Letters to the Editor
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@Elydog, New Deal Democrat
Both of you make valid points but I think there's not much to be gained from the "who's to blame" nonsense. Yes, people who ostensibly can read a contract signed up for these teaser rates, but can we really blame these people for wanting what their parents had? The idea of home ownership is deeply engrained in America. Just go back to the first seminal act of Congress -- the Northwest Ordinance of 1787 -- and see how deeply the myth/legend/pull of land and home ownership exists in our culture.
I make a significant amount of money at my job (I am a lawyer) and home ownership is out of the question for me. There is no way I could afford a mortgage right now, even with the declind in prices. First, despite my large income, my savings are nonexistent. I don't have credit card debt (thankfully), but student loans and rent eat up half my income. The rest goes to insurance, food, car loan, and so forth. I am lucky to be able to afford all this, but I am the exception, I think. Most people are drowning in debt now, paying just monthly minimums, digging themselves ever deeper with little chance for respite. I am angry that I work so hard for so little; but I know I am fortunate because there are others who work just as hard and are about to become impoverished by forces acting well outside their control.
Wealth in America today is more substantial than wealth in the 1930s. But that is a result of imperial conquest since World War II and our control of world markets since then. That is what spurred the consumerism that now appears ready to suffocate us. But behind the facade, the same structural forces which levied the Great Depression are working today as well. We may not see soup kitchens or 30% unemployment; but who back then had a credit card? We have become more clever in our forms of debt since then, haven't we? At least the poor man in line at the soup kitchen was free. You cannot say the same for the person who is in debt. By definition, a person in debt owes something to someone else.
Yes, we are all responsible for our actions. I am a firm believer of that. But let's not forget that we make choices based on the options given to us as well. I feel less inclined to blame the middle class couple hoping to live the same life as their parents by buying into the dreams of a cheap mortgage, than the powerful individuals who have been working hard over the last three or four decades to ensure the concentration of wealth in ever smaller hands. Compare how the middle class couple and the banker will come out of this crisis in 6 months, a year, and 5 years from now. My feeling is that the couple will be the one suffering. If our government -- and if as a society -- don't see a problem with that, then our priorities are skewed to the point of farce.
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ICgracchus
I agree with many of your points, and am definitely sympathetic to working people trying to make ends meet. I'm one of them myself.
However, I'd disagree (to some extent) with your characterization of people as wanting to have only the same things their parents had. While it may be true of you, and likely many others, vast portions of the population today want far more than that. They expect to have a house much larger than what their parents owned (and maybe a vacation cabin as well); couples want at least two large automobiles that would've been considered unbelievably opulent just 20 years ago; and they want to have every conceivable gadget and consumer good that's marketed to them on TV.
Moreover, the triumph of marketing seems to have been complete. Skepticism and critical thinking about needs vs. wants that I saw in my grandparents' generation and to a lesser extent in my parents', has almost vanished among Baby Boomers and younger people. (I'm a Gen X-er.)
I'm all for a revival of Keynesian economics, infrastructure investment, trust busting, and various other forms of economic progressivism. But I'm afraid that's not what the masses are crying out for in their yearning for a taxpayer-funded mortgage bailout. I think they're acting out of simple greed, the kind that has defined this country for most of my lifetime. It's just another version of the Republican line that says, "I want mine and to hell with everybody else."
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Resets
Well some is definitely wrong in Denmark! I don't know of any person in their right mind in 2004 through 2006 who would have taken a mortgage with an inital rate of 8.5% unless their credit score was below 620! The re-set, plus the added on unpaid interest will cause most mortgage payments to double, at the very least. So, the boogey man of the sub-prime loan scandal is deeply embedded in loan resets. Who would of thought?