Monday, December 15, 2008

the addict and the dealer

This post from Andrew Sullivan I think is guilty of the tendency to attack individual actors within a culture and not put the blame on the people who helped create that culture or the culture itself.

There are villains to go around, here, across the ideological spectrum. But it seems to me to be the urge among conservatives to often punish the last cog the in machine, the end-of-the-line consumer. It's conservatives, after all, who have told us for years that consumption and spending are the keys to happiness. Conservatives who have counseled us that growth is the engine on the train to prosperity and abundance. Conservatives who deride urbanism and cities, and praise the suburbs and rural areas that offer no alternatives to individual home ownership. President Bush and his administration who pushed for more home ownership. Alan Greenspan who kept interest rates artificially, irrationally low. Conservatives in the financial sector who pressed for deregulation and laissze faire conditions that led to this collapse. And it's conservatives who have long held two fundamentally conflicting virtues to be a part of the American character: fiscal responsibility, and endless consumption. There's many working against the latter impulse, of course, like Rod Dreher and the Cruncy Cons. Andrew himself has been an important voice in that regard. But here, I think, he's dropping the ball.

Should people have taken out mortgages they couldn't afford to pay off? Of course not. Do they deserve some blame? Sure. You know who deserves more blame? The lenders who eagerly offered them the loans. The banks that eagerly underwrote them. The investment banks that collateralized and bought them. The ratings agencies that went along with the charade, going against the express purpose of their existence. The boards and executives at the investment banks who knew the risks and did nothing to inoculate themselves or our economy against those risks. And what's really to blame is a culture that tells people they can have whatever they want, whenever they want it, that they can buy something today and put off paying for it forever, one that tells people that their value is actually synonomous with their belongings, with their consumption.

Our culture, our profligate, celebrity-addled culture, is cross-ideological or a-ideological. We need people from both sides to change it. Part of that is scolding, sure. Homeowners need to be chastised for shirking individual responsibility. They had people enabling them all the way along, and they were actors in a culture that has long held home ownership to be an elementary facet of American middle class identity. All of that has to change, and it can only change by applying our displeasure equally and fairly.

7 comments:

Anonymous said...

This:

It's conservatives, after all, who have told us for years that consumption and spending are the keys to happiness.

does not match this:

Our culture, our profligate, celebrity-addled culture, is cross-ideological or a-ideological.

In addition, it's just a gross generalization. Endless consumption as a conservative virtue? WTF?

This is more of that damned meme: Americans bought more because after 9/11, George Bush told them to. Americans don't need a reason to fucking spend money -- all they need is a credit card. -K.

ryan said...

The problem here is that the ownership of real property is a pretty deeply held value and has been for a long time. As in not decades, but centuries. Jefferson thought it was really important for people to own property. So did most of the rest of the Founders.

The Founders believed that unless you owned property you couldn't be truly independent, and thus the landless were inherently untrustworthy. We don't believe that anymore, not in so many words anyway, but there's still something to it that we can't manage to eradicate. Owning one's residence gives one a stake in society that renting does not. Granted, "owning" property changed a lot with the advent of 30-year jumbo mortgages, but the Founders would not have considered such arrangements "ownership" in any real sense.

So I do think we want to encourage homeownership. What we don't want to encourage is people to borrow and borrow and borrow to make that happen. Doing so is like saying that we've improved access to higher education by increasing borrowing limits: it's a lie.

The more I think about it, the less 30-year mortgages are a good idea. True, they enable people to move into homes to which they hold title. But if you don't believe that assets magically appreciate, most people will never own their homes long enough to establish any real equity in them. Even relatively families people tend to move every couple of years these days, and the way mortgages are structured that barely touches the principal of the loan.

I think the way to increase homeownership may actually be to make borrowing harder. Restricting access to ready credit will reduce the amount people are capable of paying, which in turn will reduce home prices. It will also make the people who buy homes far, far more stable in them, because they'll need to reach financial stability before buying.

In short, I like the concept of homeownership, and I think you should too, but I'd agree that the way we've been going about trying to promote that has been almost entirely counterproductive.

Freddie said...

And that's the thing. It's entirely natural for someone to want to own a home, and I think society should make some concessions to make it easier to do so.

http://lhote.blogspot.com/2008/09/should-government-try-to-expand-home.html

But we have to be responsible, too. Part of the sad reality of this situation is that the more people who bought into the bubble, and the more people with bad mortgages there were out there, the higher the value of existing homes were driven-- meaning the next group of borrowers had to take out ever larger mortgages to buy a new home, increasing the damage done to them and the economy by the bubble.

Anonymous said...

Endless consumption as a conservative virtue?

Drill, baby, drill!

mrgood1000 said...

A culture of consumption and consumerism. Well, what did you think would happen, when the one thing liberals harp on the most, their magnum opus, has always been the elimination of poverty. When the importance of the reduction of poverty is pounded on that much, the only possible outcome is a culture that values the things poor people don't have - like home ownership.

Patrick said...

That last post makes no sense whatsoever. It's like saying that if they find a cure for cancer, everyone will become a fanatical health freak.

Gypsy Cat said...

Another hysterical aspect of the last 8 yrs. has been in realty, in the aquisition of properties not as one's primary residence but as items in an investment portfolio. In Sept. 06 I turned down a mortgage I knew I couldn't pay and the mortgage guy actually called me -at work- to scold me. This was after a strange drama involving him, his realtor buddy, and a house a friend of mine built. Long story. I was intimidated and bullied by those two men for not wanting to buy a specific house for a specific price to the point where it almost became harrasment. They were mean and the process was scary for my first time, and I basically had to be a bitch and tell them both to fuck off.

So I can definitely see how people got strong-armed into closing on inflated mortgages. But in the end it comes down to basic arithmatic: you subtract the payment from how much money you take home every month and viola: either you can afford what they're trying to sell you or you can't.

In the end we're all grown ups tasked w/ caring for ourselves, the blame here trickles down to the bottom. IMHO