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If I were a poor man
Published 17 July 2008
One result of the mayhem engulfing the US economy is unlikely: there has been an abrupt drop in the number of divorces
The American economy is on the brink of recession. Rock-solid institutions such as the federal-government-founded mortgage companies Fannie Mae and Freddie Mac are teetering on the edge of bankruptcy. Banks have had to close their doors to avoid a run on assets. The huge investment company Bear Stearns disappeared over a weekend.
The same uncertainty feeds into the housing market. Bundling dubious sub-prime mortgages has led to tight credit, which, in turn, has led to a slump in homebuying. Nearly one in six American homes stands empty. May's figures showed a 4.7 per cent drop in sales. Property prices are sliding even in midtown Manhattan.
Particularly hit are the southern cities of Atlanta, Georgia and Charlotte, North Carolina. Things are so bad that even the free-market Bush administration is considering what should be done to slow the rash of home foreclosures.
Yet one result of the mayhem engulfing the US economy is unlikely: there has been an abrupt drop in the number of divorces. According to Zoila Miranda of the family court in Miami-Dade County, Florida, after five years of stability, divorces are down 18 per cent year on year: 1,300 fewer divorces were granted between January and May this year than last.
A similar drop occurred in nearby Broward County, though by a less startling 9 per cent year on year.
The new figures have the marriage experts puzzled. The US has become used to being a world leader in divorce, with 23 million male and 27 million female divorcees. And the more people get married, the more likely they are to divorce. About half of all first marriages in the United States end in divorce; after three marriages, the figure rises to 75 per cent. So not only is a drop in the number of divorces surprising, but, for all those in the marriage and divorce business, it is alarming.
Robert Jones, a magistrate in Miami-Dade, has little doubt the flagging economy is inhibiting couples from untying the knot. The general view in Florida is that the legal costs of divorce are now prohibitive for many, not least those whose jobs have become less certain. And a couple's joint assets may not amount to much if the property they live in has a mortgage. There is not much point in forcing a sale and splitting the negative equity.
"When the economy gets bad, a lot of people realise they can't afford the cost of living in two households," Scott Rubin, a divorce lawyer and chairman of the family law section of the Florida Bar told the Miami Herald. Thomas Tilson, a local divorce magistrate, agreed: "People say, 'I'll live with this a little while longer.'"
But, as F Scott Fitzgerald wrote: "The rich are different from you and me." The Wall Street types who count their fortunes in millions are finding that the downturn is leading to more divorce, not less. In New York, divorces are higher than at any time since 1980, when the divorce laws were relaxed. Raoul Felder, who specialises in dividing the spoils in high-profile cases, has seen his workload soar by 20 per cent in the past year.
One financial trader confessed that he was having to disguise the collapse of his fortune, from $20m to $8m, by borrowing heavily so that his wife could keep up her high-spending habit. If she were to suspect he was worth only $8m, he feared she would immediately sue for divorce. For once, it seems, it is easier to be poor.
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