Article on Dave Ramsey

[kyleaaa]

I think what's difficult for a lot of people is that there is no one single person trying to kick anybody. The way I see things (and this post is making me think a lot about my own thoughts) is that whether you grew up poor or rich, making yourself successful takes a lot of hard work and dedication, and anyone with enough motivation can do it.

This is the problem. That statement is NOT true. NOT anyone with enough motivation can do it. Not in this country. That's the problem. That statement has never been true and probably never will be. It's ridiculous on the face of it, if you really think about it. In order for a person to take advantage of all the opportunities (or even one of them) you mentioned, a bunch of different stars have to align.

Think of it as a compound probability: a disadvantaged person has a 90% chance of doing A, a 95% chance of doing B, an 85% chance of doing C, and so on. Even though each individual link in the chain is highly achievable on its own, a chain of 9 or 10 of them have to be strung together to achieve decent results. 0.9^10 equals about a 35% of success. These are just random numbers, but the principal holds. The chances of a disadvantaged person being able to bootstrap themselves out of property are FAR lower than anybody who isn't disadvantaged would guess. That's why we have to look at data rather than ideology. It's NICE and it MAKES SENSE to think anybody can succeed with enough effort, but the data flatly rejects that conclusion.

[mpbaker22]

It's not at all irrelevant. And in any event, if your argument REQUIRES one to have made perfect choices to be valid (which so far as I can tell, it does), you've already lost. Have you ever broken an arm? It's expensive. You seem to assume most poor people can afford insurance. That is not a safe assumption.

You've again changed your own argument and attacked an argument that isn't mine. 
At no point did I say your decisions had to be perfect.  But you are assuming the person has made the worst possible decisions at every stage of their life, then your conclusion is they're fucked.  Of course they're fucked if they always make bad decisions!  And they're fucked due to bad decision making, NOT external factors.
At no point did I assume poor people can afford insurance.  In fact, it you who assumed that I assume poor people can afford insurance.  In fact, poor people can afford insurance (because it's in the budget that a poor person could survive on below minimum wage, which I have mentioned).

[gooki]

I was born middle class and white in the US. That's HUGE. I was born with an above-average IQ. That's HUGE.

I'm pretty sure when you were born, your IQ wasn't above average.

[No Name Guy]

We need to make a distinction between individual opportunity and societal opportunity. As and individual you can study hard, become an engineer, save a lot of money and retire early. No problem with that as long as you have adequate intellectual capability. It is not, however, possible for ALL people to do so at the same time for quite obvious reasons.

You're right, not everyone can, or ought, to be an engineer, or doctor, or lawyer (please, we have enough of those leeches) or accountant.  But one need not earn a professional degree to do very well. 

Were I truly smart about it, I should have skipped 4 years of paying for an education and gone straight into the trades as an apprentice.  A few years ago, the utilities here in the PNW were griping about how they couldn't find enough linemen.  Paid over 100k / year with OT for journeyman level - get a few storms where you're working for a week straight, and you're into double, triple time after a while, especially if it's over a holiday. 

Heck, in my company, the shop guys and gals hit top scale in 6 years and average 85k / year - not bad for taking a few week "beginning XYZ manufacturing" course and then working your way up.  Engineers, yeah, we end up higher and there is no top scale, but it takes a lot longer and it's largely merit based.  I quite possibly should have gone onto the assembly line - I would have ramped up my income sooner and faster (that whole time value of money, plus NOT spending 4 years tuition, while earning 4 years of pay). 

Hell, my car mechanic charges $89 / hour shop rate - not bad for a blue collar guy with a couple years of trade school (if that, often times car mechanics OJT it or can take classes in high school) and a whiff of business sense to open his own shop in a semi-decrepit old gas station.  Always has plenty of business since he's honest and does quality work.

I won't even mention a buddy that started his own lawn care business as a teenager.  Bought a used lawnmower and weed whacker from C/L cheap.  Pushed it by hand through his 'hood to jobs until he saved up enough of his earnings for a truck, then could take on more than pushing distance clients (amazing how that works...kid never been to B School and understood how you need to re-invest earnings into CAPEX to grow the business).  One doesn't need to be too bright to mow lawns.

But hey, woe are all those people without an education - there's no way they can make it, they've all been kicked so damn hard for so long its not worth ever getting up.   Yep....doomed I tells-ya.  DOOOOOMED!

