Credit Crisis

The boss told me the other day that she didn't really understand the economic crisis. I don't fully understand it either but I found the following video to be helpful. I was listening to NPR the other night and a program talked about the sense of outrage and desire for justice that many Americans have in relation to the crisis and the bailout. Basically, many people are saying "I was a good steward of my money and I don't have to foreclose on my own home. How come my neighbor, who bought a house bigger than he can afford, gets a bailout because he made a stupid purchase?" I fully empathize with this sentiment, but there are a couple things that this complaint is missing. First, this is an economic problem right now, but it could quickly devolve into a social one. Since this affects everyone, even people that were good stewards of their money will find themselves in difficult financial situations. Prices may rise, jobs will get scarce. So, even though your neighbor made a stupid mistake, the question is how far will we go to have them reap the consequences of those actions. Will we allow those repercussions to affect us? The second thing that the program brought up was that people make stupid decisions like this all the time and yet society has already decided that dealing with the problem first is more important than determining justice, at that point. Examples are things like smoking in your bed and then your house catches on fire. The fire department will come right away and put out the fire. They won't sit there and try to figure exactly how much you should suffer and whether or not you can afford to have them come and put it out. In fact, even though your neighbors will be annoyed at you, your neighbors want the fire department to save your house because there are ancillary benefits to them. Another example might be going to the hospital in the event of an emergency. In the mini-video, it shows some people walking away from their homes because their mortgages are more expensive than the value of the house. First of all, I think that's wrong. The person borrowed $300K to buy the house. They ought to pay it back. Second of all, the price of something is only worth determining if you are going to sell it. If you want to live in your home forever, then the price that you paid is what it's worth. (Sure, you might want to borrow against the amount of money that you own in the house and that might determine it's current value, but that presupposes that you are willing to move out of your house. Which is the same thing as selling it…) The most interesting part of the NPR program was that an ethics expert (what's an ethics expert) commented that people are clamoring for others to get what they deserve, but if everyone got what they deserved, we'd all be in hell. I don't have any reason to believe that this comment was made with spiritual/religious implications, but I thought it was interesting that even in this economic crisis there is a necessity for grace. The program reminded me how I am inherently ungracious and undeserving and I need to extend grace to others.