My financial planner is a bookworm. Which means every time I visit him I leave with a list of books to read. This time I left with the name "Elizabeth Warren." I must admit I winced a bit. Politics are not something that goes down easy in my life at the moment (R, D, or I, they're equally distasteful right now). But I went to the public library and found this book and was intrigued.

The research is thorough, the problems are real, and their approach to finding a solution isn't to go for the simplest, but the best.

This book should be read in tandem with [b:Marriage and Caste in America: Separate and Unequal Families in a Post-Marital Age|773464|Marriage and Caste in America Separate and Unequal Families in a Post-Marital Age|Kay S. Hymowitz|https://images.gr-assets.com/books/1348633250s/773464.jpg|759515] and [b:Becoming Attached: First Relationships and How They Shape Our Capacity to Love|547830|Becoming Attached First Relationships and How They Shape Our Capacity to Love|Robert Karen|https://images.gr-assets.com/books/1355921449s/547830.jpg|535088]. You may not see the connection at first, or you may think you see my angle, but the research is real.

I did disagree with one statement, though. The book postulates at one point that if you fix schools you'll fix families. I hypothesize that if you fix families you'll fix schools. I know, I'm weird. ( )

With all the talk about Elizabeth Warren running for president, I decided to revisit The Two-Income Trap, a book that has had a very mixed reception amongst my circle of friends. (Disclosure, in case you think I am personally biased: I am a stay at home mother of two.)

This was published in 2003, which presents a problem for a review: Was the assessment correct at the time, and how well has it held up since? The short answer is mixed, for both of them. Essentially, the premise is this: the two income trap is faced by dual income middle class families because both incomes are committed to basic, fixed expenses, but they face nearly double the level of risk of job loss or other crisis, meaning the loss of one income is financially devastating. This is neutral as far as it goes, and can be demonstrated statistically.

The first problem is that they frames it as a competition. In Warren and Tyagi's view, dual income families have driven up the price of middle class life, principally housing in good school districts. Two income families are able to outspend single income families, thereby driving up the need for two incomes. The sense is that they view families as being pitted against each other in a war for scarce resources.

For a pair of working women in the 2000s, their views of women's roles are surprisingly simplistic. They principally ascribe women's income as providing an "economic edge"--a surplus to the man's income.

It was refreshing to see an acknowledgement of the economic value of unpaid labor provided by stay at home mothers, but even here, the details were shallow. The value of a stay at home mother is principally in the labor she provides. Its absence creates a void that must be filled--as acknowledged in the discussion of caretaking, though not her other domestic labor--but also historically has enabled men to work more, knowing their wife will pick up the slack. While Warren and Tyagi are aware of the racial disparities in working women, it gets only a glancing mention, which would not be acceptable today.

Worse, the other economic arguments of women's decisions to work are breezed over in ways that were a problem 16 years ago. They extol the potential of a stay at home mother's ability to act as a safety net in times of crisis, because her economic potential is still untapped. But you can't do that without considering how likely it is that she'll be able to bring in income. Similarly, the value of building a career is waved off because being a working woman doesn't protect you after divorce.

The proposed solutions for dealing with housing simply don't meet the smell test after the past 15 years. While middle class parents still chase desirable schools, it's also become clear that a major issue is the basic supply of housing and the overall inequality of American schooling. The problems here cannot be solved, as they suggest, by vouchers or a public school choice system.

The basic analysis that the trap is driven by spending on essentials, not luxuries, is sound and has been borne out since--even more so, given wage stagnation and rapid increases in the prices of housing, healthcare, and education. If the book were written today, more attention would be paid to the role of healthcare expenses and medical debt in driving families into bankruptcy.

There are some errors that really puzzled me--for example, stating that America "cannot afford huge subsidies for middle class housing," which ignores that we do just that through the creation of the 30 year fixed mortgage and the mortgage interest deduction on taxes. There's also a dismissal of government funded daycare because it "only helps two income families", ignoring the impact of price on quality. To their credit they later do briefly mention quality and that childcare is inherently valuable, but it's a bizarre thing to say. They encourage tax breaks for saving, but don't pay enough attention to the fact that middle class families don't have enough to save.

The work on bankruptcy and credit is, unsurprisingly, the strongest, and holds up the best, despite changes in laws and trends. This was Warren's core work, and she knows it well. She's clear about what drives personal bankruptcy (not irresponsibility) and the danger done by predatory lenders. The origins of the CFPB are clear here, though her proposed regulations may lean a little to the paternalistic and her proposal to restrict mortgage lending requires a lot more analysis for impact. It would be very interesting to redo a lot of this research post subprime crisis, with the continuing spiral in house prices in competitive markets that appears to be a supply issue, not just a credit issue.

Overall, the book is a really odd mix of liberal policy with surprisingly conservative analysis that doesn't go deep enough. Warren and Tyagi were clearly trying to write a popular book, not a scholarly one, but the thesis deserved a deeper treatment. ( )

Tyagi, Amelia Warren (Author)

This book was written in 2003. Elizabeth Warren didn't predict the subprime mortgage lending crisis and subsequent economic meltdown, but she was already fully aware that it was destroying the financial well-being of middle-class families. When the markets crashed in 2008, I -- like many people -- tried to make sense out of what happened, and assumed that we were all poor shmucks misled by a secretive cabal of bankers. But Warren was one of those people who were loudly gesturing toward something and everyone ignored it. Anyway, in summary: good book, great points, and Elizabeth Warren for president 2020. ( )

Well written description of two-income economics and the downward spiral of middle class families, particularly for women with children. Unlike many such tomes, Warren offers practical, direct actions which families can follow, as well as needed (though unlikely) congressional actions. ( )