February 19, 2009
I want to believe.
For most of my life, I have lived under the governance of those whose beliefs were firmly anchored in Max Weber's divinely-sanctioned meritocracy, conveniently justifying their own current power and any actions undertaken to retain that power. For most of my life, I have lived under the governance of those who believed, consciously or subconsciously, in trickle-down economics: since what had maximally benefitted their own success must, of necessity, benefit all. I have watched again and again as the rules of the game are subtly co-opted to shift outcomes and reinforce those beliefs.
I have watched how the media, mass or blogosphere, shapes attitudes and then is shaped by those attitudes in turn -- but only by that part of attitude which improves profit, be it bottom-line corporate profit or ideological profit. When uncomfortable truths raised their heads above the water, I have watched as the denial machine spun into action, claiming to empower people and the individual free will to make an educated choice for oneself at the same time as it undermined the educational tools to make that educated choice.
I have watched as a thousand and then a thousand thousand voices muddied the waters, no longer skeptical analysis or even a will to truly understand but the determination either to reject blindly or support equally blindly, based on whichever authority is to be trusted without understanding or question, and to drown out all opposition through repetition and repetition and repetition again. I have watched those ripples surface in television show and videogame consumed casually and without thought. Especially I have seen them surface in the increased focus on staying on message, be it the soundbytes of a political platform or the determination of customer service to answer only the existing FAQs, regardless of what question had actually been asked. And to further fog out the relevant details, I have seen how investigative reporting increasingly shifted toward celebrity non-news, amid a popular determination to drown out reality in personal entertainment and a personally customised environment.
(But I cannot seek comfort in escapism. How would that improve in any way the things I see?)
Most recently, I watched as the political machine of what is still arguably the most powerful representative democratic government in the world finally reacted against the legacy of the past two terms, a squandered good will born of tragedy, and a growing economic crisis that could no longer be completely irrelevant to the powers of the world. I watched as the political net fished up two candidates who, each in their own way, were reactory expressions of the popular will against the looming shadow on the horizon. And because I guessed wrong by a year on the exact timing of that crisis, thinking it would come fully to light only after the greater part of the campaign had already ended and the opposing ideologies had already folded in their loyal supporters, I guessed completely wrong as to who those two candidates would be.
I say what I see -- and then, since I will engage neither in manipulatory tactics nor in preaching to the choir (and thereby engaging that vast potential of reification through repetition), I mostly keep silence. I talk to the people I talk to. I don't use their agreement or non-agreement to make my points to the audience instead. Without intending it, in doing so I have chased away more than one reader of this blog, who had sought Wisdom and had looked here for Answers.
I have observations, and thoughts, and speculations only. I try to see things as they are, and not as I would have them be. I am as ruthless toward myself as toward any other, more so: and the closer a person comes to me, the more I expect of them and the less gently I treat them. Sometimes, what I see suggests a course of action which might resolve one or another particular issue -- but I don't wrap either the problem or the solution in tissue paper. And because I see things without a comfortable fuzzy lining, I often dearly want to discover I am wrong.
But, I want to believe.
I have seen a campaign based on the vision of change, of Yes We Can: but that was only words, and words are cheap.
I have heard so much genuine cheering in the course of that campaign and afterward, but the cheers are ringed with desperation.
But now I see a president who has gone beyond words into action so immediate that it still continues to startle the pundits, never mind that the situation is such that immediate action is needed. I don't agree with all the positions he holds or actions he has already taken -- although a part of one of those actions might simply be to lay the groundwork for the freedom of action he will need in future -- but how long has it been since a newly elected politician has hit the ground running?
Above all, I see a president who seems to have opted out of the three great mythos of our time: that there is a natural ruling class whose fortunes are purely deserved, that our destinies and our fortunes can be built solely upon our own individual actions, and that if someone falls into poverty, it is always their own fault.
Maybe it is only from outside that such an opting out is even possible. I abhor the self-illusion which allowed the earlier self-congratulation -- but maybe the racial barrier could only have been broken with someone from outside the existing black culture. Those in a position of authority within it have already expressed their resentment of him, when they thought the microphone was off. I think that resentment is still very close to the surface. I want to believe that people might still be willing to accept that solutions to problems which have been generations in the making will not be painless -- yet at the same time I know that most people naturally don't want to feel pain, even the pain of a potential healing.
How long has it been since economic policy has been based on a belief that the wealth of a society can only ever trickle up? How long has it been since there has been a president who has remembered that a country is built on responsibility not only for self but within the context of community, and that community is built upon every one of its families, not only those who fit an "ideal" mould? How long has it been since there has been a president who invoked the blessing of God not only on an abstract nation ideal, but upon its people?
I want to believe ... but with the growing sense of possibility comes also a growing fear. One reason I never take political platforms at face value, even those which seem genuine, is that I know the extent of the established governmental, partisan, and corporate infrastructure; and I know too that changing the status quo which has raised it to such power is never in its interest.
Above all, perhaps: I know at what cost people will cling to their illusions.
For most of my life, I have lived under the governance of those whose beliefs were firmly anchored in Max Weber's divinely-sanctioned meritocracy, conveniently justifying their own current power and any actions undertaken to retain that power. For most of my life, I have lived under the governance of those who believed, consciously or subconsciously, in trickle-down economics: since what had maximally benefitted their own success must, of necessity, benefit all. I have watched again and again as the rules of the game are subtly co-opted to shift outcomes and reinforce those beliefs.
I have watched how the media, mass or blogosphere, shapes attitudes and then is shaped by those attitudes in turn -- but only by that part of attitude which improves profit, be it bottom-line corporate profit or ideological profit. When uncomfortable truths raised their heads above the water, I have watched as the denial machine spun into action, claiming to empower people and the individual free will to make an educated choice for oneself at the same time as it undermined the educational tools to make that educated choice.
I have watched as a thousand and then a thousand thousand voices muddied the waters, no longer skeptical analysis or even a will to truly understand but the determination either to reject blindly or support equally blindly, based on whichever authority is to be trusted without understanding or question, and to drown out all opposition through repetition and repetition and repetition again. I have watched those ripples surface in television show and videogame consumed casually and without thought. Especially I have seen them surface in the increased focus on staying on message, be it the soundbytes of a political platform or the determination of customer service to answer only the existing FAQs, regardless of what question had actually been asked. And to further fog out the relevant details, I have seen how investigative reporting increasingly shifted toward celebrity non-news, amid a popular determination to drown out reality in personal entertainment and a personally customised environment.
(But I cannot seek comfort in escapism. How would that improve in any way the things I see?)
Most recently, I watched as the political machine of what is still arguably the most powerful representative democratic government in the world finally reacted against the legacy of the past two terms, a squandered good will born of tragedy, and a growing economic crisis that could no longer be completely irrelevant to the powers of the world. I watched as the political net fished up two candidates who, each in their own way, were reactory expressions of the popular will against the looming shadow on the horizon. And because I guessed wrong by a year on the exact timing of that crisis, thinking it would come fully to light only after the greater part of the campaign had already ended and the opposing ideologies had already folded in their loyal supporters, I guessed completely wrong as to who those two candidates would be.
I say what I see -- and then, since I will engage neither in manipulatory tactics nor in preaching to the choir (and thereby engaging that vast potential of reification through repetition), I mostly keep silence. I talk to the people I talk to. I don't use their agreement or non-agreement to make my points to the audience instead. Without intending it, in doing so I have chased away more than one reader of this blog, who had sought Wisdom and had looked here for Answers.
I have observations, and thoughts, and speculations only. I try to see things as they are, and not as I would have them be. I am as ruthless toward myself as toward any other, more so: and the closer a person comes to me, the more I expect of them and the less gently I treat them. Sometimes, what I see suggests a course of action which might resolve one or another particular issue -- but I don't wrap either the problem or the solution in tissue paper. And because I see things without a comfortable fuzzy lining, I often dearly want to discover I am wrong.
But, I want to believe.
I have seen a campaign based on the vision of change, of Yes We Can: but that was only words, and words are cheap.
I have heard so much genuine cheering in the course of that campaign and afterward, but the cheers are ringed with desperation.
