A Slightly more Objective Forecast
Here we go again. Not to cast a cloud over things.
Surely you have seen this already, so forgive the repetition. This is a reminder that we are living at a precarious moment, and that forecasters of growing economic stress are not all conspiracy theorists and fringe economists.
But this post is not intended as an opportunity to agree or disagree about the reality of this thing that is waiting around the corner. Rather, I intend to ask what we do with this reality. What kind of preparation is prudent under these circumstances?
13 Comments
Bruce
June 14, 2010This video is hard to argue with and reflects the absolute stark reality. I have noticed when reality is bad news people choose to stick their heads in the sand for the most part. This is just one sliver of the bad news we are facing, yet if you want to discuss the truth with people they will look at you like you are from another planet. Sad.
I really don’t know what kind of preparation is prudent. Things seem to be out of our hands.
Thanks for posting this.
Akbar Lightning
June 14, 2010what i see as common in these phenomena is the culture of dehumanizing whatever market is being referred to…these aren’t homes, they are real estate opportunities…
my point is that, not only have we entered an age where we dismiss the nature of our work, but that the work is actually built around human suffering, taking from others…
the post asks the question, how does one respond…
i’ve been reading about the Black Plague lately, and i find in that part of history some great parallels to our time…
my point is that i think the answer to dehumanizing forces is humanizing forces…like this…communities commited to exploring commitments to values, inviting discussion…BEING ENTHUSIASTIC even in the midst of calamitous forces out of our control. we have just one life, that we know of, and if we spend that life struggling against nature, then we will miss opportunities for the joy, and joy is infectious, belief in progress is infectious, the more so when things are really bad…
i am reminded of those classical musicians aboard the titanic…
Logocentric
June 14, 2010well said, Bruce. denial sucks.
but despite all the gloom this post and your comment suggest, i’m still pulling for a miracle. i’m sure it isn’t far away. faith is the antidote to uncertainty, etc.
Logocentric
June 14, 2010and Akbar: thank you for the image of the musicians. i didn’t see your comment before i posted my previous one….i think we’re working along the same thread, or at least a similar one.
Greg
June 15, 2010I do not have that worry that is stated here. When I purchased my mortgage I was intelligent about the product I picked and saw the ARM marktet for what it was. Decided on the responsible sure thing in a fixed 15 year loan. Too many in this culture are allured by risk and the gamble of perhaps winning big. But with the government absolving them of responsibility it is easy to do that. When you no longer have to own the consequences of your choices, risks and gambles are easy to take. If you are in an arm then get out now. If you ignore the signs well then you will learn your fate soon enough.
Logocentric
June 15, 2010Greg: i respect your responsibility as a homeowner. but your comment betrays a position that is beholden to the old American free-market myth: that if individuals act according to their interests, the market will accommodate and reward them. what i see is that we are part of a huge, interdependent system. and 20th-century (particularly post-ww2) economics rely on a sort of mass-psychology model in which that position is not really tenable. defaults on mortgages, for example, appear to be a mass phenomenon that goes way beyond individual actions and planning. in such a scenario, even those who have acted ‘responsibly’ are not immune to the entangled forces that could drive up inflation and thus the ability for an individual to afford their home. i’m not saying this to paint a picture of doom and gloom–but rather to say that we’re in this boat together. economic decline is systemic and felt not only at an individual level.
globatron
June 15, 2010we are all part of the same system. definitely Logocentric. what hurts one hurts us all. if only we could realize that on so many levels we could learn how to work together.
Greg
June 15, 2010Ok Logo/Globa, I understand how the system effects us all. I have 5 empty, and I mean abandoned, houses on my street alone. I was not implying we are not all intereffected by this. The point was the personal responsibility aspect of this entire thing has been overlooked. Your statements, if I read them correctly, are placing responsibility on the system and the fact the “predatory lenders” are the ones causing all this. Where did the responsibility of the consumer to be educated and intelligent go? Don’t blame the bar if the alcoholic orders another drink. People in this country need to wake up and stop with the instant gratification culture we have developed. Something called hard work and patience has it’s merits. But greedy people (god I am going to hear it from Akbar now) are offered this get more money now proposition in the form of the ARM loans (I was sold one of these by a mortgage guy who came to my house and tried to sell me on how great a 5-1 ARM was). I saw from the very first word the disaster that could easily happen as I know interest rates do not stay down forever and I foresaw the rate going up.
MY choices protected my family and myself. This is not a trumpet my own horn thing by any means. The message is that in the interdependant landscape of everything we seem to forget to hold people accountable to their bad choices. Bailouts, bankruptcy, the entire culture has shifted to absolve us of the need for us to own the consequences of our mistakes. Perhaps if there were no bailouts and people understood that this was their home they were risking, they wouldn’t take chances.
My wish would be for the government to outlaw the ARM loans AND put back in place the stringent qualifying guidelines for mortgage loans. The reduction of these I believe started this entire cycle by offering those who could not afford it something of a dream. Perhaps as a country we should get back to the lesson of live within your means.
Anywhoo I am out. Gotta go earn the mortgage.
