By Brett Arends
Tony Mathews / Shutterstock.com
President Obama said on Monday that “we are not a nation of deadbeats,” but instead a people who “pay our bills.”
Really?
A close look at the data reveals a very different story — and one that gets far too little airing in public discourse.
Far from paying our bills, the current generation of Americans — or some of them — have set records for default which probably have no parallel in the history of the human race. During the last five years, U.S. individuals have walked away from a staggering $585 billion in mortgages, credit card debts and other personal loans. That works out at about $6,000 per household.
And if the numbers are to be believed, there is probably a lot more to come.
Turn on any news program devoted to the economy and you will doubtless hear some Wall Street blowhard telling you that American households have been “repairing their balance sheets” and paying down their debts. They make it sound so virtuous, and they often then segue into sneering remarks about those degenerate Greeks and other Europeans who don’t behave in the same responsible way.
The truth is very different. According to the Federal Reserve, U.S. household debts peaked five years ago at a gigantic $13.8 trillion. Since then it has declined to $12.9 trillion – a decline of about 7%. To put that in context, household debts today still exceed those seen at the end of 2006, near the peak of the bubble. They are three times what they were in 1998.
Furthermore, as our chart shows, the majority of that reduction hasn’t come from people paying off their loans, but from banks writing them off.
The total debt reduction from the peak, says the Fed, is $954 billion. Loan write-offs, at $585 billion, account for 60% of that. In other words, for all the chest-thumping about how Americans are repairing their balance sheets and how we aren’t a nation of deadbeats, in the last five years Americans have walked away from $3 in debt for every $2 they’ve paid off.
In the first quarter of 2010 alone about 13% of all credit card debt was just written off.
Households weren’t alone. Corporations have defaulted on $35 billion to $40 billion in debt per year in recent years, according to Moody’s.
Heaven knows what the situation would have looked like under a system of honest money.
It’s easy to get too sanctimonious. Once a country gets itself into a disastrous debt hole, write-offs may be the only sensible way out. After all, for every reckless borrower there was also a reckless lender. If a debt is not going to be repaid, a policy of “extend and pretend,” let alone, say, debtors’ prison, is not going to help. So maybe deadbeat economics is the way to go.
But let’s go easy on the chest-thumping.
BUCKHED says:
So folks are a victim of circumstances . A friend who put down a 20 % down payment on his house,he bought a the height of the market. Now his house is 55% underwater…he walked away from the house losing the 60k he put down .
Do he do it with considering the consequences..nope. He tried to work with BofA for two years . They weren’t interested. Why ? Because they were going to get the full amount from Fannie Mae on his loan.
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15th January 2013 at 11:24 am
Administrator says:
Buckhed
Being 55% underwater doesn’t mean you have to walk away. My condo is underwater. I keep making the mortgage payment.
Was he unable to make the monthly payment? If so, it is his fault for buying a house he couldn’t afford.
I have no sympathy whatsoever for people who bought at the top because they thought they could flip it at a higher price.
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15th January 2013 at 11:32 am
sangell says:
Obama’s whole presidency is predicated on us being a nation of deadbeats. People who manage their money responsibly have little need for government. A prudent person takes on as little debt as possible. One does not borrow money to attend college just because one can. One attends college because only by attending college can they achieve the goal they are seeking. They may desire to become an architect, a teacher, a scientist, whatever and a college degree is necessary. To enroll in classes, on credit ,just to acquire a degree of some kind is the road to being a deadbeat and an Obama voter.
Maybe companies no longer offer these kind of deals but when I was working every place I ever worked offered tuition assistance, sometimes full tuition assistance, to any employee who desired to take classes that would improve their skills. A friend of mines daughter is working as a pharmacists assistant at a CVS drug store. CVS will pay some or perhaps all of her tuition costs for her to take courses to become a pharmacist. It will take longer to graduate and you will miss out on the ‘college experience’ of drunken parties and football games but also will graduate with little or no debt and have a job waiting for you if you put in the time and effort.
Obama offers a different deal. Get knocked up, lived in a section 8 apartment for free, decide at age 35 you are going to go back to school to become a pharmacist when your mind has rotted from watching daytime tv for a decade or more and your chances of passing a college level chemistry or microbiology course are slim to none and borrow the money to do it while the government pays someone else to take care of your kids.
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15th January 2013 at 11:56 am
sangell says:
I reviewed a lot foreclosures in Florida a couple of years back. Few were people who bought a home at the top of the markets and suffered a paper loss on house due to a declining real estate market. Almost every case I looked at was a person who extracted imaginary equity in a home via a HELOC. Those that didn’t take out a HELOC suffered only paper losses. Those that actually monetized the phantom equity through another loan on their home were the ones who defaulted.
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15th January 2013 at 12:04 pm
Eddie says:
Like admin, I have no sympathy for borrowers who have lost equity and use that as an excuse to default. On the other hand I do have lots of sympathy for people who are out of work through no fault of their own. Any of us could be wiped out if our ability to work and make money isinterrupted. It’s a very difficult decision to go into debt today, even for someone witht a stellar credit rating and lots of assets. It’s hard to judge risk these days.
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15th January 2013 at 12:13 pm
Gayle says:
I recall something Howard Ruff (yes, Howard Ruff) taught me in a book back in the dark ages of the seventies. He simply explained how much money is needed to pay for immorality. Immorality could be defined as rejection of the basic Judeo-Christian moral/ethical code that was once the foundation of Western civilization.
As quaint, old-fashioned notions like honesty, integrity, hard work for a fair wage, compassion by individuals and faith communities for those in pain or want, self-sacrifice, generosity, chastity and marital fidelity, respect for the potential within each individual, etc. etc. These are just some of the tenets that are being trampled.
