Between classes on dramatic structure and narrative poetry while working toward my MFA I’d sometimes attend an unfriendly Garden City bar for a pint. One day, in 2008, events external to ESPN had become so compelling that even those cold provincial pubsters switched one TV (a little one) to CNN. My memory’s hazy–was it the floor of the House or the New York Stock Exchange? was it mostly the ticker I watched or the muted heads, their panic unspooled across the screen in tortured, Close Caption’d grammar?–but the thrust is clear: the economy was blowing up. The Dow was down 600, 650, 700. I sipped my beer, then returned to Adelphi just in time for a playwriting workshop. This is my preferred anecdote to explain how I acquired such a mysterious and ornamental piece of debt.
Within a couple hours of finishing my last class, Arielle and I were beating a retreat back to Asheville; and three years after graduating from UNCA we were renting a tiny apartment in Kennilworth, she waiting tables and I languishing among the unemployed–only now with a Master’s. When we had fifty bucks to spend we bought whisky and smokes because, what else do you do with fifty bucks? It was basically impossible, then, to imagine ever playing a serious role in things.
This post isn’t about climbing out of that hole. Let’s skip the montage for now and cut straight to this moment: we done grown up. We have professional accreditation. We host fundraisers for political causes. We plant trees. A bottle of whisky lasts us a year. Last night we were two of the 149 folks who had a hand in electing the new State Senator from the 49th district. I started my own PAC.
It hasn’t been entirely gradual or entirely sudden–it’s been like watching someone who’s never driven stick driving stick for the first time.
Now we’re very near the heart of the industry that so hysterically sowed bombs throughout the nation’s economy in the aughts. An objective look back at the fiasco makes pretty plain what happened: after 9/11, when we went to war, the Bush administration told us to spend money–more than we had, if at all possible. Repeal of time-tested regulatory framework had plopped immense investment banks right into the heart of the game, and the game, largely diluted of referees, perverted itself into a blind, hyperventilating greed machine. Average everyday normal people were sold houses they couldn’t possibly afford by people who knew better.
Today, we’re among the younger Realtors in the field. We’re surrounded by people who linked buyers to financiers during the bad old days. Lots of them made lots of money doing it, and some of them got clobbered when the bubble burst. Loan officers–the ones who liaise between the homebuyer and the bank’s underwriters–still tend to chalk much, if not most, of the crisis up to greedy buyers. This is a shockingly common refrain in the culture here and it drives me nuts.
On one side of the table is John Q. Public. He probably doesn’t have a degree in finance. He just wants a house.
On the other side is Pierce A. Private, a professional of the financing industry. Pierce is backed up literally by rocket scientists who’ve found ways to package the mortgages of John and his ilk into financial instruments that are highly attractive to the Poseidons of the world’s ocean of idle money. Pierce’s primary obligation is to make sound use of his bank’s treasury (which is, after all, the collective product of your work, and mine) and he has vast resources at his disposal to make sure his bets are good. Pierce’s masters, the elites of American banking, are the wealthiest people in the world, made so because they occupy seats of awesome responsibility.
John’s been renting for a long time now, or maybe he owns but they’ve been blessed with another baby on the way and they’d like a little more room, a yard maybe, maybe a fence for the dog their oldest has been pestering them about. Well, John, what say we do you one better? With this adjustable rate mortgage, I’ll get you into a house twice the size of what you’re asking–I imagine you’ll want a pool–and you’ll never have to worry about paying that higher rate that kicks in two years from now ’cause you’ll sell it before that for a profit. For a profit? But I don’t have any money to put down! I’ll have no equity! That’s O.K., John, your property value will continue to rise–see this chart? You can always bet on the American housing market. Prices go nowhere but up. And don’t worry about documenting this income you say you make–your word is good enough for us.
Who is to blame? A couple years later, John Public is bankrupt and his flimsy vinyl box of a McMansion weeded up, blighting–though not without company–the neighborhood. He’d love to buy again, something small and sensible, but his credit’s ruined. So he rents at a wildly inflated price tag that leaves them nothing at the end of the month. Pierce Private, meanwhile, made it through all right. His masters certainly did. Their profits were privatized, their losses socialized. And today the banks are bigger than ever. Yet what you hear, again and again, is “greedy buyers”. From where this obsession with victim blaming?
We’ve created a culture where everyone’s at fault so no one is to blame. That’s me flying my nerd flag by paraphrasing a quotation from President Bartlet in TV’s The West Wing. I can’t help but think about it when in a room with one of my seniors talking about the housing bubble. I sit, for the most part quietly, and think: You are wrong. It was your fault. You were a bigger part of the problem than you can comfortably admit. You don’t want to concede that your pursuit of profit helped put an entire generation behind the eight ball. You’re only human–why would you want to confess to something like that? But don’t assume I’m like you.
It’s easy to forget, when you’re very young and broke, that you still have one enormous thing in your favor; an advantage impossible to overstate that might, if you just keep your head above water, deliver you to something like the life you imagined when, in the bright happy foolishness of your youth, you strode around campus revolving important affairs in your mind: you have more future than them.
Whatever regime is currently in place will retire and move on and pass, and someone will have to take their seats. It isn’t necessarily historic, it’s just a shift change. You’re expected to be there to clock in and go to work, but what work you do, and how you do it, is pretty much up to you. We can make our own weather. We don’t have to be like our parents.