Let’s spread the blame properly
Let me pose a politically incorrect question: How is it that the big guys who helped create the mortgage crisis get heaped with blame and scorn, while the little guys who are at the root of the whole mess get sympathy and money?
One inconvenient fact that’s been largely overlooked is that this crisis didn’t crash down on ordinary citizens. It crashed up on Wall Street titans. We think of economic cataclysms as events that have their origins in the corridors of power, and then cascade down onto the heads of the innocent. But that’s not what happened in this case. Instead, millions of regular Joes took on more debt than they could afford, or didn’t bother to understand exactly what they were getting into when they signed for adjustable-rate mortgages, and their troubles trickled up. It took a couple of years, but that trickle eventually turned into a tsunami — which then swept away Wall Street.
Nonetheless, a guest column in my local paper yesterday wasted no time in establishing the victim narrative in its plea for a bailout of the little guy. Here’s the first paragraph:
Amid the headlines about huge stock market losses and collapses in the financial services sector, it can be easy to forget the human face of the problem that our nation now confronts.
Only later did it grudgingly acknowledge reality:
Certainly, some of these consumers might have been irresponsible in taking on more debt than they could handle. The vast majority, however, were simply trying to buy a piece of the American Dream.
I haven’t seen anything suggesting that the “vast majority” of the people facing foreclosure were careful with their personal finances and are truly victims of circumstance. I suspect that exactly the opposite is true — that the majority of people caught in the housing squeeze are those who (1) applied for, and got, “liar loans;” (2) agreed to adjustable-rate mortgages because that allowed them to buy more house than they could actually afford, and gambled that they could refinance or sell out before the interest rate adjusted up; or (3) speculated in real estate during the boom years, and simply got caught holding property when the bubble burst.
Whatever the case, the word “victim” isn’t the first to come out of my quiver of descriptions.
Don’t misunderstand me. This isn’t a brief on behalf of corporate big shots. I’ve got no sympathy for them. They played the game, earned obscene piles of money, and however this crisis shakes out none of them will be going hungry. But neither am I buying into the oppressed-masses storyline.
September 26th, 2008 at 4:38 am
“How is it that the big guys who helped create the mortgage crisis get heaped with blame and scorn, while the little guys who are at the root of the whole mess get sympathy and money?
One inconvenient fact that’s been largely overlooked is that this crisis didn’t crash down on ordinary citizens. It crashed up on Wall Street titans.” — G.D. Gearino
“Don’t misunderstand me. This isn’t a brief on behalf of corporate big shots. I’ve got no sympathy for them. They played the game, earned obscene piles of money, and however this crisis shakes out none of them will be going hungry.” — G.D. Gearino, 4 paragraphs later
When you claim that little guys are at the root of the whole mess and that they get sympathy and money while the big guys get heaped with blame and scorn, and when you claim “this crisis didn’t crash down on ordinary citizens. It crashed up on Wall Street titans” it does sound like a brief for the corporate big shots. And it sounds like you got a lot more sympathy for them than you do for the ordinary citizens who will be going hungry. This crisis crashed down on every ordinary citizen who lost their home.
September 26th, 2008 at 8:40 am
Who should be more severely prosecuted…pushers or junkies?
September 26th, 2008 at 9:56 am
“This crisis crashed down on every ordinary citizen who lost their home.”
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And that so-called ordinary citizen is the same kind of irresponsible, instant-gratification-loving creature who maxes out credit cards and stays in debt forever because he/she wants all these things, but cannot pay for them.
If you can’t pay off your credit cards every month and if you can’t just pull out some cash and actually pay for something you want, you have no business trying to buy a home.
And now these “victims” are playing dumb.
September 26th, 2008 at 10:00 am
Moreover, many of these “ordinary citizens” have popped out children they also cannot really afford.
Everyone wants the “American Dream”….whatever that is.
“No romance without finance.”
Yet most are very happy allowing taxpayers to pay for their “pro-creating desires”…..(as it were).
