July 28, 2008
The Suicide Solution
A few days before Congress passed its Housing Bill, Carlene Balderrama of Taunton MA found her own solution to the housing crisis. Just a little over two hours in advance of the time her mortgage company, PHH Mortgage Corporation – may its name live in infamy – was to auction off her home, Balderrama killed herself with her husband’s rifle.
This is not the kind of response to hard times that James Grant had in mind when he wrote his July 19 Wall Street Journal essay entitled “Why No Outrage?” “One might infer from the lack of popular anger,” the famed Wall Street contrarian wrote, “that the credit crisis was God's fault rather than the doing of the bankers and the rating agencies and the government's snoozing watchdogs.” For contrast, he cites the spirited response to the depression of the 1890s, when lawyer/agitator Mary Lease stirred crowds with the message that “We want the accursed foreclosure system wiped out.... We will stand by our homes and stay by our firesides by force if necessary…”
Grant could have found even more bracing examples of resistance in the 1930s, when farmers and tenants used mob power – and sometimes firearms – to fight foreclosures and evictions. For more on that, I consulted Frances Fox Piven, co-author of the classic text Poor People’s Movements: Why They Succeed, How They Fail, who told me that in the early 30s, a number of cities were so shaken by the resistance that they declared moratoriums on further evictions. A 1931 riot by Chicago tenants who had fallen behind on their rent, for example, had left three dead and three police officers injured.
According to Piven, these actions were often spontaneous. A group of unemployed men would get word of a scheduled eviction and march through the streets, gathering crowds as they went. Arriving at the site of the eviction, they would move the furniture back into the apartment and stay around to protect the threatened tenants. In one instance in Detroit, it took 100 cops to evict a single family. Also in Detroit, Piven said, “two families protected their apartments by shooting their landlord and were acquitted by a sympathetic jury.”
What a difference 80 years makes. When the police and the auctioneers arrived at Balderrama’s house, the family gun had already been used – on the victim of foreclosure herself. I don’t know how “worthy” a debtor she was – the family had been through bankruptcies before, though probably not as a result of Caribbean vacations and closets full of designer clothes. It was an Adjustable Rate Mortgage that did them in, and Balderrama, who managed the family’s finances, had apparently been unwilling to tell her husband that their ever-rising monthly mortgage payments were eating up his earnings as a plumber.
Suicide is becoming an increasingly popular response to debt. James Scurlock’s brilliant documentary, Maxed Out, features the families of two college students who killed themselves after being overwhelmed by credit card debt. “All the people we talked to had considered suicide at least once,” Scurlock told a gathering of the National Assocition of Consumer Bankruptcy Attorneys in 2007. According to the Los Angeles Times, lawyers in the audience backed him up, “describing clients who showed up at their offices with cyanide, or threatened, ‘If you don’t help me, I’ve got a gun in my car.’”
India may be the trend-setter here, with an estimated 150,000 debt-ridden farmers succumbing to suicide since 1997. With guns in short supply in rural India, the desperate farmers have taken to drinking the pesticides meant for their crops.
Dry your eyes, already: Death is an effective remedy for debt, along with anything else that may be bothering you too. And try to think of it too from a lofty, corner-office, perspective: If you can’t pay your debts or afford to play your role as a consumer, and if, in addition – like an ever-rising number of Americans – you’re no longer needed at the workplace, then there’s no further point to your existence. I’m not saying that the creditors, the bankers and the mortgage companies actually want you dead, but in a culture where one’s credit rating is routinely held up as a three-digit measure of personal self-worth, the correct response to insoluble debt is in fact, “Just shoot me!”
The alternative is to value yourself more than any amount of money and turn the guns, metaphorically speaking, in the other direction. It wasn’t God, or some abstract economic climate change, that caused the credit crisis. Actual humans –often masked as financial institutions – did that, (and you can find a convenient list of names in Nomi Prins’s article in the current issue of Mother Jones.) Most of them, except for a tiny few facing trials, are still high rollers, fattening themselves on the blood and tears of ordinary debtors. I know it’s so 1930s, but may I suggest a march on Wall Street?
Good article. People who identify themselves with their credit scores and roles as consumers need to realize that their inability to pay their debt has been largely engineered by the banks. Giving up and taking such drastic measures, while somewhat understandable, is not the solution.
After all, large corporations go bankrupt every day -- you don't see any of their directors or CEOs bawling their eyes out and contemplating suicide. On the contrary, they just go to the government for handouts and treat the bankruptcy as a method of sticking the taxpayers with the bill.
