A few months back I heard Republican pundit, Pat Buchanan, humorously quip about the Wall Street meltdown: “This is not free market capitalism; it’s Gordon Gekko greed.”
After reading my last column, an old friend in Massachusetts expressed her deep upset with the greed underlying our financial debacle. A note arrived from Alabama saying, “Greed, baby, greed!” And from California came a string of expletives describing the people who – nudge, nudge; wink, wink – allowed misrepresentation of low quality mortgages that were packaged and sold around the world as if they were AAA investments, turning securitization into a dirty word. Because of these unethical actions, we cannot sell American secured loan products now. This is one of the reasons credit is not available to most consumers and businesses. Greed is not a concept I consider often. However, when the result of greed combined with power equals economic disaster and heightened levels of societal distrust, it cannot be overlooked.
In addition to thousands of foreclosures each month, real unemployment (those collecting unemployment plus those who have exhausted unemployment payments or are not eligible to receive it, and those who have given up looking for work) levels are estimated to reach 10 percent, 30 million people, by the end of the year. If the American automobile industry is allowed to collapse, the trickle down job loss – businesses that receive most of their income from auto industry workers – combined with employees of the auto industry and its suppliers is likely to be around 5 million people. There is an expectation of societal trust, which has been disintegrating gradually over time. Now it seems to generate daily concerns.
You studied hard, made good grades, were accepted by your preferred college, took out thousands of dollars in student loans to pay your expenses because your parents did not have the income to fund your education. You graduated and you cannot find a job that pays enough to meet basic monthly expenses, including your student loans. It’s not that you’re a deadbeat; you’re simply trying to survive. You did everything you thought you were supposed to do to “get ahead.” Now you’re falling farther and farther behind. There is a vague feeling of mistrust that evolves from a sense that you were betrayed somehow.
Over the years, you sacrificed and planned and never ran up huge debts. You always paid your bills on time and you built up an excellent credit history. Then you were in an automobile accident, which was not your fault, severely injuring your spine. Your insurance company found that you’d had backaches previously, claimed it was a pre-existing condition, and refused to pay your medical bills. Because you can no longer work in your old job, your company laid you off. You lost your insurance altogether since you could not pay the premiums from unemployment insurance income. Now your adjustable rate mortgage (ARM) is about to reset. This is the loan your bank talked you into when you would have preferred a fixed rate, 30-year loan. It appears that you will qualify for long term disability. However, your bank is giving you the run-around about restructuring your mortgage based on the current appraised value although real estate prices in your area have dropped in half and many houses in your neighborhood have been deserted through foreclosure. You did everything any responsible person could do. You feel shell-shocked and keep thinking your trust has been violated in so many ways.
This information faced me as I started to write:
- Billions in bailout funds to large banks
- Credit not being issued
- Unemployment rising
- Stock market volatile
- Durable goods orders diminished
- Retail sales tanking
It’s a lot to deal with in addition to our personal issues. What can we do as we endure many more months of this worsening credit crisis and economic meltdown accompanied by deepening distrust?
- Be true to yourself. When distrust seems to be raging in your midst, find ways to behave which reinforce your sense of self trust. Treat others with kindness. Keep your promises. Do what you know is right. Live your values.
- If there is any possibility you could lose your job, figure out a survival plan now – before you have to face the situation.
- With a mortgage that is going to reset, begin working with your bank to refinance the loan several months in advance. If your lender is one that will not restructure loans, the earlier you know their policies the more life control you can exercise.
- Much as you might dislike the process, analyze where all your money goes. Look for ways to cut back and save.
- Each day, find one example of trust to focus on and smile about as an uplifting antidote to distrust.
In these challenging times we must grow in creativity and determination to triumph in spite of the forces that – at times – seem overwhelming.