Vigeland: Let’s start with a little definition. How do you define ethical behavior?
Cohen: Ethics concerns are the effects of our actions on other people. And so ethical behavior is that which has a benign effect on other people, or certainly doesn’t do harm to other people.
Vigeland: Given that definition, you know, as we’ve just heard from Nancy, there’s a lot of, shall we say, frustration out there from people who say, “Look. I did nothing wrong. I was responsible. My neighbor’s going to get a bailout. Where’s mine, even though I don’t really need it?” How are we supposed to reconcile, I guess kind of the greater good, versus individual fairness, especially when it comes to the dollars in our pockets?
Cohen: It’s an understandable feeling, but it’s a poor guide to public policy. Once you start conjuring up this Victorian notion of the undeserving poor. Look, we help people who make mistakes all the time. When someone goes to the emergency room, the doctors don’t question their moral worth, they make a medical decision. We send the fire department to someone’s house without asking why did their house catch fire? What it is to live in a community is to shoulder the burden of responding to the needs of those around you, without making moral judgments.
Vigeland: But, you know, there seems to be this notion that helping people in trouble is equivalent to rewarding them for bad behavior. But, as you said, we choose as a society to help people all the time. Why is this different?
We put out the fires when a house burns. Then we ask if the owner set the fire, before we pay his insurance, and if yes, we may send him to jail.
The emergency room treatment is not really a valid analogy. People will not, presumably, die if they have to move out of houses they cannot afford. Rental units are available. If foreclosed houses go on the market, someone who CAN afford it might buy.
It is one thing to help people who make a mistake. Restructuring mortgages so people can maintain thier homes and pay the mortgage is one thing. Giving these same people a thousand dollars a year for keeping up the mortgage payments is rewarding bad behavior. What about those who have paid thier mortgage on time? Sorry you are not only helping your neighbor stay in his house but are rewarding him with a $1,000.00 a year? Please.
People come to our agency, a housing/homelessness non-profit mainly doing transitional housing, on a regular basis who walk away fuming. They’re in a home or rental, and they’re heading up against it, and we have some funds for preventing homelessness, which is much cheaper than dealing with homelessness having already occurred. Our service coordinator talks them through intake, and then tells them — well, it gets repeated as “they said i don’t make enough for them to help me!”
What we say is, when your income, current and projected (and we try to be reasonable but hopeful, not including lottery tickets) means that your current housing costs will put you back where you are in a couple of months *even if we pay every back debt you have* today, then we can’t help you. Your situation is unsustainable, and you need to make a change, which we will help you with.
That’s answered with “but i’ve raised my babies in this place” or “i’ll never find a place as nice/big/adequate for what we pay (and they aren’t paying)” which is all true. But if you have $1,000 coming in and $750 a month is your total housing cost, you, um, don’t make enough for us to help you.
What i’m hearing about the housing part of the stimulosity plan is a certain willful tone-deafness about this very factor. They toss around 9 million facing impending foreclosure, and i’m sure that’s true. But i doubt most of those would make it past our screening policies — most of which are rooted in HUD/federal mandates for our primary grants. So how many of the 9 million can/should qualify for some form of federal assistance if in a couple years you are guaranteed to be right where you are, *even if we pay every back debt you have* today.
I’m guessing, based on my experience here in central Ohio, that vanishingly few of these 9 million will make it past the sustainability hurdle. So what’s the point of the plan, other than bank bailout by indirect means? Which may be the real point after all.
For the vast majority of America, this is not about helping our “neighbors” or anything even close. The [b]foreclosure problem is confined to [i]five[/i] states[/b] — California, Nevada, Arizona, Florida, and Michigan (which is a bit of a special case).
Everywhere else in America default and foreclosure rates are in the vanishingly small low single digits. The first four states in trouble are all places where people paid far too much money, and borrowed far too much of that amount … because the real estate markets were frothy and people figured that a nice $100,000 profit would be a piece of cake, they suspended all rational judgement.
Now they the rest of us to bail them out of their stupidity? And cupidity?
For some reason I don’t think they would have shared their big gains with me just because I choose to farm for a living and had a bad weather year. Now they want me to share my meagre gains because their greedy plans didn’t work out?
#2, the analogy makes sense if you consider your house to be something you earned and something you deserve to keep rather than something God gave you. And I thick it’s pretty clear most people, particularly the ones who are underwater right now, fall in the former category.
It would actually cost our society more if we let people forclose too easily. Foreclosures mean that their neighbors housing values go down.
#5 – the state does seem to spend a lot of money subsidizing farms, especially corn. I think this began during the seventies.
Those who have good credit ratings should now refinance their mortgages. They can be rewarded.
But the issue is moral hazard. In general, moral “hazards” are myths. Cohen gets it right, our unwillingness to help doesn’t reveal our better nature.
#7 Why should folks who live frugally in trailer parks and who bike to work subsidize folks living beyond their means in McMansions who sneer at the “Trailer Park Trash” as they speed by in their flashy, credit fuelled automobiles?
Surely the folks in the McMansions should trade down to housing they can afford, and the folks in the trailers should trade up as housing values become affordable to them.