Bankruptcy or foreclosure should be looked at as a business decision and a reaction to changing economic conditions. Not as a moral decision -- corporations certainly don't consider it a moral decision, and neither should homeowners.
Organized political action? What a concept! I long to see people in the U.S. participate in this kind of thing. "I'm mad as hell, and I'm not gonna...."
Great post. Sadly though we have become a society that only values money and for many when there is no money or in this case debt, we stop seeing our value.
Posted by: shay | July 28, 2008 at 11:05 AM
Your comments err a bit. 23 years age my husband opted for this solution for business/money woes. Even with mental health care he made the choice of suicide. However, his estate, i.e. wife and 3 children, inherited the debt with no life insurance payment. I paid everything along with years of legal proceedings and costs. I raised 3 sons hovering slightly above the poverty level and look forward to old age of real poverty. The financial plight of the surviving family isn't even on the radar of a subject no one wants to acknowledge.
Posted by: mjk | July 28, 2008 at 11:44 AM
I'm all for a march on Wall Street. People have started to protest in front of health insurance corporations like GHI concerning health care costs too. Who want's to organize this? Or who's willing to help me organize it?
Marching on Wall Street sounds like fun, but what are you going to do when you get there?
Let me suggest some possibilities.
(1) You can wave signs around, yell, and demand that the rich be nicer or else. This is called "working within the system." A big demonstration will cause politicians to emit wads of hot air; then things will go back to what they were before. But you will have had a nice march, anyway.
(2) You can employ the power of the state or violent revolution to replace the existing financial system with something else. In this case, you had better figure out what the replacement is beforehand, and get everyone to agree (or make them agree). You'll probably need a great leader, too. You may get more marching than you bargained for. Note: this sort of thing has not worked out too well in the past.
(3) You could forget about Wall Street and the various medical care and insurance rackets and build alternative institutions that serve _your_ interests and desires instead of rich people's. Oh, wait, that isn't marching anywhere. Cross it out.
Posted by: Anarcissie | July 28, 2008 at 03:20 PM
We are tracking these cases in Greenspan's Body Count. Carlene Balderrama is number 36.
Beautiful column. I hope others with a public forum will gain the courage to speak as clearly as you have.
Posted by: Greg Farnum | July 29, 2008 at 07:31 AM
Barbara, you ought to be ashamed of yourself. Of course there ought to be more outrage about the the greed & corruption amongst the financial elite and the venal idiots we've allowed to take over our government, but please, don't tell me people are killing themselves over having less money. Behind each of these stories you'll find some deeper cause of despair I'm sure. There are millions of people out there in financial distress and saying that this is something that actually causes suicide might even give someone the idea. Saying the people ought to pick up the gun and turn it on bankers or other crooks is at least as pernicious. What if someone, having read your article, did just that? While I believe in justice for thieves, the death penalty or being shot in the street is kind of harsh, isn't it? Maybe you're just displaying your brilliant wit here or something? I hope you don't encourage someone with your lovely writing turned to such a nasty end. Also, of course, there are things that really do need to be done about this crisis -- crooks prosecuted, even more important, relief for debtors in over their head and some sane economic policies, ending the war and so forth. You really don't think we'll get there by someone picking up a gun and shooting a few bankers, do you? If you do, go visit someplace where this has been tried.
Posted by: le.gai.savant | July 29, 2008 at 08:20 AM
The problem isn't a few crooks. The problem is systemic.
le.gai.savant: Did you skip the word "metaphorically"? Of course I'm not suggesting shooting anyone.
Anarcissie: I think the function of a march would be to shame the finance industry and alert the politicians that we are angry.
Posted by: Barbara E | July 29, 2008 at 02:24 PM
I don't think trying to shame the shameless is going to accomplish much.
If what you want is to replicate the social democracy and welfarism of the 1930's, you will have to wait for different conditions. In those days, the various ruling classes of the West were frightened by the success of Communist and fascist movements and figured they'd better buy off the workers, as well as get their own games under control. There is no threat like those of yesteryear even on the horizon today. Rightists have tried to create bogeymen out of Russia, China and Islam but they are unable to scare anyone, even themselves.
I do think things are going to get worse, though -- given the long-term abuse of the economy and especially the monetary system -- so maybe they'll get better, too, from someone's point of view. I myself favor movements toward autonomy, toward making the ruling class and the rich irrelevant. They control us only because we let them.
