What are the rules? And what are the judgments?
Remember my co-worker who was thinking about walking away from his mortgage? Well, he recently did exactly that. His mortgage was around $2500/month. Now he's renting a similar sized house (maybe a bit smaller) for about $1200/month. Financially, it's a no-brainer for him.
When I talk to him about it, he doesn't see himself having any role in what went wrong--"You know, Jonathan, I work hard, pay my taxes, and keep my promises, but when the housing market does something as crazy as this, I really have no other choice."
In other words, the fact that his house dropped in value by $200,000 is something akin to a natural disaster...an earthquake or hurricane. He had nothing to do with it. He's a victim. His purchase of the house was something within the rules, within the background structure of society. It's something that people do at a certain point in their lives. It was not a judgment.
Of course, I don't see it that way. He bought the house at a bubble peak. When someone makes a purchase by taking out a loan, he's making a judgment call. Sure, there are background rules - mortgage laws, tax rates, interest rates, etc. But the purchase is a judgment about the future value of that purchase. And people are indeed responsible for that judgment.
My co-worker sees himself as a good citizen who follows the rules and was victim of the whims of nature. I see him as a good citizen who follows the rules and made a bad judgment for which he bears some responsibility.
I bring this up because there was a recent essay by Gonzalo Lira called "The Coming Middle-Class Anarchy" (not the good kind) in which he talked about a retired couple who are simply giving up on the system.
Just like the poker player who’s been fleeced by all the other players, and gets one mean attitude once he finally wakes up to the con? I’m betting that more and more of the solid American middle-class will begin saying what Brian and Ilsa said: Fuckit.
Fuck the rules. Fuck playing the game the banksters want you to play. Fuck being the good citizen. Fuck filling out every form, fuck paying every tax. Fuck the government, fuck the banks who own them. Fuck the free-loaders, living rent-free while we pay. Fuck the legal process, a game which only works if you’ve got the money to pay for the parasite lawyers. Fuck being a chump. Fuck being a stooge. Fuck trying to do the right thing—what good does that get you? What good is coming your way?
When the backbone of a country starts thinking that laws and rules are not worth following, it’s just a hop, skip and a jump to anarchy.
TV has given us the illusion that anarchy is people rioting in the streets, smashing car windows and looting every store in sight. But there’s also the polite, quiet, far deadlier anarchy of the core citizenry—the upright citizenry—throwing in the towel and deciding it’s just not worth it anymore.
The essay got a lot of readers and was reprinted in innumerable places. The featured couple is a lot like my co-worker: they follow the rules, pay their taxes, etc. They're middle America.
What few people notice about Lira's couple is that they took out a massive loan during their retirement! Is that wise? Isn't that risky? Retirement should be a time of thrift, a time to live off your accumulated savings, not the time to take out a massive loan for a house in a gated community on the golf course. I guess the easy credit of the past few decades has become such an essential part of American life that taking a big loan during retirement is, ahem, par for the course.
What bugs me about both the couple in Lira's essay and my co-worker is a refusal to see how their poor judgment was a big part in their current woes. They see the bursting of the housing bubble as a random event that they had no way of predicting.
Sure, when middle-class people say "fuckit", that doesn't bode well for society. But what's worse is when people refuse to take responsibility for their own foolish, risk-laden decisions. The next decade is going to teach some painful lessons.