But now I see a president who has gone beyond words into action so immediate that it still continues to startle the pundits, never mind that the situation is such that immediate action is needed. I don't agree with all the positions he holds or actions he has already taken -- although a part of one of those actions might simply be to lay the groundwork for the freedom of action he will need in future -- but how long has it been since a newly elected politician has hit the ground running?
Above all, I see a president who seems to have opted out of the three great mythos of our time: that there is a natural ruling class whose fortunes are purely deserved, that our destinies and our fortunes can be built solely upon our own individual actions, and that if someone falls into poverty, it is always their own fault.
Maybe it is only from outside that such an opting out is even possible. I abhor the self-illusion which allowed the earlier self-congratulation -- but maybe the racial barrier could only have been broken with someone from outside the existing black culture. Those in a position of authority within it have already expressed their resentment of him, when they thought the microphone was off. I think that resentment is still very close to the surface. I want to believe that people might still be willing to accept that solutions to problems which have been generations in the making will not be painless -- yet at the same time I know that most people naturally don't want to feel pain, even the pain of a potential healing.
How long has it been since economic policy has been based on a belief that the wealth of a society can only ever trickle up? How long has it been since there has been a president who has remembered that a country is built on responsibility not only for self but within the context of community, and that community is built upon every one of its families, not only those who fit an "ideal" mould? How long has it been since there has been a president who invoked the blessing of God not only on an abstract nation ideal, but upon its people?
I want to believe ... but with the growing sense of possibility comes also a growing fear. One reason I never take political platforms at face value, even those which seem genuine, is that I know the extent of the established governmental, partisan, and corporate infrastructure; and I know too that changing the status quo which has raised it to such power is never in its interest.
Above all, perhaps: I know at what cost people will cling to their illusions.
February 18, 2009
Remarks by the president on the home mortgage crisis
Dobson High School, Mesa, Arizona
Thank you very much. Please, everybody have a seat. Thank you. Well, it is good to be back in Arizona. Thank you. Are you excited? Thank you, thank you. And thank you for arranging for such a beautiful day. I want to stick around, but I got to go back to work. But it is wonderful to be here. And to all of you, I know that attending these kinds of events, oftentimes you have to wait in line and there's all kinds of stuff going on. But I appreciate you being here very much. And to all the officials here at the school, the principal and the student body, everybody who helped make this possible, thank you so much to all of you.
I'm here today to talk about a crisis unlike we've ever known -- but one that you know very well here in Mesa, and throughout the Valley. In Phoenix and its surrounding suburbs, the American Dream is being tested by a home mortgage crisis that not only threatens the stability of our economy, but also the stability of families and neighborhoods. It's a crisis that strikes at the heart of the middle class: the homes in which we invest our savings and build our lives, raise our families and plant roots in our communities.
So many Americans have shared with me their personal experiences of this crisis. Many have written letters or emails or shared their stories with me at rallies and along rope lines. Their hardship and heartbreak are a reminder that while this crisis is vast, it begins just one house -- and one family -- at a time.
It begins with a young family -- maybe in Mesa, or Glendale, or Tempe -- or just as likely in a suburban area of Las Vegas, or Cleveland, or Miami. They save up. They search. They choose a home that feels like the perfect place to start a life. They secure a fixed-rate mortgage at a reasonable rate, and they make a down payment, and they make their mortgage payments each month. They are as responsible as anyone could ask them to be.
But then they learn that acting responsibly often isn't enough to escape this crisis. Perhaps somebody loses a job in the latest round of layoffs, one of more than 3.5 million jobs lost since this recession began -- or maybe a child gets sick, or a spouse has his or her hours cut.
In the past, if you found yourself in a situation like this, you could have sold your home and bought a smaller one with more affordable payments, or you could have refinanced your home at a lower rate. But today, home values have fallen so sharply that even if you make a large down payment, the current value of your mortgage may still be higher than the current value of your house. So no bank will return your calls, and no sale will return your investment.
You can't afford to leave, you can't afford to stay. So you start cutting back on luxuries. Then you start cutting back on necessities. You spend down your savings to keep up with your payments. Then you open the retirement fund. Then you use the credit cards. And when you've gone through everything you have, and done everything you can, you have no choice but to default on your loan. And so your home joins the nearly 6 million others in foreclosure or at risk of foreclosure across the country, including roughly 150,000 right here in Arizona.
But the foreclosures which are uprooting families and upending lives across America are only part of the housing crisis. For while there are millions of families who face foreclosure, there are millions more who are in no danger of losing their homes, but who have still seen their dreams endangered. They're the families who see the "For Sale" signs lining the streets; who see neighbors leave, and homes standing vacant, and lawns slowly turning brown. They see their own homes -- their single largest asset -- plummeting in value. One study in Chicago found that a foreclosed home reduces the price of nearby homes by as much as 9 percent. Home prices in cities across the country have fallen by more than 25 percent since 2006. And in Phoenix, they've fallen by 43 percent.
Even if your neighborhood hasn't been hit by foreclosures, you're likely feeling the effects of this crisis in other ways. Companies in your community that depend on the housing market -- construction companies and home furnishing stores and painters and landscapers -- they're all cutting back and laying people off. The number of residential construction jobs has fallen by more than a quarter million since mid-2006. As businesses lose revenue and people lose income, the tax base shrinks, which means less money for schools and police and fire departments. And on top of this, the costs to local government associated with a single foreclosure can be as high as $20,000.
So the effects of this crisis have also reverberated across the financial markets. When the housing market collapsed, so did the availability of credit on which our economy depends. And as that credit has dried up, it's been harder for families to find affordable loans to purchase a car or pay tuition, and harder for businesses to secure the capital they need to expand and create jobs.
In the end, all of us are paying a price for this home mortgage crisis. And all of us will pay an even steeper price if we allow this crisis to continue to deepen -- a crisis which is unraveling home ownership, the middle class, and the American Dream itself. But if we act boldly and swiftly to arrest this downward spiral, then every American will benefit. And that's what I want to talk about today.
The plan I'm announcing focuses on rescuing families who've played by the rules and acted responsibly, by refinancing loans for millions of families in traditional mortgages who are underwater or close to it, by modifying loans for families stuck in sub-prime mortgages they can't afford as a result of skyrocketing interest rates or personal misfortune, and by taking broader steps to keep mortgage rates low so that families can secure loans with affordable monthly payments.
At the same time, this plan must be viewed in a larger context. A lost home often begins with a lost job. Many businesses have laid off workers for a lack of revenue and available capital. Credit has become scarce as markets have been overwhelmed by the collapse of security backed -- securities backed by failing mortgages. In the end, the home mortgage crisis, the financial crisis, and this broader economic crisis are all interconnected, and we can't successfully address any one of them without addressing them all.
So yesterday, in Denver, I signed into law the American Recovery and Reinvestment Act, which will create or save -- The act will create or save 3.5 million jobs over the next two years -- including 70,000 right here in Arizona, right here -- doing the work America needs done. And we're also going to work to stabilize, repair and reform our financial system to get credit flowing again to families and businesses.
And we will pursue the housing plan I'm outlining today. And through this plan, we will help between 7 and 9 million families restructure or refinance their mortgages so they can afford -- avoid foreclosure. And we're not just helping homeowners at risk of falling over the edge; we're preventing their neighbors from being pulled over that edge, too -- as defaults and foreclosures contribute to sinking home values, and failing local businesses, and lost jobs.
But I want to be very clear about what this plan will not do: It will not rescue the unscrupulous or irresponsible by throwing good taxpayer money after bad loans. It will not help speculators -- it will not help speculators who took risky bets on a rising market and bought homes not to live in but to sell. It will not help dishonest lenders who acted irresponsibly, distorting the facts -- distorting the facts and dismissing the fine print at the expense of buyers who didn't know better. And it will not reward folks who bought homes they knew from the beginning they would never be able to afford. So I just want to make this clear: This plan will not save every home.
But it will give millions of families resigned to financial ruin a chance to rebuild. It will prevent the worst consequences of this crisis from wreaking even greater havoc on the economy. And by bringing down the foreclosure rate, it will help to shore up housing prices for everybody. According to estimates by the Treasury Department, this plan could stop the slide in home prices due to neighboring foreclosures by up to $6,000 per home.