On the day Ted Stevens senior US Republican Senator with 30 years in congress was indighted, Barbara gets to the core of our economy which is "if you can't pay your debts or """play your role as a consumer"""you're no longer needed" Yaaahhh!! Our economy is cannabilistic, and the next time you hear some devil preach the wondertudes of 'free market capitalism' as if that is what we have going her, get out of the room! We don't have free market capitalism, we have a rigged market requiring huge amounts of capital if you want to make a mark in it. These pundits are toxic messengers of brainwashing, as "the system" wants people "programmed to recieve". Anyways, I think Barbara has unearthed to the core of the problem. The machine we live in eats us alive and then when we are no longer a profit center it spits us out, either into infirmatiy, old age, or prison or even worse homeless. I think we need a new type of analytic politique that transcends socialsim or marxism or hippism, but looks at an American as simply a consumer. Debt is modern slavery. Debt is never worth suicide as debt is just a loan that promises if you pay for a very long time, like a 30 year mortgage you get to own the property, yet the state can at a whim tax it away from you anytime. Its all an illusion. Whenever the state can take your property for unpaid taxes, it means you don't really own it. You are simply being put through layers of illusions. Thats not to say, it might be a practical thing to do to mortgage a house and pay taxes if the numbers work for you and still leaves you a measure of dignity and a cushion. But our brand of consumerism makes you push the buying envelop. "Pushing the consumers buying envelop".
1. American narcissism confused as patriotism.
2. great advertising and glad handing and unrequited promises.
3. addictions and drug and booze induced decision making.
4. relationship blackmail, threat of pulling away ones love if you don't get that "thing" or "dream holiday">
But let me add the greatest travesty of todays America and that is the huge amount of debt students and their families have to take on to get even a basic college education. Its insane and wrong. "Generation Debt" covers it well. One question--during the recent housing boom and double and tripling of prices, did anyone ever hear anyone from mortgage lender to the "innocent" sellar ever wonder if it was ethical to saddle people with these yet huger mortgages they would be paying off month after month for most of the rest of their lives working extra hours, overtime, two jobs, and separating marriages over the stress, but whether it was ethical to be part of this? I watch on the home channel how suburban dwellers drool when the realtor tells them their house has doubled in value in the past 10 years, but no one ever asks the question, how is the first time or even second time home buyer going to be able to afford it. A mortgage is a backbracker, a home wreaker. But its all about "me, me, me" and somehow these same people think going to church on sunday absolves them of their very deep sins. Outside of all the greed, I am appalled no-one has even started a national discussion on the ethics of greed. By that I mean the hurt and harm greed can do to others and is that ethical? But no discussion, just sign me up to the ponzy scheme. Yet we are the greatest nation the earth has ever seen. Something is not computing here.
Posted by: Brian | July 29, 2008 at 07:52 PM
Brian, the banking industry did an excellent job of convincing people that they can no longer file for bankruptcy to have their debts discharged. You still can, but you have to earn the median or less for your family size. In Maryland, that is about $40K per year for a single person, and add about $3K per year or every additional family member.
People tend to focus on the monthly payment more than how long it will take to pay off a debt. For at least the last ten years, the focus in the lending industry has been on making payments affordable, either through car leases, reduction of minimum monthly payments on credit cards, or pay-option mortgages, or worse, the toxic 80/20s where you took out another loan for the down payment as well.
Deductibility of interest never seemed like a great deal to me. Suppose that my combined tax rate is 30% and I'm deducting $10K in mortgage interest. My taxes are lower, but I still have to pay that $7000 "left over" in mortgage interest. People confuse deductibility with a tax CREDIT.
One can argue that housing prices HAD to collapse when the average house price was 4-6 times people's income, and higher than that in some places. Few buyers compared the after-tax costs of ownership with the cost of renting. I get a hard time from family members because I didn't buy a house when I moved back east four years ago. It was cheaper to rent by about 30% for the amount of space that I had.
One of the books that you should read is "Balance Sheet Recession" by John Koo. It is about the Japanese, but there are lessons that apply to the U.S. The main one is that a recession is inevitable as people repair their personal balance sheets, either by paying down debt or filing for bankruptcy.
It is hard to start a discussion on the ethics of greed when we are taught that we have to get what we can, while we can, as we await the next downsizing. Your "greed" may be someone else's "survival".
I'd like to see credit card interest capped at 2-4 points above the fed funds rate and oenalty fees capped at $10, but that would cause 80% of the people to have their credit cards cancelled. It wouldn't be profitable enough. The most moneymaking customers for the banks are the highest risk customers, because they can get 24-30% plus however much in late fees.
