Friday August 15th 2008, 10:15 am
Filed under: Credit, Credit Card, Debt, current events, real estate
The three little pigs built their homes to withstand the Big Bad Wolf. One built a home out of straw, another out of sticks, and the last little piggie chose bricks. From this perspective, it’s easy to choose a house.
As adults we know home ownership — and its funding — is a lot more complicated. Take for instance the current mortgage crisis. This week Greenspan called a bottom to the housing market, and The Wall Street Journal ran a poll:
Do you agree with Alan Greenspan’s forecast for house prices to stabilize in the first half of 2009?
You can weigh in yourself at The Big Picture blog.
Pigs have a bad reputation for being stupid or greedy. In reality, science shows that pigs are just as intelligent and social as the family dog. Unfortunately, descriptions like “greedy pigs” creep into discussion about who is at fault when discussing the mortgage crisis.
The short answer is that everyone is partially at fault — our culture for being more accepting of debt, our banking and government systems for relaxing rules, and our media for encouraging too many of us to take brick houses and turn them into straw.
An in-depth series in The New York Times explores the role of advertising in the mortgage crisis. Specifically, how advertisers (industry self-described “ad-holes”) literally re-wrote the language of credit to make borrowing against your primary asset more palatable. And, coupled that with images of the “good life”.
And is this debt crisis situation as “American as apple pie”? Unfortunately, no. Here’s a British take on the recent housing troubles:
A crumbling sign on the first house boasts it is “For Rent” but, given that it doesn’t even have a door, it seems unlikely the owner, if there is one, will be getting too many inquiries.
And another explores how we Americans are exporting our credit card addiction:
“People who would kill their sisters or daughters for bringing shame on the family would do anything to avoid being labeled a debtor,” said Nazim Kaya, the president of Consumers Union, an advocacy group that helps those who fall into debt.
But in a cultural shift that has swept aside centuries of tradition, credit cards have become commonplace here. Only three decades ago, Turkey had fewer than 10,000 cards; today it has more than 38 million.”
So is your “financial house” made of straw, sticks or bricks?
