E-mail a friendPeter Gosselin
airdate June 24, 2008
Peter Gosselin has been national economics correspondent for the Los Angeles Times since '99. He's also author of High Wire: The Precarious Financial Lives of American Families. The recipient of several investigative reporting awards, he began his journalism career at the Catskill Daily Mail, a small New York daily, and has worked at a variety of papers, including The Boston Globe and The Providence (Rhode Island) Journal. Gosselin is a graduate of Brown University and holds an MBA in economics from Columbia.
Author describes how free markets impact the financial struggles of the average American family. (1:29)
Full Interview. (11:04)
Peter Gosselin
Tavis: We continue our "Road to Wealth" series tonight with Peter Gosselin, national economics correspondent for the "Los Angeles Times," also a visiting fellow at the Urban Institute in Washington and author of the new book "High Wire: The Precarious Financial Lives of American Families. He joins us tonight from Washington. Always strange, talking to an "L.A. Times" guy - I'm in L.A. and you're in Washington. What is this, Peter?
Peter Gosselin: Ah, we're just trying to mix it up, do it a little differently this time, huh?
Tavis: Glad to have you on, though.
Gosselin: Great to be on.
Tavis: You start at the outset of this book talking about the fact that whether families know it or not, whether they know it or not, they are facing precarious situations with regard to their long-term survival and sustenance where their financial matters are concerned. You say that why?
Gosselin: I say that because I think though we've been an amazingly prosperous country for most of the last generation, something else was going on at the same time we had the prosperity that we had up until the current economic crisis, and that something else was that a whole lot of risks - the risks of layoffs, the risks of illness, job-stopping illness, lots of risks that we were previously helped to bear by business and government, have been shifted to our backs and the backs of our families, and I don't think that Americans realize the extent to which that shift has occurred.
Tavis: What would a family have to do to come into the reality that they are, as you argue in the text, on a high wire?
Gosselin: Well, they can look at any piece of the struts that hold up families and have held them up for a generation - jobs. Jobs, they're shorter and shakier than they were a generation ago. Benefits, your grasp on your benefits, which are really the safety net for working Americans, whether you're working poor or you're working affluent.
You're grasping those - those important safety nets are weaker because of a series of Supreme Court and federal appeals court decisions. Your housing, your housing is a crucial part of your financial picture. It's 60 percent of all the things that the average American family owns, made up by the house where you lay your head at night, and yet the very thing that protects it, your homeowners insurance, is less protective today than it was a generation ago.
And I can walk down the whole list of other things that leave you more - further out on the economic limb than you were a generation ago.
Tavis: As you ran down that list, Peter, as I thought about what you have even beyond that in the text, it seems to me - you tell me if I missed the point or if I'm wrong about this - but it seems to me that the economic downturn notwithstanding, when we come out of this, because we always come out of these downturns eventually, the points you're making now, the argument you're making in the book is that these situations continue to exist, yes?
Gosselin: That's right, that's right. This shift of economic risk was occurring before the current downturn and unless something big happens, it's going to continue when we come out of it. But one thing about the current troubles that we're having: you would be hard-pressed to design them in a way that's harder for American families to bear.
They're hitting families in the prices that people see most often - for food and fuel - and they're hitting families in the value of their biggest asset - houses. So the trends that I'm talking about were underway long before we hit the current downturn, but they make it particularly difficult for you to cope with what's in front of you today.
Tavis: Historically, situation for me - historically, again, this high-wire act that we are on now as compared to the past.
Gosselin: Well, it's clear that we've - American history is like a pendulum swing, and there have been times in our history when we've been very much on our own. Settling the frontier west was an on-you-own economic enterprise. But one of the things about the previous times in American history when American families have been on their own, they've been on their own in economic situations where they could do something else.,
If you're on a farm, if worse comes to worst you grow your own food. But the more complicated the economy has become, the more we're taught to specialize in something and depend on others for the rest of our economic lives. And so that what's particularly troubling about what's happening today is that simultaneously we're asked to be specialist in the thing we do for work, the job we go to, and ye all of these tasks of being an investment banker for our retirement savings and our college savings, of being an insurance broker to get the right insurance for our houses and our health.