That is insane!
September 26th, 2008 at 10:23 am
Yes indeed, many people thought they could have everything. Not just the people at the lower rungs of the economic ladder who were pushed onto the lenders by the politicians when they had no realistic ability to pay those mortgages but other people who had means but just simply wanted more house than they could afford. I knew people who were getting interest only loans, 125% loans or risky ARM’s so they could buy that bigger house. Some tried to make me feel dumb for taking my investment earnings and paying off my mortgage rather than leveraging further. Sometimes it’s good to be a stodgy old conservative.
September 26th, 2008 at 10:53 am
I’m starting a nonprofit, TrickleUp, to help support and comfort former masters of the universe displaced by the financial turmoil. It’s one thing to lose a home if you have only one or your job as a bank teller, but if your stock options plummet, you have to try to sell the house in the Hamptons in a down market and retrency to just your Manhattan co-op, trade in the helicopter for a cab and auction off the Picasso, then you’ve really lost something. And if your career options are going to be limited to a salary no higher than the president’s, that’s bleak. It’s one thing for the government to bail out these businesses, but consider the human toll these people will pay. Won’t you help today?
September 26th, 2008 at 10:57 am
Finally!!
September 26th, 2008 at 12:01 pm
Debrah, your rant that the “so-called ordinary citizen” is an “irresponsible, instant-gratification-loving creature who maxes out credit cards and stays in debt forever because he/she wants all these things, but cannot pay for them. … Moreover, many of these “ordinary citizens” have popped out children they also cannot really afford. … Yet most are very happy allowing taxpayers to pay for their “pro-creating desires”” is insane. Sorry your life is such a bitter pill.
September 26th, 2008 at 12:28 pm
“Sorry your life is such a bitter pill.”
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I have no idea what you’re even trying to say….
……unless you live the life of a freeloader and have found recently—as have so many “ordinary citizens”—that reality bites.
You know, someone DOES have to pay the tariff.
September 26th, 2008 at 4:58 pm
Debrah,
Honestly? People like you make me sad. Some people have actually lost their homes in an economy that hasn’t worked for many people for a few years. My next door neighbor’s job was outsourced and she has yet to find a new job, after looking almost a year. Many people have lost their health insurance, too, by the way. And, you know what? Some people can afford their homes but max out their credit cards to take their kids to Disney World. Wrong in your book but something the kid will always remember. Stop being so judgemental, stop always parroting whatever authority you’re listening to on WPTF. Yes, people were incredibly stupid about buying homes they could afford one year but didn’t realize they’d never be able to afford a few years down the road. But, somebody in a position of authority talked them into these homes. I’m happy to behold the trauma that Wall Street is going through right now and can’t ever feel an ounce of sorrow for people who’ve made themselves rich and laugh at the fools they tricked into buying their fake gold.
September 26th, 2008 at 7:30 pm
Inquiring minds want to know what you think of the book editor being laid off. I realize it’s way off topic, but I was hoping you’d chime in on the N&O’s following the herd in that direction.
September 26th, 2008 at 10:19 pm
Debrah, I have no idea why you think ordinary citizens are freeloaders or why you are so bitter about reality.
September 27th, 2008 at 10:48 am
()))))))))))))))))))))) YAWN (((((((((((((((((((((()
September 27th, 2008 at 11:03 am
COCO–
Your verbal gyrations seem to be going down that same path you supposedly decry.
“Judgmental?”
Most certainly presumptuous and insular, you are.
FYI, (if anyone gives a flying fig)……I don’t listen to this WPTF you mention. Don’t have the time, or wish to take the time for talk radio.
And I pay for my health care out of my own pocket.
Don’t expect violins in the background from me.
Some of you guys just don’t know how to hang without all those safety nets under you.
You flail about as if the rest of the world should stop what they’re doing to come to the assistance of these supposedly educated people and lift them up from their own bad decisions.