So here's how my plan works: First, we will make it possible for an estimated 4 to 5 million currently ineligible homeowners who receive their mortgages through Fannie Mae or Freddie Mac to refinance their mortgages at a lower rate.
Today, as a result of declining home values, millions of families are what's called "underwater," which simply means that they owe more on their mortgages than their homes are currently worth. These families are unable to sell their homes, but they're also unable to refinance them. So in the event of a job loss or another emergency, their options are limited.
Also right now, Fannie Mae and Freddie Mac -- the institutions that guarantee home loans for millions of middle-class families -- are generally not permitted to guarantee refinancing for mortgages valued at more than 80 percent of the home's worth. So families who are underwater or close to being underwater can't turn to these lending institutions for help.
My plan changes that by removing this restriction on Fannie and Freddie so that they can refinance mortgages they already own or guarantee.
And what this will do is it will allow millions of families stuck with loans at a higher rate to refinance. And the estimated cost to taxpayers would be roughly zero. While Fannie and Freddie would receive less money in payments, this would be balanced out by a reduction in defaults and foreclosures.
I also want to point out that millions of other households could benefit from historically low interest rates if they refinance, though many don't know that this opportunity is available to them -- meaning some of you -- an opportunity that could save your families hundreds of dollars each month. And the efforts we are taking to stabilize mortgage markets will help you, borrowers, secure more affordable terms, too.
A second thing we're going to do under this plan is we will create new incentives so that lenders work with borrowers to modify the terms of sub-prime loans at risk of default and foreclosure.
Sub-prime loans -- loans with high rates and complex terms that often conceal their costs -- make up only 12 percent of all mortgages, but account for roughly half of all foreclosures. Right now, when families with these mortgages seek to modify a loan to avoid this fate, they often find themselves navigating a maze of rules and regulations, but they’re rarely finding answers. Some sub-prime lenders are willing to renegotiate; but many aren't. And your ability to restructure your loan depends on where you live, the company that owns or manages your loan, or even the agent who happens to answer the phone on the day that you call.
So here's what my plan does: establishes clear guidelines for the entire mortgage industry that will encourage lenders to modify mortgages on primary residences. Any institution that wishes to receive financial assistance from the government, from taxpayers, and to modify home mortgages, will have to do so according to these guidelines -- which will be in place two weeks from today.
Here's what this means: If lenders and home buyers work together, and the lender agrees to offer rates that the borrower can afford, then we'll make up part of the gap between what the old payments were and what the new payments will be. Under this plan, lenders who participate will be required to reduce those payments to no more than 31 percent of a borrower's income. And this will enable as many as 3 to 4 million homeowners to modify the terms of their mortgages to avoid foreclosure.
So this part of the plan will require both buyers and lenders to step up and do their part, to take on some responsibility. Lenders will need to lower interest rates and share in the costs of reducing monthly payments in order to prevent another wave of foreclosures. Borrowers will be required to make payments on time in return for this opportunity to reduce those payments.
And I also want to be clear that there will be a cost associated with this plan. But by making these investments in foreclosure prevention today, we will save ourselves the costs of foreclosure tomorrow -- costs that are borne not just by families with troubled loans, but by their neighbors and communities and by our economy as a whole. Given the magnitude of these crises, it is a price well worth paying.
There's a third part of the plan: We will take major steps to keep mortgage rates low for millions of middle-class families looking to secure new mortgages.
Today, most new home loans are backed by Fannie Mae and Freddie Mac, which guarantee loans and set standards to keep mortgage rates low and to keep mortgage financing available and predictable for middle-class families. Now, this function is profoundly important, especially now as we grapple with a crisis that would only worsen if we were to allow further disruptions in our mortgage markets.
Therefore, using the funds already approved by Congress for this purpose, the Treasury Department and the Federal Reserve will continue to purchase Fannie Mae and Freddie Mac mortgage-backed securities so that there is stability and liquidity in the marketplace. Through its existing authority, Treasury will provide up to $200 billion in capital to ensure that Fannie Mae and Freddie Mac can continue to stabilize markets and hold mortgage rates down.
And we're also going to work with Fannie and Freddie on other strategies to bolster the mortgage markets, like working with state housing finance agencies to increase their liquidity. And as we seek to ensure that these institutions continue to perform what is a vital function on behalf of middle-class families, we also need to maintain transparency and strong oversight so that they do so in responsible and effective ways.
Fourth, we will pursue a wide range of reforms designed to help families stay in their homes and avoid foreclosures.
And my administration will continue to support reforming our bankruptcy rules so that we allow judges to reduce home mortgages on primary residences to their fair market value -- as long as borrowers pay their debts under court-ordered plans. I just want everybody to understand, that's the rule for investors who own two, three, and four homes. So it should be the rule for folks who just own one home -- as an alternative to foreclosure.
In addition, as part of the recovery plan I signed into law yesterday, we are going to award $2 billion in competitive grants to communities that are bringing together stakeholders and testing new and innovative ways to limit the effects of foreclosures. Communities have shown a lot of initiative, taking responsibility for this crisis when many others have not. And supporting these neighborhood efforts is exactly what we should be doing.
So taken together, the provisions of this plan will help us end this crisis and preserve for millions of families their stake in the American Dream. But we also have to acknowledge the limits of this plan.
Our housing crisis was born of eroding home values, but it was also an erosion of our common values, and in some case, common sense. It was brought about by big banks that traded in risky mortgages in return for profits that were literally too good to be true; by lenders who knowingly took advantage of homebuyers; by homebuyers who knowingly borrowed too much from lenders; by speculators who gambled on ever-rising prices; and by leaders in our nation's capital who failed to act amidst a deepening crisis.
So solving this crisis will require more than resources; it will require all of us to step back and take responsibility. Government has to take responsibility for setting rules of the road that are fair and fairly enforced. Banks and lenders must be held accountable for ending the practices that got us into this crisis in the first place. And each of us, as individuals, have to take responsibility for their own actions. That means all of us have to learn to live within our means again and not assume that -- and not assume that housing prices are going to go up 20, 30, 40 percent every year.
Those core values of common sense and responsibility, those are the values that have defined this nation. Those are the values that have given substance to our faith in the American Dream. Those are the values we have to restore now at this defining moment.
It will not be easy. But if we move forward with purpose and resolve -- with a deepened appreciation of how fundamental the American Dream is and how fragile it can be when we fail to live up to our collective responsibilities, if we go back to our roots, our core values, I am absolutely confident we will overcome this crisis and once again secure that dream not just for ourselves but for generations to come.
Thank you. God bless you. God bless the United States of America.
Dobson High School, Mesa, Arizona
Thank you very much. Please, everybody have a seat. Thank you. Well, it is good to be back in Arizona. Thank you. Are you excited? Thank you, thank you. And thank you for arranging for such a beautiful day. I want to stick around, but I got to go back to work. But it is wonderful to be here. And to all of you, I know that attending these kinds of events, oftentimes you have to wait in line and there's all kinds of stuff going on. But I appreciate you being here very much. And to all the officials here at the school, the principal and the student body, everybody who helped make this possible, thank you so much to all of you.
I'm here today to talk about a crisis unlike we've ever known -- but one that you know very well here in Mesa, and throughout the Valley. In Phoenix and its surrounding suburbs, the American Dream is being tested by a home mortgage crisis that not only threatens the stability of our economy, but also the stability of families and neighborhoods. It's a crisis that strikes at the heart of the middle class: the homes in which we invest our savings and build our lives, raise our families and plant roots in our communities.
So many Americans have shared with me their personal experiences of this crisis. Many have written letters or emails or shared their stories with me at rallies and along rope lines. Their hardship and heartbreak are a reminder that while this crisis is vast, it begins just one house -- and one family -- at a time.
It begins with a young family -- maybe in Mesa, or Glendale, or Tempe -- or just as likely in a suburban area of Las Vegas, or Cleveland, or Miami. They save up. They search. They choose a home that feels like the perfect place to start a life. They secure a fixed-rate mortgage at a reasonable rate, and they make a down payment, and they make their mortgage payments each month. They are as responsible as anyone could ask them to be.
