I had an interesting disagreement with one of the partners of my firm a couple of weeks ago. I was talking about a recent speech I’d seen former President Bill Clinton make at an event sponsored by one of my clients. I’ll likely write about that another time, but it’s the disagreement following my recounting of the speech to the partner that I want to concentrate on, as well as a New York Times story on March 11 by Eric Eckholm entitled “As Jobs Vanish, Motel Rooms Become Home” http://www.nytimes.com/2009/03/11/us/11motel.html?ref=opinion.
Following the discussion about President Clinton’s speech, I commented about how there was hope in what he was saying, and that indeed, I had great hopes for President Obama’s stimulus plan. Frankly, I still do, and I’ll get to that too in a second. But the partner in question then indicated that he was of the opinion that our 42nd President was responsible for the mess we’re in based on his edict that “every family should have a home.”
I’ve heard this logic many times before, and was unprepared for a major rebuttal, except to say that the partner was “wrong” in his analysis, and that President Clinton’s intention was that everyone should be able to afford their own home. The logic being that both home prices and financing should be reasonable, and when presented with a responsible history and income level, people should be able to afford a home. I’m sure that it is quite haughty of me to think that I know what the 42nd President of the United States meant in several speeches during the mid-90s, but I’ve been called worse by better people, and if you think it’s the first time I’ve even been called haughty then you just don’t know me very well.
Anyway, cut from those days in the early/mid-90s to today. Many of the folks who went after homes beyond their ken are homeless, or living in motels or in dire circumstances as a composite result of the sub-prime mortgage crisis, the banking crisis, financing the Gulf War, avarice and short-selling of and within the finance industry, dandruff, halitosis and any number of other factors that arguably contributed the state we’re in today. How the hell can it be Clinton’s fault? Is it even George W. Bush’s fault?
[I’m going into parentheses here to say that I, too wish I could blame everything on Bush 43. But on this one, it really was only partly his fault – and I think that the fault of his is in the dumbing down of our country instead of people striving to understand and learn more, rather than come back with snappy retorts. But I also hear very loudly and clearly the thundering voices of those screaming “YES! IT’S BUSH’S FAULT,” a la Berkely Breathed in the 80’s blaming everything on Regan (which was correct, by the way, but that’s neither here nor there).]
So, no, it’s not GWB’s fault. It’s clearly ours! Ours? Me? Not me! No, surely you’re wrong! I’m just standing here!
Here’s why it’s all of our faults. We’re human beings. We’re always looking for the angle. There’s no such thing as purity among humans. Take Communism. It was a GREAT idea! Really, it was! Could’ve worked. People would have had what they needed, and there would have been enough for everyone. But then people had to go and confuse it with power mongering! You see? The Soviet Union wasn’t a communist state! It certainly wasn’t a socialist state! It was a hybrid of the easy application of communist ideas with the desire of a few people to maintain power and influence over a lot more people. They saw an angle, they exploited it, and there you are!
Not a clear enough example for you? Try this on (boy am I gonna get smacked for this one…): take MAJOR LEAGUE BASEBALL! These human growth hormones and steroids that became so abused were not designed for that purpose! Initially, steroid use was designed to help heal inflammation and injury sooner, as was HGH. But some Mr. Wizard realized that if a little was good, a lot would be awesome and make an entire generation of super sluggers! So while their scrota were shrinking, they were creating records that mere humans could never have imagined! But then they couldn’t stop. And it got worse and worse, until it got to the point where no one is sure whether the last ten baseball seasons were actually played by real people or by Petri dishes. Someone saw an angle for something that would have been of benign benefit and turned it into something sinister, or at least shameful. They saw an angle, they exploited it, and there you are!
So now, let’s look at what happened with the sub-primes. President Clinton said, “let’s make it easier for people who can afford to get a house to get one. Let’s make it so everyone who wants one can have one.” My friends, if you don’t understand that when we say “everyone” we don’t mean “EVERYONE,” then you’re pretty much Rush Limbaugh trying to make a stupid literalist point that holds no water. But guess what? A bunch of guys said, “ok, you want everyone to have a house, they can, but we’re going to give them loans at such unfavorable terms that they would have to be stupid to take them.”
PT Barnum wasn’t wrong. Sadly, there is a sucker born every minute, and the financial industry is looking to take advantage of his parents, by telling them that even though they have jobs at Wal-Mart and the corner bodega that they, too, can afford a five-bedroom house.
So what happened? Smart guys made sick money off of dumb guys, and dumber, or at least more innocent guys are left with mortgages they can’t possibly afford when the piper came to call on the so-called smart guys. So everything collapses (and then the banks happened, the market crashed, people panicked, chaos ensued, cue 2009).
Now the mercantile guys are going to argue with me that if they qualified for the lousy loans, and they were willing to accept the responsibility in good times to take them on, what’s the problem? It’s just business. But it isn’t. Business in any other context is working together to come to a fair agreement so that services and goods are exchanged for a reasonable amount of money, such that the person offering the goods and/or services are able to make some profit, and the recipients are able to benefit long-term. Otherwise, my friends, it is just called a swindle. A swindle.
So the partner WAS wrong. Clinton didn’t cause this. Greedy people caused it. The same way greedy people caused ENRON (remember them?), the same way greedy people caused the collapse of the banking system, and the same way that greedy people caused the collapse of AIG, the same way that greedy people have tainted all of the idealistic opportunities created for the greater good over the years.
I urge those greedy people to read Mr. Eckholm’s article, so that they can see what they wrought. Many of them are out of jobs at this point as well. But look at what happened to the people they swindled. The less intelligent or savvy or more innocent and trusting people that they decided it was ok to swindle. Look what happened to them. And I then urge them to get on their knees and at the very least, thank whatever greater power they believe in that this kind of swindle wasn’t illegal. And that the people who are currently struggling are too busy trying to survive to seek the reasonable restitution they deserve for having their innocence preyed upon.
Until next time, when I’m sure that my soapbox will be wet and I am likely to slip – do as I say and not as I do, and you should be alright.