Posted by: paperpusher666 | July 29, 2008 at 09:32 PM
You could forget about Wall Street and the various medical care and insurance rackets and build alternative institutions that serve _your_ interests and desires instead of rich people's.
Everyone does that to some extent. I tell everyone I know to remember who among their friends and acquaintances (hint: it's helpful to have friends and acquaintances) is a doctor, lawyer, nurse, or other professional who will negotiate with you directly and bypass health insurance and its corporate agenda. Find those people, help them find others, start building local networks of support and help.
I was greatly helped this way. There are health care professionals who want to HELP more than they want to make money for the corporation. Developing respectful and mutually helpful relationships with actual doctors and nurses is a good starting place.
Sometimes you don't do it until you absolutely have to--maybe it's good to start compiling local knowledge now. It's worked for me on dentistry and foot surgery.
Posted by: JMarra | July 30, 2008 at 09:24 AM
They control us only because we let them.
The system gives property more recourse to legal physical violence than it gives to me.
I can storm the gates, and the police or privately hired security can give me a concussion. I may recover and file a lawsuit. I might win the lawsuit, some years down the road. A lawsuit will cost me money, and necessarily reduce the time I can spend protesting the original issue in the first place.
Posted by: JMarra | July 30, 2008 at 09:37 AM
I don't think people are killing themselves because they "have less money." Losing your home is a lot more fundamental and devastating, and I could see how it could lead to suicide.
Are we at a tipping point here in the U.S.? How much longer before we get angry enough to do something, i.e. vote, march, protest, keep to the streets like we did in the Vietnam era?
Posted by: Buena | July 30, 2008 at 03:22 PM
JMarra: '... The system gives property more recourse to legal physical violence than it gives to me. ...'
Yes, as an individual it's hard to beat the system, and especially hard not to get sucked into the system and become like it and part of it. Hence I go about preaching the gospel of collective autonomy. Doesn't seem to do much but maybe I'm planting a few seeds here and there. Your suggestion of establishing personal relationships is something like what I'm talking about.
Buena: '... How much longer before we get angry enough to do something, i.e. vote, march, protest... ?'
Voting, marching and protesting are basically asking the ruling class to be nicer. There are some problems with this approach. First, ruling-class people didn't get where they are or stay there by being nice. It is not really a behavior they understand well, although the more clever ones can simulate it on occasion. Second, the ruling class itself has to some extent lost control of the situation. They have allowed themselves to be seduced by easy money, stock and real estate bubbles, celebrity, and so on. Being a lord and master is a hard job and they've muffed it. Even if they wanted to (which they don't) it may well be impossible for them to rectify the damage they've done from the top.
It is probably going to be up to outsiders and lower-downs to rebuild our economy and restore our politics to some semblance of reason and virtue. In other words, the knight in shining armor, the man on a white horse, is you.
Just this Sunday I sat and watched with sadness as I listened to Fritz Hollings, the retired North Carolina Senator. Greed is the biggest problem in American political system, driven by K-Street lobbyists demanding more money and influence from "Joe Average American." $30,000 was the amount of money Hollings had to raise weekly! He stated sadly that pretty much all of his time was in the pursuit of cash. He admitted freely he was more concerned with that than creating policies to help average Americans. I hate to sound like the Ugly Canadian, but I have to tell the fine folks of still the Great U.S. of A not only are your bank accounts and governments deeply in debt but your entire democracy has a deep rot, troubling not just for you but for citizens around the world. It's time "Joe and Janey average America", to wake up and see, that a group of devious, dangerous, Neo-Cons have robbed you all blind! It's funny how American's lampooned the French for not joining in the Iraq debacle because they were called "soft" and "outdated" but try and take away the hard fought rights of French citizen's and you'll see the strong character of the French as they stand up proudly for those rights. It seems American's are the ones who have grown fat and soft. You have lost the ability to stand up for your own rights, because you've abdicated them to K-Street and in the process you have foolishly had your pockets picked. It's time to grow a backbone America, if not you will go down in the history pages as a country with seemingly unlimited potential, a potential lost by indolence and the greed to a political criminal class unheard of or unseen ever before in the planet's history. Now wake up and start fighting for your rights, there are those of us around the world that still look to the great American experiment with hope.
Posted by: Ron McAllister | July 30, 2008 at 08:10 PM
Barbara writes: "Dry your eyes, already: Death is an effective remedy for debt, along with anything else that may be bothering you too."