But then they learn that acting responsibly often isn't enough to escape this crisis. Perhaps somebody loses a job in the latest round of layoffs, one of more than 3.5 million jobs lost since this recession began -- or maybe a child gets sick, or a spouse has his or her hours cut.
In the past, if you found yourself in a situation like this, you could have sold your home and bought a smaller one with more affordable payments, or you could have refinanced your home at a lower rate. But today, home values have fallen so sharply that even if you make a large down payment, the current value of your mortgage may still be higher than the current value of your house. So no bank will return your calls, and no sale will return your investment.
You can't afford to leave, you can't afford to stay. So you start cutting back on luxuries. Then you start cutting back on necessities. You spend down your savings to keep up with your payments. Then you open the retirement fund. Then you use the credit cards. And when you've gone through everything you have, and done everything you can, you have no choice but to default on your loan. And so your home joins the nearly 6 million others in foreclosure or at risk of foreclosure across the country, including roughly 150,000 right here in Arizona.
But the foreclosures which are uprooting families and upending lives across America are only part of the housing crisis. For while there are millions of families who face foreclosure, there are millions more who are in no danger of losing their homes, but who have still seen their dreams endangered. They're the families who see the "For Sale" signs lining the streets; who see neighbors leave, and homes standing vacant, and lawns slowly turning brown. They see their own homes -- their single largest asset -- plummeting in value. One study in Chicago found that a foreclosed home reduces the price of nearby homes by as much as 9 percent. Home prices in cities across the country have fallen by more than 25 percent since 2006. And in Phoenix, they've fallen by 43 percent.
Even if your neighborhood hasn't been hit by foreclosures, you're likely feeling the effects of this crisis in other ways. Companies in your community that depend on the housing market -- construction companies and home furnishing stores and painters and landscapers -- they're all cutting back and laying people off. The number of residential construction jobs has fallen by more than a quarter million since mid-2006. As businesses lose revenue and people lose income, the tax base shrinks, which means less money for schools and police and fire departments. And on top of this, the costs to local government associated with a single foreclosure can be as high as $20,000.
So the effects of this crisis have also reverberated across the financial markets. When the housing market collapsed, so did the availability of credit on which our economy depends. And as that credit has dried up, it's been harder for families to find affordable loans to purchase a car or pay tuition, and harder for businesses to secure the capital they need to expand and create jobs.
In the end, all of us are paying a price for this home mortgage crisis. And all of us will pay an even steeper price if we allow this crisis to continue to deepen -- a crisis which is unraveling home ownership, the middle class, and the American Dream itself. But if we act boldly and swiftly to arrest this downward spiral, then every American will benefit. And that's what I want to talk about today.
The plan I'm announcing focuses on rescuing families who've played by the rules and acted responsibly, by refinancing loans for millions of families in traditional mortgages who are underwater or close to it, by modifying loans for families stuck in sub-prime mortgages they can't afford as a result of skyrocketing interest rates or personal misfortune, and by taking broader steps to keep mortgage rates low so that families can secure loans with affordable monthly payments.
At the same time, this plan must be viewed in a larger context. A lost home often begins with a lost job. Many businesses have laid off workers for a lack of revenue and available capital. Credit has become scarce as markets have been overwhelmed by the collapse of security backed -- securities backed by failing mortgages. In the end, the home mortgage crisis, the financial crisis, and this broader economic crisis are all interconnected, and we can't successfully address any one of them without addressing them all.
So yesterday, in Denver, I signed into law the American Recovery and Reinvestment Act, which will create or save -- The act will create or save 3.5 million jobs over the next two years -- including 70,000 right here in Arizona, right here -- doing the work America needs done. And we're also going to work to stabilize, repair and reform our financial system to get credit flowing again to families and businesses.
And we will pursue the housing plan I'm outlining today. And through this plan, we will help between 7 and 9 million families restructure or refinance their mortgages so they can afford -- avoid foreclosure. And we're not just helping homeowners at risk of falling over the edge; we're preventing their neighbors from being pulled over that edge, too -- as defaults and foreclosures contribute to sinking home values, and failing local businesses, and lost jobs.
But I want to be very clear about what this plan will not do: It will not rescue the unscrupulous or irresponsible by throwing good taxpayer money after bad loans. It will not help speculators -- it will not help speculators who took risky bets on a rising market and bought homes not to live in but to sell. It will not help dishonest lenders who acted irresponsibly, distorting the facts -- distorting the facts and dismissing the fine print at the expense of buyers who didn't know better. And it will not reward folks who bought homes they knew from the beginning they would never be able to afford. So I just want to make this clear: This plan will not save every home.
But it will give millions of families resigned to financial ruin a chance to rebuild. It will prevent the worst consequences of this crisis from wreaking even greater havoc on the economy. And by bringing down the foreclosure rate, it will help to shore up housing prices for everybody. According to estimates by the Treasury Department, this plan could stop the slide in home prices due to neighboring foreclosures by up to $6,000 per home.
So here's how my plan works: First, we will make it possible for an estimated 4 to 5 million currently ineligible homeowners who receive their mortgages through Fannie Mae or Freddie Mac to refinance their mortgages at a lower rate.
Today, as a result of declining home values, millions of families are what's called "underwater," which simply means that they owe more on their mortgages than their homes are currently worth. These families are unable to sell their homes, but they're also unable to refinance them. So in the event of a job loss or another emergency, their options are limited.
Also right now, Fannie Mae and Freddie Mac -- the institutions that guarantee home loans for millions of middle-class families -- are generally not permitted to guarantee refinancing for mortgages valued at more than 80 percent of the home's worth. So families who are underwater or close to being underwater can't turn to these lending institutions for help.
My plan changes that by removing this restriction on Fannie and Freddie so that they can refinance mortgages they already own or guarantee.
And what this will do is it will allow millions of families stuck with loans at a higher rate to refinance. And the estimated cost to taxpayers would be roughly zero. While Fannie and Freddie would receive less money in payments, this would be balanced out by a reduction in defaults and foreclosures.
I also want to point out that millions of other households could benefit from historically low interest rates if they refinance, though many don't know that this opportunity is available to them -- meaning some of you -- an opportunity that could save your families hundreds of dollars each month. And the efforts we are taking to stabilize mortgage markets will help you, borrowers, secure more affordable terms, too.
A second thing we're going to do under this plan is we will create new incentives so that lenders work with borrowers to modify the terms of sub-prime loans at risk of default and foreclosure.
Sub-prime loans -- loans with high rates and complex terms that often conceal their costs -- make up only 12 percent of all mortgages, but account for roughly half of all foreclosures. Right now, when families with these mortgages seek to modify a loan to avoid this fate, they often find themselves navigating a maze of rules and regulations, but they’re rarely finding answers. Some sub-prime lenders are willing to renegotiate; but many aren't. And your ability to restructure your loan depends on where you live, the company that owns or manages your loan, or even the agent who happens to answer the phone on the day that you call.
So here's what my plan does: establishes clear guidelines for the entire mortgage industry that will encourage lenders to modify mortgages on primary residences. Any institution that wishes to receive financial assistance from the government, from taxpayers, and to modify home mortgages, will have to do so according to these guidelines -- which will be in place two weeks from today.
Here's what this means: If lenders and home buyers work together, and the lender agrees to offer rates that the borrower can afford, then we'll make up part of the gap between what the old payments were and what the new payments will be. Under this plan, lenders who participate will be required to reduce those payments to no more than 31 percent of a borrower's income. And this will enable as many as 3 to 4 million homeowners to modify the terms of their mortgages to avoid foreclosure.
So this part of the plan will require both buyers and lenders to step up and do their part, to take on some responsibility. Lenders will need to lower interest rates and share in the costs of reducing monthly payments in order to prevent another wave of foreclosures. Borrowers will be required to make payments on time in return for this opportunity to reduce those payments.
And I also want to be clear that there will be a cost associated with this plan. But by making these investments in foreclosure prevention today, we will save ourselves the costs of foreclosure tomorrow -- costs that are borne not just by families with troubled loans, but by their neighbors and communities and by our economy as a whole. Given the magnitude of these crises, it is a price well worth paying.