Akbar Lightning
June 15, 2010yo greg, i agree with everything you’ve said…however, i disagree with your attitude toward the victims…
because, and this goes back to a deep interest of mine, that has to do with how we relate to knowledge and education…
greg, you are smart enough to know the difference between a scam and a good deal…now, of course i agree that these lenders should be regulated so that they can not get away with lending to people who are not qualified…
but personal responsibility…how do we think of the personal responsibilities of a 10 year old…they are different than those of a 30 year old…
in other words, people who have higher levels of knowledge about any particular act, are therefore able to understand, and therefore take conscious higher levels of risk…
the problem with the mortgage crisis was that lenders were actually ‘banking’ on the ignorance…taking advantage of the unconsciousness of these people, and in this case we ought not spend time looking down our nose at people who already have it worse off than we do…we ought to put the blame on those people who, with full knowledge, made the lives of poor people worse…and yes, did so by taking advantage of their ‘desire’ (greed as you say) but doing so to feed their own greed…
it’s funny you have an easier time holding the lower classes accountable for their greed than you do the upper classes…i’m the opposite in that regard..
globatron
June 15, 2010if ignorance is the problem then i know many ignorant people who are very intelligent.
a very good friend of mine who is college educated and a long time business owner took a bad loan and lost his home.
i really have a hard time saying he was ignorant or did not have the education to know the risk involved. i do see what you are saying though akbar.
if these loans were aimed at high school dropouts i could understand how edu-mu-kation would be the issue.
good point about Greg seemingly having an easy time giving big business the break versus regular working class folks who were caught in a scam.
i’m interested in his response.
Akbar Lightning
June 15, 2010i’ve said it before, and i’ll say it again…
we have reached that point in human history where we no longer have to work as hard as we do to maintain our survival, so we are having to construct more and more complicated ways to avoid the reorientation with nature that is necessary for our future…
that reorientation will require better sharing…more time spent in leisure and education with our families…
industrialization has enabled us to eat and house ourselves with less work than ever before…we have yet to really face this fact…instead we are stockpiling wealth, to what end?
Greg
June 15, 2010Alright well let me reply, first I would say to Akbar you ask about stockpiling wealth, to some wealth is goal. That wealth affords them the opportunity to have more pleasure and more options for pleasure. That I would say is the drive. The difference in taking you family to the Evil Mouse kingdom vs having a backyard barbeque. So that is the reason people seek to obtain wealth, to provide more options for pleasure I would say.
You seem very much the anti-materialist so I am sure that it would not be a priority to you to have things. TO some of us it does. I like owning my PS3 and 61′ HD Plasma set with the 5 computers and lab I own. It might not be for all but it is what I like. Everyone has a priority, these usually for the most part take resources of some sort. Sorry but I raised three daughters and hanging out just sitting chatting with Dad was okay for a little while but soon became the definition of boredome. It is a new world, I am just not thinking you are being realistic about what the new world is coming to. We have tvs in our cars there is more distraction than ever and you think we are going to connect more as humanity? No no no, I disagree completely, I believe we are becoming less connected in our humanity.
As far as the standard, I hold all people to the same standard. You don’t blame the Lion for eating the gazelle. It is what it is. In every facet of existance there have always been predators and prey. The key to survival is learning to avoid becoming prey. This is probably a very core and basic analogy but true still with humanity none the less.
I know you will ask the moral question, does that make it right? I have no idea. I know though if you take away the ability to learn and the motivation to learn the prey becomes lazy and easier prey when the new predator comes along. If you doubt that look at all the people taken advantage of in electronic scams and fraud.
People who have been successful are just as accountable as those who struggle. Ok, let me put it this way, this is like blaming the water when someone who can’t swim decides to get in the pool. Why is the water at fault? It is being what it is. Salespeople have been taking advantage of desparate people forever, desperation makes people hasty and foolish. I have done things like this myself, and I learned.
I guess the point I am trying to make is, you want to blame everything on those who would seek to be an opportunist when the victim should be better informed. People are going to try and sell something, always, from cars, to food, to houses, to land there will always be someone trying to sell something, does it make them wrong for getting the best deal they can?
If people begin to get more aware and learn to not kneejerk at the biscuits offered to them with emotional reaction. If that happens then perhaps this culture will change.
You wanna a simple example, look at soccer. It is popular around the world but not in the US. Look at football, popular in the US but not around the world. Why? Because soccer takes a long time and investment with minimal returns (scoring) for the viewer. Football is about scoring fast and lots of gratification with frequent success. That is the culture that is America and that is why the predators have such an easy environment to work in. We want it now and we want it all.
So I end with the way I started, don’t blame the lion for being a lion. The gazelle should learn to run faster. 🙂
Akbar Lightning
June 15, 2010in a weird way i agree with you greg, i think on some level we are on the same page, just reading different paragraphs…
first of all, i’m sure the gazelle blames the lion…
my point is, i’m not talking about ‘savings’, i’m talking about wealth…
as chris rock says Shaquille O’neal is rich, the white guy who writes his check is wealthy!
i am an xbox player, so perhaps this is the essence of our differences…he he
i have compassion for the poor because i grew up in the american version of poverty, which is, i’m sure different from 3rd world versions of poverty…nonetheless, my successes have had a lot more to do with luck, than with my efforts to outrun the lions…and i will always look for a way to defeat the lions, because, using your nature analogy, i am more a gazelle, than i am a lion…i have not forgotten that…
the difference between us can perhaps be characterized as thus…
i have seen the limits of my own reason, and have been crushed from time to time in this life, and as a result i have a lot of compassion for those who have not been as lucky as i have, even though they have utilized some of the same methods of intelligent and responsible behavior.
like you, i am a man of faith, but i don’t think god rewards us materially…i am not a prosperity spiritualist…because if one bases one’s spirituality on material and then has material shortfalls, then one is liable to blame god…
we are all equal, spiritually…and those with great wealth have a responsibility to more than themselves, precisely because they have been lucky…we are all lucky…