Credit Crunch Puts Family On A Downward Slide Economic turmoil is hitting the middle class hard — especially small-business owners who can't get credit from banks they've done business with for years. That's the situation David Leschinsky finds himself in, as the owner of Eureka Puzzles, a store near Boston.
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Credit Crunch Puts Family On A Downward Slide

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Credit Crunch Puts Family On A Downward Slide

Credit Crunch Puts Family On A Downward Slide

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The financial turmoil is hitting people at all levels, of the economic spectrum. So, over the course of NPR's programs today. Our reporters will bring you a series of kitchen table conversations with families from different backgrounds. NPR's Tovia Smith has our first installment with a small business owner outside of Boston.

TOVIA SMITH: The kitchen table at David and Deborah Leschinsky's house is not a great place to have a conversation these days.

DEBORAH LECHINSKY: That doesn't sound good.

DAVID LESCHINSKY: Its better now than it was.

SMITH: The fridge has been broken for months.

LESCHINSKY: How's that?

LECHINSKY: Dave, just turned it off. It's alright. The milk has already gone bad.

SMITH: Years ago the Leschinsky's would have bought a new fridge. They were both making good salaries and high tech. Owned a house in a great neighborhood of Brooklyn in Massachusetts, vacationed in Hawaii, and gave to charity. Then shortly after Deborah quit work to take care of their three kids, David lost his job in the high-tech implosion. He went into business and things were tighter, but still OK - until now.

LESCHINSKY: I would say that we were upper middle class and we sank to middle class and now we're sinking below that.

SMITH: Leschinsky says he's being choked by the financial meltdown both at home and at his store where he sells the kinds of puzzles and games that are his passion.

LESCHINSKY: Have you guys seen this one before?

SMITH: I've seen it, but I haven't played it.

LESCHINSKY: OK. The way it works is it - it's a wonderful beginning (unintelligible) logic game.

SMITH: The store, Eureka, got off to a great start. Sales climbed steadily.

LESCHINSKY: But if he starts moving in this direction, he's history.

SMITH: Unidentified Woman: I'm going to just think that...

LESCHINSKY: Unidentified Woman: Thank you very much.

LESCHINSKY: My pleasure.

SMITH: Then came the fiasco on Wall Street.

LESCHINSKY: The day that the market plummeted, we had no business until two o'clock in the afternoon.

LESCHINSKY: That whole week was terrible.

SMITH: Now, sales are down more than 20 percent, and Leschinsky is short on the cash he needs to make payroll and to buy inventory for the holidays. But the banks he's been going to for years have slammed the brakes on lending.

LESCHINSKY: And they've come back and basically have said their credit policies are tightening, and so it's clear that that's not going to work.

LESCHINSKY: It's a vicious cycle, you know. If I don't have the money, you can't expand. If you can't expand, you're not going to get more money. I mean, it's - you know, it's really crippling.

SMITH: Leschinsky says he hasn't been able to draw a salary in a year. In the meantime, his wife had returned to work but just quit because of a family medical issue. And now things are, quite literally, falling apart at home.

SHAPIRO: I have fixed the door knob, I think, permanently.

LESCHINSKY: Oh, the girls will be so excited. OK, great.

SMITH: Minor repairs get done by Deborah's father. But most things wait - from the gas stove to dental work. They've long since stopped eating out. Now, they no longer have dinner guests even on holidays. But still, the credit crunch is killing them. When their car died, they applied for a loan to replace it. But got turned down. Now, they borrow a neighbor's car and the interest rates keep going up on the credit cards they used to start their business.

LESCHINSKY: I don't know what we're going to do. I mean, it's embarrassing but it's just getting further and further into the hole and you know we worry.

SMITH: The stress has taken its toll. Deborah says she's lost a ton of weight this year, but she quips...

LESCHINSKY: You know I look nice now.

SMITH: It's the kind of humor that's getting them through the family's ordeal. Both Deborah and her husband are more upbeat than you'd expect from such logic-minded, pragmatic types.

LESCHINSKY: I mean, it's like - it's absurd. I mean, it's sort of like as David said, let's take bets on which appliance is going to break next. You know, the...

SMITH: The Leschinskys say they're not angry about the bailout. As they put it, we understand that Wall Street needs to work for our business to work. But they are furious at the banks hiking interest rates and making it impossible to get financing.

LESCHINSKY: The choice becomes, do I pay health care expenses or do I buy inventory. And there is no easy answer.

SMITH: In a sense, it's a puzzle.

LESCHINSKY: Exactly. You know, it's a sequencing puzzle. It's saying OK and this time, I'm going to try and pay a bill today that was due a week ago. And then I hope that the money will come in tomorrow to pay the bill that's due today.

SMITH: As Deborah puts it, we'll just have to be smarter to figure this one out. One thing they've just started doing is hiring themselves out to run corporate game nights in parties. Selling their time and services is something they can do even without a bank loan. Tovia Smith, NPR News.

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