In the good old days, people felt a moral obligation to avoid debt and to pay off what debt they did acquire. Lenders felt a moral obligation to make prudent loans that would not put their institutions at risk. As moral obligation in the financial world has diminished, it has cost us incalculable sums of money and has left our economy gasping it’s last painful breaths. As moral standards for individual and family responsibilities have waned, we have gained huge numbers of fatherless, impoverished children.
Just thinkin” about the roots of our mess.
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15th January 2013 at 12:24 pm
Administrator says:
Gayle
You nailed it. This is just a symptom of a cancerous tumor that is engulfing our country. Honesty, morality, self responsibility, and speaking the truth are just quaint notions. Greed, avarice, power, and control have been rewarded in this warped culture. It will surely end in tears.
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15th January 2013 at 12:31 pm
ecliptix543 says:
And why shouldn’t people walk away? The governments from local to federal do it, corporations have whole divisions of lawyers to tell them how to do it, banks wrote the book (and the laws) on how to shaft a creditor – entire nations default on a regular basis. What makes a single person’s decision to follow the example of virtually every ‘official’ into default irresponsible? That’s like saying you’ll get ahead in life by being loyal to your company. Bullshit.
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15th January 2013 at 12:31 pm
Administrator says:
When people see politicians, bankers and corporate executives get away with crimes and misdeeds, they figure why should they follow any moral code.
Those who continue to try and live their lives the right way end up being screwed and pissed on.
A showdown is coming and it ain’t gonna be pretty.
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15th January 2013 at 12:33 pm
Bob says:
I agree that the the psychology of debt default can be ethically troubling. I make no excuses for the many tragic mistakes of optimism this peak of social mood created. I do believe defaut is the cleanest, best option for starting a fresh future.
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15th January 2013 at 12:33 pm
ecliptix543 says:
Admin – Yep. That’s pretty much it. I do know right from wrong and I take my debts seriously, but when doing right gets you fucked over and doing wrong gets you ahead, the society is already dead. After the death of a body, some cells live on for quite awhile… nations are no different.
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15th January 2013 at 12:37 pm
napari says:
As quaint, old-fashioned notions like honesty, integrity, hard work for a fair wage, compassion by individuals and faith communities for those in pain or want, self-sacrifice, generosity, chastity and marital fidelity, respect for the potential within each individual, etc. etc. These are just some of the tenets that are being trampled.
Gayle and admin got this right….
Pointing at bad behavior never justifies bad behavior.
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15th January 2013 at 12:40 pm
sangell says:
As far as home loans go I have no problem with a person ‘strategically defaulting’ on loans made prior to 2008 when the banks and US government blew the bubble. The banks are, in large part, responsible for putting people in overvalued homes they knew to be overvalued.
The average person relies on the banks appraisal to keep them from paying too much for a house. If the bank is willing to lend $300,000 the person figures the house is worth that much…at least. They know the bank will not lend them $50,000 to buy a $30,000 car and they assume the same prudence would be used on an even larger home loan. That prudence broke down in the bubble years for two reasons. First, banks no longer held tmany of he mortgages they originated and two the appraisals could come in at elevated levels because underwriting standards went out the window. An appraiser could honestly say that comparable homes were being sold for $300,000 but what he did not consider was that was only because lenders were giving $300,000 loans to unqualified buyers.
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15th January 2013 at 12:49 pm
AWD says:
Our government is $16.4 trillion in debt and is borrowing more money just to service the debt. So are Americans (borrowing for debt service). Once the game of borrow from Peter to pay Paul ends, the music stops, holy shit will it be a mess.
The morals, ethics and values that made this country great are gone, wiped out by one generation (you know which one).
Debt=Slavery. The government has gotten into the usury game with student loans, auto loans, and mortgages. Therefore the banksters and government OWN most of the population, which is why they (the debt enslaved sheeple) will do nothing no matter what the tyrannical dictator(s) running this country do.
Why Americans Are Broke, And Getting Further In Debt
Submitted by Tyler Durden
just as the president reminded us yesterday we are not a deadbeat nation, merely borrowing money today to pay the bills of yesterday, so, as the NY Times reports in this all-too-real article, many of the citizens of the US are also living not just paycheck-to-paycheck but short-term-loan-to-short-term-loan.
As one debt-consolidation service noted “They’ve been borrowing just to meet payments on previous loans; it builds on itself.” Rings an awfully loud bell eh? (and yes, we know the government’s finances are not run like a households – though at some point the check book needs to balance). People in tough ‘economic’ situations fall into the ‘poverty trap’, borrowing money at ever higher interest rates in a shell game to keep previous borrowers at bay.
The average debt for households earning $20,000 a year or less more than doubled to $26,000 between 2001 and 2010 – as people dig deeper, precisely because they long to escape. As the focus of the article notes, “the belt-tightening was the easy part… the larger problem was cash-flow.” Critically, experiments show that ‘economic’ scarcity by itself – independent of personality or any other factors – fuels a drive to borrow recklessly.
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15th January 2013 at 1:02 pm
Stucky says:
Fuckit. I am doing a complete 180 on my previously held belief …. that it is the morally right thing to pay one’s debts.
I have lived amongst evil too long. Moral authority? What fucking moral authority are we talking about? Sure as shit isn’t something that comes from biblical principles. The government, the banks, the corporations, the lawyers …. they abandoned that a long time ago. They only use it now to beat us over the head with and to keep us in line in servitude. They get richer at our expense, because we’re so goddamn stupid in continuing to play the game by their rules … separate rules that don’t apply to them. Time to play a new game.