There's a third part of the plan: We will take major steps to keep mortgage rates low for millions of middle-class families looking to secure new mortgages.
Today, most new home loans are backed by Fannie Mae and Freddie Mac, which guarantee loans and set standards to keep mortgage rates low and to keep mortgage financing available and predictable for middle-class families. Now, this function is profoundly important, especially now as we grapple with a crisis that would only worsen if we were to allow further disruptions in our mortgage markets.
Therefore, using the funds already approved by Congress for this purpose, the Treasury Department and the Federal Reserve will continue to purchase Fannie Mae and Freddie Mac mortgage-backed securities so that there is stability and liquidity in the marketplace. Through its existing authority, Treasury will provide up to $200 billion in capital to ensure that Fannie Mae and Freddie Mac can continue to stabilize markets and hold mortgage rates down.
And we're also going to work with Fannie and Freddie on other strategies to bolster the mortgage markets, like working with state housing finance agencies to increase their liquidity. And as we seek to ensure that these institutions continue to perform what is a vital function on behalf of middle-class families, we also need to maintain transparency and strong oversight so that they do so in responsible and effective ways.
Fourth, we will pursue a wide range of reforms designed to help families stay in their homes and avoid foreclosures.
And my administration will continue to support reforming our bankruptcy rules so that we allow judges to reduce home mortgages on primary residences to their fair market value -- as long as borrowers pay their debts under court-ordered plans. I just want everybody to understand, that's the rule for investors who own two, three, and four homes. So it should be the rule for folks who just own one home -- as an alternative to foreclosure.
In addition, as part of the recovery plan I signed into law yesterday, we are going to award $2 billion in competitive grants to communities that are bringing together stakeholders and testing new and innovative ways to limit the effects of foreclosures. Communities have shown a lot of initiative, taking responsibility for this crisis when many others have not. And supporting these neighborhood efforts is exactly what we should be doing.
So taken together, the provisions of this plan will help us end this crisis and preserve for millions of families their stake in the American Dream. But we also have to acknowledge the limits of this plan.
Our housing crisis was born of eroding home values, but it was also an erosion of our common values, and in some case, common sense. It was brought about by big banks that traded in risky mortgages in return for profits that were literally too good to be true; by lenders who knowingly took advantage of homebuyers; by homebuyers who knowingly borrowed too much from lenders; by speculators who gambled on ever-rising prices; and by leaders in our nation's capital who failed to act amidst a deepening crisis.
So solving this crisis will require more than resources; it will require all of us to step back and take responsibility. Government has to take responsibility for setting rules of the road that are fair and fairly enforced. Banks and lenders must be held accountable for ending the practices that got us into this crisis in the first place. And each of us, as individuals, have to take responsibility for their own actions. That means all of us have to learn to live within our means again and not assume that -- and not assume that housing prices are going to go up 20, 30, 40 percent every year.
Those core values of common sense and responsibility, those are the values that have defined this nation. Those are the values that have given substance to our faith in the American Dream. Those are the values we have to restore now at this defining moment.
It will not be easy. But if we move forward with purpose and resolve -- with a deepened appreciation of how fundamental the American Dream is and how fragile it can be when we fail to live up to our collective responsibilities, if we go back to our roots, our core values, I am absolutely confident we will overcome this crisis and once again secure that dream not just for ourselves but for generations to come.
Thank you. God bless you. God bless the United States of America.
February 12, 2009
Unseasonable weather across the globe, windstorms, tornadoes in the Plains states and Hawai'i, a heavy and highly unusual snowstorm stranding travellers in Great Britain and western Europe, wildfires and an ever deepening drought in Australia, ever worse unemployment figures (again, globally), a satellite crash in space (not for the first time in history, although the first time that it has resulted in destruction of both satellites): it has been an uneasy couple of weeks.
Amid all this, two very small, but curious, stories of customer service.
For the first, a dining-entertainment business had run a pre-Christmas advertising campaign which promised a 20% gift certificate bonus to a cash card of three-digit value, those gift certificates to be valid only during the month of January. Turns out those gift certificates were also to be interpreted as discount, not as equivalent-to-cash (for the purpose of purchase only) -- although nothing of this was mentioned in the original advertisement. It is the only dining establishment in the entire area to have offered a seasonal promotion for purchasing a high-value cash card, then built in a dodge. (Its required pre-purchase to be eligible for the bonus was also the highest in the area.)
For the second, in a huge grocery chain which sees itself also as department store and bank, a discounted product had mis-scanned as full price. Upon my pointing it out, the cashier checked with her manager what to do, and the manager told it to her correctly, per store policy: give the mis-scanned product for free. But then the supervisor turned up after she had laid down the telephone and overruled the manager, insisting on charging the full price. "You could have swapped the tags," he said, and even the customer in line behind me laughed when I said simply, "Try it." He did. He could not, not without ripping them -- but he did not back down either.
So I let the price stand for then and went to the customer service desk instead: and there the supervisor and then another manager insisted that the full price must be right. As it happened there was an identical product on the shelf, and it too showed the discounted price -- which was the only reason my word that the marked price was the correct one ended up being accepted at all. And even then, while I was standing in front of where the store policy had been glued to the counter, the manager chose to ignore it even after it was pointed out to her, not by me, but by a different customer. It was too surreal, so at that point I let it be.
In the first case, the difference would have been equivalent to $5; in the second, it came out to less than $1.25 when I dropped it.
In a time when one would think every retail business would be trying to hang onto every one of its customers with care, it seems some still prefer to hang onto every dime ... whatever the cost.
Amid all this, two very small, but curious, stories of customer service.
For the first, a dining-entertainment business had run a pre-Christmas advertising campaign which promised a 20% gift certificate bonus to a cash card of three-digit value, those gift certificates to be valid only during the month of January. Turns out those gift certificates were also to be interpreted as discount, not as equivalent-to-cash (for the purpose of purchase only) -- although nothing of this was mentioned in the original advertisement. It is the only dining establishment in the entire area to have offered a seasonal promotion for purchasing a high-value cash card, then built in a dodge. (Its required pre-purchase to be eligible for the bonus was also the highest in the area.)
For the second, in a huge grocery chain which sees itself also as department store and bank, a discounted product had mis-scanned as full price. Upon my pointing it out, the cashier checked with her manager what to do, and the manager told it to her correctly, per store policy: give the mis-scanned product for free. But then the supervisor turned up after she had laid down the telephone and overruled the manager, insisting on charging the full price. "You could have swapped the tags," he said, and even the customer in line behind me laughed when I said simply, "Try it." He did. He could not, not without ripping them -- but he did not back down either.
So I let the price stand for then and went to the customer service desk instead: and there the supervisor and then another manager insisted that the full price must be right. As it happened there was an identical product on the shelf, and it too showed the discounted price -- which was the only reason my word that the marked price was the correct one ended up being accepted at all. And even then, while I was standing in front of where the store policy had been glued to the counter, the manager chose to ignore it even after it was pointed out to her, not by me, but by a different customer. It was too surreal, so at that point I let it be.
In the first case, the difference would have been equivalent to $5; in the second, it came out to less than $1.25 when I dropped it.
In a time when one would think every retail business would be trying to hang onto every one of its customers with care, it seems some still prefer to hang onto every dime ... whatever the cost.
February 09, 2009
I must wonder at anyone in the business of economic forecasting who still retains the ability to be shocked by the latest numbers. At this point in time, having access to presumably better financial data than I, the only surprise ought to be if numbers are somehow significantly better than forecast: since it would indicate that the credit-consumer confidence-unemployment feedback cycle has finally spiralled to a new point of balance, and thus that the depression is coming close to an end.
To think that such bottoming out is already close to happening speaks to me more of wishful thinking than of any objective observation. Me, I don't think we are even close, not yet, not for another five years -- although for the last year or two, we might start to even out.
(If you think this painful, consider that a very real alternative to economic depression, here and now, had been hyperinflation. We were drifting very close to it for a time. Why do we assume we are somehow immune to the economic and societal extremes?)