[kyleaaa]

You've again changed your own argument and attacked an argument that isn't mine. 
At no point did I say your decisions had to be perfect.  But you are assuming the person has made the worst possible decisions at every stage of their life, then your conclusion is they're fucked.  Of course they're fucked if they always make bad decisions!  And they're fucked due to bad decision making, NOT external factors.
At no point did I assume poor people can afford insurance.  In fact, it you who assumed that I assume poor people can afford insurance.  In fact, poor people can afford insurance (because it's in the budget that a poor person could survive on below minimum wage, which I have mentioned).

Don't know what to tell ya. My argument hasn't changed even slightly.

[kyleaaa]

I was born middle class and white in the US. That's HUGE. I was born with an above-average IQ. That's HUGE.

I'm pretty sure when you were born, your IQ wasn't above average.

Open for debate, since there's no generally accepted IQ test for newborns so far as I know.

[gillstone]

Tim Minchin said it best, “Most of society’s arguments are kept alive by a failure to acknowledge nuance. We tend to generate false dichotomies, then try to argue one point using two entirely different sets of assumptions, like two tennis players trying to win a match by hitting beautifully executed shots from either end of separate tennis courts.”

Speaking as an over-educated liberal who used to LOVE stuff like this article, I can see exactly where it has merit and where it just rubs me (and a good number of people here) the wrong way.  At the core of her article is a thesis that takes what would fill a mustachian Circle of Control and flips it with the Circle of Concern.  In this view, the debt these people face is because of things that may fill our Circle of Concern (unethical corporate practices, corrupt politicians, effects of globalization, etc…) rather than things that fill our Circle of Control (how much you save, how you can cut back costs, how you invest your savings).

The problem of that thesis is not accuracy in a general sense.  There are historo-socio-economic barriers that can limit opportunity or make it harder to gain a foothold on the economic ladder (by merit of two hyphens I win my argument).  The problem is that her position is that people should focus their energy on things they can’t directly control (unethical corporate practices, corruption etc…)  as a means of excusing them from exerting control over the things they need to focus on in order to exit debt or poverty (saving & spending). 

The damage of this is that it turns the conversation away from the debate we need, which is systemic barriers to class mobility and the need to stem the rise of social inequality and makes it come out as a crass debate that is either hard working taxpayers vs. slackers and ‘takers’ OR oppressed people being crushed by an unfair system - all depending on where you land ideologically. 

[No Name Guy]

In fact, poor people can afford insurance.....

...because it's free.  It's called medicaid.


MP - kyleaaa likes his / her straw men, just as Ms. Olsen does.  It is futile to point out how people CAN get ahead to the likes of either since their attitudes are that of a poor person - woe is me / them, no matter what, can't get ahead, have to be perfect, always going to fail unless you're born privileged with a silver spoon in the mouth, etc.

kyleaaa - I could be financially wiped out by external factors - no doubt about it, doesn't matter how - poof, gone like a fart in the wind (to steal a line from Shawshank Redemption)....but with my positive, can do attitude and a willingness to bust my ass in hard work*, it would only be a matter of time until I'm back where I am now.  With a woe is me, can't do it attitude like you've expressed on this thread on the other hand, I'd be left wallowing in poverty. 

*-hmmmm....kind of like how my ancestors did, when they stepped off the boat.  Didn't speak the language nor have two flipping dimes to rub together, but some how they made it.

I pity you kyleaaa, I really do........your can't do attitude insures failure. 

[Brad_H]

I am glad I suffered these two pages so that I could read gillstone's post.  Well said.

On topic: My wife asserts that after you have spent more time out of your parents house then you did in it you are responsible for your own life.

[Heart of Tin]

Speaking as an over-educated liberal who used to LOVE stuff like this article, I can see exactly where it has merit and where it just rubs me (and a good number of people here) the wrong way.  At the core of her article is a thesis that takes what would fill a mustachian Circle of Control and flips it with the Circle of Concern.  In this view, the debt these people face is because of things that may fill our Circle of Concern (unethical corporate practices, corrupt politicians, effects of globalization, etc…) rather than things that fill our Circle of Control (how much you save, how you can cut back costs, how you invest your savings).

