What I want to know is why people are shocked by the economic downturn.
No, I'm serious. Why is such a large portion of the American population shocked and surprised?
America has, for quite some time, been building up a culture of debt. My father gave me a Washington Post article on the matter about five years ago, when I was a senior in college. (It was hilarious timing, as I had spent the entirety of that particular Christmas break trying to figure out how to ask him to help me with my schoolbooks.) The article basically said that we had built a culture in which keeping up with everybody else was more important than financial responsibility, and it predicted dire things ahead if this trend continued.
That was in 2003.
We haven't learned anything, obviously.
To be fair, I don't know how we could possibly expect the American people to exercise any kind of fiscal restraint given the example that our government sets, but honest to God, people, show some fucking common sense.
Right up front, the pot will admit that she is in fact a lovely shade of black, which I'll talk more about later.
The roots of the problems have been discussed ad nauseam elsewhere, so I'm not going to touch on those again. I'm appalled at the lack of ethics that banks demonstrated in creating these sub-prime lending instruments (oh my God, the doublespeak, it is here), but even more so, I'm epically disgusted at the general stupidity of the American populace.
If you make $40,000 a year, you CANNOT AFFORD an $800,000 house! Why is this so incredibly hard to comprehend? If money coming in is less than money going out, you are living beyond your means. This is unsuitable to your future financial health.
I think that Americans have gotten lazy and envious and greedy. obviously we are all entitled to our McMansions, our Lexuses, our month-long vacations on the Riviera (although if you have a job that allots you that much vacation time, please tell me where so I can sign up!) And I think that's what infuriates me the most - the sense of entitlement.
Right now, I make $42,000 a year. When I got out of college, I was making $28,000 a year (which, over 3 years at that company, inched up slowly to $38,500 a year but only because they realized that the turnover rate was 80% and gave across-the-board raises to try and stem the tide.) For the last four years, I've lived in fairly expensive suburbs of Chicago. This was a poor decision on my part; I valued time with friends and ease-of-access to same over a less expensive apartment somewhere else. This has resulted in credit card debt; $14,000 to be exact. I also have a car loan and a student loan.
When I stop to think about it, the fact that I have that debt makes me kind of frantic. The really annoying thing is that much of it was for things that were actually necessary as opposed to I-want-it: at least half that credit card debt is from my car and various repair costs, rental car costs, etc.
So I'm not exactly in a position to sneer at people who are carrying debt. I have it; I'm doing my level best to pay it off. (My new apartment is actually helping with that; although the rent is higher, I don't pay for heat. Although I pay for cable and stuff, I eat out or order in a whole lot less.) Ideally, I can get it all paid off within 3 years. (For the credit cards, anyway.) And I've reached a really helpful point where I can make triple or quadruple the minimum payment relatively easily. This is a great thing.
But getting back to my point, I completely fail to understand how someone who makes what I do can think that they can afford a house. And I understand that mortgage brokers said "oh, no down payment? bad credit? no problem!" but I still don't understand how the consumer failed to consider the consequences or ask questions. And thus, I have exactly zero patience for anyone going "oh, why me? How did this happen to me?" It happened because you were stupid and bankers were greedy. Shut up, get up, and figure out a way around it.
And while I'm on the subject, people really need to re-read the definitions of "want" and "need." I want at least three new video games coming out this holiday season. I need to eat, get to work, pay my rent, and pay my electric bill. Guess which one loses? (Okay, not really, because I have gift certificates and indulgent parents and Christmas is coming up, but *I'm* not spending money on them, because I have other things I NEED to do - like pay down my debt.)
On the subject of the bailout, by the way - I don't like that it is happening, in the slightest. But I am cognizant that at this point it was very likely the only way to prevent an utter crash.
Which reminds me of my third point - The media is so very not helping. Granted, many of the companies that failed had significant fiscal problems - WaMu and Wachovia both had ridiculous exposure to sub-prime. But did anybody else notice that as soon as Lehman failed, the media started squawking about how WaMu was next? I did. And what happened? As soon as the media started saying that, WaMu lost 10% of its deposits in a 10 day run. Once the dust from that settled, the media started saying Wachovia was next. And what happened? Gosh, people lost all faith in Wachovia and they had to organize a buyout.
Fearmongering pisses me off.
