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Nope, I don’t know anything about it. But the guy who made this video seems to. If you are having a hard time understand who to blame for all this, watch this video.
The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.
The more I watch it, the angrier I become about the whole thing. Don’t buy what you can’t afford. The end. The world is saved.
I'm a mid-twenties SAHM/part-time photographer currently living in Chicago. My husband is from Poland, my son was born in April of 2010, and I'm LDS. I write frequently about parenting, adventures in the kitchen, my faith, and photography. I post daily because I love checking my inbox for new comments, so please take a moment to say hello!
You can also find me over at Jenna Cole, my photography site. If you like to smile and laugh then I would love to take your picture!
February 28th, 2009 on 1:34 pm
I loved the “The end. The world is saved.” It’s amazing how we have been counseled by church leaders for YEARS - many decades - to not live beyond our means and to save money for a rainy day. Now the rest of the world is going “Hey, we should start not living beyond our means! What a novel idea!” Sheesh!
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February 28th, 2009 on 2:18 pm
Jenna, this animation was awesome!! I think personal responsibility should be number one, but there is also a responsibility on the part of the *businesses*.
Per the animation, these investors, and brokers, and bankers gave these loans out knowing FULL WELL that they would default, but it didn’t matter because hey, you know what, housing prices always go up, so we’ll be fine, we’ll just sell it.
I think the blame is not just on the homeowners, but squarely 50/50- the option for those horrible, terrible subprime mortgages should never have been there, and the people offered them should never have taken them either.
One last thing- I worked in the financial services industry, for a very well known “American Company” that has gotten rich off selling it’s Americanness and good old fashioned values. And I can tell you, they outright LIED to these people. Not everyone who gets into bad loans are horrible, irresponsible people. A lot of times they are deceived by loan officers. I can’t tell you how many times I heard a salesman telling outright lies to get customers to sign. Or conveniently leaving out a page of the contract. Or not telling the customer something. We have to remember that this problem came from the TOP down- and yes, when it got to the bottom it was met with ignorance, irresponsibility, and people buying things they couldn’t afford.
What really makes me personally so angry about all of this is that these greedy bankers and brokers went into this knowing how risky it was, and they tapped into a market that they should never, ever have approached, because they knew the default rates would be astronomical. And instead of saying “wait a minute, who the h$ll gave these people these loans in the FIRST PLACE?” people just blame it on the homeowners. It’s like giving a kid black paint in a white room, and then getting mad at them for making a mess. The kid shouldn’t have smeared paint all over the place, but more importantly, who was stupid enough to give them put them in a white room with black paint in the first place? I’m angry at the bankers, and investors, and brokers for even making it an option to fund such irresponsible loans, because they basically just gambled on our economy. And they lost. And they’re *still* millionaires, and the rest of us are losing our jobs. It’s ridiculous!
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March 1st, 2009 on 10:02 am
Jenna, I’m sorry, but it is pretty annoying to hear from someone who doesn’t have to work that if we had all just lived within our means that there would be no credit crisis. Not all people are as lucky as you - some are married with each spouse working 2 jobs and still can’t afford a house. Is that fair? Who is to blame for that.
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Katy Reply:
March 1st, 2009 at 10:37 am
I think we are all finding out that nothing is life is guarenteed to be fair.
I don’t know exactly about Jenna’s finances, but I know about mine and people like my husband and I. Other people must think that if we aren’t living on credit, we must either have lots of money rolling in or maybe a rich uncle and don’t understand hard work and sacrifice.
My husband is the only source of income in our home because I stay home and raise/care for our children. We are not rich. We don’t have half the fun things that some of the ‘kids’ our age have, but what we do have is immense security. We can afford the things we need (even the surprise things that come along) because we don’t indulge into every little whim our heart desires. Being financially secure has little to do with how much you make, but more with how you spend what you make. The things that many view as ‘necessities’ - things they would never dream of giving up - aren’t always necessary if you truly want to afford the things that are important.
I worked before we had our son and we had major moola coming in at that time - - BUT, instead of accumulating lots of things and setting ourselves up for turmoil down the road, we used pretty much ALL my paycheck to pay off my student loans, our car loan, and any credit card debt we acquired in collge. We basically lived off one income (like we are now) and while that wasn’t much ‘fun’, boy are we sure happy now and having fun now that we aren’t stressed about this economy. We have so much more control and choice over our finances than we think we do - we can move to a less-expensive area of town or town altogether if that means finding something we can afford. We can sell a car, or trade in for something less-expensive. We can give up some or all of the expensive meals we eat out. It takes time and effort, but there is a way to achieve the goals we want if we are willing to do what it takes.
I know I sound so preachy and like we are perfect (which we aren’t), but when it comes to finances, we have actively resisted the urge that many of our peers in their 20′s have given into and have consciencously not accumulated more than we could immediately afford and have worked to have financial peace of mind. Thanks to my husband’s efforts (and my own of course!), I can stay home with my sweet boy (who by the way has Down Syndrome…so I understand the extra costs that come with that!) and we can get by just fine.
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TH Reply:
March 1st, 2009 at 9:10 pm
Emily, I think you point to a difficult part of why the crisis started - that everyone hard-working family should be able to afford a house. And the key learning lesson from the crisis is that whatever stand we take, and whatever we do, some people will not be able to afford to buy a house, even though they may be good and hard-working people.
If the requirements for home ownership are relaxed, they will end up buying a home only to lose it when the payment comes due and, as we sadly see, this has a serious toll on the rest of the economy as well. In other words, it hurts everyone.
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Kristin Reply:
March 2nd, 2009 at 10:39 am
TH, you make an excellent point.
