It's a Wonderful Life and Sub-Prime 2007

You don't have to be an expert at analyzing films or the economy to figure out that the holiday season favorite, It's a Wonderful Life, has never been so right on. George Bailey does indeed represent the American mortgage company which supplied the money for those who wanted to build and buy their own (modest) homes. Mr. Potter is the greedy banker who laughs and offers 50 cents on the dollar to the citizens of Bedford Falls when there is a run on the bank, and on Bailey's own equivalent of the small town mortgage company.

Bailey, played beautifully by James Stewart, cares for his neighbor, be it the new Italian immigrant family buying their first home, or the pharmacist who has lost his son (in Iraq?). He listens to the people of his town, and he trusts them. And in the scene where there is almost a run on his own company, he explains to all of his customers that they are the mortgage company. Without trust, there is no value to their endeavor, and that it is by Mr. A paying back each month that the new loan is made to Mrs. B, and so on and so on. If they all lose trust and give up faith, it all comes tumbling down. As Bailey says, "The money is not here, it is in his home and her home..."

And that is exactly the problem, the money is not really there, it is tied up in your neighbor's home and someone else's home. And if your neighbor cannot pay back, or you cannot pay back, the entire system suffers. The problem is that trust was not part of this sub-prime equation once someone greedy got their hands on it. In the beginning, the idea was to actually help people build up equity, therefore strengthen the economy, by buying their own homes. Mortgage companies do not want everyone's homes back, they want to sell homes. Many people in the business were actually excited that people who normally would not get access to money to purchase a home, could end up doing so and making monthly payments that were less than rent to a faraway landlord. Because one way you begin to touch the American Dream is by building up equity, and it was not those who took subprime loans who ruined the deal, it was the speculators who used cheap money to flip real estate. They were not investing in homes for their families, they were trying to make a fast buck. But both sides lose, when the borrower does not understand the contract he or she is signing, or no one factors into the borrowing equation the higher monthly payment of an arm.

More importantly, the entire U.S. economy and government is at fault, as so very many people are one illness or job loss away from not only not paying their mortgage payment, but their credit card bills, health insurance premium, etc etc etc. Wall Street has dealt with all this by using these mortgages, which have been repackaged and sold off, as some kind of asset on the other side of the world where no one cares anymore about Mr A or Mrs B until they stop making those monthly payments. Then there is no more money to loan and the money that was in his house and her house and was never really in the bank and the first place (try going to your bank and taking out a really large deposit...I tried it and they told me not even Brinks could deliver the money, which was not mine by the way) is in no one's house and the neighborhood dies and the house of cards begins to fall, until there is no house left.

So at the end of It's A Wonderful Life, when George Bailey is convinced by his guardian angel to not kill himself, but that his life has meaning and without him this world would be a place much worse off...is a hard sell this year. Is it playing on cable at all? Or did someone doing the holiday programming actually sit down and watch the film and realize the negative connotations...?

But there is still a positive side to all this story...which is that George Bailey's Savings and Mortgage Company does not go out of business and is not bought out by a greedy banker for 50 cents on the dollar...Bailey convinces his clients, who are also his friends, neighbors, and fellow citizens, to keep their money with him and keep loaning and helping their fellow men and women keep their homes. His town's economy does not go under. And the greedy banker ends up finding that, somewhere under his finely cut three-piece suit, he too has a heart.

Comments

[Sundialsvc4]

In simple words, it's called "usury." And ancient cultures of whom we still have many well-known records spoke harshly against it ...

"If he has exacted usury Or taken increase -- Shall he then live? He shall not live! If he has done any of these abominations, He shall surely die; His blood shall be upon him." (Ezekiel 18:13)

I especially like this one from Islamic texts:
"Those that live in usury shall rise up before God like men whom Satan has demented by his touch; for they claim that trading is no different from usury." [The Cow 2:275]

There are, of course, many good sites on the Internet which lay-out the various historical and religious views on usury, such as this site (to which I am not in any way affiliated):
http://www.macroknow.com/books/philosophy/usury.htm

And the thought that I would leave with you is this: whether you accept their religious elements or do not, why has this precept been so very rigorously taught, in so many ways, to so many people, for so long a time ... that we have, in the past forty years or so, forgotten it, and watched our own gold turn to dross before our eyes?

