Monthly Archives: May 2009

This is a very interesting article that I read in the Washington Post. The article is written by Derek Kravitz and it highlights the measures that homeowners whose houses have been foreclosed take to resist leaving. As we discussed in class last week, the mortgage crisis is very severe and it is devastatingly affecting the live of many. Last week we focused on how many people commit suicide because they are unable to pay their mortgages. However the people that are discussed in this article do not turn to such extreme measures by killing themselves. Instead they feel that these houses are theirs and it is their right to live there regardless of what the banks or police say. Therefore when their houses are foreclosed they protest to leave and at times they do some things that are unthinkable or at some times literally gross. Kravitz states that

One former homeowner rigged his front door with coffeepots filled with boiling water. Another left pile of ferret feces. Hidden compartments have been used as living spaces, with people hiding in attics, tool sheds and garages to elude police.

I understand the plight of these people. They have worked hard to achieve the American dream of home ownership. It definitely is not easy to let go of their investment, regardless of what anyone says. The people who are doing this is not necessarily the working class America who were working from pay check to pay check and suddenly lost their jobs which was their only means of survival. This is also affecting Middle class America.

In the D.C. suburbs, a new class of squatter has emerged, as people illegally remain in homes after they have lost them to the bank. Some have become aggressive in their efforts to stay, setting booby traps to ward off police.

Many people may ask why these people so resistant. Can’t they just leave and rent somewhere. Yet we tend to forget that to rent somewhere cost money. Most of these people are broke and jobless. They used what little savings that they had to pay their mortgage. Their retirement plan money that they could have used to sustain them is all lost in the stock market. Their unemployment benefit may have run out or it is just not enough to sustain them and their family. Therefore they are facing a dilemma of being homeless on the streets or squatting at a place that they once called home. This is an extremely sad predicament to be in.

A national survey released last month showing the impact of widespread foreclosures found that an estimated 42 percent of those who have lost their homes in the housing crisis now have no fixed address. A large number of the cases involve families who have lost their homes and struggled to transition into rental units that they also cannot afford. 

This statistic is alarming. This is almost half of the people whose houses have been foreclosed. This is clear that sometimes rent is not an option simply because some people cannot afford to pay rent.

Squatting has long been a barometer of economic health in urban areas.

This situation is a clear remainder of the great depression and how squatting had become a way of life. I am starting to wonder how far we are now from normalizing squatting. I am also wondering how unhealthy the economy is?  Are we still in a recession or is this a depression? I guess the economic experts will inform us of that soon.

This is the link to read this article in its entirety.

http://www.washingtonpost.com/wp-dyn/content/article/2009/05/02/AR2009050202150.html

This is a very interesting article that I read in the Washington Post. It is about how people are obsessed with credit cards. As we discussed in class credit cards are so easily accessible and being a credit card holder gives us a sense of freedom to shop. However, a lot of us are living in a sense of false consciousness and need to realize that credit cards do not give you the freedom to shop. Instead it enables us to be in debt easier.  Phillip Arlington in this article enlightens us that

If you truly want to spring clean your life, it’s time to ditch your credit cards. We all know that plastic pseudo-currency tempts us to buy almost anything today and repay next month, next year or even next decade. And we know that a card’s interest and fees can dwarf the original price of whatever toy, bauble, event or shroud that we or — heaven help us — our kids purchase

I totally agree with Arlington some people view credit cards as cash. They are oblivious to the fact that credit cards are like loans. They go out and buy everything under the sun and do not think about how or when they are going to pay their credit card bills. Arlington also makes a point that a lot of us tend to ignore. He states that

The worst aspect of credit cards, though, is psychological. When you can immediately have almost any consumer good you want, you wind up not appreciating much of anything. You frequently tell yourself, with a prod from advertisers, that “I’m worth it.” You pay for something with plastic, and then, before the bill arrives, it’s off to the next shiny distraction, payable of course with Visa or MasterCard. You end up with more stuff, more debt, and less satisfaction with any one item.

This statement is absolutely true.  Some people tend to “shop until they drop” because they think that they are worth it. They buy things that they do not need all because they have a credit card at their disposal. Their homes are filled with boxes of goods that serve no purpose, things that they will never use. If someone enters their homes they would think that they are in a warehouse. Since their homes are lined with unused goods. A lot of online shoppers are guilty of this.

Credit cards were once not that easily accessible. Credit cards holders were once people who had good credit ratings and who could prove that they could and have the financial resources to make their monthly payments. People who did not have a credit card had to save their money to purchase things that they wanted. As Arlington states

Contrast today’s attitude with the ancient 1950s through 1970s, when kids and adults actually had to save money before buying something. If you were a kid, you’d do yard work, save your earnings and then buy that bike of your dreams. Sure, it took time, but you had an emblem of your labors and a reason to actually take care of the thing.

Therefore this was a huge accomplishment when you purchase something. You felt a sense of pride and you saw the benefits of your labor. Unlike today a purchase is just a swipe away. Therefore a lot of people are less attached to the goods that they purchase and tend to care less for them. There is a less sense of ownership. When a purchase is made, most people are thinking about what they can buy next. They are not thinking about the hard work that they need to invest to try to decrease their credit card bills.

 Most people need to wake up a face reality and be cognizant of the fact that credit cards are not free money. It increases your debt and often times with all the hidden fees and interest attached you will end up paying a lot more money than if a purchase was made with cash. Arlington supports this point. He states that

Studies show that people spend more if they “pay” with a credit card instead of the cold-water-in-the-face reality of actual cash. Yet it is this reality that we sorely need, to put not just our finances in order but also our attitudes toward consumption. After all, you’re worth it.

I do agree with Arlington we definitely need to put our finances in order. We definitely need to spring clean our finances.  Do not be fooled by all these credit cards companies. You don’t need five or six credit cards. If you can’t avoid having a credit card, one or two should be sufficient. If you take out a credit card read all the fine prints. Make sure you pay your credit card bills on time. As the credit card companies are like predators. They ply on people who are less likely to pay their credit card bills on time because these are the people who maximize their profits.