I am so sick and tired of the American attitude of entitlement. We have twisted the words of the Declaration of Independence to say that we are entitled to “life, liberty, and happiness.” On the contrary, we are entitled to “life, liberty, and the PURSUIT of happiness.” In conjunction with this, we need to understand that my pursuit for happiness must end when your pursuit for happiness is infringed upon. We as a culture have begun to think that happiness is guaranteed. And surprisingly we are one of the least “happy” nations in the world, despite all our wealth. We believe that if we aren’t happy then the govt needs to do something about it (ex. stimulus package). Now I don’t mean to make this political. I personally am on the fence about the stimulus. But I am upset that we argued for the stimulus, b/c we felt entitled. B/c we felt that growth should be continuously upward reaching.
We think that the “American Dream” means that we all deserve to have 2.5 kids, 3.7 cars, and homes with 6.8 bedrooms and 3.2 baths (numbers entirely made up). The so-called “American Dream” is more about being given/entitled to an opportunity to make a better life. It doesn’t guarantee a better life.
I have begun to think more and more about what we really need (not want) to survive. We take so much for granted.
Kinda a hodge podge comment. I personally am frustrated by what is going on. And pointing the finger (be it at irresponsible borrowers, irresponsible lenders, etc) won’t do us a bit of good. Hopefully the world can learn from this so that it doesn’t happen again.
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Cristin Reply:
March 2nd, 2009 at 11:01 am
You’re right. Every American doesn’t get a house by virtue of being American. Or, in the case of TH, by simply living in America.
BUT - I am heartbroken by the tone on this site in regard to the video. I generally love this blog, and I have tried hard to not comment on this post.
Most of you have taken a very “holier-than-thou” attitude about the credit crisis, lecturing about how gosh-darn-simple it is to save. Many (if not all) of us are college-educated. We are all on our own computers. We haven’t known want like many of the poor people losing their homes. Many (not all) were pursued by predatory lenders. It reminds me of the poor grannies & grandads who get letters in the mail and are suddenly in the middle of a pyramid scheme or sending their money to some Zimbabwean princess because they think they’ll get a good return. The people you are so disdainfully and piously lecturing do not have the education that you have. Many don’t have the magnificent institutions like the LDS church to lean on for council. They lack seemingly elementary things, like birth control and health care.
I think it is horrible that we’re in this credit crisis. I live within my means. I have no credit card debt. But, I do have a heart and I do know what its like to live in a city with massive poverty. Imagine living in a too-small apartment without heat (note that it is snowing where I live), when suddenly, you get a letter in the mail that says you can qualify for a low interest loan and get a house! What loving mother would deny her children a better future, particularly when she doesn’t understand the repercussions?
The harsh tone here disregards people who have had medical emergencies and lost their savings. Or car accidents and lost a primary-income provider. If something happened to TH, ThatWife would have her parents to lean on while she presumably finishes her education and/or starts a photography business. Not everyone has your loving support systems.
Every hard-working family should be able to find safe and healthy housing in the United States. Not necessarily to own, but to live in. Not everyone can afford to pick up and move to places like the outskirts of Dallas, where there’s plenty of cheaper safe housing than there is in NYC or Chicago. Currently, that is not the case, and it stinks.
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R Reply:
March 2nd, 2009 at 2:37 pm
Well said.
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March 1st, 2009 on 11:20 am
Hold your tongue. If you and your spouse are both working two jobs and cannot afford the Neccessities (car, house, food, lights.) Then you either need to discover somthing called a buget or you are working ridiculously low paying jobs. When we moved cross border my husband couldn’t work. It was illegal. I worked a $15.00 and hour job and supported my family with children and him in school. Live within your means. Sell a car and take a bus. Live in just as much house as you need. Because of an incredible buget and a lot of self discipline we are now getting ready to buy a second car and a house. But it took us years of saving. Just because she is doing somthing right financially and you are not isn’t her fault.
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March 1st, 2009 on 12:01 pm
Thanks for this Jenna! It really helped me finally understand some of this stuff better.
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March 1st, 2009 on 2:20 pm
I agree that personal responsibility is key. It is really hard to save money! You can’t buy things like fun clothes all the time or go out to eat whenever you want to do so. But I also remember when we bought a house about a year and a half ago—our bank was throwing a no down payment loan in our face—and I can see how some people would think, “oh! If my banker is willing to loan me this or thinks that I will be fine, then it must be true! I will go ahead and do this!” People have trust in their bankers—but unfortunately should have been dealing at an arm’s length with them during the last few years (and probably from now on!).
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March 2nd, 2009 on 9:50 am
I live in California and our deficit isn’t related to just one thing (the housing crisis or credit crisis). Due to the growing amount of people who require aid- via medical or social security… That ran us to the ground. -What we have to understand is people got greedy. Next we have to know that the world runs on varying degrees of credit all the time. It isn’t just about the small family who is working hard to make ends meet. It is about all the strings that bind us together and interconnect us. We learned that what happens in one nation doesn’t exempt other nations from feeling the financial pinch as well. We are all in this together whether we like it or not.
So when you vote for or against a proposition, bond, or public project you are part of the financial decision making. so be a part of the solution and help your county or state make a fiscal decision.
I want to encourage us not to get angry. It isn’t a productive use of our time. We need to find solutions and to be part of that solution. I think we need to be a vital part of our children’s education by providing them healthy economical lessons when we can. And that will give them tools later on in life to deal with what we are dealing with now- because our kids will be facing the remnants of our fiscal woes.
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March 2nd, 2009 on 10:57 am
My advice to everyone is to take a personal finance class at a community college/center, church, or build it into your class schedule if you’re still in school. In today’s global economy, everything is connected and so much more complicated than when our grandparents were our age.
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