“No” Friend Is the Best Friend  

You have heard of the phrase “’yes’ men” in reference to sycophants?  How about “’no’ men” or, better, “’no’ friends”, people who truly are interested in our welfare and are ready to say “no” to dissuade us from doing something foolish?

Do you think that the woman here could have used a “no” friend?

Given a Shovel, Americans Dig Deeper Into Debt
by Gretchen Morgenson, New York Times , July 20, 2008  
The collection agencies call at least 20 times a day. For a little quiet, Diane McLeod stashes her phone in the dishwasher.

"We have become a nation of shoppers. Our heroes? 'Sex and the City' types. Consumerism has replaced soulfulness."

But right up until she hit the wall financially, Ms. McLeod was a dream customer for lenders. She juggled not one but two mortgages, both with interest rates that rose over time, and a car loan and high-cost credit card debt. Separated and living with her 20-year-old son, she worked two jobs so she could afford her small, two-bedroom ranch house in suburban Philadelphia, the Kia she drove to work, and the handbags and knickknacks she liked.

Then last year, back-to-back medical emergencies helped push her over the edge. She could no longer afford either her home payments or her credit card bills. Then she lost her job. Now her home is in foreclosure and her credit profile in ruins.

Ms. McLeod, who is 47, readily admits her money problems are largely of her own making. But as surely as it takes two to tango, she had partners in her financial demise. In recent years, those partners, including the financial giants Citigroup, Capital One and GE Capital, were collecting interest payments totaling more than 40 percent of her pretax income and thousands more in fees.

Years of spending more than they earn have left a record number of Americans like Ms. McLeod standing at the financial precipice. They have amassed a mountain of debt that grows ever bigger because of high interest rates and fees.

While the circumstances surrounding these downfalls vary, one element is identical: the lucrative lending practices of America ’s merchants of debt have led millions of Americans — young and old, native and immigrant, affluent and poor — to the brink. More and more, Americans can identify with miners of old: in debt to the company store with little chance of paying up. ...

If you answer the multiple-choice questions below and e-mail to lessonanswers@mymontebello.com with “Lesson answers” in the subject field, you will be credited toward a “certificate of recognition in community affairs” to be awarded in 2008 by a local nonprofit organization. 

1. What is a “’no’ friend”?

(a) Somebody who looks after our best interest.

(b) Somebody who is willing to dissuade us from a bad decision.

2. What is a lesson to be learned from Ms. McLeod’s case?

(a) We cannot trust the big corporations to look after our interest.

(b) The unforeseen does happen and can have a major adverse impact on our lives.

September 25, 2008