(cross-posted at ShameTheBanks.org)
Hello, my friends.
Today, I would like to talk to you about greed.
In the course of trying to save our house, it has become necessary to publish our personal business - something I was not excited about doing.
I realize that in reaching out for help in public, there are going to be people who are supportive, and also people who are critical. When you put your business in the street, that is part and parcel of the deal. It would be ridiculous to expect any different. If you can’t take the heat, stay out of the kitchen. As a blogger, I know and accept those terms.
I have laid myself open to the finger-pointers, and I would like to respond.
My friend JP, who posted about my situation, wrote me today, saying,“People are already speculating that you guys are greedy and I had to tell them, No, they’re not.”
That is, if I may be so bold, high-larious.
This is how it always comes down for the individual.
In my post Entrepreneurship, Greed, 'Moral Hazard' and Music I tried to lay out some ideas that would explain what I’m talking about, but perhaps I can make it more clear here.
This is a microcosm of the kind of thinking that has brought our economy to its knees, and kicked the legs out from under the middle class.
Let me start by asking a question.
Is it ‘greed’ when a small business owner secures financing to pay for the first year’s operating expenses while the business gets going?
Would any sane person expect a business to start up with no capital, just saying, “Hey, if you can’t make enough profit to pay your bills as soon as you start, then you shouldn’t be in business”?
I would hope not.
But that seems to be what people expect of us.
As I wrote in the aforementioned earlier post, my husband and I are entrepreneurs. We are a small business - a two-person business. My husband is a session singer and songwriter. He has been in that house since 1983, including having to refinance to divide up the worth of the house during his divorce. He does not work for a company that pays his salary. His capital is his talent and experience. And that talent and experience have made it possible to live in a house in Los Angeles for over 25 years. We do whatever we can to get through the lean times so that we are able to produce our product. During one of those ‘lean times’ my husband wrote a TV theme song that paid our bills for five years. But if we had thrown in the towel instead of sticking with what we do as well as anyone in the world, that never would have come about, because we would not have been in the professional music environment where that kind of work opportunity exists.
Up until three years ago, we were able to weather the ups and downs of our unpredictable business, cutting back as our particular field got more and more difficult to make a living in. With careful management, we have been able to keep a home that our kids could grow up in. But when you have a business that is feast or famine, one thing that will not happen is that every bill will be paid on time. However, every bill does get paid. And we have had to understand that our credit score is going to reflect this, even though we live up to our obligations.
Guess what? Not having a perfect credit score does not make one ‘irresponsible’. It means that the way our income comes in is different than people who are salaried or guaranteed a certain amount of money per week, month or year. And when we’re out of work, there is no unemployment insurance to cover us till we can find more work.
I am sick to death of being accused of being ‘greedy’ for doing what we need to do to stay in a modest home. I am tired of being constantly pressed to defend my choice of profession - especially when one of the main reasons people give for deregulation is that regulation ‘penalizes risk-taking and stifles entrepreneurship’. Yes, it’s really important not to have any limits on how much money people can make by whatever means they can - but only if it’s a certain kind of entrepreneur, I guess. It's vital to the American Way of Life™ to encourage risk-taking in pursuit of riches. You want to talk about ‘greed’ - let’s talk about the idea that allowing credit card companies to charge arbitrary and usurious interest rates is ‘competitive’ instead of predatory.
When people say “You shouldn’t own a home if you can’t afford it,” that is really not what they mean. They are making a knee-jerk moral judgment about you. Let me clue you - it would not be cheaper to live in an apartment or rent a house. And, guess what? You have to have some kind of decent credit score to rent the crappiest house or dinkiest apartment. They throw around this word ‘greedy’ without having the least idea of what that entails. I am not going to dignify these attacks with specific numbers - you don’t get to judge how my family lives our lives or spends our money because we have made public our situation with a predatory lender.
My issue is not with being broke - my issue is with being lied to, cheated and stolen from.
The reason that we took a predatory loan is that no other ones were open to us, and that we were told that taking a high-interest loan for a year would improve our credit score, and that at the end of that year we could get a better loan. When you do not have the luxury of knowing in advance how much or little money you will be making, you have to do the best you can with what is at your disposal.
We kept up our end of the bargain.
We made those outrageous payments on time for a year.
Had IndyMac kept up their end of the bargain, we would not be having this issue. But it took two more years of those usurious payments to break us.
Dear friends, our ‘greed’ is not the issue. We willingly forgo things that most of you would not consider doing without. Our priorities are not material things - new cars, clothes, vacations, furniture, restaurants; everything we have is second-hand, thrift-shop, broken, or old. We do not use credit cards, and have no credit card debt. Our only debt is our home. Our priorities are our kids, our time together, our music. But one thing we will fight for is a home that our children can feel secure in.
We will not stand by and allow ourselves to be cheated and stolen from by a company whose greed was a major contributing factor to the collapse of our economy, simply because we don’t work for someone who pays us every two weeks and should be ashamed of ourselves because of it.
If we were in the same situation, and had a ‘regular’ job with steady pay, and were laid off, people would not be accusing us of being ‘greedy’ and irresponsible. But it's happening to those people too. The real ‘greedsters’ have raped the rest of the country - and been bailed out for doing it! No one is taking any money away from them; they’re simply given more - out of our pockets!
I have had it up to here with living in Opposite World, where the biggest and greediest are admired for risk-taking, lying, and outright fraud in search of the biggest profits, and those of us who are trying to make our way in the world without starving or living under an overpass are condemned as ‘greedy’.
It is Big Greed, in fact, that has brought this country to the economic disaster we are now experiencing. It has taken somewhere around thirty years for it to happen but the policies of union-busting and deregulation have resulted in such an unequal balance of power between corporations and individuals that real wages have gone down steadily for thirty years for all but the one-tenth-of-one-percent, who have seen their income skyrocket 400%. Wages - money made from actual work - are taxed at 30%, and investment income - dividends from speculation (not used as a pejorative term; merely descriptive) - are taxed at 15%.
So let’s think about that. Since 1980, it has happened at an incremental level - not a giant crash, but in a imperceptible, ‘boiling frog’ kind of way, where it just gets a little harder each year to stay where you are, lifestyle-wise. So, people don’t realize that as a group the middle class - the American triumph of the twentieth century - has fallen farther and farther behind, until the inevitable happened - they could not spend any more.
Rather than wagging a disapproving finger at people who use more and more credit, we should be asking, “Why are people being put in a position where they need credit just to stay in the same place?” Why should you have to go into debt just to sustain a normal, middle-class lifestyle? Why should you have to owe the cost of a small house just to go to college? It was not that way when our parents went to school. We are simultaneously required to spend money to keep the economy afloat, and blamed for it at the same time.
We have been systematically stolen from for 30 years and the bill has finally come due. There is nothing left to steal.
So, please, keep your sanctimonious remarks about ‘greed’ to yourself. Go insult someone else. You have no idea what you are talking about.