Can it be said by any means that these bankers were "wise?" These ancient texts would have said that they committed a serious crime. And indeed, have they not?

[MistahCharleyPhD]

It's a Wonderful Life - the Rest of the Story

Potter's personal health care attendant (the man who pushes his wheelchair) bursts into the party. The festive mood changes immediately as the tale of Potter's purloining of the disappeared bank deposit is told. At first incredulous, the people become increasingly angry as the depth of depravity of the twisted, misanthropic millionaire becomes clear.

Next scene - the crowd carrying torches as they approach Potter's mansion - the evil twin of the house that George, Mary, and their kids have filled with love, it is equally large, but almost all in darkness, and without holiday decoration, neither Christmas tree, menorah, or solstice wreath. Ernie drives up in his cab, and siphons some gasoline from the tank into a large metal can. We see him and Potter's former assistant splashing the gasoline at the entrances of the house, including the wheelchair ramp. Uncle Billy ignites the flammable liquid by throwing his torch into it, and the rest of the crowd follows suit. The volunteer fire department arrives, but Burt the cop keeps them from coming up the long drive.

Inside the house, through the windows, we see Potter desperately going from room to room, trying to escape, but it is useless. Uncle Billy watches with grim satisfaction, and we see the flames of the house reflected in his glasses as he mutters "So long, you old so and so."

We recognize other members of the crowd - the same individuals we saw in the "Pottersville bar" scene - and, like then, there are no women or other members of the Bailey family present, except for Uncle Billy.

Clarence the angel, no longer in civilian clothes, but rather in his magnificent new robe and wings, watches sadly from treetop level. The camera pulls back and we see the house beginning to collapse as the flames leap higher. The final scene pans upward from the burning house to the starry sky, and we see in Gothic letters the following Biblical quote: "I have set before you life and death, blessing and cursing: therefore choose life" (Deut. 30:19).

[realitytrumpsbull]

It's 'the treadmill'. Pay and pay for a house
you'll never really 'own'(the state can seize
your land through eminent domain, and if
you don't pay your property taxes you're out
on your ass), and the insurance and electric
companies spend late nights figuring out if
they can get you for another 15 bucks, or
that most beautiful of all lending rackets,
'home equity lending', baiting people right
back out of their homes. It's all done with
computers...


Tent, 400 dollars...

[JasonGeyer]

Actually, the greedy old banker didn't find that he had a heart. People tend to forget that George was bailed out by his friends, not because the banker forgave the debt or returned the money that he was accidentally given.

The moral is: bankers suck.

[Lt]

this was brought to us ,untimately, by the christians, because the mindless christin vote was bought by bush with his faith based bribe, than bush got elected (kind of) and continued that other conservatives (reagan) plans to dissolve government and deregulate.


and now we can see what the greed driven capitalist economy actually will look like.

[ndem]

The real problem is that the whole system is too big, not local enough and no one knows the person lending or borrowing. And television, film and popular culture as well as advertisng are all convincing us to get deeper and deeper into debt...this is NOT the case in many other countries in the world where one must actually put down real money, saved over time, for a home, one also does not use credit cards left and right...so no buying things one cannot afford!!!!

[afgail]

You are way too kind. The whole subprime scandle was predicated on congress stripping the federal bankrupcy law of the right of homeowners to renegotiate their mortgages or to exempt forclosure on homes when the homebuyer got into financial trouble. The housing sector melt down is the result of no oversight on the mortgage industry and the unfetteed greed of the banking industry. It is the predictable outgrowth of the incompetence of the Bush administration coupled with his paying off the corporate plunders of our economy. Bush Rangers and Pioneers one and all.

[peterg76]

Debt is not just money, it's control. Banks, whether private banks, central banks, the IMF, etc., understand this.

[Desiderata]

When you borrow too much, you no longer work for your family, you work for people you probably don't know nor ever will.

[liveandlearn]

i agree. it's a wonderful life explains what a bank panic is about as well as anyone. credit unions, anybody?