Banks and governments using shame tactics to keep people stuck in debt slavery

[kopperhead]

I think the article missed a 3rd important reason people stay & keep paying... not just guilt, but they honestly love their house.  Maybe it's near neighbors, family, good school - whatever the reason.   They think as long as I have my job, the same job I had when I signed on for the payment, what's the big deal?  It'll recover value eventually, at least back to break even.  I bet there are a lot of people like that.  Afterall the mindset is that until you've sold an asset, you haven't lost any money.  Now, with what we all know, we know there is little chance in hell of a breakeven, but have to remember 99% of the population is life as usual.   As long as they keep the boss happy, it'll be the other guy that gets let go, they'll keep the McMansion, and everything will be fine.

or i grew up there?  yeah, lots of reasons.

Here's a history lesson I learned today.

Went to the library to watch 'Tecumseh's Vision.'    They outright showed that Jefferson used debt slavery against the Native Americans to get their land "legally."  Got them to "trade" furs for white folks stuff:  clothes, pots, beads, etc. etc. etc.   Then talked them into taking more than they had furs to trade for "to pay for later."  Then they couldn't come up with the furs and ended up trading land to take care of their "debts."


It's been the same shit over and over and over and over and over and over and over and over.    And we all just keep taking it.


A friend of mine said something tonight that was quite interesting:  "They can't do anything to us that we don't go along with.  We are helping them to enslave us."  

fool me once....shame on you. fool me twice...

the ball is in our court.   what do we do?

[ellen45]

The idea of "shame" over defaulting on debts like unaffordable mortgages ought to be as archaic as a buggy whip factory in view of the fact that Wall Street firms, big banks, and big corporations are not only defaulting left and right but are being PAID by the taxpayers at the same time. 

[Alecia]

People desperately want to be the "Money Magazine" poster couple that manages to have a beautiful house, 2.5 well-outfitted children, a nice SUV etc. AND still be able to say that they maxed out their 401ks this year. From what I see on other message boards (VERY non-doomer minded womens forum) people have bought the "cozy retirement" model hook line and sinker and any deviation from that gospel is very close to blasphemy. Recently a woman with 2 small children posted on that board about how her husband had stopped contributing to his 401k- she was furious even though she admitted that they were having a hard time buying groceries. The other posters bashed her husband saying that he was ruining their future security and she should consider leaving someone so reckless. I about died.

These people won't change their minds until those accounts hit 0.  It's like getting a fundamentalist to consider an abortion.

[C.Pepo]

What amazes me is the number of people that are seriously considering walking away from a home because they're under water on the note, yet will find every excuse imaginable to justify continuing to pay for the $40,000 car parked in the garage.

[mtlouie]

People desperately want to be the "Money Magazine" poster couple that manages to have a beautiful house, 2.5 well-outfitted children, a nice SUV etc. AND still be able to say that they maxed out their 401ks this year. From what I see on other message boards (VERY non-doomer minded womens forum) people have bought the "cozy retirement" model hook line and sinker and any deviation from that gospel is very close to blasphemy. Recently a woman with 2 small children posted on that board about how her husband had stopped contributing to his 401k- she was furious even though she admitted that they were having a hard time buying groceries. The other posters bashed her husband saying that he was ruining their future security and she should consider leaving someone so reckless. I about died.

These people won't change their minds until those accounts hit 0.  It's like getting a fundamentalist to consider an abortion.

You've hit it right on the head.

what do we do?

When most people think like Aleica posted about, there's nothing we can do.  The momentum will carry the day.  People don't see the truth until it's too late to stop.  It was the same with Tecumseh's people.  He tried to tell them they were going down a bad road, but the pots and beads and crap was more important to them.

People are pretty much the same across the board.  "The eye of man is never satisfied."

[Arraya]

What amazes me is the number of people that are seriously considering walking away from a home because they're under water on the note, yet will find every excuse imaginable to justify continuing to pay for the $40,000 car parked in the garage.

It an easy cost/benefit calculation.   You applying emotion and ethics to a math problem.  There is no financial sense in throwing money at a depreciating asset when you could get the same service(rent) for less.  The main problem lies with our economic emperors thinking it is a good idea to gamble with such things.  But that is another story. 

[haniel]

People desperately want to be the "Money Magazine" poster couple that manages to have a beautiful house, 2.5 well-outfitted children, a nice SUV etc. AND still be able to say that they maxed out their 401ks this year. From what I see on other message boards (VERY non-doomer minded womens forum) people have bought the "cozy retirement" model hook line and sinker and any deviation from that gospel is very close to blasphemy. Recently a woman with 2 small children posted on that board about how her husband had stopped contributing to his 401k- she was furious even though she admitted that they were having a hard time buying groceries. The other posters bashed her husband saying that he was ruining their future security and she should consider leaving someone so reckless. I about died.

