The Economy, the Media and Deceptive Sob Story Headlines
When it comes to reporting on the U.S. economy, never let it be said that the media allows facts to get in the way of a good sob story. So it was today in yet another report in the New York Times. The Times has been running a series called “The Debt Trap” about “the surge in consumer debt and the lenders who made it possible.” Right away from the subtitle we see that the Times is blaming the “debt trap” on the lenders, not the borrowers.
This is how the story described the situation:
Tony and Carrie Forsyth, both 30, chose not to walk away from their house in Florida. The couple said they thought their financial situation would improve in 2006, when Mr. Forsyth accepted a promotion from his employer, a Michigan food distributor, that required them to move to Florida. But they could not sell their home in Ypsilanti, Mich., so they decided to rent it out.
In June 2006, the couple headed south and bought a house for $220,000 in Tamarac, Fla., with no money down. Five months later, their tenants in Michigan stopped paying, and the family had to carry two mortgage payments, just as the adjustable-rate mortgage on their Michigan home reset to a higher interest rate. They lost the Michigan home to foreclosure in February 2007.
What did the “downturn” have to do with their problem and bankruptcy? Was it because Mr. Forsyth was promoted? That can’t be it. Did the downturn keep them from selling their house in Michigan? I don’t think so. This was June 2006, before the real estate bubble burst. Sounds to me like they were asking too much for the house.
Did the “downturn” cause them to buy the house in Michigan with an adjustable rate loan that was going to jump upward? Did the “downturn” cause them to buy a second house in Florida with no money down? Did the downturn cause them to have so few financial reserves that when the Michigan rent stopped, this couple went immediately to their credit cards to make up the difference, losing the Michigan home to foreclosure after only three months?
Why on earth did this couple buy a second house with no money down when they could not even handle three months of mortgage payments if something went wrong? It’s money insanity.
No, Ms. New York Times reporters, the story of Tony and Carrie Forsyth is not about downturns. It’s about irresponsible behavior and the consequences of assuming too much financial risk. So why the deceptive headline? Because the New York Times and many other media outlets are all about promoting victimhood at the expense of personal financial responsibility. Someone other than the designated victim must be blamed. In this case, blame the mystical “downturn.”
I don’t know about you, but Mr. ToughMoneyLove is not fooled by headlines or reporting from people who do not know a downturn from a left turn. I prefer to let the facts tell the story. My guess is that the Times reporters were themselves carrying hefty consumer credit balances. They wanted to feel like victims so why not write about others who similarly mess up their financial lives Everyone feels better when blame can be deflected in another direction, away from themselves.
I am sorry that the Forsyths are in bankruptcy. But I am also sorry that neither the Forsyths nor the media can properly assign responsibility for that bankruptcy. I want to help by writing a new headline for the Times story about the Forsyths. How about this one: “Underfunded Consumers Gamble and Lose with High Risk Borrowing.” Do you think that will sell papers?