Several months ago I was captivated by an episode of This American Life called The Giant Pool of Money which was a joint effort of T.A.L. and N.P.R. news that explained exactly how we got into the housing crisis in a way that I could understand. I listened to it two or three times, took notes, referenced it in a sermon. Apparently I wasn’t the only one to feel that way. T.A.L. has received more positive feedback on that show than on most any other and as the economy has continued to spiral downward the two guys who collaborated to do that show, have started a daily podcast, and they just did another episode for T.A.L. last week, Another Frightening Show About the Economy, that once again opened up the scary, scary state of our economy in most helpful ways for me. I listened to part of it earlier this week and finished it this morning upon waking earlier than I really wanted to.
What struck me about the first show, “The Giant Pool of Money”, in listening to folks at every level of the mortgage crisis (from individual borrowers who had gotten in way over their heads to high level investment managers who had fueled the insanity of loans such as No Interest, No Asset loans because they needed more and more mortgages to bundle together to create securities to sell to the highest level of investors because there was a lot of stray money out there on which folks wanted to turn a decent profit- listen to the episode, or read the transcript- I’ve been working on a lecture all day and I’m no where near as lucid an interpreter as they are) was that one could sniff greed at every level. From people borrowing money to live in houses they couldn’t afford, to people encouraging such borrowing, to people ignoring risk and bundling mortgages so they could pad their pockets… Greed all the way down and all the way up. And what a mess that greed made.
Well, that was only the tip of the iceberg. Last week’s show revealed a whole other piece of the puzzle which was a major unregulated segment of the market, Credit Default Swaps, which they describe initially in this way: “If bad mortgages got the financial system sick, this next thing you’re about to hear about, helped spread the sickness into an epidemic”. I am not even going to try to explain it to you. It made sense to me, but I’d have to listen three more times before I could distill it to share it. Please do listen. Interspersed with the various segments was, as usual, music, frequently (if not consistently) Depression era music. Which got me thinking…
Why aren’t people jumping out of windows this time around?
Not that I want to encourage suicide in the face of financial ruin, but, in some ways, it seems like things are even worse now than they were then- o.k., yes, the stock market isn’t yet as low as it was then, but… it has fallen farther, and the particular mess we’re in is… horrific. Truly horrific. And lots of people have a lot to lose and bear responsibility and… isn’t that enough to seriously mess some people up? Perhaps there have been some terrible personal tragedies in the face of this financial crisis, but I haven’t been hearing about that, and one would think that we would be hearing…
One of the members of the congregation I served was a long time, faithful member of the stewardship and finance committee. He regularly would try to educate me about the differences between his generation and mine when it comes to money, particularly to borrowing money. “My generation,” he’d say, “And certainly the generations before me, we wouldn’t buy a house or a car until we had the money to buy a house or a car outright. But your generation it’s all about the monthly payments. All you have to be able to afford is the monthly payments.” I keep hearing his voice as I hear the radio show tell me that the root problem of which the housing crisis and the credit freeze up are only symptoms is that everyone is carrying too much debt. I wonder if the fact that folks assume debt so casually now, and the fact that folks are more prone to think only in terms of monthly payments (on the simplest scale, but I think this can be translated to larger and more complex financial interactions as well) if this hasn’t created a whole society (world?) of people who have no sense of real personal responsibility attached to finances and hence… no jumping out of windows. And really, hence, the horrific mess we’re in.
A friend and I went to hear Shane Claiborne speak a few weeks ago, on the day that the stock market dropped the most it had ever dropped in history. She shared that when it comes to money she’s fairly medieval, not understanding complex speculation and lending and borrowing- she thinks more in terms of bartering. Well… maybe we all should.
I write this knowing full well that I still have student debt (from undergrad- that we’re slowly chipping away at), and we have house debt, no car debt at the moment (woohoo!). We bought a house based on the down payment and monthly payments we could afford. We are a part of the debt culture. I am a part of my generation. We are living responsibly, for the most part, there’s always room for belt tightening. But if I gambled with our livelihood in the hopes of turning a quick buck and it turned out badly- I’d be devastated. And worse, if I gambled with someone else’s livelihood in the hopes of turning a quick buck and it turned out badly- I’d be destroyed. I don’t know that I’d jump out a window, but I’d feel like it.
So what is up with the banks trying to get off as lightly as possible? What is up with no one wanting to bear consequences for bad decisions? What is going on?
Truly frightening these times we’re in. May many, many hearts and minds be changed.