Fuck that shit. I now advocate a new Moral Authority. The Government is now my guide on how to act. I will NOT do as they SAY …. I will DO as they DO. Why shouldn’t I???? Why should I live to a different set of standards? What benefit is that to ME? So, since the government has no problem not meeting its obligations, I shall do likewise.
I urge all my brethren, to the greatest extent possible, stop paying your bills! Default, if at all possible. Get as much Free Shit as you possibly can! Stop being productive! Hasten the coming of the Four Horsemen! Welcome to the New Normal.
“Everyone did what was right in his own eyes.” —— Judges 21:25
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15th January 2013 at 1:03 pm
Administrator says:
sangell
I have no problem with any borrower defaulting on any loan for any reason. It is a contract between a person and a bank. Just leave me, the taxpayer, out of the fucking issue.
My problem is paying for the bad behavior of borrowers and lenders. That fucking pisses me the fuck off.
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15th January 2013 at 1:04 pm
prtrb'd says:
I’m a deadbeat and proud of it. If BofA gets bailed out why should I feel responsible and pay off my engineered 24k book with them? I chose to settle for a 50% discount. The fed steals your savings thru printing $’s and you willingly pay your tax robbery dues and you feel some remorse if you don’t contribute to their theft? Gimme a freakin break.
There IS a cancerous tumor eating at our society, so adjust your morality to reflect your indignity at the crimes being committed. If you play by their rules you will be screwed. What will it get you to live with high standards when standing in a cesspool? Step out of the pool, step out of the system. Stop paying on underwater real estate and feel good about helping the fed-gov-TBTF banking cartel go under.
When the real estate market hits bottom in 10 years time take the wealth you’ve saved in gold and silver and buy your house back from the bank for pennies. Inflation adjusted pennies that is.
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15th January 2013 at 1:10 pm
prtrb'd says:
Ha Stucky, good post.
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15th January 2013 at 1:14 pm
Administrator says:
Stucky & ptrb’d
WRONG!!!!
Good and evil exist. Right and wrong exist.
Your solutions will lead to chaos and blood in the streets.
Your solution is to fuck the rest of us, as your unpaid bills are just passed onto me through taxes and deficits built up by the government.
You borrowed the $24k and spent it on something. That’s your fucking problem. Keep me out of it.
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15th January 2013 at 1:22 pm
Administrator says:
I’m tired of all the bullshit about the evil banks. No one put a gun to your head to borrow.
The vast majority of people who have defaulted on their debts in the last four years are nothing but deadbeat screwups who thought they could live the good life without earning it.
There are consequences to every action. I shed no tears for any fuckup who borrowed more than they could repay and got what they deserved.
Boo Hoo. Life’s not fair. Yada Yada Yada.
Tell me another sob story. A deadbeat is a deadbeat.
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15th January 2013 at 1:27 pm
Stucky says:
Admin
Yes, right and wrong exist. But, WHOSE definintion do you want to play by? I am advocating playing by the government’s definition. What they do, I do. Why not?
There will be “chaos and blood in the streets” regardless. You know it.
You’re fucked Six Ways To Sunday regardless of what I do, or don’t do. AT least if/when I fuck you … you’ll enjoy it.
Hot debate. What do you think?
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15th January 2013 at 1:48 pm
Administrator says:
Stuck
When it is time for blood in the streets, who will have the moral high ground? If we all descend to the level of those in power, then who will be the good guys when the time comes?
Sorry. Homey don’t play that game. I honor my obligations. I keep my word. I tell the truth.
Whatever happened to the notion of leading by example?
If you want to screw the banks, don’t borrow from them or deposit your money with them. Starve them to death. Don’t screw me by borrowing from them, defaulting, and letting them pass the bill to me.
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15th January 2013 at 1:53 pm
Gayle says:
Stucky
There is no way in hell I will model my behavior on the evil cesspool that poses as our system. I will starve first. I probably will when my pension disappears. But that’s just me.
I compromised with evil once and it didn’t go so well.
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15th January 2013 at 2:25 pm
Administrator says:
Gayle
Whenever I use the term gold plated pension and government union drone, I’m specifically excluding you from my rant.
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15th January 2013 at 2:33 pm
Stucky says:
Admin, Gayle, and other Moralists
Imagine if 50 million households decided to not pay their mortgage for the next two months. It will bring down The System. THAT is a moral thing. What will Obama do? Imprison everyone? Impossible to do, even if he wanted too. Strength in numbers, comrades!
Keep living by YOUR moral code … while they live by THEIRS. Who wins? They do. But, no doubt, y’all will feel good about being so damn Righteous.
Let’s quick look at Slavery during the reign of Pharaoh. It was THE LAW. By your accounts, poor old Moishe Schmuckenstein should just know his place, STFU, and do the right thing … keep makin’ bricks muthafucka! Stay in slavery, and praise da lawd doing it. Had Moishe and his pals done that, they would have never made it to the Promised Land.
And that’s what I’m trying to do. I’m trying to start a fucking revolution, to lead you bill paying slaves to the land of Milk and Honey. But you fucking curs are a stubborn and stiff-necked people.
Hot debate. What do you think?
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15th January 2013 at 2:48 pm
Gayle says:
Admin
Duly noted and appreciated.
I never felt guilty for being a retired teacher until I started reading TBP.
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15th January 2013 at 2:49 pm
Gayle says:
Stucky
I’m all for bringing down the stinkin’ system. 50 million people withholding mortgage payment for two months is a different ball game than Joe Sixpack walking away from a mortgage because he made a poor investment, don’t you think?
