One of the biggest problems with government is the fact that one size can never fit all, especially in a country as large and diverse as ours. The federalist system does a better-than-anything-else job at managing differences, but it's not perfect.
It always (always) grates on me when I hear either politican party default to the perceived resident evils in others (established anecdotally, of course) as justification for taking one particular side or another. The Republican favorites: welfare creates irresponsibility, personified by the cadillac driving welfare queen (or, her contemporary, Octo-mom), higher taxes deters entrepreneurship, or motivation to work, public health care creates an incentive for people to abuse the system. The Democratic favorites: all rich people are evil, all corporations are evil, without regulation, no one would do the right thing.
This Good Morning America feature (h/t Escape Brooklyn, who, btw, seems very close to Escaping Brooklyn - you go, girl!) really demonstrates to me how very wrong we can get it sometimes.
For the first 45 years of Ken Karpman's life, everything was close to perfect.
He graduated from UCLA with a bachelor's degree and M.B.A., then got a high-paying job as an institutional equity sales trader. He married his dream girl, had two children and traveled the world on expensive vacations.
Over the span of Karpman's impressive 20-year career as a trader, he climbed the company ladder, reaching a salary of $750,000 a year.
Karpman was so confident in his good fortune and the strong economy that he left his job in 2005 to start his own hedge fund. To pay for the new business and their standard of living, Karpman quickly burned through $500,000 in savings and, like so many Americans, took a line of credit against his house.
But in the reversal of fortune that followed, Karpman was unable to attract investors and was forced to dissolve his hedge fund. He found himself jobless in a job market that had collapsed.
[After being unemployed for two years, Karpman finally took a job delivering pizzas.] Karpman's salary plummeted from six figures to $7.29 an hour -- plus tips -- but it's money that he's grateful to earn, even when it means delivering to neighbors or his old office building.
I can already tell you what the haters out there are saying. For the amount of money he made, he should have saved more. He should never have bought the McMansion, or taken the loans he did in order to buy it. He was irresponsible with his money. His current situation was of his own creation.
And I would say that anyone with this kind of attitude is engaging in just a bit of unseemly Schadenfreude.
Was he irresponsible? On an absolute level, sure. But for heaven's sake, when you have earned over six figures for years, and reached the point where you're making 3/4 of a million dollars a year (and amassed $500,000 of savings too), should you really still be forbidden from enjoying what you've earned? Are we supposed to live each day as if the Armeggedon is just around the corner? Really?
And if that is so, if that is what the "truly responsible" do, then how can we ever expect entrepreneurship to flourish in this country. There is so much blather out there about how America will be saved by small businesses and entrepreneurs. But there is almost no recognition that the flip side to entrepreneurship is the fact that failure rates are extraordinarily high. That far more entrepreneurs end up bankrupt (which, under the bankruptcy scheme - though less so since the 2005 changes - is a kind of bailout by creditors) than end up rich, or even helping the economy. Being an entrepreneur is inherently irresponsible.
And that is what this family is finding out. Sure, the fact that they had an extravagant life meant that the collapse came far faster, but in the end, what really brought them to this point is the fact that Karpman decided to strike it out on his own. And it didn't pan out.
The economic situation we are facing is nuanced, complex, and so sad. We need to stop wasting our time blaming and spend a bit more time unraveling. Maybe we can then arrive at a real solution, rather than the recent haphazard approach of slapping a band-aid on the wrong wound.
Great post. It's so true that people (myself included) are quick to blame the victim, when in fact there are actually all these systemic problems we need to address, too.
Posted by: Escape Brooklyn | March 20, 2009 at 04:02 PM