Here’s an advertisement for a service that is roiling the business blogs. Here’s an interview with some people who are walking away. Of course, the interview, from 60 minutes, is all this is so immoral. Not a story they would ever run about a company that fired a mass of workers for no other reason than that the company wasn’t making a profit. Or a big enough profit. That, of course, is good clean fun!
All the style sections of papers and mags have had so much fun for the past decade with how we can now all act like millionaires that people are starting to act like millionaires – is that cool or what? Act like a bank and ‘write down’ your debt. Write it down on a piece of paper, scotch tape the key to the house you can no longer afford, and send it to the bank that holds the mortgage with best wishes on selling the sucker.
Last night, CBS' "60 Minutes" took a look at the "subprime loan crisis." You can find the full transcript here, but the following exchange between "60 Minutes" correspondent Steve Kroft and homeowner Stephanie Valdez is a highlight worth examining a bit closer; it's significant both from an economic and, more importantly, a socionomic point of view.
STEPHANIE VALDEZ: Why pay a $3,200 payment on a 1200-square-foot home? It makes no sense.
STEVE KROFT: That's what you agreed to do when you bought the house.
STEPHANIE VALDEZ: Fine. If the value is going up. But we're not going anywhere. The price or the value is going down. It makes no sense because we will never be able to refinance and get a lower payment. There's no way.
STEVE KROFT: You're saying, essentially, that you're going to stop making payments on it? You're just gonna let it go into foreclosure?
STEPHANIE VALDEZ: You know, that's the only advice we've gotten so far is walk away from the home. We don't want to do that to our credit. Why can't our mortgage company work with us?
The issue Kroft is alluding to here is what one might call "the morality of contractual obligation." Without saying it explicitly, Kroft implies ("That's what you agreed to do when you bought the house,") that Valdez and her husband, by walking away from the house, are engaging in some vaguely immoral behavior. It's a promise. They are breaking their promise. Left dangling for the viewer to arrive at is the conclusion that people who break promises are immoral.