ve argued these points with me before) promoting this article.” This could be a reference to me, so I’ll respond. You should read both if you haven’t already. Four things.

Foreclosures, Bankruptcies

The share of mortgages either in foreclosure or 3 or more months delinquent is 11.4 percent, which, because 30 percent of homeowners have paid off their mortgage, translates into 8 percent of homes. So the Freemans’ situation is typical of about one in twelve homeowners, or not quite 3 percent of households (since one-third rent)….

This is bad Elizabeth Warren research—she counts a bankruptcy as being “caused” by illness or accident if one was reported, but the household could have been in serious debt before these occurred. At any rate, bankruptcies are exceedingly rare (under 1 percent of households—see Figure 13).

So only 1% of households go bankrupt in a year, and only 11% of mortgages are delinquent or in foreclosure. That’s not a big part of the population, that’s not even a majority. So what’s the problem?

My friend JW Mason called this argument the Marty Blank gambit, after John Cusack’s character in Grosse Point Blank, who defends his job as a hit man on the grounds that the number of people he’s killed is “not that many, as a share of the population