Hmmm, not according to the Buddhists, though. For them, I think, anyone who dies this way will have to be reborn into a life of even greater suffering to really learn they can come up with a better solution to their woes than self-destruction. Well, maybe the Buddhists are wrong. Still, I don't think death offers any easy way out, although Atheists like to think so. As for the Religious, is listening to a heavenly choir singing for eternity truly an easy way out or the fast track to eternal tedium? Even pitchforks have to get old, after a while. Think about it.
Posted by: Mara | July 31, 2008 at 06:44 AM
In terms of the "deeper" reasons for suicide, sometimes it's a more impulsive act than we realize (the NYTimes had a great article about this). Have a gun lying around or live by a high bridge, and you (or a family member) just might one day decide to shoot or jump to a quick death. Motto: troubles come and go but death often takes a holiday anytime the means for a truly lethal end presents itself.
Posted by: Mara | July 31, 2008 at 06:48 AM
i have all sympathy for the family. suicide is an exasperating and tragic event. the pressure and strain were authentic.
the family pursued, negotiated and agreed to a mortgage plan with an established financial institution.
" I had no clue," said John Balderrama explaining that his wife handled all the couple's finances. "I'm just lost. I tell you I'm beside myself."
" He said Carlene had been intercepting letters from the mortgage company and shredding them without his knowledge. He had no idea she hadn't paid the mortgage in 42 months. "
given the signed contract that the family entered into, and the apparent circumstance in which the contract was not met for 42 consecutive months; i must pose the question: what action, other than foreclosure did you expect from the finance company.
it is suitable to discuss the relative merits of working outside of a system which manipulates the populous; to wit:
" and especially hard not to get sucked into the system and become like it and part of it. Hence I go about preaching the gospel of collective autonomy. "
that said. i would find it difficult to conceive that the mortgage company is responsible for this death or that society may expect the mortgage company to do much more than notify the authorities when someone received the fax of the pending suicide.
again all of this reasoning is couched in terms of sympathy for the family at this tragic loss.
Posted by: roger | August 01, 2008 at 08:06 AM
I agree that people do turn to suicide far too often than the public would like to think. Faced with an unfair lawsuit at the age of 19 (by an elderly couple in their 70s), I spent my remaining college years in therapy for PTSD, too close to suicidal thoughts for comfort. Sometimes you just want to get away, and you see no other choice. You feel yourself a burden to the world and everyone that loves you. As a college student, I was lucky enough to get easy help through a university program. Non-students aren't as lucky.
Three years later and the lawsuit went away. I'm three months out of college with no luck in the job search, slowly drowning in new debt without health insurance (thanks to a pre-existing condition). Not only does the economy need a serious overhaul of ethical and reasonable standards, but I must attest to the same for health care. Money and health are the two things a person can't live without, and unfortunately, the two things people will continuously use against each other in an attempt for overall power.
Posted by: Heather | August 01, 2008 at 10:42 AM
Provided that one can at least have the basics, such as food, and not necessarily at the unreasonably high level that many Americans find normal, debt is largely a state of mind. If it is really huge, it might as well be zero, because it will never be paid, and at least some of it will be discharged or written off. There are even laws saying that after a certain number of years, debt "expires". And one's efforts to at least pay something may just reset the clock.
Many people cannot afford home ownership in the first place. If the bank takes the house, people will end up living somewhere, probably as renters.
The real problem is the idea that if there is no money, debt must be paid, and this is a shame and a burden to others. No material goods are worth one's life.
And I don't know what happened in the case of the person who was only 19 when sued, but at that age, many people are judgment-proof. Speaking of judgment, the law may actually protect a certain amount of assets that simply cannot be taken. And at 19, life is full of opportunities (and not necessarily where those old folks live), whereas the old people may not even have many years of life left.
Be a burden or beg for food if you must, but by all means, people, protect your life first. In the current economic climate, it would not be surprising if the whole economic system collapsed and money lost nearly all its value. In some areas, houses are simply blown away by some flood or hurricane. Life is more important than material things and the ability to pay, which could disappear or become totally irrelevant.
In the social order of contemporary liberal capitalism, where all respectable people are employed and work constantly, you are your money. It's not surprising that people introject -- mentally aborb and incorporate -- this kind of thinking, since they are surrounded by it and it has so much power over them. In this scheme of things, if you lose all your money, you're worthless and should die. But if you gain your sense of self-worth from the global work machine, however successfully, you're already sort of dead.
yes, I, too, am waiting for us to moblize and march. However, when we did in the 60s there was a sense of shared mission. One person's gain was everyone's gain. Not any more. Everyone seems to be in it for themselves.
How many people know their neighbors or care to? How often do people get together with non family members? Not often. While even on TV programs showing people house hunting almost all comment on wanting privacy fencing. Just what are we afraid of?
