Section 1:
The segment I found interesting was in the first chapter,
when the author made the comment about home ownership as being the embodiment
of the American dream. Economists
worried that there would not be enough liquid capital to support those dreams,
and of course they were right. Lenders
took advantage of that dream, and the slew of circumstances that led to the housing
bubble burst are myriad and complex, but basically, this entire crisis stems
from that fantasy.
Obviously just about everything has to be bought on credit – most people
cannot buy anything very expensive without it.
Credit revolutionized the American economy and has allowed the American
empire to grow and prosper (for better and worse). But giving credit to irresponsible people
with irrational pipe dreams (as noble or well-entrenched in broader society as
these dreams often are) is a recipe for disaster. That obsession with property ownership are
the eggs that hold the disaster batter together.
I don’t believe individuals are responsible for this. Plenty of decent, hard-working people (I feel
like a lame politician just saying that phrase) hold this dream, along with
less scrupulous individuals. It has been
ingrained in our culture – our educational, political, religious, and social
institutions – since the founding of the nation. If you don’t own property, you have failed as
a person. Period. I think this is an antiquated, silly notion
that needs to be abandoned, lest we continue to have more crises like this
along all economic sectors (not just housing).
I think this really gets at the heart of who we are as
social studies teachers – teaching kids to question these ingrained values and
evaluate them based on their own merits, and comparing real-world consequences
of holding those values.
Section 2:
As far as responding to the discussion question goes, the
point Jason (I think Gary and Louis did as well) raised towards the end really
stuck with me. They asked, basically,
can we prepare for a situation like this again in the future, given how the
environment (physical as well as social, political, economic, technological,
etc) changes and is essentially unpredictable.
I submit that we cannot. We can
put safeguards in place to keep things from happening again like we did during
the New Deal, but we cannot anticipate future situations with any more degree
of accuracy than we can predict the weather more than 10 days in advance. I know that sounds depressing and it is, but
until we all turn into omniscient beings, it just isn’t possible.
Shawn,
ReplyDeleteI agree with your perspective on the book when you discuss how giving the credit to "irresponsible people" can indeed cause a lot of unintended consequences, both for the people and their creditors. The same could be said about the rising bubble of unpaid student loans that the government will have to eventually take major action to fix (right before the elections I imagine). I also agree about the ridiculousness of certain social standards in America, such as owning a home or making a certain salary being the ultimate determining factors in an analysis of a person's success. With the housing market the way it is, people are relying more on renting and subleasing their places of residence higher than ever before, except perhaps in the 1930's. People will use the credit that they shouldn't be spending in order to obtain a larger home or a new car, many times in the pursuit of just being looked at as the American definition of "successful".
I don't think we can prepare for this, either. We can put safeguards in place, but safeguards can be dismantled.
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