World Famous Comics: High Wire: The Precarious Financial Lives of American Families
High Wire: The Precarious Financial Lives of American Families
By: Peter Gosselin Publisher: Basic Books Average Rating: Binding: Hardcover Label: Basic Books Number of Items: 1 Number of Pages: 272 Publication Date: June 02, 2008
The U.S. economy is wrapping up twenty-five years of some of the strongest, smoothest growth in its history-a performance so sweet economists have given it a name: “the Great Moderation.” So why have so many of us, even those making hundreds of thousands of dollars, arrived at the new century with a gnawing sense that events are moving against our families and ourselves? The easy answer is that we’re suffering a case of needless anxiety. But the easy answer is wrong. Drawing on interviews with hundreds of Americans and new statistics he developed, Peter Gosselin traces a quarter-century shift of economic risk from the broad shoulders of business and government to the backs of working people. It is a shift that has shaken the pillars of most families’ lives-stable jobs, solid benefits, government protections. The change doesn’t mean one can’t prosper. But it does mean the benefits of growth come at greater peril and your financial fall will be steeper if you stumble. This threat to working Americans’ security-and what to do about it-is a pressing concern to economists, policy-makers, and everyone who works for a living.
Good observations, weak prescriptions. I don't think this book will get much notice or have much impact. Sure, it will encourage those who agree with its points, but I can't imagine that it will reach the general population in a big way. The idea of the book is that Americans, all but the very richest, are being sacrificed on the alter of private ownership that only benefits that thin upper crust of wealthy people. The rest are losing their ability to retire, to have health care, to securely own their homes, provide college educations for their children (or get them for themselves), or even have a job with a good company.
The author does point out the very interesting idea of the "unjob" where many of us work because the traditional career is closed to us for a variety of reasons, yet we can't start our own profitable company (or are working towards that goal), and we scrape by making a living and providing our own benefits with consulting, contracting, or other short term work. Usually we have multiple gigs running at the same time.
My own view is that our system does put too much of the burden of dislocation and disruption on the workers and too little on the companies and executives who either create or decide to use these dislocations as part of their business strategy (even if that is bankruptcy). However, many of the examples Gosselin cites in his book, while unfortunate, are also fairly well to do people who chose to live a life of consumption rather than with prudence and thrift and now want someone to bail them out of their difficulties. Sure, some of them got some very bad breaks in health or dishonest companies. And others did not read their insurance policies closely enough. Still, there is no doubt that some insurance companies push those with expensive claims into court hoping that either the claimant will die before they can collect or that the legal approach will simply be more costly than they can bear.
I thoroughly disagree with Gosselin's notion that somehow we need to turn back the clock and go back a few decades to large corporations that employed people for life and provided pensions. We can't go back because the world has changed, people live too long after 65 to have that be the retirement age. Do you realize that when Social Security was first created only about 3% of the population lived to collect it? We would have to push the retirement age up past 72 or more to achieve similarly "secure" retirements that would not bankrupt companies or society.
While I appreciate Gosselin's good heart and like some of his observations, his prescriptions are faulty and too nostalgic to be taken as a serious prescription for what ails us.
Reviewed by Craig Matteson, Ann Arbor, MI
Excuse Me, Mr. President. Wow, what a fantastic book! In my quest to understand the financial workings of American society, I came across this book. What an education. As a British expat now living in the US, I have been shocked by just how insecure I feel in my financial life here. Attempting to build an element of security into my family's new life, I am faced with insurance companies that no longer keep their promises, pensions that no longer exist and a host of eager sharks fighting to get me to invest my meagre savings with them. College costs are exorbitant and the economy so fragile that even a masters degree is now more of an albatross around the neck (debt) than a guarantee of a stable income. Peter Gosselins book confirmed what I was beginning to realise myself. I'm caught in a game that I have no chance of winning. It is a call to arms; a warning shot across the bow of the presidential campaigns to ensure that the real issues facing this country are included in the ballot. These are the issues that affect Americans every day, so 'Excuse me, Mr. President. In your run for the White House, could you please remember the electorate.'
A good and slow read... I read this at work. Mr. Gosselin's descriptions of the displaced "c class" executives shows an expanded view of how so many of us may be going to the dogs. I am just wealthy enough to be able to cruise through the rest of my life, if nothing bad happens. By the way, the book arrived quickly and in excellent condition. jb
This is a Great Great Book and I Would Make it a Point to Read It This is a GREAT book and I would encourage every citizen of America to read it, young or old. It's actually a hair-raising book. Well researched and each chapter has a personal, true life story of a family or individual that has been challenged with the topic being discussed.