Until we as a people understand that we're all in this together, nothing will change.
Posted by: Solo | August 02, 2008 at 03:28 PM
In response to Monica, yes, I agree about youth judgment. I must clarify, the case was about an accident that occurred when I was 19, and was served papers at 21, just two months shy of the statute of limitations. The case went through my employer, and I was lucky to not have to appear in court. I was just ecstatic when it was over. Not long ago I read in the paper about a car accident in Maryland in which a mid-50s man was being sued by a mid-70s couple for the same reasons I was...a wife was denied "companionship" from her husband, severe emotional trauma, etc.
I was sad, learning of such a similar situation. So when an adult with real financial status is set to lose, I could see how stress has the possibility to result in drastic measures. What seems simple and black and white to others would seem tremendously urgent to you, therefore perpetrating the notion that you're "crazy." And that really doesn't help a mentally unstable person in need of help.
I wholeheartedly agree with Barbara's notion of "metaphorically" turning the weapon in the other direction. Not that even metaphorical violence is the answer, but that as people, we have to learn to value ourselves and our self-worth before counting our life's savings.
Posted by: Heather | August 02, 2008 at 07:27 PM
Solo the reason we were together in the 60's was in part demographic, the post world war 11 baby boom, highly suburbanized, from families that were living in posperity, the advent of the tv generation, rock and roll, and various communal enhancing relaxants. Now look, the suburban kids are no longer the majority, the families are under finanical and social presssure, nobody is happy, and worse the government has criminalized all communal enhancing relaxatnts to the point of deomonizing anyone who would go near them, there are also more dangerous agents around that feul violence, and the corportations have co-opted the music to serve their own commercial interests. All the good stuff has been hijacked and turned around, so that is why nobody feels communal about anything anymore. Plus the work environment has sped up and gained control over all our free time and stolen our lives. During the Carter years the 35 hour work week was in and so were 4 week vacations for college level professionals. You didn't have to worry about being fired if you took your vacation either. And there were personal days and occasional 3 and 4 day weekends, the kind of time you need to have a life. Now they have even lay employees working longer hours as if they were first year law firm associates. They have everyone tethered to cell phones and beepers and various electronic monitoring 24-7 so you are always on the clock. They drug screen all employees, even for the Gap. The message is totally negative on workers period. You are just a cost center on a balance sheet and they have taken your free time, your life, your dignity, your family, and your chance to be you so they can generate more on their profit line. No wonder the conservatives so demonize the carter years. And people are brainwashed to believe them even though it goes against their own interests.
Posted by: Brian | August 02, 2008 at 11:15 PM
I don't want to be too cynical, but I think the alleged togetherness of the Sixties was largely the product of latter-day marketeering in pursuit of sales in media, clothing, cars, and other markers of artificial hippitude.
The Sixties were actually very complicated (like every other era), had major dark sides (like every other era) and witnessed the beginnings of the present fragmentation and total commercialization of popular culture.
This essay couldn't be more timely and I fear the situations Barbara discusses are only the tip of the iceberg. We're in for some very rocky times, esp. since so many of the people who will lose their homes, are driven by appearances they really couldn't afford to keep up in the first place. When those appearances are threatened, they will become undone. For many of these people, having to move to a smaller/less new house (or god forbid, gasp! rent an apartment!) would be the end of the world.
I have no idea how the people I am surrounded by "afford" the lifestyles they display so ostentatiously because I know they make barely more money than we do. There is something seriously amiss and I feel bad about the angst overextended people must feel -- I feel it about my own day to day expenses. On the other hand, I do not support a homeowner bailout unless the homeowners in question are forced to downscale in ways that truly humble us as a society. I do not support giving people even more rope to hang themselves. It's time we all figured out that 2 incomes does not entitle us to Disney vacations every other year, a new minivan as soon as the old one isn't shiny, totally unnecessary cell phones, home pools, etc. Maybe this is my own brand of selfish entitlement, but I have been living simply for more than a decade now and I think it's time many of my peers (mid-30s) get w/the frugal program too.
Posted by: lc2 | August 03, 2008 at 05:30 PM
A homeowner bailout is, in fact, a way to give economic power to individual citizens, although, unfortunately, the poorest citizens are not included. Or, more exactly, a way to ensure they are not deprived of the economic power they got. Evicted homeowners will end up living somewhere. It's just that if they keep their home, those homes are owned by ordinary citizens instead of being owned by some corporation or by rich individuals. And rich landlords don't make money from them, because they have no need to rent. Because they will still end up paying for housing, even if it seems expensive. They can't live on the street. At least, by paying, they are empowering themselves and not the landlord.