And I have only contempt for these corporate and Wall Street movers-and-shakers. They take advantage of the stupidity of others and are basically unapologetic–and very transparent–thieves.
What to do?
There have always been unscrupulous businessmen and businesswomen.
But don’t worry……the govern-MINT will always come to the aid of fools.
September 27th, 2008 at 5:59 pm
()))))))))))))))))))))) YAWN (((((((((((((((((((((()
September 28th, 2008 at 7:50 am
Debrah, Your pride is misplaced. The government is what allows you to make your money and to be so proud of your self-sufficiency. If there were no government, I suspect you’d be living a life that was nasty, brutish, and ultimately short. A little humility and perspective is in order. If you are comfortable, there is no reason why you should be so angry at those who are suffering.
September 28th, 2008 at 12:26 pm
Hobbes–
I never mentioned that I was “comfortable” or somehow stupendously “self-sufficient”.
My points have been only to illuminate the fact that the public–(read, OTHER PEOPLE)–are not responsible for how my life or the lives of anyone else might be faring.
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Now, on to a more interesting topic.
The N&O is paring down even more. I will miss the “Q” section simply because it’s just always been there.
Why do they keep chipping away at the actual paper? They could achieve the same degree of savings by eliminating several of their superfluous and incompetent employees.
Drescher below:
http://www.newsobserver.com/2711/story/1235178.html
(By the way, who is the book editor mentioned by someone above who was eliminated?)
September 28th, 2008 at 1:37 pm
At this point I’m not sure why it’s important to point fingers at who is stupider or greedier — the a-holes at the top of the idiots at the bottom who signed onto something they couldn’t afford. People tend to be greedy and stupid at all levels of society, and in any case, the whole danged society from top to bottom will be hurting because of where we are now however we got here.
I am not wealthy; I’m not partying with the small handful who have the power and money to manipulate the system from the top, nor am I struggling, nor have I signed contracts I can’t honor. But I can see how the effects of this crisis may affect me, could cost me my health insurance, could cost me my job, and that it could be very difficult for me to compete with younger, more technologically sophisticated, more resilient and (did I mention younger?) less battle weary competitors for what jobs aren’t frozen or phased out.
I guess my lack of faith in human beings in general causes me to feel greater sympathy for the deluded dingalings at the bottom. They’re no better or worse in mores or morals than the ones at the top — but they’re certainly less fortunate.
Also, I’m feeling closer to ‘em all the time on the rungs of the national ladder.
September 28th, 2008 at 11:02 pm
No one ever answered Uncle Frank’s question.
September 29th, 2008 at 12:35 am
I disagree. I think his question was answered in a variety of ways.
1st - most people identify with the little guy at the bottom, not the fat cats at the top
2nd - we’re all going to be affected, and since “most” of “all” are, as I noted, closer to the folks at the bottom than at the top, we are naturally inclined to take a more hostile view of the party at the farthest end.
3rd - Not everyone accepts Uncle Frank’s premise that it is the little guys at the bottom who are the root of the entire mess.
I think everybody pretty much answered Uncle Frank’s question.
September 29th, 2008 at 12:41 am
~!@#$%^&*
We need to be able to edit these danged things. I should have said that not everyone accepts our gentle host’s premise.
As for Frank’s question, his own choice of terminology implies an answer. “Pusher” connotes a more deliberate action while “junkie” connotes vulnerability.
September 29th, 2008 at 11:34 am
Bingo Brunette !
October 7th, 2008 at 9:35 am
[…] A friend of mine thinks I was wrong when I recently described the people who bought houses they couldn’t actually afford as a root cause — rather than victims — of the financial crisis we’re now in. Because she’s one of the most capable journalists I know, equal parts bulldog and softy (as every great reporter is), her disagreement gives me pause. Here’s her note: You gave me some food for thought with your observations this week that it’s not really fair to paint the poor, befuddled subprime mortgage holders as innocent victims of the turmoil. I think that’s blaming the hog for wallowing in his interest-only slop. […]