If it is amoral for businesses to walk away from debt ... why is it immoral for individuals?
Walk Away From Your Mortgage!
Interesting statistics:
- The housing collapse left 10.7 million families owing more than their homes are worth.
- A family who bought a three-bedroom home in Salinas, Calif., at the market top in 2006, with no down payment (then a common-enough occurrence), could theoretically have to wait 60 years to recover their equity. On the other hand, if they walked, they could rent a similar house for a pittance of their monthly mortgage.
- A quarter of mortgages are underwater
- 10 percent of mortgages are delinquent
Comment: Interesting read ... I just culled out the statistics. More below:
Morgan Stanley recently decided to stop making payments on five San Francisco office buildings. A Morgan Stanley fund purchased the buildings at the height of the boom, and their value has plunged. Nobody has said Morgan Stanley is immoral — perhaps because no one assumed it was moral to begin with. But the average American, as if sprung from some Franklinesque mythology, is supposed to honor his debts, or so says the mortgage industry as well as government officials. Former Treasury Secretary Henry M. Paulson Jr. declared that “any homeowner who can afford his mortgage payment but chooses to walk away from an underwater property is simply a speculator — and one who is not honoring his obligation.” (Paulson presumably was not so censorious of speculation during his 32-year career at Goldman Sachs.)
Interesting point....I would dare suggest that corporations are not seen as immoral for the same reason that many people can never see anyone who is poor as immoral; they are wards of the government.
ReplyDeleteWon't stop me from saying they're immoral, though. :^)