Remember, Pharoah TOLD the Hebrews to leave. You’ll need to get God to send 10 plagues to Washington, D.C. and then I’ll follow you into glorious revolution.
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15th January 2013 at 3:03 pm
Stucky says:
2nd ranked Indiana Hoosiers will be on ESPN tonight at 9PM (EST).
They play the Wisconsin Badgers. (A badger is a short ugly animal that stinks like shit …. just like Bo Ryan) IU is the nation’s top scoring team … exciting to watch. Wisconsin has the top rated defense in the Big Ten … butt fuck ugly to watch. Winner will be in 1st place in the Big Ten. Will be an epic battle, which IU wins by 12.
If IU does win, I will wait until next month to start the revolution.
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15th January 2013 at 3:05 pm
Administrator says:
Stuck leading us to the Land of Milk and Honey – Newark NJ
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15th January 2013 at 3:06 pm
napari says:
I like stuck’s concept but the reality is not enough pain has yet been administered to get all the people on the same page.
I think the concept is similar to service men in the military refusing an order that goes against their oath to serve.
Once enough people feel enough pain the extremes on both sides will be willing to move to the center and….drum roll….COMPROMISE!
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15th January 2013 at 3:08 pm
Eddie says:
Moses to God:
“Newark? You gotta be shittin’ me. I wandered in the desert for forty years for Newark? I thought we were getting Boca Raton.”
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15th January 2013 at 3:13 pm
Administrator says:
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15th January 2013 at 3:14 pm
Jeebus, Son of God says:
Gayle
What? I have already sent 535 plagues to Washington D.C. I let Satan into the Oval Office. What more can I do?
Stucky is my voice in the wilderness. Do as he says and I will extend your child bearing years to fourscore and ten.
The Lord Thy God (PBUM)
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15th January 2013 at 3:17 pm
Dorkus Maximus says:
Stucky and Admin,
It’s risky to “play by the rules” when no one else is. I reached a conclusion similar to Stuckys on November 7th – namely, why the hell do I pay my taxes?
Cheating on your taxes is no different that not paying your private debts. I’ve always been willing to pay a fair tax, but at this point is just feeding the beast that’s going to kill me someday.
I’ve never cheated on my taxes but at this point I do not want to have to pay for my own enslavement. At least the slave traders back in the day didn’t make the blacks play for the ships they were using to haul them out of africa.
I need to learn some skills that can be useful for non-cash trades. Anyone have any ideas as to what kind of skills these would be?
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15th January 2013 at 3:18 pm
IndenturedServant says:
Administrator says:
“When people see politicians, bankers and corporate executives get away with crimes and misdeeds, they figure why should they follow any moral code.”
Actually your statement is worded incorrectly. It should read: “When people *with no morals* see politicians, bankers and corporate executives *with no morals* get away with crimes and misdeeds, they figure why should they follow any moral code.”
I believe that if you have to ask that question, you probably lack morals. I don’t ask that question because I have to live with myself. Regardless of whether anyone else knows whether I’ve done right or wrong, I KNOW! My morals and integrity are never affected by anyone but me. They cannot be taken away from me. I can only lose them by giving them away. To give them away makes you just like them. From what I can tell, not many regulars here want to be anything like them.
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15th January 2013 at 3:24 pm
Stucky says:
Admin
Serious question. What college BB team, if any, do you follow?
What FEAR looks like to teams playing in Assembly Hall.
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15th January 2013 at 3:33 pm
John says:
Morality has nothing to do with what the other person or entity does. Sorry, I don’t buy that. Any personal rationalization to steal, lie or pork your neighbor’s wife because someone else or everyone else does or the government does is consummate fucking bullshit.
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15th January 2013 at 3:39 pm
John A says:
John A’s comment above…..
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15th January 2013 at 3:42 pm
Administrator says:
Stuck
One of my alma matars that played the greatest NCAA championship game in history.
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15th January 2013 at 3:43 pm
Administrator says:
Dorkus
Prostitution or selling your organs on the black market.
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15th January 2013 at 3:47 pm
IndenturedServant says:
“I need to learn some skills that can be useful for non-cash trades. Anyone have any ideas as to what kind of skills these would be?”
Uh yeah………be willing to do anything others might need and would be willing to barter for. Figure out what you need, who has it and what you can do for them in trade to get it. You know, hand-jobs for crack etc.
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15th January 2013 at 3:49 pm
IndenturedServant says:
The “new Stucky” ES!
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15th January 2013 at 3:49 pm
crazyivan says:
“When it is time for blood in the streets, who will have the moral high ground? If we all descend to the level of those in power, then who will be the good guys when the time comes?”
Admin, isn’t that a line out of Clint Eastwood’s memorable film ‘Drifty Rider Poopy Pants’?
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15th January 2013 at 3:55 pm
Stucky says:
Admin
Good Lord, that was a helluva game.
FYI for the curs who don’t know ……… ‘nova beat a Patrick Ewing Georgetown team who already beat ‘nova twice during the regular season …….. ‘nova shoots around 80% and misses only one or two shots in the 2nd half ….. unfucking real.
‘nova needs another Rollie. Jay Wright is a nice guy, but he just ain’t getting it done.
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15th January 2013 at 3:55 pm
Administrator says:
They got beat by fucking Columbia this year. For Christ sakes – an Ivy League team!!!!
If they lose to Penn, it will be time to throw in the towel.
They gave Syracuse a hard time, but they don’t have enough horses.
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15th January 2013 at 3:57 pm
Administrator says:
crazy
What would TBP do without your wisdom?
