Rob Horning speculates on the sociological underpinnings of the financial collapse of sub-prime mortgages:
“I wonder if the bias toward
home ownership (as a symbol of arriving in the middle class and
becoming a stakeholder in society’s stability) makes us collectively
tolerant of bad loans—in the grand scheme of things in America,
bankruptcy seems more dignified than being a renter, even though
spending more than you’ve earned seems to me a way of stealing from
posterity. We’re willing to underwrite this fantasy that everyone’s
middle class with more and more exotic financial instruments… What happens when we can fantasize no longer? “
Rob’s onto to something here. Easy credit has been the way to keep consumption up and the illusion of middle-class life intact. It’s also fueled much of the recent economic expansion with construction jobs being the difference between growth and decline in countless US cities and regions.
But its impacts are very concentrated, hitting hardest in Midwest industrial centers, where hard-working, American-dreaming families have seen their real estate piggy-bank turned upside down and shaken until it’s more than empty – with a house that’s under water, won’t sell, and has them on the edge of bankruptcy if not already over it.
The threat of losing your home creates a kind of fear and anxiety that is much more palpable than that of terrorists in far away lands, immigrants, gay lifestyles, and city-people. And guess who’s bugging them everyday to pay up and threatening to take away their home. You got it: a very big and very faceless financial institution.
This is likely to have a significant effect on politics – and particularly on the political landscape in Midwestern battleground states. If you thought populism was a powerful political tendency in ‘06, just wait for ‘08. I hear lots of pundits saying that the election will turn on the Iraq war and “security,” but I wouldn’t bet the proverbial farm on that.