Okay, I think my rant has lost any threads of coherence it pretended to have, so I'm done.
America has, for quite some time, been building up a culture of debt. My father gave me a Washington Post article on the matter about five years ago, when I was a senior in college. (It was hilarious timing, as I had spent the entirety of that particular Christmas break trying to figure out how to ask him to help me with my schoolbooks.) The article basically said that we had built a culture in which keeping up with everybody else was more important than financial responsibility, and it predicted dire things ahead if this trend continued.
That was in 2003.
We haven't learned anything, obviously.
To be fair, I don't know how we could possibly expect the American people to exercise any kind of fiscal restraint given the example that our government sets, but honest to God, people, show some fucking common sense.
Right up front, the pot will admit that she is in fact a lovely shade of black, which I'll talk more about later.
The roots of the problems have been discussed ad nauseam elsewhere, so I'm not going to touch on those again. I'm appalled at the lack of ethics that banks demonstrated in creating these sub-prime lending instruments (oh my God, the doublespeak, it is here), but even more so, I'm epically disgusted at the general stupidity of the American populace.
If you make $40,000 a year, you CANNOT AFFORD an $800,000 house! Why is this so incredibly hard to comprehend? If money coming in is less than money going out, you are living beyond your means. This is unsuitable to your future financial health.
I think that Americans have gotten lazy and envious and greedy. obviously we are all entitled to our McMansions, our Lexuses, our month-long vacations on the Riviera (although if you have a job that allots you that much vacation time, please tell me where so I can sign up!) And I think that's what infuriates me the most - the sense of entitlement.
Right now, I make $42,000 a year. When I got out of college, I was making $28,000 a year (which, over 3 years at that company, inched up slowly to $38,500 a year but only because they realized that the turnover rate was 80% and gave across-the-board raises to try and stem the tide.) For the last four years, I've lived in fairly expensive suburbs of Chicago. This was a poor decision on my part; I valued time with friends and ease-of-access to same over a less expensive apartment somewhere else. This has resulted in credit card debt; $14,000 to be exact. I also have a car loan and a student loan.
When I stop to think about it, the fact that I have that debt makes me kind of frantic. The really annoying thing is that much of it was for things that were actually necessary as opposed to I-want-it: at least half that credit card debt is from my car and various repair costs, rental car costs, etc.
So I'm not exactly in a position to sneer at people who are carrying debt. I have it; I'm doing my level best to pay it off. (My new apartment is actually helping with that; although the rent is higher, I don't pay for heat. Although I pay for cable and stuff, I eat out or order in a whole lot less.) Ideally, I can get it all paid off within 3 years. (For the credit cards, anyway.) And I've reached a really helpful point where I can make triple or quadruple the minimum payment relatively easily. This is a great thing.
But getting back to my point, I completely fail to understand how someone who makes what I do can think that they can afford a house. And I understand that mortgage brokers said "oh, no down payment? bad credit? no problem!" but I still don't understand how the consumer failed to consider the consequences or ask questions. And thus, I have exactly zero patience for anyone going "oh, why me? How did this happen to me?" It happened because you were stupid and bankers were greedy. Shut up, get up, and figure out a way around it.
And while I'm on the subject, people really need to re-read the definitions of "want" and "need." I want at least three new video games coming out this holiday season. I need to eat, get to work, pay my rent, and pay my electric bill. Guess which one loses? (Okay, not really, because I have gift certificates and indulgent parents and Christmas is coming up, but *I'm* not spending money on them, because I have other things I NEED to do - like pay down my debt.)
On the subject of the bailout, by the way - I don't like that it is happening, in the slightest. But I am cognizant that at this point it was very likely the only way to prevent an utter crash.
Which reminds me of my third point - The media is so very not helping. Granted, many of the companies that failed had significant fiscal problems - WaMu and Wachovia both had ridiculous exposure to sub-prime. But did anybody else notice that as soon as Lehman failed, the media started squawking about how WaMu was next? I did. And what happened? As soon as the media started saying that, WaMu lost 10% of its deposits in a 10 day run. Once the dust from that settled, the media started saying Wachovia was next. And what happened? Gosh, people lost all faith in Wachovia and they had to organize a buyout.
Fearmongering pisses me off.
Okay, I think my rant has lost any threads of coherence it pretended to have, so I'm done.