Suicide Is Painless. Bailouts Are Not.

posted by mihow on September 19th, 2008

After the week we’ve had here in America, I think the flier I saw last week may need to be updated.

Suicide isn’t the answer at all. The United States government is.

I have ranted about this to the people I know. I have gone on tangents inside my own head for weeks now. And I know that I’m going to come off as someone who is resentful and jealous. I’m going to sound bitter and scornful.

And perhaps I am all of that. Truth be told, I feel very much the same way about the financial stuff going on right now that I do whenever I see people using the shoulder to cheat a traffic jam thereby making it worse. I feel the same type of anger and unfairness I experience whenever I see someone doing 55 in a 25 with total disregard for everyone else.

I’m frustrated by all those who took out mortgages they couldn’t afford from even greedier banks.

There have been moments recently I have wished we had done something entirely stupid and accepted a mortgage we couldn’t afford. Everyone else was doing it, right? What’s another foreclosure? What’s another declaration of bankruptcy? Why not gamble with our financial stability like so many others have? Why not sit back and hope that it works out?

Why not?

Because we’re cautious. Perhaps we’re a little too cautious because now that so many American banks are in financial tailspins hoping our government throws them a parachute, there’s a pretty good chance we won’t be getting a mortgage anytime soon.

And that’s my question to no one. Are we, as first-time home buyers, going to be penalized because we played things by the book? Are we going to be overlooked now because we weren’t seduced by a high-paying, or sub-prime mortgage back then?

To all those who want less government intervention, less regulation, less bureaucracy: look around you. This is a perfect example as to why your ideal world is an impossibility. When choosing between a high-risk gamble and being conservative many people opt for the former. Just watch one episode of “Deal or No Deal” and you’ll see how greedy and stupid people can be. We need intervention. We need help.

We don’t even have enough personal restraint to get our chubby hands out of the deep fryer, and we get pissed off whenever the government suggests adding calorie count to a menu. (Whatever happened to making informed decisions?) Due to the rising cost of cigarettes, some smokers are now demanding that government pay for their nicotine patches, gum, whatever. (Why should I have to pay for someone else to quit smoking? No one helped me quit.) People were told to leave Galveston, Texas a week before Ike hit. Many chose not to. Two days later, they were begging for help on camera.

We are children in need of adult supervision. We lack the willpower to say no. We need a guardian to step in and make sure we’re don’t kill ourselves, financially or otherwise.

So, I’m going to be honest today. I am a little resentful. I am a little frustrated. I am shaking my head at all those who stepped outside their means, and at the banks for allowing them to do so. And even though I agree with what many are saying—that government intervention is needed right now so that our teetering financial stability doesn’t come crashing down—I can’t help but want to wag my finger at the government as well. Where were you when the banks were giving money to people who couldn’t pay it back? Where were you when people were buying houses they couldn’t afford?

I’m actually one for government regulation. I like knowing how many calories are in my banana nut muffin. And I don’t mind paying taxes to make sure that people are able to eat, get the healthcare they need—whatever. I have always felt that as a society we’re only as good as our weakest member. We need to look out for one another.

But I’d be lying if I said that this member of society isn’t angry.

24 Responses to “Suicide Is Painless. Bailouts Are Not.”

  1. Z Says:
    September 19th, 2008 at 12:02 PM

    I’m with you. I’m a first-time home buyer who accepted a small house at a higher interest rate so that it could be fixed. Because that is what we could afford FOR THE NEXT 30 YEARS. We knew better than to get the bigger house at the lower interest rate because that rate was not fixed.

    I feel ya’. I find myself often grumbling under my breath now. And I hate being that person. The bitter person mumbling about people who should have known better.

    I guess I do feel truly sorry for the non-greedy but simply naive people. A family whose bank said, “Yeah – but the interest rates haven’t gone above X.X% EVER! You’ll be safe, TRUST ME. Your payments will always be this low!” And they fell for it. And took that adjustable interest rate because they “trusted” the person who they thought knew more than they did. And then had to foreclose. And I almost understand because, it’s hard not to trust someone who tells you to trust them. Some people are just naive I think. Sometimes I wish I was less jaded…hehe.

    Wow. I’m truly sorry I babbled so long in your comments. Can you tell I’ve been thinking about this too?

  2. Milissa Says:
    September 19th, 2008 at 12:06 PM

    Thank you. We have been having the same discussions recently regarding real estate, Ike victims, bankruptcy, etc. Our anger has grown as well.

    In fact, our anger is now seriously threatening a friendship we have with a man who decided several years ago that he just didn’t feel like repaying some of his loans, so he declared bankruptcy. And now his credit is good enough that he got approved for nearly $500,000k towards a house. His gloating about how bankruptcy was the smartest thing he has ever done - while my husband and I continue to pay our numerous bills every month, on time, without fail - has pushed us to see him less and less. The “out for what I can get” attitude sickens me. Whatever happened to pride and self-respect and all those sorts of qualities?