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15th January 2013 at 3:58 pm
Eddie says:
Dorkus
Barter is very tricky. I have had a few great trade relationships over the years, and a lot more that didn’t work out well.
A few things I learned:
People generally forget their commitments if enough time goes by…so collect on what’s owed you in a timely manner.
It’s best to trade for things of equal time value. For instance, I can do work in a couple of hours that might take the other party a month of day labor to pay for…this creates resentment..never mind if I did a great job or made them a better deal than they could get anywhere else.
If you doubt the intentions of the other party, then insist that they do their part or provide their goods or service in advance of yours. If they have a problem with that, then don’t trade with them.
I think this kind of arrangement is ideally suited to the kind of existence that most of us don’t happen to have…a one where neighbors are long term, and neighbors trade with neighbors who know each other and have a level of trust.
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15th January 2013 at 4:29 pm
Administrator says:
Eddie
Have you ever gotten so FU that you pulled your own tooth?
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15th January 2013 at 4:44 pm
Eddie says:
Not even in the depths of a depraved ether binge have I ever been that fucked up.
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15th January 2013 at 4:53 pm
prtrb'd says:
I’m back inside to see what comment my earlier post enlivened. Freaky nice day outside, fresh snow on the trees and sun all over. Feels good to be alive sometimes.
About morals- they come in all shapes and sizes. For myself I do not support the beast anymore. Or shall I say- very little. No income to tax, no bank account and as little support to the beast as befits me to stay unchained.
Admin, if you think my take from BofA has done you wrong then you must not understand the depth of corruptness that the fed stands in. But I know you know that printing all that paper is serious stuff, and passing some off to the banks to keep them happy is just part of their game. Taxes are just a tiny part of the equation.
“Whatever happened to the notion of leading by example?”
Exactly what I’m doing. Follow my example, and give us a hand in bringing down the beast ASAP, before it eats us all for lunch. I’m up here on moral high ground. Come on up. Paying taxes only feeds it more, and to me is moral low ground.
“Your solution is to fuck the rest of us, as your unpaid bills are just passed onto me through taxes and deficits built up by the government.”
Not true, I’ve worked hard labor since I was 15, just turned 57 and still at it. I’ve paid a huge debt to society by personally (at my own expense) saving thousands of acres of pristine Alaska old growth timber, AND by showing that logging in the rain forest can be done in a micro scale, sustainable, family oriented, value added way. Did you know it takes about 2,000 years to grow a 1,000 year old, old growth tree? For the wood to have old growth characteristics it needs to grow up through a closed canopy. There’s no doubt lots of stuff you don’t know, Jim, and one of them is my moral platform.
But anyway, different strokes for different folks, as my pop used to say. I do what I feel is right and hold my head high while making what little difference I can in this world. To that end I do my part in not only not feeding the beast anymore, but taking from it what little I’m able, and also showing others a sustainable way of living. Hint- a debt service economy is not it!
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15th January 2013 at 4:54 pm
Micro-Be says:
Admin said –
“When it is time for blood in the streets, who will have the moral high ground? If we all descend to the level of those in power, then who will be the good guys when the time comes?”
If you are not ashes yourself, you will emerge from the dust to be a great leader. Great men do not adjust sound wisdom, they endure. Thank you for showing your colors, I will continue on the same path as you.
Everyone else –
I dig what you are saying about playing the government’s game. Is it not moral to starve this beast? I wouldn’t do it at the expense of others even though there are great swaths of people who would doing something at your expense in a heart beat. I understand the sentiment. Stucky I have enjoyed your posts on this thread but I’ll respectfully disagree in regards to the application of moral relativism, I just think it is a dangerous slope. Revolution will come, such is the course of oppression.
Through it all we can’t afford to lose our moral men. If we do, we’ve truly lost and the remnants left will have no opposition, the bewildered survivors will have none to shine light for them. Or I’m just completely wrong.
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15th January 2013 at 5:25 pm
llpoh says:
Going through the comments,
Edie said “On the other hand I do have lots of sympathy for people who are out of work through no fault of their own.” That is one of those horseshit lines thrown about willy nilly. My experience is, generally, people are indeed out of work through faults of their own. Didn’t work hard enough, didn’t skill up, didn’t see the writing on the wall or ignored it, didn’t do their part in making the business viable. It sometimes happens, but generally employees play a HUGE part in their own unemployment. But it is easier to say “through no fault of tmy own” I am unemployed. It is almost always bullshit.
Ecliptix says “And why shouldn’t people walk away?” His position is basically two wrongs make a right. It is ethically wrong to walk away from responsibilities. That companies or governments do it does not make it right. He made a better point following that, to his credit.
Bob says: ” I do believe defaut is the cleanest, best option for starting a fresh future.” Bob advocates walking away from bad decisions. He would be one of those who wants to take mulligans when playing golf. That was a bad shot – do over. What a load of crap. Make the decision – suffer the consequences. Learn from it and move on.
Sangell said “As far as home loans go I have no problem with a person ‘strategically defaulting’ on loans made prior to 2008 when the banks and US government blew the bubble. The banks are, in large part, responsible for putting people in overvalued homes they knew to be overvalued.” Basically, he thinks it is the banks fault – the banks made them do it, so they shouldn’t have to pay. What a load of shit. The banks made some loans – probably millions of them – that they new were suspect. However, they did not hold a gun to anyone’s head. Caveat emptor. Sheep are for shearing, and always get sheared by ruthless businessmen. They made a bad deal – tough titty. Live with it. The people are not walking away because of bad appraisals – they are walking away because they are finding it difficult to pay the debt. They borrowed too much. And as has been noted, most of the defaulters remortgaged to take advantage of all that “equity” they had built up so they could buy things. That was the banks fault, too?