Many people have to overextend themselves just because necessities like rent are expensive but needed. But those who just buy luxuries will either end up affording them at the limit, or losing them. But if they lose them, at least they have enjoyed them while they could. It depends on one's point of view. To some, a frugal lifestyle is the way to go. To others, temporary affluence is still affluence while it actually lasts, and worth having. If someone offered you to be a millionaire for 5 years, how many of you would prefer to maintain a frugal lifestyle and never experience that at least once in a lifetime?
And don't forget the power of positive thinking, and of making more money by faking 'till you make it. It's not the very poor who are faking affluence, although some may fake a modest middle-class existence. To fake it, one must be a notch or two below, and the hope is that in time, it may become true, and that by being surrounded by money, one eventually becomes a money magnet. If not, being a little rich for a while is almost like stealing from the rich. But the psychological effect is important, although the success it creates is not automatic.
My boss has noticed a change in my behaviour since I have started my online businesses. I did not tell him that, but this is due to the fact that I would like to put myself in a position not to need jobs and bosses anymore and sometimes seem to act as if that was already the case. Sometimes, I almost felt life lauging in the boss's face. It's the same kind of idea as with faking affluence. Feel like the boss and you may end up being the boss. Pretend you have money and you may end up rich. It does not create success, but it motivates.
Recently read Nickeled and Dimed. Yesterday had to preach on the scripture in Matthew about the feeding of the 5000. This was not just about Jesus performing a miracle. It was about the compassion he had for the physical needs of each individual in that multitude. I always talk to the taxi drivers, hotel maids, waitresses etc that I come in contact with on my travels. Bless you for your work.
Posted by: Barbara | August 04, 2008 at 06:13 AM
The key to the story of the feeding of the 5000 is that Jesus first collected what food people had and were willing to give. As a miracle worker, he could have created the food out of thin air; in fact, as God, he could have created a world where people weren't hungry in the first place. Instead, he showed people that they could feed themselves, but they would have to take the first step, put together what they had and share it, instead of waiting for a handout from the authorities.
The story is usually reinterpreted to emphasize Jesus's skill as a magician, obscuring its political and moral content. Jesus the communist and autonomist isn't too popular with the authorities and their fans.
6 Reasons Why Americans Aren’t Angry About the Current Economic Crisis
Today's Metro New York featured a letter from Margaret Pelleriti, mother of a teenaged suicide victim Michael, 16. She railed against your saying that "Death is an effective remedy for debt". Metro's website has links to pdf's of today's edition. There are other letters about the mortgage crisis and marching against debt.
I found her website in memory of her son, and wrote this reply into her guestbook:
Dear Mrs. Pelleriti: I saw your letter in today's Metro New York. (Maybe you get Metro Philadelphia?) My condolences on the loss of your teenage son. However, you misunderstood Barbara Ehrenreich's intention. In the paragraph you quoted, she was being satiric, like Jonathan Swift's "A Modest Proposal", where he suggests that the starving poor eat their own children. Look again at another line from her column: "The alternative is to value yourself more than any amount of money and turn the guns, metaphorically speaking, in the other direction." Her true target was not suicide victims, but heartless institutions that drive them to suicide, run by "high rollers, fattening themselves on the blood and tears of ordinary debtors." Ehrenreich, railing against the suicide of Carlene Balderrama of Taunton MA, the woman losing her home to a failed mortgage, would agree with what you said in your letter: "That person has WORTH!"
I'm sending a shortened version of this guestbook entry as a letter to Metro New York. I'll also tell Ms. Ehrenreich about your letter, and hope she will find the time to write to you herself. You can find a longer version of her column here: [I list your blog's column's URL.]
Melanie N. Lee
Corona, Queens, NY
So, Ms. Ehrenreich, if you want to seek her out, you can enter "Margaret Pelleriti" into a search engine and find her tribute to her son, and its guestbook.
Here's the shortened letter I sent to Metro:
Dear Mrs. Pelleriti: My condolences on the loss of your teenage son. However, Barbara Ehrenreich was being satiric, like Jonathan Swift's "A Modest Proposal", when she said “Death is an effective remedy for debt.” She also said, “The alternative is to value yourself more than any amount of money and turn the guns, metaphorically speaking, in the other direction." Her true target was heartless institutions that drive people to suicide. Ehrenreich would agree with you about the debtor and the suicide victim: "That person has WORTH!" I found her column life-affirming!