  3. Milissa Says:
    September 19th, 2008 at 12:09 PM

    Um, didn’t mean to cross out that line in my comment above. Those were supposed to be dashes. Oops.

  4. greta Says:
    September 19th, 2008 at 12:09 PM

    thank you for saying out loud what i’ve been thinking for the last few days as i listen to the news. i am normally all for government regulation and provision of certain things, especially when they are things that i think will influence the greater good. there are people who are unable to fend for themselves when it comes to basic needs and i do feel that it is our civic duty to help them, so that we can expect help when we later maybe find ourselves in a similar situation. (Healthcare, shelter, childcare, food assistance, education, etc.) But the government bailout of financial institutions, institutions whose sole purpose was to make a profit? My hard-earned tax dollars will be spent so that profit-making companies that are suddenly not profitable can survive? While meanwhile there are people who can’t pay their medical bills or can’t get a decent public education? ARGH!!!

    anyway, sorry, rant over. :) i just wanted to say, i hear you, and you are not alone.

  5. Gillian Says:
    September 19th, 2008 at 12:22 PM

    Preach on, sistah!

    I bought a house in 2005. I bought it for $50k less than I qualified for, because I knew despite what the bank said that was all I could afford. I had to really educate myself to make sure I was getting a good deal and was not being stymied by greedy people, and I’m glad I did, because I would be one of those foreclosure statistics now otherwise. My sister is trying to buy a house now. She is a first time homebuyer, and though it is a little harder for her (she had to put $$$ down, whereas I did not), she is still able to do it. Again, though, she educated herself and looked hard at her budget before selecting a townhome, and her budget was way less than they said she could get. EVEN NOW.

    Handholding annoys the piss out of me, because, like you, I don’t need my freaking hand held. But there will always be greedy asshats. Always. So I try to unclench my jaw and just not think about it. Which is hard to do right now, since it’s all over the news.

  6. Jonathan Says:
    September 19th, 2008 at 12:42 PM

    What angers me most, is that everything wrong and bad that has happened would not have happened if people and investment firms/banks weren’t so greedy and selfish.

    The tiniest bit of common sense would have avoided this—in fact, many Americans and financial firms avoided this because they actually used common sense.

    I kind of want to go out and buy a home FAR beyond my means and immediately declare bankruptcy. Like the next day. As a renter, a self-employed individual, and someone who has been financially responsible, I’m footing the bill for other people’s fancy homes and exorbitant salaries. Bullshit to that.

  7. Maren Says:
    September 19th, 2008 at 03:23 PM

    First off, I completely agree with you about the mortgage crisis, and the amount of greed of our financial institutions astounds me.

    However, as someone who grew up in Galveston, I feel like I need to weigh in on that issue. Unfortunatly the call for mandatory evacuation for most of Galveston was on Thursday at noon, about 30 hours before the storm hit. Water began to rise as early as Friday morning, and many people simply did not have the means to leave at that point or were already blocked in by the water. Also, a recent evacuation debacle with Hurricane Rita in 2005 was fresh on everyone’s minds (more people died from evacuation problems than from the storm). Now, many people still don’t have the means to leave. The people who did evacuate are not allowed to return to their homes and assess damage and start cleanup. It’s an unfortunate situation from any aspect, but not quite at the level of “bailout” as our country’s banking institutions.

    I really enjoy your blog and I hope you keep it up!

  8. mihow Says:
    September 19th, 2008 at 04:27 PM

    I probably shouldn’t have used Galveston to a much bigger point I’m trying to make. What I should have written was that more and more people continue to live in areas that are constantly battered by storms. And that’s fine. That’s everyone’s right. (Hell, I’d love to buy a house on the outer banks. But if I were an insurer, there’d be no way I’d insure a house there. It’s too risky.)

    But many places are (at least for portions of every year) consistently threatened by storms and surges. When are we going to deem them too dangerous to insure? When is the government gong to say, we can’t help you anymore. We’re fighting a losing battle, both financially and humanely.

    We keep building bigger and bigger levees or dams to keep the water away from our real estate.

    The point I was trying to make was when is enough enough? When will we finally say, “hey, you know what? If you want to live there, you can do so at your own risk.”

    Now, I am NOT saying that about all storms and disasters that have taken place and I’m certainly not suggesting everyone be evacuated from their homes, but I do think we need to reconsider some of the battles we’re trying to fight with mother nature.

  9. mihow Says:
    September 19th, 2008 at 07:02 PM

    Sorry if I seem callous. I’m not. I’m just frustrated and that’s why I wrote the post. I’m just frustrated about everything right now.

