Our Default Double-Standard

by Tony Chavira

GREAT article in the New Yorker about the double standard our society has devleoped toward different kinds of entities that deal with default. Let's cut to the chase:

It is now generally accepted that when it’s economically irrational for a company to keep paying its debts it will try to renegotiate them or, failing that, default. For creditors, that’s just the price of business. But when it comes to another set of borrowers the norms are very different. The bursting of the housing bubble has left millions of homeowners across the country owing more than their homes are worth. In some areas, well over half of mortgages are underwater, many so deeply that people owe forty or fifty per cent more than the value of their homes.[...]

Paying your debts is, as a rule, a good thing. But the double standard here is obvious and offensive. Homeowners are getting lambasted for doing what companies do on a regular basis. Walking away from real-estate obligations in particular is common in the corporate world, and real-estate developers are notorious for abandoning properties that no longer make economic sense. Sometimes the hypocrisy is staggering: last winter, the Mortgage Bankers Association—the very body whose president attacked defaulters for betraying their families and their communities—got its creditors to let it do a short sale of its headquarters, dumping it for thirty-four million dollars less than the value of the building’s mortgage.

When it comes to debt, then, the corporate attitude is do as I say, not as I do.

But, then, when has that ever NOT been the case? The article also points out that 81% of Americans feel that it was "immoral" not to pay thier debts. But then, Americans often feel irrational obligations to entities that do not have their interested in mind at all (oil companies, agribusiness, big banking... congress). This mindset was cleverly skewered by Jim windolf in the Atlantic Wire today in an article titled "If I Were A Middle-Aged White Guy"

If I were to see a coworker slacking off, I might remark, in jest, "Some of us have work to do." And if they told me to fuck off, I would call human resources and report them, because middle-aged white guys should not have to be subjected to such abusive talk. I would also discuss the incident with my immediate boss, and if he were to tell me, "You just need to worry about your own work and let me take care of the rest of the floor," I would probably say, "It's funny how you asshole liberals are always talking about 'it takes a village,' but the minute someone steps up to point out that one of the 'villagers' is slacking off, you get nothing but shit for it." And if he were to reply, "Are we done here?", I would probably just say something like, "Yeah, I guess we are. I guess nothing's ever going to change around here," and then I would walk back to my desk, muttering to myself. For a little office humor I would make sure a coworker or two heard me use the word "shotgun."

If I were a middle-aged white guy, and my children were doing poorly in school, I would smash things in their rooms, the lamps and vacation souvenirs and such, and I would inform them that the stuff I had just broken to bits had been gained in exchange for a certain thing known as money, and you get money in this world because you have skills, like computer programming, and you acquire those skills only after you earn halfway decent grades in school, and then you offer those skills to an employer who will pay you for your services, even if they never take it seriously when you make the slightest remark about how you're the main guy pulling his weight.

Question: How long does someone live like this before they begin to notice that they're not the only ones painfully struggling to make ends meet in a system that does not look out for their best interest? Answer: Who the hell knows, man.


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