The house next door
We are all one.
I say this not out of some religious belief or because I’ve been listening to too much U2. Actually, it’s an idea I’ve picked up over the last half a year by reading the business pages of the papers.
In a world in which the gap between rich and poor grows ever more absurd and unjust, there is something extremely satisfying about the way in which the subprime mortgage crisis is playing out.
Poor people in Detroit and Cleveland are victimized by predatory lenders who sell them all kinds of borderline loansharkish and fantastically incomprehensible mortgage deals, and who pays? They do, of course. Their cities do, too, in the most pathetic ways, since they already struggle with the abandonment of homes that nobody seems to want. Ameriquest and Countrywide and its ilk do, too, deservedly.
But so do some of the top bankers on Wall Street, including E. Stanley O’Neal of Merrill Lynch and Charles Prince of Citigroup, who both lost their jobs in the wake of colossal losses in complex securities based on subprime loans. It doesn’t stop there, either. UBS in Switzerland has taken nearly as big a bath in the American mortgage marketplace as Citigroup. BNP Paribas in France. IKB Deutsche Industriebank in Germany. Now there are fears of a global recession.
In other words, somebody in Detroit is taken shameless advantage of, and investors in Shanghai shiver. Such is the beauty of a global economy.
I mention Detroit in particular, since I was there in late spring reporting a magazine story. Detroit certainly has the most amazing urban landscape in America, with 40 out of 139 square miles now reverted to prairie. In the last half-century, the city has lost half its population and demolished much of what was left behind. The first real thought I gave the subprime mortgage crisis was thanks to an excellent Wall Street Journal piece by Mark Whitehead in late May about how rising payments on adjustable rate mortgages were undermining Detroit’s fragile middle class.
Yet as late as last July, that horse’s ass Treasury Secretary Hank Paulson was still traveling around and crowing that it was "far and away the strongest global economy I’ve seen in my business lifetime." A fantastic economy for Paulson and friends, surely–but for the people of Zimbabwe, not so much. For the people of Detroit, not so much. Even for this country’s many non-financial professionals struggling to pay for decent houses in decent public school districts on stagnant wages, not so much.
I’ve noticed a little less crowing in recent months.
No question, there is going to be a lot of suffering before all of this mortgage madness is resolved. Yesterday in the New York Times, Timothy Egan had a wonderfully evocative blog post about the abandoned swimming pools of foreclosed homes in Riverside County, California. The local government is forced to spray them against mosquitoes, presumably trying to prevent a malaria epidemic. Incredible, the way financial sharkery moves into the realm of landscape and nature.
Here’s what I’ve learned from the business pages: That that abandoned California swimming pool is right next to your beautiful highly gardened plot, which is right next to that burned-out shell of a Victorian mansion in Detroit, which is right next to Bill Gates’s stunning Lake Washington backyard.
Ultimately, our money is all connected, our landscapes are all connected, our weather reports are all connected, the clouds and birds flying over our heads are all connected. We’d better try to take better care of each other, or each of us, in his or her own way, will pay.