Tag: Occupy Wall Street
I’m a little late, I know — your birthday was last week. But still, congratulations!
Congratulations, also, on scoring that new refi on your Washington, DC townhouse. I read all about your pad: three bedrooms, 2,100 square-feet and it’s still worth just a wee bit more than the $839,000 you paid for it in 2004. Well done! You somehow escaped the fate of 10.7 million of your fellow homeowners who are ass-end upwards on their mortgages. Amazing how you pulled that off, bro! After all, you did tell the Financial Crisis Inquiry Commission that all of this was a “perfect storm” that regulators could not possibly have stopped beforehand. Then again, you’ve always been one lucky S.O.B. Continue Reading
Here’s a re-cap of the past week on Finance Addict! And after the jump our GIF of the week.
- Suffer the little children
Here are just a few ways that children are suffering from the damage caused by the U.S. economy.
- The hidden meanings of debt
The Europe debt crisis and the housing crisis in America both have moral dynamics at play.
- Business lessons from a fat sweaty dolt
When American comedian Louis CK wanted to do a standup show, he decided to go about it a little differently.
- Plan B for “Breakup”
Here’s a round-up of companies that have disclosed their what-if plans for aEurozone breakup thus far.
- Is the UK the new Iceland?
It looks increasingly like UK banking is a case of the tail wagging the dog.
Many observers have talked about a “morality play” when discussing the north vs. south divide in the Europe debt crisis: the prudent Germans, Dutch and Finns vs. the lazy ne’er-do-wells of Greece, Ireland, Portugal, Spain and Italy. Witness:
“It was a kind of morality play, intended to show to skeptical German voters how the Greek government intends to keep its promises to continue cutting public spending and services to meet stiff deficit requirements, despite increasing political opposition.”
-Steven Erlanger in the New York Times.
“[It's] wrong to think of this as some sort of pat morality play, where the Germans have done everything right and the Irish have done everything wrong.”
-Ezra Klein in the Washington Post.
“Even if those from Europe’s northern countries are right in claiming that the euro would work if effective discipline could be imposed on others (I think they are wrong), they are deluding themselves with a morality play.”
-Joseph Stiglitz in Project Syndicate.
What is a morality play, anyway? As Philip Pilkingon explains, the idea behind this Tudor England convention was
that it would impart wisdom to those who watched it. The common people – thought somewhat stupid by the writers – could then follow the simple moral messages purported by the playwright. It was hoped, for example, that if onlookers could see Virtue winning out on the stage against Prodigality, the citizenry would then act more virtuously and be less prodigious and greedy.
The discussion of fiscal prudence vs. fiscal profligacy in Europe does seem to have taken on a normative hue. It’s doesn’t seem to be just about economics, it’s also about who’s a saint and who’s a sinner.
Reading Debt: The First 5,000 Years, has helped me to better understand why. This excellent book is by David Graeber, the American anthropologist who Businessweek described as the “anti-leader of Occupy Wall Street.” While I hope to write a full review of his book sometime soon, I wanted to call attention to his citation of British sociologist Geoffrey Ingham. Ingham says:
In all Indo-European languages, words for “debt” are synonymous with those for “sin” or “guilt”, illustrating the links between religion, payment and the mediation of the sacred and profane realms by “money.” For example, there is a connection between money (German Geld), indemnity or sacrifice (Old English Geild), tax (Gothic Gild) and, of course, guilt.
Very intriguing. Consider this also in light of strategic default, a topic recently addressed by James Surowiecki in the New Yorker. Companies, like American Airlines, often decide to declare bankruptcy for purely economic reasons. When they do so they’re applauded by analysts for making a smart move: they can restructure their debts, renegotiate with the unions and generally get a fresh start.
By some measures over half of all U.S. mortgages are underwater– borrowers owe more on their mortgage than the house is worth. Unfortunately for many, the value of their house may never rebound to the point where this situation is reversed. But instead of following American Airlines’ example, homeowners face great moral pressure to throw good money after bad. Surowiecki:
According to one study, eighty-one per cent of Americans think it’s immoral not to pay your mortgage when you can, and the idea of default is shaped by what Brent White, a law professor at the University of Arizona, calls a discourse of “shame, guilt, and fear.” When the housing bubble burst, the banking industry was terrified by the possibility that homeowners might walk away en masse, since that would have stuck lenders with large losses and a huge number of marked-down homes. So strategic default was portrayed as the act of dishonorable deadbeats. David Walker, of the Peterson Foundation, waxed nostalgic about debtors’ prisons, and John Courson, the head of the Mortgage Bankers Association, argued that defaulters were sending the wrong message “to their family and their kids and their friends.”
Looks like it’s not just the Europeans caught up in a morality play. (For more on the obscured meanings within today’s economic debates see Ed Harrison’s recent post on code words and dog whistle economics.)
Check out our top stories from the past (holiday-shortened) week and see our surprising GIF of the week after the jump!
- What’s underneath the $470 billion TARP? Last week’s publication of the annual TARP audit left many troubling questions.
- Black Friday, television and debt. Black Friday is a good time to look at whether television caused Americans to take on more debt. A study from 2009 says that it did.
- Catfights breaking out over Greek bond swap. Felix Salmon takes issue with the New York Times’ Gretchen Morgenson & her latest article on the Greek bond swap. Is he missing the point?
- Hard lessons from banking layoffs. A few articles have been written recently about the individual experiences of the most recent round of banking layoffs. Continue Reading
A few articles have been written recently about the plight of laid-off bankers. (I always marvel at the coincident timing of pieces like these–and wonder if it’s really a coincidence.)
The articles occupy a broad spectrum. In some cases, for example some of those cited in the Businessweek article, you’d really have to have a heart of stone to not feel some kind of sympathy.
For Schubert, the former Jefferies banker in his third year looking for work, the longer he’s out of a job, the harder it is for him to tell his 10-year-old son to do his homework, he said.
“It might seem outwardly to him that I’ve given up,” he said in an interview this month from his four-bedroom home in Glen Ridge, New Jersey.