It is ironic that we would recognise this pattern at once in another's dating behaviour. We even have a formal psychological term for it, "avoidant attachment style", where attitudes toward social relationship (and thus outcomes of attempted social relationships) are characterised by a lack of trust. We know, in the abstract and in other people from whom we can detach emotionally, that such lack of trust is one of the hardest handicaps to overcome. Yet, as in so many other things, we seem unable to see exactly the same patterns when they are our own.
(Most of the things I write about have formal psychological terms attached to them, along with a great deal of experimental support linked to those terms. Yet were I to use them with any more frequency than I already do, this blog would become only so much more psychobabble cluttering up the Internet -- and what is the point of that?)
There is a survival mechanism in our personal psychology that usually requires us to see the world as more favourable to us than it really is. I sometimes think I have spent the better part of my life learning how to see things as they are without sinking into that depression, working on the premise that nothing is perfect, that non zero sum improvement is always a desirable thing, and that we can't improve what we refuse to see. I know it can be done, if there is a will.
(Psychology has not found it yet, but I suspect that a solid test for clinical depression will eventually come out of the gap between overall accuracy in self-assessment and accuracy only in assessing those situations which are not under the individual's total control -- and in the inverse of that same gap, perhaps, resides the conundrum of the Dunning-Kruger effect.)
Yet when I speak what I see and it is not unequivocably positive, I am still met with a vehement resistance that shouts of defensiveness and of a hidden fear that must not be faced. It seems that to be acceptable to others I must speak only positive or not at all: and lately even that the acceptability of others within the in-group is measured against their willingness to hear and rebut what I have to say. I even know of one promotion at least partly on that basis: and that is all I can say about it without jeopardising the person's self-image and opening up a new and truly nasty can of worms. The mechanics of it are not dissimilar to those of affirmative action, along with all the associated baggage were it to be seen too clearly.
And yet there has never been any shortage of yes-sayers, so "Yes" is seen quite clearly enough without my adding to it and thereby adding to the illusion of absolute, unquestioning consensus. It is amazing, the amount of energy and time and logical fallacies people are willing to invest in calling the current state of things the best of all possible outcomes.
Which leads to interesting questions about the nature of happiness.
We use the term so very loosely, I should first make some kind of distinction between different types of what is called happiness. The first, call it a radiant joy, is often relegated to the realms of first loves, profound spiritual experiences, and other overwhelmingly positive emotional experiences. It is a rare and beautiful thing, which perhaps adds to its wonder and its specialness. Once experienced, it colours one's life forever. But it is also an overwhelmingly personal thing, and so it is almost never considered when attempting to measure the relative happiness of different people and different societies.
"Happiness" is also used as synonymous with contentment, the degree to which we are at peace with ourselves. This is sometimes assumed to be the same as being equally at peace with the current state of our social and physical environments: which leads to the secondary assumption that contentment cannot co-exist with a drive for improvement. In those studies where happiness quotients are corrected for consumer wealth and where Buddhist monks seem continually to come out on top, I suspect it is this kind of happiness which is being measured.
The third emotion which we often name "happiness" is the filling of various needs and wants. This one perhaps is the most ephemeral of all. It stops in briefly when a want or need has been satisfied, and then flees almost at once as the next want or need is identified. When we learn to measure in this way, we will also find that there will always be another want or need -- manufactured, if so many of our existing needs and wants have already been filled that we cannot quickly enough think of another for ourselves. In those studies where consumer societies are identified as measuring highest on happiness indices, I suspect it is this kind of happiness which is being measured.
(Once we become dependant on wants that have been manufactured for us -- which happens very quickly, we are very lazy thinkers and even more reluctant to examine our own motives too closely -- it is a very small step to constantly feeling out of sorts with the world, feeling that somewhere out there is the answer to all our unhappiness, did we but know what it was. ... And now you might begin to guess my true reasons, having nothing to do with conservative protection of the free market or liberal seeking of accountability or socialist desire to bring under government control or libertarian desire to eradicate all governmental restrictions, for opposing corporate subsidy where there can be no corresponding corporate societal responsibility, only fiscal responsibility to stockholders.)
This last kind of happiness is sometimes confused with contentment, in that we think ourselves content when all our needs and wants have been filled: but contentment actually stands entirely apart from the need/want hamster wheel and focuses only on self-discrepancy.
To constantly yea-say, to constantly seek acceptance through consensus, to constantly deny that things could stand improvement, are all aspects of seeking contentment by deliberately closing one's eyes to those things which don't fit, and quickly hammering them down when they so rudely force themselves upon awareness. To borrow a phrase from the 1990's: "Dude, you are interrupting my Zen."
Yet in this day and age, it seems almost criminal to me that we might choose to pursue our own happiness at the expense of others. We can only get away with it at all by clinging to a firm belief that things should be different, and above all by avoiding thinking of those others as real people. I could never be content, knowing I had stood by and watched in silence while my lack of speaking supported a narrow frame of want-fulfillment built on a foundation which takes away from others.
Because I speak, seeing just as readily from the perspective of those others as from that of what people assume to be my in-group, many look at my actions and think that I must be a deeply unhappy person: because why else wouldn't I want to accept the tightly localised positives as they are and leave it there?
Why, indeed?
To think that such bottoming out is already close to happening speaks to me more of wishful thinking than of any objective observation. Me, I don't think we are even close, not yet, not for another five years -- although for the last year or two, we might start to even out.
(If you think this painful, consider that a very real alternative to economic depression, here and now, had been hyperinflation. We were drifting very close to it for a time. Why do we assume we are somehow immune to the economic and societal extremes?)
It is ironic that we would recognise this pattern at once in another's dating behaviour. We even have a formal psychological term for it, "avoidant attachment style", where attitudes toward social relationship (and thus outcomes of attempted social relationships) are characterised by a lack of trust. We know, in the abstract and in other people from whom we can detach emotionally, that such lack of trust is one of the hardest handicaps to overcome. Yet, as in so many other things, we seem unable to see exactly the same patterns when they are our own.
(Most of the things I write about have formal psychological terms attached to them, along with a great deal of experimental support linked to those terms. Yet were I to use them with any more frequency than I already do, this blog would become only so much more psychobabble cluttering up the Internet -- and what is the point of that?)
There is a survival mechanism in our personal psychology that usually requires us to see the world as more favourable to us than it really is. I sometimes think I have spent the better part of my life learning how to see things as they are without sinking into that depression, working on the premise that nothing is perfect, that non zero sum improvement is always a desirable thing, and that we can't improve what we refuse to see. I know it can be done, if there is a will.
(Psychology has not found it yet, but I suspect that a solid test for clinical depression will eventually come out of the gap between overall accuracy in self-assessment and accuracy only in assessing those situations which are not under the individual's total control -- and in the inverse of that same gap, perhaps, resides the conundrum of the Dunning-Kruger effect.)
Yet when I speak what I see and it is not unequivocably positive, I am still met with a vehement resistance that shouts of defensiveness and of a hidden fear that must not be faced. It seems that to be acceptable to others I must speak only positive or not at all: and lately even that the acceptability of others within the in-group is measured against their willingness to hear and rebut what I have to say. I even know of one promotion at least partly on that basis: and that is all I can say about it without jeopardising the person's self-image and opening up a new and truly nasty can of worms. The mechanics of it are not dissimilar to those of affirmative action, along with all the associated baggage were it to be seen too clearly.
And yet there has never been any shortage of yes-sayers, so "Yes" is seen quite clearly enough without my adding to it and thereby adding to the illusion of absolute, unquestioning consensus. It is amazing, the amount of energy and time and logical fallacies people are willing to invest in calling the current state of things the best of all possible outcomes.
Which leads to interesting questions about the nature of happiness.
We use the term so very loosely, I should first make some kind of distinction between different types of what is called happiness. The first, call it a radiant joy, is often relegated to the realms of first loves, profound spiritual experiences, and other overwhelmingly positive emotional experiences. It is a rare and beautiful thing, which perhaps adds to its wonder and its specialness. Once experienced, it colours one's life forever. But it is also an overwhelmingly personal thing, and so it is almost never considered when attempting to measure the relative happiness of different people and different societies.