The problem of that thesis is not accuracy in a general sense.  There are historo-socio-economic barriers that can limit opportunity or make it harder to gain a foothold on the economic ladder (by merit of two hyphens I win my argument).  The problem is that her position is that people should focus their energy on things they can’t directly control (unethical corporate practices, corruption etc…)  as a means of excusing them from exerting control over the things they need to focus on in order to exit debt or poverty (saving & spending). 

The damage of this is that it turns the conversation away from the debate we need, which is systemic barriers to class mobility and the need to stem the rise of social inequality and makes it come out as a crass debate that is either hard working taxpayers vs. slackers and ‘takers’ OR oppressed people being crushed by an unfair system - all depending on where you land ideologically.

I think when it comes to the Circle of Control we need to keep in mind that a journalist's Circle of Control is very different from our own Circles of Control. It seems to me that this article is Ms. Olen's attempt at bringing the very systematic barriers and social inequalities that you mention in that last paragraph to the forefront of the minds of more privileged readers who can, in turn, use their collective control to change said disparities. She is attempting to use her platform to actually shape the conversation that we're having, thus bringing these issues within her Circle of Control (perhaps Circle of Influence would be a better term here). I guess I just disagree with you on the intended audience for this article. It seems that you think that she is writing to appease and excuse the indebted poor who rely on Dave Ramsey but fail to save like us Mustachians while I think that she is writing to change the way we privileged savers think about that other group and whether society has done everything it should to help them. Whether or not she is successful in that attempt is another matter that seems to have been covered by others in this forum.

(Also, I'm demoting you two hyphens to "historical socioeconomic barriers" ;-P)

[mpbaker22]

In fact, poor people can afford insurance.....

...because it's free.  It's called medicaid.

LOL touche.  but that wasn't my point.  The point was that I've taken my current budget, added healthcare expenses (to offset my employer paid subsidies), and it still comes in 20% under a minimum wage salary.
The previous poster had try to refute that it's possible to live on minimum wage by saying someone on minimum wage couldn't afford healthcare.  I was just pointing to that statement as false.  Of course it's true for the small subset with legitimate chronic health problems who are also on minimum wage (when pre-existing conditions result in higher premiums, IE speaking in pre-obamacare terms), but for the vast majority, health insurance was affordable.

[gillstone]

I guess I just disagree with you on the intended audience for this article. It seems that you think that she is writing to appease and excuse the indebted poor who rely on Dave Ramsey but fail to save like us Mustachians while I think that she is writing to change the way we privileged savers think about that other group and whether society has done everything it should to help them. Whether or not she is successful in that attempt is another matter that seems to have been covered by others in this forum.

I'm not disagreeing that Ms. Olen is seeking to influence our viewpoint on the causes of poverty etc...but then she has to account for her opening example.  The couple used as an example has medical debt but also a camper, a boat and spending habits that are not caused by the system.  The article is about how Dave Ramsey is a huckster who tells people their bad lot in life is because they did it all wrong rather than the ‘TRUTH’ that it’s the system. 
The closing sentence of the article says essentially that. “If we can exercise self-control over our wallets, he says, the rest will take care of itself. But for all too many people in the United States of 2013, that’s not really true. Larger forces overwhelm their best efforts. And the sooner we admit that, the faster we can begin to address the real causes of our personal finance woes.”

The harder truth is that an unethical and corrupt system magnifies the impacts of poor decision making and can make climbing up the economic ladder difficult, temporary or both.  The examples used by the author don’t quite fit the thesis of corrupt external actors preventing success.  These people made some poor choices with their money.  The system being what it is has made the impact of those poor choices much worse.  If the system was more transparent, ethical, and accountable would their mistakes have the same impact? Likely not.

But the system did not make them buy a boat.  The system did not make them buy a camper. The system did not make them buy a truck with a loan for over $20,000.  A message of self-discipline is not the problem.  Saying all the blame for their situation is in the system is disempowering and ultimately self-defeating (I reclaim a hyphen!).  Those who are told they lack the self-efficacy (another hyphen!) to control basic spending habits won’t storm the barricades for a better world. 

Do I like that he makes a ton of money off of desperate people even if the message is basically good? No.  Do I agree with everything he advocates for like managed funds, debt abstinence, or the snowball method?  No.  Do I agree with his theology?  No. But if you want to change the world the first real step is to help people realize they can control their lives and he does that.