    That is all. :]

  10. wendyr Says:
    September 20th, 2008 at 05:50 AM

    I understand the frustration! The husband and I have not been in a position to buy a house until now. No, take that back. WE didn’t feel like we were in a position to buy a house until now. When we lived in London, we were told we could get a mortgage for £180,000 (with a £10,000 deposit that my father-in-law has given to all his children….he is a kind man). Shocked both of us – I was working at a contract job (read – fixed term) in the charity sector. The husband was finishing his PhD and working part-time as a research assistant. We had NO MONEY. In fact, the only reason we looked into the mortgage thing was to get his family off our back who were pressuring us to buy. I can only imagine what would have happened if we had done this – we would probably be in negative equity, living in a tiny one bedroom flat in the fourth worst area of all England (I love you, Hackney), unable to move – all because we got a bit greedy and allowed to go beyond our means.

    I thank god we are too cautious.

    We are lucky right now – I am a student and the husband is an academic who has good job security. We are cautious people. I feel for people who were swayed by greed, but at the same time, I do sometimes become a petulant child and do the whole “I’m the GOOD KID! Where’s my reward!”

  11. chele Says:
    September 20th, 2008 at 09:46 AM

    I agree completely.. Thank you for so eloquently stating it!

    I wanted to buy my own house, so I did what I felt was the right thing. Researched the neighborhood, bought a house for significantly LESS than what I was pre-qualified for, and did the standard 30-year fixed (which means I’ll be paying for this house til I’m a tad over SEVENTY – EEK!).

    So yes, my little teeny tiny house is postage-stamp sized, but it’s MINE. And I’m so pissed off at all my neighbors who bought the HUGER houses around me and have defaulted on their mortgages.. they’re bringing MY value down (right now I couldn’t sell even if I wanted to). The only bright spot in this is that my property taxes probably won’t go up next year.

    It isn’t fair. Life isn’t fair, I guess. I just wish some people weren’t idiots.

    Done ranting now!

  12. anne nahm Says:
    September 20th, 2008 at 12:47 PM

    I am also very irritated about this. Like you, we didn’t buy a house we couldn’t afford, even when people told us we were stupid not to (not makin’ any more land!! Get in before you are priced out!). Now it feels like we have to pay for doing the right thing.

    I’m irritated at the people who took out foolish loans, but I am furious that none of the bankers are going to jail. I believe the people who approved many of those loans committed knowing fraud and did so because they knew Fannie and Freddie would buy the loans.

    I also think that while Greenspan was saying “there is no bubble”, the American Government was closing all the bankruptcy loopholes. They knew what the banks were doing and they let it happen. Changing the bankruptcy laws just shows premeditation.

    Arg. Sorry. Ending rant now.

  13. mihow Says:
    September 20th, 2008 at 01:09 PM

    Rant away, ladies and gentlemen. Rant away.

  14. jenB Says:
    September 22nd, 2008 at 05:11 AM

    Way up here in Canada! at a family diner WE were all ranting about this very thing, and we live, did I mention, in Canada? I feel sorry for people who lost their homes, but also, fuck, you couldn’t afford it people! BANKS! WTF?

    love you though xo

  15. andrea Says:
    September 22nd, 2008 at 11:37 AM

    I wouldn’t count on any lessons having been learned. My cousin—-in his early 20’s, filed bankruptcy 2 years ago and who’s job history is a string of gas station/retail store/college kid type jobs, just got approved for a massive loan on a condo from his bank.

    Funny, I would have thought this stuff would be a little harder to get now? Apparently not.

  16. Michele Chaves Says:
    September 22nd, 2008 at 01:08 PM

    Right on Michele. I don’t understand the “no regulation” thing. It is for greedy pigs who don’t want any restrictions on their unethical activities. The free market is fine and good, but we have to be realistic when we think about consequences. When money is the primary motivator ethics go out the door. Shit, does anyone in the White House right now even know how to define the word ethics? I bet that word has never passed the lips of George W or Dick.

    This country is too big. Corporations are too big. Grocery stores are too big. Banks are too big. What the f*#! is going on when the key phrase in the past week is “financial instruments.” What the hell is going on when we are ruled by “financial instrument” created by greedy SOBs who know what they’re doing is wrong, but do it anyway because money is number one in America. Anything is ok if you’re making money. If the free market buys it, it is a-ok.

    America has an epidemic of irresponsibility. We are a bunch of spoiled children without any parental guidance. We want politicians to give us feel good pep talks, we live in debt, in fear of insurance companies, overloaded with the endless details of modern life.

    Anyone want to find a small town in the mid west and take it over and build our own community with our own bank and our own stores and our own schools? If I could get off the train speeding toward the wall, I’d love to get off and start again.

  17. jenB Says:
    September 22nd, 2008 at 01:53 PM

    How long does it take to clear bankruptcy in the States? My friend from University had to wait about 7 years before she could even get a credit card after declaring personal bankruptcy with a $500 limit here, again, in Canada, in Edmonton, Alberta, where I live. :-)

  18. mihow Says:
    September 22nd, 2008 at 02:08 PM

    Michele: Let’s start our own Michele (With One L) Militia.