"Happiness" is also used as synonymous with contentment, the degree to which we are at peace with ourselves. This is sometimes assumed to be the same as being equally at peace with the current state of our social and physical environments: which leads to the secondary assumption that contentment cannot co-exist with a drive for improvement. In those studies where happiness quotients are corrected for consumer wealth and where Buddhist monks seem continually to come out on top, I suspect it is this kind of happiness which is being measured.
The third emotion which we often name "happiness" is the filling of various needs and wants. This one perhaps is the most ephemeral of all. It stops in briefly when a want or need has been satisfied, and then flees almost at once as the next want or need is identified. When we learn to measure in this way, we will also find that there will always be another want or need -- manufactured, if so many of our existing needs and wants have already been filled that we cannot quickly enough think of another for ourselves. In those studies where consumer societies are identified as measuring highest on happiness indices, I suspect it is this kind of happiness which is being measured.
(Once we become dependant on wants that have been manufactured for us -- which happens very quickly, we are very lazy thinkers and even more reluctant to examine our own motives too closely -- it is a very small step to constantly feeling out of sorts with the world, feeling that somewhere out there is the answer to all our unhappiness, did we but know what it was. ... And now you might begin to guess my true reasons, having nothing to do with conservative protection of the free market or liberal seeking of accountability or socialist desire to bring under government control or libertarian desire to eradicate all governmental restrictions, for opposing corporate subsidy where there can be no corresponding corporate societal responsibility, only fiscal responsibility to stockholders.)
This last kind of happiness is sometimes confused with contentment, in that we think ourselves content when all our needs and wants have been filled: but contentment actually stands entirely apart from the need/want hamster wheel and focuses only on self-discrepancy.
To constantly yea-say, to constantly seek acceptance through consensus, to constantly deny that things could stand improvement, are all aspects of seeking contentment by deliberately closing one's eyes to those things which don't fit, and quickly hammering them down when they so rudely force themselves upon awareness. To borrow a phrase from the 1990's: "Dude, you are interrupting my Zen."
Yet in this day and age, it seems almost criminal to me that we might choose to pursue our own happiness at the expense of others. We can only get away with it at all by clinging to a firm belief that things should be different, and above all by avoiding thinking of those others as real people. I could never be content, knowing I had stood by and watched in silence while my lack of speaking supported a narrow frame of want-fulfillment built on a foundation which takes away from others.
Because I speak, seeing just as readily from the perspective of those others as from that of what people assume to be my in-group, many look at my actions and think that I must be a deeply unhappy person: because why else wouldn't I want to accept the tightly localised positives as they are and leave it there?
Why, indeed?
February 07, 2009
Wife Swap is a reality show where the wives of two families change places and lifestyles for two weeks. During the first week, the newly arrived wife tries to follow the rules of the household ... or not. During the second week, she gets to rewrite those rules as she sees fit ... and the various members of the household may or may not abide by the revisions. At the end of the experiment, the husbands and wives meet and discuss the week. Sometimes they find common ground. Sometimes "discuss" is an overly polite word. And sometimes it becomes blazingly clear that it is only one member of the couple who is completely behind a family policy, sometimes even of ostricism of one of its children: and I wonder whether this moment of clarity will once again be covered over, whether a new family equilibrium can be evolved, or whether a divorce is in the near future.
In general, I avoid reality shows, from Survivor to Big Brother to others I don't know exist. What I know of them is mostly what has drifted into the common currency: which means that I can usually tell you the premise and maybe some of the tactics of the major ones, but I usually have no clue who participated or what interesting water-cooler moment happened last week, and the names of the winners mean nothing to me. My interest is in human interaction and human reaction, and I tend to find viewer reaction to shows such as Survivor of far more interest than whatever happened on the show itself.
Like most reality shows, Wife Swap draws from the extremes in the interest of entertainment, and expands on that voyeuresque entertainment by clashing opposing lifestyles. In these stressed cross-sections of humanity, I find a fascinating window opened on that place where ideology is expressed in its most basic building block: the nuclear family.
This goes far beyond lifestyle, into an entire life view that colours all else. Part of the success of Wife Swap is in having identified a few core polarities, which find many different ways to express themselves and which almost immediately evoke defensive reactions upon being challenged. Oddly enough, differences of religion are only superficially polarising, and then only among those who absolutely cannot abide the existence of another religious belief within their world space: not really all that common in the environments which have given birth to Wife Swap. The much sharper religious polemic is between a deep religious belief and observance contrasted against lack of any religious core, or even against an equally faith-based atheism. Other core polarities include:
I myself hold an ideology that almost certainly colours my view, of this and other things. I firmly believe that no one knows everything, and that there is always something that can be learned. In this, perhaps, lies the core of my fascination with Wife Swap, for the most extreme of the polarities are invariably marked by one common element: one or both spouses so firmly believe in their way of life that they can't conceive of there being anything worth learning from something different (except, of course, the error of the other's ways).
Perhaps the most ironic example of this came up in the swap between the intellectual and the (below?) average Joe. As usual, each was convinced of the absolute rightness of their way of life: but since it was upon their intelligence that the intellectual couple based their superiority, every failure to use that intelligence for anything more than abstract superiority games stood in particularly stark relief.
The wife did try to compromise, a little and clearly painfully. She, at least, did not use her vocabulary as a weapon. Yet for all her intelligence, she was incapable of anticipating that some tastes might be acquired ones.
As so often happens on this show, the husband was by far the more defensive of the two, although I doubt he saw it as such. His defensiveness took the form of such vicious mocking that he reduced the guest wife to tears -- yet at the end of it, she was able to see herself the higher for it: "I learned something from all this. I came through this, I can survive anything."
He, on the other hand, actively refused to learn anything from her: although he said it again and again as an apparently objective observation, that there was nothing to be learned from her. In this manner, by the end of the first day, he had utterly closed himself off to anything she might have to say, let alone any potential value it might have. Such conviction did he have in the inherent superiority of his tested intelligence score that he considered himself above any ability to learn from others whom he did not consider to be his equal. He must have mentioned his percentile on the graduate studies admission test at least half a dozen times: and since I myself have scored similar percentiles, I know exactly what they do and do not mean.
(Apparently the ability to regurgitate facts and demonstrate some abstract problem-solving skills does not translate into the ability to see that another family's demeaning label of "skirt work" is really not all that different than hiring a cleaning lady -- and it was never questioned that it was "lady", not even "cleaning person".)
Yet who could blame him for his self-assessment? Every aspect of the society in which he chose to participate continually reinforced his own perception of himself, from grades to salary. Quite possibly participating in this show was the first time his assumptions of self and appropriate measuring stick had ever been challenged -- and like so many others of us, he accepted as valid only those measurements which supported his self-assessment, and rejected those which did not.
Perhaps the final measure of his intelligence must surely be that he and his wife agreed to be on this show. I, who treasure my privacy, often wonder at people's motivations in doing so. There is money involved, so for some at least, it would have to be the money ... but I can't see that motivation for him. Instead, I can only think it might be a determination to display to the world the inherent rightness of a particular way of life, so powerful a rightness that it must necessarily convince others who experience it ... who equally come on this show to demonstrate their own superiority of lifestyle.
If this is accurate, perhaps the only remaining question is whether this is only another example of "Hey Mom! Hey World! Look at ME!" or whether this is intended as yet another form of evangelism. To even begin to answer that question, ask first who the participants see as the focus of their efforts: the swapped spouse and family, or the television audience?
In general, I avoid reality shows, from Survivor to Big Brother to others I don't know exist. What I know of them is mostly what has drifted into the common currency: which means that I can usually tell you the premise and maybe some of the tactics of the major ones, but I usually have no clue who participated or what interesting water-cooler moment happened last week, and the names of the winners mean nothing to me. My interest is in human interaction and human reaction, and I tend to find viewer reaction to shows such as Survivor of far more interest than whatever happened on the show itself.
Like most reality shows, Wife Swap draws from the extremes in the interest of entertainment, and expands on that voyeuresque entertainment by clashing opposing lifestyles. In these stressed cross-sections of humanity, I find a fascinating window opened on that place where ideology is expressed in its most basic building block: the nuclear family.
