Yesterday at the GC London office we conversed about the sub-prime mortgage crisis, and that somehow led to my reflection (as the token American) on the essence of the American Dream.
Of late my home state of Ohio is not just famous for being a big player in the Obama-Clinton showdown, but for being hard-hit by the sub-prime crisis. The BBC actually chose Cleveland, Ohio, to illustrate how the crisis affected one American city.
The lakeside city is one of the most impoverished in the United States (but from the looks of many areas of it, you would never know). Now Cleveland apparently is one of the U.S. cities with rows and rows of repossessed homes. The BBC tells the typical story: The working-class Clevelanders were told they could get cash by refinancing their homes, but werent aware of how they would later have double the interest rate. Of course that resulted in defaults on loans and the sub-prime meltdown. And then these Americans call them imprudent or call them deceived lost their homes.
Americans really do take a lot of pride in their homes and oftentimes the American image of success is epitomized by the white picket fence of a two-story home for their 2.2 children and dog. A blow to the homes of Americans is a blow to the very essence of the American Dream the ideal that people can achieve what they want with hard work, despite the hand they were dealt in life. The American home has served as a symbol of prosperity and hope, from the time frontiersman covered their wagons and built log cabins across the wilderness to the 20th century when traditionally underprivileged groups of people began to obtain suburban residences.
Enter the sub-prime mortgage crisis, and the American Dream proves elusive yet again. Houses have been emptied of their occupants in no time. In Boston, one can take a guided bus tours of bank-owned properties for sale. The CBS show “60 Minutes” also talks about other so-called bank foreclosure tours in California, which lies right at the fault line of the sub-prime mortgage crisis. (Click here to hear a podcast of the episode.)
I guess today instead of pondering a new way to write “sub-prime mortgage crisis,” (market woes? turmoil in the sub-prime sector? sub-prime meltdown?) I thought I’d look at the crisis in terms of people and not billions.
Ellie Behling, reporter
ebehling@www.globalcustodian.com
Add-on: Soon after I published this blog, I saw that the New York Times led with a story about how the U.S. government is contemplating helping homeowners whose mortgages are more than the value of their home. The article says that not since the Depression have so many American homeowners been in this predicament. Ten percent, or 8.8 million homeowners, are underwater.