Since the other reviews to date go over the book, I want to share what I took from it. First, I got out all my insurance policies after reading the chapters on how the insurance industry has slowly & slyly sandbagged us consumers. I read them with a fine tooth comb and voila! wouldn't you know it - just like the author said they were doing, well that is what they are doing. Sneaky company (and this is one of the Big Three property/casualty companies in California and the rest of the country) well guess what, they did exactly what the author said they were doing - changing the terms of the policy in such a way that the ordinary consumer, you & me, who (unfortunately) trust our agents so well ... are/were clueless that this got by us. Yep they changed me from the Guaranteed Replacement coverage on my home to the Limited Replacement + some percentage of cost overrun. And it got by me and I'm pretty smart (at least I thought I was). Just as it has probably gotten by most of you too. I called my agent last month and he told me it was the best policy money could by, Limited but with a 150% total replacement ratio, and furthermore the company I was considering replacing them with, well they had a reputation of quoting low and then next year WHAM they would sock it to me. I don't think so because that company is the one used exclusively by AARP and I just don't think AARP would stand for that kind of treatment. But back to my agent .. funny, but my policy said ... 125%. My agent disagreed with me and spoke to me in such a way that I would never want to go look further. But I did look further and HE WAS WRONG. I called the Home Office and got clarification and it is 125%. MY AGENT DIDN'T KNOW WHAT HE SOLD ME and my agent has been my agent since 1988 - or my agent wants that commission. He's a nice guy, I really don't know. But I'm not asking him. I got very angry when I realized that I had been sandbagged and g-d forbid if my house did burn to the ground, I would end up paying out of pocket over $200,000 to rebuild it just as it is.
Just as many of the Oakland/San Diego and other parts of California that have faced total losses have had to do.
The case studies in the book are all the same - about how the families of Oakland and San Diego fires really took it on the chin. The losses above the policy limits were/are staggering. Guess what, with rare exception, I'll bet you a zillion bucks that if you are reading this review or the book, chances are you are grossly underinsured.
I changed that. I changed companies and policies in the last 2 weeks. And surprisingly, between my car, home and umbrella policy, I went DOWN $600/year in premium along with going up from $1M to $2M in my umbrella. That was worth the book right there.
Then on to the ERISA chapters. What a shocker. I really was stunned at what I read. Imagine this law, passed to protect US the workers, in reality does not protect anyone except the insurance companies. Coincidentally there was a story in the LA Times last week about a woman whose 30-yr old husband died and was covered with $400,000 in his group life policy through his job. Guess what, the company and the insurance company refused to pay the death benefit even though the deceased employee paid the premiums for over the 3 years he worked there. The widow sued in state court, the insurance company knows its rights and got it into federal court (because this is ERISA) and the grieving widow was ordered by court to get the premiums paid returned to her and no payment for the policy. And it is not appealable. Who in the world ever knew that? Did you? I didn't. Does this mean that all life insurance policies through your job won't get paid? I guess I was lucky when my dad died 21 years ago because his group life policy did pay me. But then again my dad owned the company so suspect they didn't want to futz with that claim. However the gall of the company to deny the claim and then the courts, under ERISA precedent rulings, denying the payment. I almost fell off my chair. This is just as the author described is happening in the book.
So if ERISA is undermining employee's benefits (and this includes health coverage too, not just pensions, IRA's & other employer provided plans, employer offered disability and the rest of the benefits of the job) and if ERISA is stripping all our rights of we workers, what is left?
The chapters and stories on employeer provided disability coverage almost left me in tears. I usually shed tears only when reading fiction. This was just a scandalous nightmare to read. But I believe it. And the reason I believe it is that my former husband went blind in his last job due to a detached retina-like condition and his privately held disability company policy (coincidentally the same one talked about in the book) denied him his benefits for close to 4 years. Good thing my ex is an attorney and could take them on. 4 YEARS. While my ex is an attorney what he wasn't able to do was to pull money for living expenses out of a hat along with a few rabbits. He ended up on the brink of bankruptcy with this stunt the company pulled. How an attorney that goes blind can continue to be a litigator and read his briefs is beyond me - and the disability company plays the 'let's see who can hold out the longest' game.
This really is sick stuff.
I realize this is a long review. But I decided to list real life stories to support exactly what this book is all about. I have to say, anybody reading this review that is thinking about buying the book, STOP NOW and buy this book. I came upon it at Borders by accident, it was shelved under Economics and not my favorite category which is Investments - and I don't really like economics, but this is an easy & engrossing book to read. And the time has now come at this passage of time in our history that the public, ALL OF US, need to get our heads out of the sand and meet these challenges head on, informed, and not stupidly ignorant. Ignorance costs and at this point of our historical times, NOBODY can afford to be ignorant anymore.
Please read the book. And thank you for reading this review.
High Anxiety What an interesting book! High Wire goes a long way in explaining why our society seems so fragile in relation not only to our economic lives, but also in our relationships with our communities as a whole. This book also confirms the notion of how shifting so much risk away from employers, insurance companies and the government onto individuals creates an environment of "it's every man for himself" rather than "we're all in this together". Maybe this might explain some of the disconnectedness we experience in our day-to-day interactions. High Wire is very easy to read and very informative as well.
Anything Goes Trivia
Last Kiss
Megaton Man
Trevor