This goes far beyond lifestyle, into an entire life view that colours all else. Part of the success of Wife Swap is in having identified a few core polarities, which find many different ways to express themselves and which almost immediately evoke defensive reactions upon being challenged. Oddly enough, differences of religion are only superficially polarising, and then only among those who absolutely cannot abide the existence of another religious belief within their world space: not really all that common in the environments which have given birth to Wife Swap. The much sharper religious polemic is between a deep religious belief and observance contrasted against lack of any religious core, or even against an equally faith-based atheism. Other core polarities include:
- Structure vs. lack of structure, especially wrt the children's education
- Education vs. lack of education, but only where both are identity-values
- Conformity vs. lack of conformity, but only where both are identity-values
- My country right or wrong vs. any questioning whatsoever, sometimes expressed as pro-/anti-military, pro-/anti-party politics, even pro-/anti consumerism, and once as vs. country only as an accident of birth; this could also be expressed as what, if anything, constitutes duty/responsibility to the country of birth
- The purpose of money
- The value of monetary/job security. (Ah, Rhui, you and I have had our debates on this one ourselves in the past.)
- Any threat to a father's ability to do as he has always done, sometimes expressed through a threat to a pet project (such as the book which has taken three years of research but never seems to get any closer to solidity)
- How to deal with "free" time.
I myself hold an ideology that almost certainly colours my view, of this and other things. I firmly believe that no one knows everything, and that there is always something that can be learned. In this, perhaps, lies the core of my fascination with Wife Swap, for the most extreme of the polarities are invariably marked by one common element: one or both spouses so firmly believe in their way of life that they can't conceive of there being anything worth learning from something different (except, of course, the error of the other's ways).
Perhaps the most ironic example of this came up in the swap between the intellectual and the (below?) average Joe. As usual, each was convinced of the absolute rightness of their way of life: but since it was upon their intelligence that the intellectual couple based their superiority, every failure to use that intelligence for anything more than abstract superiority games stood in particularly stark relief.
The wife did try to compromise, a little and clearly painfully. She, at least, did not use her vocabulary as a weapon. Yet for all her intelligence, she was incapable of anticipating that some tastes might be acquired ones.
As so often happens on this show, the husband was by far the more defensive of the two, although I doubt he saw it as such. His defensiveness took the form of such vicious mocking that he reduced the guest wife to tears -- yet at the end of it, she was able to see herself the higher for it: "I learned something from all this. I came through this, I can survive anything."
He, on the other hand, actively refused to learn anything from her: although he said it again and again as an apparently objective observation, that there was nothing to be learned from her. In this manner, by the end of the first day, he had utterly closed himself off to anything she might have to say, let alone any potential value it might have. Such conviction did he have in the inherent superiority of his tested intelligence score that he considered himself above any ability to learn from others whom he did not consider to be his equal. He must have mentioned his percentile on the graduate studies admission test at least half a dozen times: and since I myself have scored similar percentiles, I know exactly what they do and do not mean.
(Apparently the ability to regurgitate facts and demonstrate some abstract problem-solving skills does not translate into the ability to see that another family's demeaning label of "skirt work" is really not all that different than hiring a cleaning lady -- and it was never questioned that it was "lady", not even "cleaning person".)
Yet who could blame him for his self-assessment? Every aspect of the society in which he chose to participate continually reinforced his own perception of himself, from grades to salary. Quite possibly participating in this show was the first time his assumptions of self and appropriate measuring stick had ever been challenged -- and like so many others of us, he accepted as valid only those measurements which supported his self-assessment, and rejected those which did not.
Perhaps the final measure of his intelligence must surely be that he and his wife agreed to be on this show. I, who treasure my privacy, often wonder at people's motivations in doing so. There is money involved, so for some at least, it would have to be the money ... but I can't see that motivation for him. Instead, I can only think it might be a determination to display to the world the inherent rightness of a particular way of life, so powerful a rightness that it must necessarily convince others who experience it ... who equally come on this show to demonstrate their own superiority of lifestyle.
If this is accurate, perhaps the only remaining question is whether this is only another example of "Hey Mom! Hey World! Look at ME!" or whether this is intended as yet another form of evangelism. To even begin to answer that question, ask first who the participants see as the focus of their efforts: the swapped spouse and family, or the television audience?
February 05, 2009
Google's new Latitude is a product which, in many ways, is behind the times. After all, GPS systems have been doing a similar function for years: and where was the objection then? For the majority of people, convenience has long trumped privacy concerns. As a friend of mine succinctly puts it, "I will worry about it if I ever commit a crime".
(-- which always reminds me of the classic definition of conservatives and liberals: that a conservative is a liberal who has been mugged, and a liberal is a conservative who has been jailed. Not to mention that with all these technological crutches, what happens to our innate and learned sense of direction?)
But in one key way, Google has done the unthinkable. It has stated directly that the primary purpose of its new product is to track people -- other people. GPS could always do that. It just never said it.
Of course there will be a market. Employers may wish to start including cellphones as part of the employment package: which is, after all, the next logical step from monitoring employee keystrokes and Internet use. Parents will wish to monitor children. Teens will grow up with it (as they now grow up with cellphones and text messaging), and come to see this as the norm.
Some, of course, will seek to abuse this technology. Technological stalking is nothing new. For now, Google allows it to be taken to a new level: but again, only because they are open about the purpose of their product. The potential was already there.
Others may choose individually to opt in or opt out, depending on the balance between curiosity about others and tolerance for their personal privacy: but individual choice here is a dying luxury.
Can the subdermal locator microchip be far behind?
(-- which always reminds me of the classic definition of conservatives and liberals: that a conservative is a liberal who has been mugged, and a liberal is a conservative who has been jailed. Not to mention that with all these technological crutches, what happens to our innate and learned sense of direction?)
But in one key way, Google has done the unthinkable. It has stated directly that the primary purpose of its new product is to track people -- other people. GPS could always do that. It just never said it.
Of course there will be a market. Employers may wish to start including cellphones as part of the employment package: which is, after all, the next logical step from monitoring employee keystrokes and Internet use. Parents will wish to monitor children. Teens will grow up with it (as they now grow up with cellphones and text messaging), and come to see this as the norm.
Some, of course, will seek to abuse this technology. Technological stalking is nothing new. For now, Google allows it to be taken to a new level: but again, only because they are open about the purpose of their product. The potential was already there.
Others may choose individually to opt in or opt out, depending on the balance between curiosity about others and tolerance for their personal privacy: but individual choice here is a dying luxury.
Can the subdermal locator microchip be far behind?
February 02, 2009
Despite slow sales that only barely sold out Super Bowl advertising, and that during the week of the Super Bowl itself (and we don't know at what price incentive the last two spots were sold), the Ashley Madison commercial was not among them. Having an affair is not yet against the law, nor is helping and abetting such an affair -- yet apparently we still must not acknowledge that fact on national television, and national television dare not profit from it (directly).
Never mind the minor point that, during the opening scenes of a full-fledged depression, Ashley Madison appears to be one of the few companies easily able to absorb the astronomical cost of such a commercial. Obviously the business is thriving -- as is its counterpart and complement, Alibi Network -- which suggests in turn that obviously a need is being met.
Equally obviously, the word of mouth, free mass media, and blogosphere publicity garnered by the commercial's having been rejected is much more valuable as airing the commercial would have been.
Yet whatever the monetary cost, whatever the background truth, the rejection does allow us to retain our determined image of our own society for just a little longer. Who can put a price on that?
Never mind the minor point that, during the opening scenes of a full-fledged depression, Ashley Madison appears to be one of the few companies easily able to absorb the astronomical cost of such a commercial. Obviously the business is thriving -- as is its counterpart and complement, Alibi Network -- which suggests in turn that obviously a need is being met.
Equally obviously, the word of mouth, free mass media, and blogosphere publicity garnered by the commercial's having been rejected is much more valuable as airing the commercial would have been.
Yet whatever the monetary cost, whatever the background truth, the rejection does allow us to retain our determined image of our own society for just a little longer. Who can put a price on that?