" but heartless institutions that drive them to suicide, run by "high rollers, fattening themselves on the blood and tears of ordinary debtors "
is this actually a predator who/which fattens itself on blood and tears of innocent victims or is this a financial contract which was contravened for 42 consecutive months by the party who signed for and pursued the mortgage.
the histrionics are simply not applicable.
Posted by: roger | August 04, 2008 at 01:08 PM
Hmm...like the person who sets a trap with cheese for a starving mouse, catches the mouse, and then blames the mouse for being greedy.
Or think Hansel and Gretel.
your mouse and hansel and gretel were each ensnared by deception.
i dont read in the article that the mortgage company deceived the family. the forclosure was a result of the monthly mortgage not being paid.
Posted by: roger | August 05, 2008 at 09:52 AM
But, you see, I think those particular mortgages were deceptive, or at least predatory.
Now I don't understand fully how the subprime mortgage and other such mortages work, but think: you give a loan to someone whom you know, or suspect, can't pay it back, at least not in a timely way, giving you an opportunity to seize the property and keep whatever money they did give you--perhaps to sell the same property to someone else?
Can you say "loan shark"?
Also think: many, if not most, of the subprime mortgages were marketed to African-Americans. Even those Afr-Ams who could afford the regular mortgage deal were steered toward the subprime. I suppose the predatory market thinks dark meat tastes especially delicious. (Yes, I'm Afr-Am, too!) The market is often glad to sell our kind the inferior brand.
" Now I don't understand fully how the subprime mortgage and other such mortages work, but think: you give a loan to someone whom you know, or suspect, can't pay it back, at least not in a timely way, giving you an opportunity to seize the property and keep whatever money they did give you--perhaps to sell the same property to someone else? "
why would a mortgage company want the mortgage to fail in the first place.
" Can you say "loan shark"? "
loan sharks dont sell their businesses for $7 billion.
" I suppose the predatory market thinks dark meat tastes especially delicious. "
without qualification the most ridiculous thing i have read today.
Posted by: roger | August 05, 2008 at 03:33 PM
You say loan sharks don't sell their businesses for $7 billion. That's like saying that huge corporations don't rob people because they don't mug people in the streets. Aren't big credit companies acting like loan sharks these days, only breaking your finances and your reputation instead of your knees?
Sorry you found my "dark meat" statement ridiculous. I'm a poet, not a financier. I'm sure many readers will know and appreciate exactly what I mean, even if you don't. In case you didn't understand, I'm saying that in a racist society, those looking for easy, powerless, "out of the loop" victims to prey upon and to scam might choose black people as their victims--like the Tuskegee experiments that used unwitting, and unwilling, black people to see how syphillis affects human beings. The experimenters didn't infect their victims, but let the syphillis affect the sick ones without treatment. I doubt they would have been so ready to do the same to white people.
Yes, I know that today's financial institutions prey upon white people, too. But, if they were thinking racistly, they would be all the more eager to prey upon black people.
I don't think economic predation started with subprime mortgages. It's pretty fundamental to capitalism itself. This isn't nice, but it was better than the physical predation which preceded it under feudalism and slavery. At least most people seem to think so.
The subprime event started because, in a sense, the Federal government has been printing money. Actually, what they do is not literally print it, but lower interest rates abnormally and then create money which banks can borrow. Money is created through credit. Because it's credit-based, it is mostly available only to rich people and corporations. Soon, the rich were awash with funny money, driving up the cost of the things rich people buy, stocks, real estate, collectibles, to absurd levels. What to do with all the money?
One scheme was to lend mortgage money to not-rich people. As long as the money bloat was on, real estate prices would rise no matter what, so the banks were more than willing to loan to relatively poor people, even obvious bad risks, figuring if the poor didn't make the payments, they'd just take the real estate back and sell it at a higher price to someone else.
But there was a bad side effect: the flow of money into the lower classes started to cause inflation in the price of labor and manufactured goods -- the "real economy". In order to head off the inflation, which was unacceptable politically and financially, the Fed raised interest rates. This move reset adjustable-rate mortgages driving many borderline borrowers over the brink. Even if they weren't bankrupted or foreclosed, they cut back on their expenditures and the economy sank.
Thus the subprime scheme, and a good many other schemes, began to curl up and die, with dire economic consequences for large numbers of people including those subprime borrowers. And here we are. In the last year, the American dollar has lost about a third of its value on currency markets. We import a lot, and our government and rich folks are addicted to cheap money, so the inflation will go on, regardless of whether we produce anything or have much money to spend. It is not just the poor who ar