Admin has made a series of comments with which I agree. Surprise surprise.
Stucky has made a series of bonehead comments to which I generally do not agree. That is really a surprise. He must have passed his 60th birthday, as he has gotten old and cranky by the look of it. He and Muck sitting side by side:
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15th January 2013 at 5:32 pm
Stucky says:
llpoh
I am reevaluating EVERYTHING. As such, I have decided to generally disagree with everything you ever said, or ever will say.
Keep sucking on that Pay Your Bills titty. mmmmm, good. sucka!
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15th January 2013 at 6:03 pm
llpoh says:
Stuck – I happen to be able to pay my bills, at least until such time as someone confiscates all I have. I am not certain that will not happen. But until then, I will keep paying that which I have agreed to pay. That said, re payments to the myriad governments – local, state, and federal – I am taking steps to minimize that which I pay them. I am going to yank the LLPOH teat out of their fucking mouths. They can find some other trough to put their fucking snouts into.
Gee – I can hardly wait for the battles to come. Seems you have transmorgified into RE.
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15th January 2013 at 6:10 pm
sangell says:
llpoh, like I said, look at as a car loan. If your bank loaned you $50,000 to buy a $30,000 car and said your $30,000 car was really worth $50,000 you might agree to sign the loan thinking the bank knows more about car prices than you do. They make car loans everyday and you haven’t bought a new car in 10 years and if the dealer said it was a $50,000 car and the bank said it was too who are you to argue. The bank even brings in an ‘outside’ car expert who reports back that ‘yep that’s a $50,000 car.
Six months later you drive by the dealer and see that exact same make, model and year car sitting on the lot with a price of $30,000 on it…new! You might come to the conclusion you’ve been had and decide to tell the bank to come pick up your “$50,000″ car and the keys are in it. Ding your credit rating if you want but you aren’t going to pay $50,000 for a car they damn well knew wasn’t worth $50,000 when they loaned the money for it. Let them take the loss.
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15th January 2013 at 6:11 pm
Eddie says:
LLpoh
You are totally full of shit. At this juncture there are plenty of people who are out of work through no fault of their own. What planet do you live on?
What about all those those long term employees who worked for K BToys who got the axe when Romney and Bain Capital took them down? The employees of Federated Department stores? The LA Times? The Chicago Tribune? Leveraged buy-outs have put many thousands of people out of work over the past twenty years.
What about all the people who lost manufacturing jobs that went away to China?
When I said what I said, I was also considering that my own ability to make the kind of decent living I’ve always made is now being jeopardized by the shenanigans of Obamacare and the state run healthcare system. If that causes my little practice to go belly up, is that because I failed in some way to work hard enough? If I have to lay people off because I’m not as busy as I was before the rules got changed in mid-game, will that be their fault?
Hot debate. What do you think?
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15th January 2013 at 6:27 pm
Eddie says:
“When you “pull the Llpoh teat” out of your employees mouths and hand out the pink slips,whose fault will it be that they are out of work? Theirs, for being stupid enough to work for an asshole?
Hot debate. What do you think?
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15th January 2013 at 6:33 pm
llpoh says:
Banks appraisals are, or should be, based on current value – selling price etc., and what people are willing to pay at the time, and may include, for their own purposes, not the buyers, some projection f what prices might or might not do going forward.
People can, and should get their own appraisals. They didn’t. Banks do NOT provide appraisals for the benefit of the buyer. Those appraisals are meant to for their OWN internal justifications.
The borrowers do not go to the bank and say, hey, there is this house for $300k, is it worth that much? No, they go to the bank and say “Can I borrow $300k for this house?”. Same goes for that car – the bank is not a fucking resource to provide appraisals for purchasers. Any appraisals they make have to do with there own internal risk analysis. It is up to the buyer to do his own analysis.
Banks internally justified loans that backfired on them, as values went south in a hurry, and because they grew cocky that prices “would always go up”. They made the same mistake the borrowers did. And the banks lost a lot of money. It is criminal that the banks were bailed out after having made such fuck ups, but that is a separate issue.
People paid too much, and values cratored. Tough shit. They fucked up. They were responsible for what they signed and how much they borrowed and for the repayments.
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15th January 2013 at 6:35 pm
llpoh says:
Eddie – you are a fucking moron. You think employees had nothing to do with jobs going overseas to China? You are stupid as a fucking rock. Lack of their skills, lack of work ethic, unresonable wage demands, too much time off, etc. had nothing to do with it? What a joke. They were intimately involved in their own demise. and the fact that they are still unemployed – whose fucking fault is that? Theirs, for the most part, for the same reasons.
Leveraged buy-outs took their jobs? for fuck sake, if they took their jobs, then fact is their jobs were already dead and they did not know it. If the companies were viable and profitable, the jobs would not necesaarily have gone. Leveraged buyouts tackle businesses that ae in trouble. Often because of things like poor employee performance. But also for a lot of other reasons. LA Times and others got hit because newspapers are dying. Remember that point about reading the writing on the wall? Anyone working for a newspaper should have long ago been making exit plans.
I suppose that Hostess employees had no involvement in their loss of employment either?
Re my employees – they are in manufacturing. They have not developed their skills, by and large. They have their head in the sand. They do no more than they have to, and not a smidgen more. They in many ways make my life hell by their bullshit – not coming to work, their internal bickering, their unwillingness to accept change, their desire to put their personal issues before the business issues, etc. Do you think that their behavior has nothing to do with decisions I make? Do you think that they perhaps should be protecting themselves given what is happening in the world? No – they rely on me to provide them work, they do nothing to increase their marketability, and they cause me problems. But they have nothing to do with their future? If they are relying on me, or anyone, to provide them security, they are idiots. Not my responsibility. They need to take care of themselves.
