I am not an asshole. I’m not mean. I’m not a knee-jerk anti-establishment liberal, either. I’m not saying the recent economic crisis is good because venture capitalists can easily buy low, especially real estate foreclosures (but stocks, too), and later will almost certainly make money off these investments. I’m not saying it’s good because the banks deserved to lose money. But I am saying there’s an up side.
Hear me out.
I’m personally affected by all of it. I may lose my house. From that perspective, it sucks and I hate it. But from a global perspective, it may be just what we need. Under Reagan and Bush I, America and Americans were the most powerful people in the world. Under Clinton, we started to use that power on a global level, going on peacekeeping missions, increasing aid to foreign countries, and moving our own industries abroad at a staggering pace. We lowered trade barriers, too, believing that we were invincible and none of this would ever end. And banks started seeking out homeless people and offering them homes at subprime rates. I say sought out because that’s not an exaggeration. Banks and loan mercenaries actively sought out clients for these loans, both as re-fis and to first time homebuyers (i.e., homeless people). Many (most) of these subprime loans were provided without documentation. These “no-doc” loans basically meant that the homeless person could say, “Yes! I make $200k a year! Trust me!” They didn’t have to sign an affidavit, either. Because the loaners didn’t want to know the truth. The entire premise here was that the loaner remain ignorant, and then cut the debt into pieces and export it. That’s right, financial institutions across the planet now all owned slivers of the U.S. home market.
Now that it has finally crashed, our country will have to learn to be humble again. We may not even be the number one economic power in the world, for at least a time. $holders who made a bad business decision will be hurt, although not as much as the folks who owed them money, but at least they’ve been hurt enough to stop offering these ridiculous loans. And a few of these folks are actually able to allow the foreclosure to occur and walk away with cash in pocket. Their credit ratings are crap for about 7 years, but at least maybe they’ve got a nest egg to ride out that storm.
Overall, of course the crash sucks for now. But it’s also an AFGO. A Fucking Growth Opportunity. Those who borrow have to recognize that the purpose of a loan is to make money (so if the loan looks too good to be true, and if the house looks like more than you can afford, it probably is). And those who lend have to go back to the roots of their profession: Yes, you can make money. But the idea behind homeloans is not to be a shark; it’s to help people get a place to live. It’s a helping profession.
And the rest of the world can now see that the U.S.A. is not an unstoppable juggernaut. We’ve done nothing but lose for the last eight years. We now have the chance to come out not swinging but being humble, with the spirit of true global unity and change.
Is there any chance we’ll learn, or are we just going to wind up the same old punch?