These people won't change their minds until those accounts hit 0.  It's like getting a fundamentalist to consider an abortion.

You've hit it right on the head.

what do we do?

We make hero's out of those who break new ground by strategically defaulting. 

We get bankruptcy attorneys, debt advice councilors etc to sell their services as "Your route to your own personal bail-out.  Look how the banks are doing so much better after getting relief from their debt.  According to the law, companies are people, just like you. If you have a Troubled Asset - your house - and you want a Relief Program as other people like Goldman Sacs and Bank of America received, talk to us.  There's no shame in turning in a toxic asset to a bank who will lend against it- follow the example of the flagship companies of Wall Street."

When someone walks away and surrenders the deed in lieu of continuing to pay the upside down mortgage, it should be celebrated with a little ceremony - and a lot of publicity. 


Yes, I know there is a difference between walking away or filing bankruptcy and the TARP program.  That's what they want us to think.  The difference is scale.  Corporations want the legal status of humans, let's go for the monkey see, monkey doo approach. 

[C.Pepo]

It an easy cost/benefit calculation.   You applying emotion and ethics to a math problem.  There is no financial sense in throwing money at a depreciating asset when you could get the same service(rent) for less.  The main problem lies with our economic emperors thinking it is a good idea to gamble with such things.  But that is another story. 

I've yet to see a vehicle that doesn't depreciate the moment you drive it off the lot.

[Arraya]

It an easy cost/benefit calculation.   You applying emotion and ethics to a math problem.  There is no financial sense in throwing money at a depreciating asset when you could get the same service(rent) for less.  The main problem lies with our economic emperors thinking it is a good idea to gamble with such things.  But that is another story. 

I've yet to see a vehicle that doesn't depreciate the moment you drive it off the lot.

So, what's your point?  That is standard and irrelevant to the cost/benefit analysis of ditching on your mortgage.

[C.Pepo]

My point is the lack of logic we apply to one asset class over another.

This thread is about moral/social  norms vs logic  is it not?

[Arraya]

My point is the lack of logic we apply to one asset class over another.

This thread is about moral/social  norms vs logic  is it not?

Cars are not considered an asset class because the are expected to dramatically decrease in value

[onemintomidnight]

who is the villian. the person who goes into debt to live beyond their means (particularly credit card debt which is usually full of pit falls and high interest rates), the person who bought the house as an investment and knowingly defaults because their investment is not panning out, or the one who offers the loan.


we may hate the banks for what they have done to make more money, and how they ran their business. We still accepted their offer. No one held a gun to our collective heads and said we had to buy anything.

So who is at fault? the one who holds up the shiny thing that we want, or our desire for shiny things.

[Arraya]

People are people and follow herding behavior, this is known.  When you create a myth that home values only can go up and it is parroted by "official" sources(media and tacitly by government) and all your peers tell you this, what happened is inevitable.    The ones that take advantage of and manipulate, well known and predictable behavior are the most culpable because they profit from and regulate such outcomes.  Put another way:  You can't blame joe six pack for repealing glass-stegall or having the SEC turn a blind eye to fraud for years. 

[onemintomidnight]

People are people and follow herding behavior, this is known.  When you create a myth that home values only can go up and it is parroted by "official" sources(media and tacitly by government) and all your peers tell you this, what happened is inevitable.    The ones that take advantage of and manipulate, well known and predictable behavior are the most culpable because they profit from and regulate such outcomes.  Put another way:  You can't blame joe six pack for repealing glass-stegall or having the SEC turn a blind eye to fraud for years. 

No you cant blame joe six pack for "glass-stegall or having the SEC turn a blind eye to fraud for years."  But you can blame him for being a sheep and following the heard.

If we are all lemmings i hope i am one of the few that is smart enough to run the other way when it is time to jump off the cliff.

[Arraya]

People are people and follow herding behavior, this is known.  When you create a myth that home values only can go up and it is parroted by "official" sources(media and tacitly by government) and all your peers tell you this, what happened is inevitable.    The ones that take advantage of and manipulate, well known and predictable behavior are the most culpable because they profit from and regulate such outcomes.  Put another way:  You can't blame joe six pack for repealing glass-stegall or having the SEC turn a blind eye to fraud for years. 

No you cant blame joe six pack for "glass-stegall or having the SEC turn a blind eye to fraud for years."  But you can blame him for being a sheep and following the heard.

You can blame them but  people are just following millions of years of evolutionary fitness.  Following the herd was a successful survival strategy and it does not go away over night.  Just like you can blame a dog for eating a steak that you leave out.  It does not really help except to make yourself feel better because the dog will do it over and over again. 

In essence you are blaming people for trusting authority.