Sure, they may lose their jobs with me. But if they are “unemployed” for more than a short time, that lies with them. If they are prepared and skilled and cogniscent of what is happening, they will not be unemployed for long.
You really are clueless.
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15th January 2013 at 6:50 pm
llpoh says:
I have literally been part of companies firing THOUSANDS of employees. I can say unequivically that the EMPLOYEES were majorly at fault in all but a tiny handful of cases.
I was part of the closure of a very significant plant in the mid-west. It was heavily unionized. The employees were making $25 per hour back in 1988. It was unsustainable, and the roots of the issue went back to WWII. They were offered $18 per hour, and the plant would stay open. They rejected the offer as they deemed it a bluff. We spent 3 months trying to reason with them, to no avail. We finally set them a deadline, and their answer was “you are bluffing and stick your deadline up your ass”. We issued closure notice when the deadline hit. They then came back and said they would take the $18. Too fucking late. 1700 employees lost their jobs, and the small community where the plant was located went into a depression. Whose fucking fault was that?
The “no fault of my own/their own” stuff is bullshit, and is simply an attempt to avoid personal responsibility.
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15th January 2013 at 6:57 pm
Anonymous says:
llpoh is full of shit.
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15th January 2013 at 8:16 pm
llpoh says:
anonymous is obviously another poor unemployed person who has lost his job through no fault of his own. Poor anonymous.
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15th January 2013 at 8:23 pm
llpoh says:
Total long-term unemployed numbers are about 5 million – those unemployed for over 27 weeks are counted as long term unemployed. I suppose they are not responsible for that in any way – no bad references, no job hopping on their resumes, no lack of skills, no poor education, no lack of effort in finding work, no refusal of work “beneath them”, no history of excess time off, no outrageous demands during interviews, no nothing.
I have been hiring and firing people for going on 40 years. The idea that people are unemployed through no fault of their own is almost entirely bullshit. It happens – but it is rare as fucking hen’s teeth. People almost always make create their own situations, but it makes them feel better to blame someone else and say “through no fault of their own”. And others buy into it, poor little unemployed person through no fault of their own. Not me – I know better.
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15th January 2013 at 8:33 pm
Anonymous says:
for AWD –I hope you likey.
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15th January 2013 at 9:32 pm
BUCKHED says:
Gayle…the bible teaches us about debt …..what does it say about Usury ?
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15th January 2013 at 9:56 pm
Novista says:
Damn, I sure got tired hearing about “speculators and deadbeats” in 2007. Then, any number of people standing on high moral ground had a lot to say. A year later, that first wave of s&d were gone.
Sure, there were a lot of them. But those smarter than the rest, or so they thought, joined the ranks of the unemployed, their 401Ks and other alleged assets were decimated. Enter the era of ‘jingle mail’. Some were ‘strategic defaults’, could afford to pay the mortgage but chose not to. Many others had no option, no savings to speak of (their fault, right?) so there was the government largesse of HAMP and other scams. That’s when the banks or servicers or whomever told them, Stop paying your monthly so you are eligible for a debt restructuring — following by multiple requests for documentation that always got lost. And fees paid by the government for these efforts (your tax dollars at work) with mostly no modifications in sight anywhere.
Now, back in the dim, dark days of the 20th C, banks held their own loans, no MERS fuckarounds, etc. and there were always cases of people decimated by major medical expenses and so on. So banks then were amenable to modifications =if= it looked like the borrower could manage, otherwise, a clean foreclosure, done deal.
That all changed in the mid-90s and got the steroids treatment in the first decade of this ‘American century’. Now, most people do not know who owns their mortgage and note, who their servicer represents and few realize the depravity of the vampire squids et al.
In so many securitized loans, the providers or assigns have been made whole (again, your tax dollars at work, TARP and more). Mortgages have been sold multiple times to unsuspecting investors, look at any tranche of an RMBS and the majority of documentation is fraudlulent.
What’s really funny is, there are people who struggle onward to make the monthly payments, and have no clue that someday, a slime will show up with the =note= and say, You owe me the original sum. Other lurks are giving notice of foreclosure, person moves out, foreclosure is cancelled (why take a balance sheet hit on a short sale? The ‘asset’ is still at book value.) Then you see the debt for pennies on the dollar, probably to more than one vulture outfit …
Robosigning is still alive and in use, sometimes it dates back to the original mortgage signed and modified with no notice.
So, I wonder what is the moral decision between a ‘deadbeat’ and a ‘holder’ of the mortgage with no real documentation, who gets the house? Seems to me, having no standing but senile judges who rubberstamp foreclosures is just more corruption that serves no good to anyone.
What about Zombie Titles? Found this one a couple of days ago:
http://graphics.thomsonreuters.com/13/01/ZombieTitles.pdf
Yes, a download, and with sob stories but also more. Page 5 is enlightening.
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15th January 2013 at 9:58 pm
chen says:
i can imagine all sorts of dastardly ways to stick it to the system but then i go the way of the non-taker priesthood. not because of the priesthood but because, ahm, morality. sad to say, i heard a growing number of youths do not believe in a christian god anymore. the conflict between bible and political correctness has so confused them that they have chosen to conform to social standards. so, as things get worse than they are now, when the new heathens take over government (as opposed to the old hypocrites) do we follow a moral code and keep getting screwed or make a break for it? actually, my question is larger pic, when the nation falls apart and everybody is screwing everybody, is it immoral to stop playing it straight?
