Homes are more akin to consumer goods than to productive assets. They produce shelter but the value added lies primarily in the building of them and then they last for a long, long time during which relatively little in the way of utility value is added. Yet their prices increase dramatically. I'm no economist but it does strike me as more than a little odd, that enough imputed value has been ascribed to mortgaged homes that a drop in those values could bring down the global financial infrastructure. That so much capital has been tied up in boring old housing instead of out there bravely being risked to increase food production, developing clean sources of energy and cures for cancer leads me to believe that a lot of so-called capitalists are just chickenshit, weasley, blood sucking parasites. Spend a day watching CNBC if you don't believe me. To get a good overview of how the mortgage/credit crisis started I highly recommend listening to This American Life's episode
The Giant Pool of Money
In all honesty I should probably include myself among the chickenshit, weasley parasites. I've got a pension plan that pays me $4,800 bucks a month for breathing, pays 90% of my $10k a year health plan premium, and I've got $400,000 in my 401(k) that guarantees 6.1% for the current year. As to the investments my former employer is making to produce these benefits I have no idea. But I have little doubt that it involves something weasley and parasitic.
Alas, my other significant asset, the equity in my home, has risen like golden vapor from a still lake at dawn and drifted away. I shall in one or more subsequent postings provide details of just how this happened and report on my ongoing negotiations with my bank to modify my loan.
Given the much more dire circumstances of others currently facing foreclosure,and given my income and assets, there are many who would have little sympathy for my position. I share the sympathies of those who more greatly sympathize with those other than myself. Really, I do. I'm currently waiting for Acorn to return my calls and e-mails so I can volunteer to assit those others. I even made a donation and still they don't call.
What is interesting about my case is that I am surely well within the middle class pale. If this is happening to me and if it is true that the existence of a large middle class is a pillar of American democracy and all manner of other cool stuff then....I don't know what. You tell me.
In 2004 my wife and I were in the midst of a divorce. We had two children living at home at that time and, since her job required a great deal of travel, we decided that I should buy her share of our equity and remain in the family home....to be continued.