A Fighting Chance

working families, against “that awful bill”: In her book, Hillary Clinton writes: “Proposed bankruptcy reform moving through Congress threatened to undermine the spousal and child support many women depend on.” Hillary Rodham Clinton, Living History (2003), 384. The New York Times also reported on then First Lady Clinton’s involvement in the bankruptcy fight: “[Mrs. Clinton] wrote dozens of personal notes to lawmakers last year as the [bankruptcy] bills made their tortuous way through the Congressional process. And she, along with Senator Edward M. Kennedy, Democrat of Massachusetts, played what the bill’s opponents say was a decisive role in helping to kill the legislation last year.” Katharine Q. Seelye, “First Lady in a Messy Fight on the Eve of Her Campaign,” New York Times, June 27, 1999.

inflicted chaos on the credit industry’s well-laid plans: For more on the Schumer Amendment: “The provision would bar abortion opponents from declaring bankruptcy to avoid paying court-imposed fines or damages that result from violent protests at abortion clinics. In recent years, a number of prominent abortion foes have used the bankruptcy laws for that purpose, among them Randall Terry, the founder of Operation Rescue. In declaring bankruptcy in 1998, Mr. Terry said he wanted to avoid paying debts, which then totaled more than $1 million, ‘to those who would use my money to promote the killing of the unborn.’” Philip Shenon, “Abortion Issue Holds Up Bill on Bankruptcy,” New York Times, April 30, 2002. Senator Schumer had long been prochoice and his vigorous defense of an amendment to prevent abortion clinic protestors from discharging their debts was a critical strategic move.

bankruptcy than would be diagnosed with cancer: See The Two-Income Trap, 6.

best predictor that a family would go bankrupt was if they had a child: In The Two-Income Trap, we found that married couples with children are more than twice as likely to file for bankruptcy compared to couples without children. A divorced woman raising a child is three times more likely to file for bankruptcy than a woman without children (6).

right up until something went horribly wrong: In The Two-Income Trap we found that two-income families were actually more likely to file for bankruptcy than their one-income counterparts (83).

“urge to splurge” was overtaking us: Many scholars and pundits have belittled the American consumer as reckless and on a “credit binge.” In Affluenza: The All-Consuming Epidemic, John De Graaf, David Wann, and Thomas Naylor decry consumerism in the United States.

Juliet Schor blames “the new consumerism.” She points to “mass ‘over-spending’ within the middle class [in which] large numbers of Americans spend more than they say they would like to, and more than they have. That they spend more than they realize they are spending, and more than is fiscally prudent.” Juliet B. Schor, The Overspent American: Upscaling, Downshifting, and the New Consumer (1998), 20.

Robert Frank argues that America’s “Luxury Fever” causes middle-class people “to finance their consumption increases largely by reduced savings and increased debt.” Robert H. Frank, Luxury Fever: Why Money Fails to Satisfy in an Era of Excess (1999), 45.

pet food to boys’ pajamas: “The Consumer Expenditure Survey (CE) program consists of two surveys, the Quarterly Interview Survey and the Diary Survey, that provide information on the buying habits of American consumers, including data on their expenditures, income, and consumer unit (families and single consumers) characteristics. The survey data are collected for the Bureau of Labor Statistics by the U.S. Census Bureau.” For more information, see http://www.bls.gov/cex/.

the average family spent less on food than they did thirty years earlier: We found that the modern family of four spends 21 percent less on clothing than they had a generation earlier, adjusted for inflation. Similarly, the modern family of four spends 22 percent less on food (at-home and restaurant eating combined) than its counterpart of a generation ago. The Two-Income Trap, 17–18.

solid, comfortable, growing middle class of my generation: For example, we found that a modern family spends an extra $290 per year on telephone services compared with its counterpart of a generation earlier (all numbers are inflation adjusted). On the other hand, the average family spends nearly $200 less per year on floor coverings, $210 less on dry cleaning, and $240 less on tobacco-related purchases. Similarly, today’s family spends 44 percent less on major appliances today than a generation ago. For more, see The Two-Income Trap, 17–19 and 196–97.