    JenB: I think it’s the same—7 years. That’s what TJ thought as well. (No cell phones, credit cards, etc. As far as I know. But to some degree, I think we could all stand to give up at least 50% of that!)

  19. Michele chaves Says:
    September 22nd, 2008 at 02:27 PM

    let’s do it. we need a manifesto. and cool tee shirts.

  20. jo Says:
    September 22nd, 2008 at 03:31 PM

    Careful, there.

    While this may not have been your intention, pointing fingers is never helpful. Yes, some people took on mortgages they couldn’t afford; all of these people are not assholes. Yes, you may be struggling to purchase a home; good for you for not incurring unrealistic debt, but understand that some people must.

    Take for example, a middle aged man who found himself jobless with a wife and 13 year old daughter, renting the same house for 8 years and being told he had to buy or move…would you move your son to a new community, a considerably not-as-good school district, if you had the means to stay in your home? You hope you would figure it out, but sometimes there is no other answer. He took out a mortgage, his child finished junior/high school, and attended an ivy league school, but still doesn’t have the money to buy out the mortgage. Who can even say who is responsible here? Is it his kid? Is it the dad? Is is the bank? Is is his old boss, his old landlord?

    Maybe we are all to blame, for being complacent in a system which we should have known-did know, deep down-was broken. We are all Americans, and this is all of our problem. As are people without relief in Texas. Cutting ourselves off into groups; us vs them, we did this and you didn’t, accomplishes nothing.

    To quote Thomas Paine; “these are the times which try men’s souls.” We are tried, we are trying, we will continue to try. And the only way we have a shot, I think, is if we do it together.

    Respectfully, Jo

  21. Michele chaves Says:
    September 22nd, 2008 at 07:44 PM

    I believe that government should promote the greater good and ethical practices that respect people—all people, not just people with a lot of money. I’m not in any way opposed to people making money. I love money. But I do not believe the government should be in the business of making policies that legally allow one person (or corporation) to take advantage of others. It isn’t right and it doesn’t unite us.

    I personally do not believe the policies of the Republican party over the past 30 years have done anything to better our world. They are opposed to regulation that restrains unscrupulous corporations, opposed to alternative energy, opposed to health care reform, opposed to immigration reform.. opposed to anything that might limit their club’s ability to continue making money unrestrained. All the people responsible for these banks and corporations that we’re all now bailing out…the people in power will be fine, they made more money in one year than most of us will see in a lifetime. They aren’t going to suffer and that’s wrong.

    I heard someone today say that the government should just pay off every mortgage in America instead of bailing out these irresponsible companies and the extra money every family will have will be spent on stimulating the economy. And crazy as it sounds, that sounds like a pretty good idea to me and I bet it might cost less than what is currently being proposed. I think I would rather bail out families than bail out these corporations. But of course, this won’t ever happen because families and individual people don’t mean crap. They are only good if they are towing the line and paying the bill so the devils can float away to hell with their golden parachutes.

  22. Milissa Says:
    September 23rd, 2008 at 01:18 PM

    Sorry to keep dragging this out, but just FYI, I have had two friends declare bankruptcy, and both of them had no problem getting credit cards (and I mean MC and Visa, not small retail chain cards with a $100 limit) after about 3 years. And I should rephrase that sentence a bit – it wasn’t just that they were ABLE to get cards, but offers were mailed to them all the time.

    They were also both able to get car loans in the same period of time at reasonable rates – no, the rates were not the best available, but they were definitely reasonable. I think one friend said her car loan was at 5% when people with stellar credit were getting less than 1%.

  23. melhow Says:
    September 23rd, 2008 at 08:23 PM

    Sorry, probably not the place for this, but it is Tuesday. I’ve waited patiently all day. Where is Murray?

  24. Jennifer Says:
    September 24th, 2008 at 02:42 PM

    can’t help but want to wag my finger at the government as well. Where were you when the banks were giving money to people who couldn’t pay it back? Where were you when people were buying houses they couldn’t afford?[/quote]

    The govt was the one mandating that the banks COULD NOT red-line communities to prevent people who couldn’t afford mortgages – or had a history of not paying their debts – from borrowing money. The govt REQUIRED that the banks give mortgages to people, esp. minorities, with bad credit!

    All the follow-on idiocy: the rolling up of mortgage packages and pumped-up sales to hide the lack of ability to pay and the unlikelihood of repayment; the foisting off of these “instruments” on foreign banks; all that was definitely the bank’s trying to to avoid their liability—but if you write laws to FORCE banks to loan money to people who can’t or won’t repay, then how in the heck can you be blindsided when they DON’T PAY!?

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