Of being specialists in all sorts of things, we're required to do that to operate our households now in a way we weren't a generation ago.
Tavis: I like anecdotal stories or anecdotal examples, and you have one in the text - Deborah Potter. Tell me the Deborah Potter story.
Gosselin: Deborah Potter is a great woman, and she was one of the interviews that was both more fun and more heartbreaking than many others. Deborah Potter is a woman in western Virginia. She's married to the pastor of the Sunnyside Presbyterian Church in Winchester, Virginia, and the couple has five children.
And sometime in the '80s they realized they were not gonna get five children though college on a preacher's salary, and Deborah Potter, great American, pull yourself up by the bootstraps story, she goes out and gets her insurance license and she makes herself into one of the biggest insurance agents in the state of Virginia and in the nation, selling group health and disability policies to employers who provide it to their employees.
And then Deborah Potter gets diagnosed with multiple sclerosis, and she couldn't collect on the very policy that she'd been selling to people. The company simply denied her claims and denied them for three and a half years, and it took this insurance insider three and a half years, the hiring of a lawyer, and an "L.A. Times" reporter writing a long story about it to get her benefits turned on.
Tavis: What do you make of that?
Gosselin: Well, the moral I draw from it, I try to step back from these stories of individual people and try to draw the broader moral. Her benefits in the case of that policy are governed by a single federal law. All of our benefits that we get from our employers are governed by a single federal law. It's called ERISA, and ERISA was meant by its authors, its congressional authors, to protect employee benefits. And we know that because it says so right in the preamble of the law.
But over the last generation, the Supreme Court and increasingly conservative federal appeals courts have rendered a series of decisions that have basically flipped the law on its head, making it easier for employers, for insurance companies, and for benefit administrators to deny people like Deborah Potter her benefits.
Tavis: I got an answer for you, Peter, for everything you've laid out in this book, "High Wire," I've got one surefire answer. Two words.
Gosselin: Go to it.
Tavis: Free market. What about the notion, which is always the case - somebody tell us the free market will figure all this out?
Gosselin: Well, look, that's - we came out of the '70s in real trouble, this country, and I think there was a pretty broad consensus that we wanted to have a freer market. And I don't for a minute deny that the free market did a lot of good. I'm not one of those journalists who says, "Oh, that prosperity you thought you enjoyed? That wasn't really prosperity. It really was prosperity for a lot of Americans."
What I'm trying to say in the book is that we - that free market makeover of America has - most people think it sort of went sort of part way there and sort of settled at a nice, happy medium. And what I'm saying in the book is it kept going sort of behind the scenes in your benefits, with your housing, in the nature of your jobs and the security of your jobs, it's kept right on going.
So that at the end of the day you're the one who's bearing a huge share of the risk. I don't doubt for a moment that free markets will sort this out one way or the other if left to their own devices. What I wonder about is whether they'll sort it out in a way that you can live your life, raise your children, keep your house, in a way that's livable for most Americans.
Tavis: I hear you. I hear you loud and clear. Let me ask - with a minute to go, let me ask you right quick. I'm not going to ask you, as a journalist, to take sides here, but help me and those of us who are everyday voters here with what we ought to be looking for, listening for, paying attention to around these issues, given the race between the presumptive candidates of their parties, Mr. Obama and Mr. McCain. What ought we be focusing on, listening to, around these issues, Peter?
Gosselin: Well, I must say frankly I am surprised so far, and we're just getting started in the general election campaign, but I'm surprised that neither of the candidates are focusing on this issue or really offering very much in the way of a new economic program.
You'd be hard pressed to tell me what's new about either John McCain or Barack Obama's economic program. I think that as we get into the general election, I suspect that Americans are going to be saying, "I want to know how you're going to make my life more secure so I can go out and take new risks, try new things, in a new and much more competitive global economy."
Tavis: They say these elections always come down to pocketbook issues, and if they're right about that, then Peter Gosselin is out front with a new book called "High Wire: The Precarious Financial Lives of American Families." Peter, thanks for the text and glad to have you on the program.
Gosselin: I'm very appreciative for being on.
Back to June 24, 2008