Friday, February 05, 2010


From the New York Times courtesy of

No Help in Sight, More Homeowners Walk Away

Most of all, though, he struggles with the ethical question.

“I took a loan on an asset that I didn’t see was overvalued,” he said. “As much as I would like my bank to pay for that mistake, why should it?”

That is an attitude Wall Street would like to encourage. David Rosenberg, the chief economist of the investment firm Gluskin Sheff, wrote recently that borrowers were not victims. They “signed contracts, and as adults should also be held accountable,” he wrote.

Of course, this is not necessarily how Wall Street itself behaves, as demonstrated by the case of Stuyvesant Town and Peter Cooper Village. An investment group led by the real estate giant Tishman Speyer recently defaulted on $4.4 billion in debt that it had used to buy the two apartment developments in Manhattan, handing the properties back to the lenders.

Moreover, during the boom, it was the banks that helped drive prices to unrealistic levels by lowering credit standards and unleashing a wave of speculative housing demand.


Okay, Atrios over at Eschaton made essentially the same point I'm going to make, but it's well worth repeating again and again: how can something be unethical if the most powerful and respected "citizens" in our nation, the corporations, do it all the time? Actually, the answer is that it's unethical either way. If you borrow some money and can pay it back, you should pay it back, whether you're a corporate "citizen" or a real citizen, with "real" meaning "human being." Nonetheless, when a corporation does refuse to repay a loan because it's a good business decision to do so, said corporation is lauded for being responsible; when a person refuses to repay a loan because it's a good business decision to do so, said person is condemned for being irresponsible.

This makes clear the main reason why it's an extraordinarily bad idea to give the legal entities known as corporations the same set of inalienable rights the people have: corporations operate under an entirely different set of motivations. That is, human beings, generally speaking, want to be happy, want to make their lives and the lives of their loved ones better, want to make the nation and the world a better place to live. Corporations want to maximize their profits. Period. If that means destroying the environment, or oppressing millions of workers, or polluting the airwaves with bullshit, then fine. They're making more money, and, by definition, that's a great thing. It simply doesn't matter if everything else is going to hell in a hand basket.

Do we really want such Frankenstein creatures to have the same rights real people have?

At any rate, this is the situation in which we now exist. So I say, if it's okay for the corporations to fuck over their lenders, then it simply has to be okay for real people to do the same thing. If you owe more on your mortgage than your house is worth, walk the fuck away. You're maximizing profit, which is the responsible thing to do. Fuck everybody else. It's the American way.