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15th January 2013 at 10:30 pm
chen says:
crap, forgot to write: you might be a deadbeat if you pay off your credit cards each month, according to the credit card company.
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15th January 2013 at 10:36 pm
Gayle says:
Buckhed
I’m no Bible scholar, but as I understand it, the Bible recognizes the charging and earning of interest as legitimate business practice. Usury (charging excessive interest) is forbidden, especially as it relates to taking advantage of the poor.
Deuteronomy taught the Hebrews to avoid charging interest to each other, but they were free to charge it to the foreigner. Other places in the Old Testament warn of misuse of interest as part of a general pattern of injustice to the poor.
In the Sermon on the Mount, Jesus taught his followers to “lend without expecting anything in return.” However, his Parable of the Talents uses profitable investing (earning interest) as a model for the investing of personal attributes and skills for the furtherance of his kingdom.
The early church was taught that they should not charge interest when lending to other members.
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15th January 2013 at 11:00 pm
Stucky says:
Usury was only a sin if done to God’s people (a Jew lending to a Jew).
“If thou lend money to ANY OF MY PEOPLE that is poor by thee, thou shalt not be to him as an usurer, neither shalt thou lay upon him usury.” —– Exodus 22:25
Usury was OK ttowards strangers.
“Thou shalt not lend upon usury to thy brother; usury of money, usury of victuals, usury of anything that is lent upon usury. Unto a stranger thou mayest lend upon usury; but unto thy brother thou shalt not lend upon usury…” —- Deut 23:19
The literal meaning of the word ‘usury’ in Hebrew means “to strike with a sting like a snake”
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15th January 2013 at 12:58 am
Stucky says:
The Catholic Church viewed all usury as a horrible sin ….. and that’s the origin of Jews becoming bankers / money lenders. It was too “dirty” for Jesus folk. Seriously.
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15th January 2013 at 1:01 am
AKAnon, AKA government (non)drone says:
Call my a sucker, a chump, naive, whatever. When I make an agreement, I do my damnedest to honor my end of the bargain. I try not to make stupid choices, but I still abide by them. Even if no one else knows, it’s me I have to sleep with every night. Reneging on a commitment because it is inconvenient or worked out poorly is, as llpoh stated, bullshit.
“There never was a truly great man that was not at the same time truly virtuous.”
Benjamin Franklin
Not that I consider myself either great or virtuous, but I strive to be honest, and that means honoring my commitments.
Paying taxes is a different matter-I pay what I am legally required, so as to stay out of jail, and I take the deductions and credits I am legally entitled to, regardless of whether I feel I “deserve” them, because as Clint said “deserves got nothing to do with it”. I didn’t enter into a contract with the IRS, so I don’t feel compelled to pay any more than the legal minimum. If Warren Buffet wants to pay more, he can knock himself out.
I’m not going to jump very deep into the unemployment issue. I suspect that as a group, unemployed folks (especially unions) are largely responsible for their condition, as llpoh has stated. On the other hand, looking at it from an individual perspective, I am certain there are a lot of unemployed folks these days who reasonably could not have done much to prevent it. Is that moral relativism? I think it is a matter of perspective. But there is no doubt in my mind, zero, that the unemployment insurance/welfare/SSDI policies currently in place encourage unemployment and that a lot of leeches find it more comfortable (and probably more lucrative) to game the system than to work. I have heard too many anecdotal cases to doubt this.
Re religion and morality-I’m not much of a Bible thumper (but I capitized “Bible”, just in case). I studied Norse mythology at one time, and I summarize Odinism as “life is a bitch, but you do the right thing anyway, and in the end you lose”. Not very uplifting, but seems pretty realistic and it works for me. I’ll do the best I can to hold the moral high ground, even if that makes me a chump, and I’ll die with a clear conscience.
“Cattle die, Kinsmen die, Even you yourself leave this world, But one thing that I know that never dies, Judgement on a dead man”. Havamal
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15th January 2013 at 2:01 am
Llpoh says:
Aka – good stuff. I am not one bit in disagreement.
Here is another way I see people screw themselves. When I walk around our parking lot, what do I see? Japanese and Korean pieces of shit everywhere. Now I knowGM and Ford are douchebags, , but how many employees in manufacturing have fucked themselves out of jobs by buying foreign good (with the aid of the rest of society, of course). The answer is simply this – every one who has lost a manufacturing job in the US has lost it because of folks buying foreign shit.
But they have lost it through no fault of their own, while they drive toyotas, watch Samsung TVs, and wear their Taiwanese clothes.
The unemployed have done so much to cause their own situation, en masse, it is difficult to know where to start when listing all the shit they have done to themselves to cause their unemployment.
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15th January 2013 at 3:07 am
Eddie says:
Sorry llpoh I still don’t buy it. Entrpreneurs like you were eager to hire unskilled workers when it suited you, and you could leverage their labor into building your own wealth.
It’s certainly true that the big unions priced the American worker out of the labor market in some of the big manufacturing areas, but that doesn’t say anything about the folks who worked for small businesses. Good employees who worked hard, showed up for work and lived on a working man’s wages. A lot of them are out of work, and I doubt the jobs are ever coming back.
I busted my ass to get out of that category, and I did. But I can see their plight, and I don’t see it as all their fault. Personal responsibility is something I believe in, myself, but not every guy out of work is a lazy piece of shit.
I’m struggling with keeping all my staff working. They are good people, and I absolutely hate the thought of having to lay off a single one of them. They have made me successful, and I am as loyal to them as I can be, within the limits of solvency.
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15th January 2013 at 9:03 am