As a home owner that bought below market, at a low 30 year fixed rate, for less than I could “afford”; and as one that did not run up my credit card and default on it; I consider my “unwillingness to help others” from defaulting as unwillingness to help others commit FRAUD. They borrowed more than they could ever pay back to live a lifestyle beyond my own and beyond their ability to sustain…and now they have the audacity to demand that I pay for their profligacy.
As a home owner, I am VERY willing to let them default on their mortgages. I bought my home at a fair price and it was AFFORDABLE for me. I do not lose my dwelling if others default on their mortgage. If there is a period of deflation, and the dollar value of my home drops, it will still hold value because I live here. It isn’t an investment, it is my home. Those that borrowed money to speculate in real estate…money that they had no way of repaying…perpetrated fraud.
I do not wish to be pulled into bailing out their fraud. This feeling is compounded by the fact that the amount of “bailout” in question puts my minor children in debt FOR THE REST OF THEIR LIVES. It also likely puts my grandchildren in the same sort of debt. This debt is not of their making and the repayment will be coerced by the full weight of government (read as “men with guns show up if you don’t pay”).
Don’t expect my happy cooperation with being forced to pay for others crimes.
Well said #8. Your reasoning belies your nom de plume.
The more I think about the reasoning here the more it reminds me of the con men who come in the office expecting us to buy into remarkably flimsy stories. This is Bernie Madoff stuff, with the government running the Ponzi.
I find Cohen reliably unsatisfactory:
Aside from question-begging statements such as this, he clearly refuses to grapple with the underlying moral issues, such as the potential of over-consumption or poor stewardship.
However, I am grateful. He is really easy to fisk:
😉
Moral Failings:
1) Lying about your income, lying is a moral failing,
2) Avarice (keeping up with the Jones) is a moral failing,
3) Envy is a moral failing.
these moral failings are what lead to some people being in over their head.
“To make a bad financial decision, isn’t a moral failing. It’s a practical failing. It’s a financial failing.â€
good point #12 – why do these things have to be mutually exclusive? Answer: they don’t.
#7 House “values” — prices should go down, and go down good and hard to the traditional 2.5-3x income levels that indicate sound underwriting and a proper allocation of resources.
Houses are not productive assets. The allocation of so much capital to residential real estate has to be the worst misdirection of economic energy in the history of the world. Cheaper houses make it easy to buy, easy to move, easier to insure, and release money for investment in something that benefits the future.
Prices will go down–the question is whether they will go down fast, or slowly after huge government expenditure. Reason dictates one thing, politics another. So of course we’ll waste the money in a futile attempt to deny reality.
[blockquote]Cohen gets it right, our unwillingness to help doesn’t reveal our better nature.[/blockquote]
Some of us are more than willing to help, John, it’s that we just have heartburn with being forced to do so. We’re more than willing to help those whom we know are in a bad situation through unforeseeable events, but less so those who live high at the edge of their credit. We’re able to make the moral distinctions the government is unwilling to.
#7, John — Farm subsidies have been around since the ’30s, when they were instituted by the administration in hopes of persuading farmers to vote Democrat. That they were of genuine assistance to some people was an excellent by-product.
However … 75 years later we [i]still[/i] have farm subsidies. They got bigger and more bureaucratic. More and more farmers became dependent on them. They continue to create unfair competition for those of us not receiving them. They continue to distort the markets.
Now, in the case of corn, already one of the most distorted markets, they’re adding in over a billion dollars of [i]additional[/i] ethanol subsidy, and it will distort the market even more.
The main reason for opposing these things in general is that even though presented as a “temporary,” “emergency” assistance to address a crisis … they never go away.
It was only a few years ago that Congress finally repealed a 3% emergency telephone tax originally instated to help fund the Spanish-American War.
#16. I see.
On another topic, what do you think of the story of the Prodigal Son? I suppose the father had heartburn as well.
#18. How do you think the father would have responded had the Prodigal Son, instead of repenting, supporting himself by pig herding, and eventually returning home to live as a child under his father’s rule, simply demanded that since he had wasted the inheritance that his father had already given him, that his father send him his brother’s inheritance, so he could continue to live in style in foreign parts.
Interesting parable, Clueless. It would be a different story, and it wouldn’t be the gospel. The father, alas, doesn’t seem to ask such questions. The son simply returns. You see a story of repentance. I read one of magnanimous love. And of course – your view is in scripture. There is the other son who knows, probably, that the prodigal son is profligate.
How do you think the father would have responded?
Clueless, you will get your reward. The father still loves those who aren’t as perfect as you are in your industry or thrift.
I think that the father would have responded like the owner of the vinyard. He would have sent servants to check on his son, and to beg him to repent and to do what was right. Perhaps he would have sent his second son to try to retrieve the prodigal. That is what God did by sending prophets and eventually Jesus. I doubt that the father would have sent more money than would provide “bus fare home” any more than the owner of the vinyard would have given the ungrateful tenants a second vinyard to abuse.
After all, it is the Father’s will that we repent, so that there may be restablishment of communion with God, not that we get comfortable, apart from God.
That does not mean that the Father does not love us. However there is a difference between sending an erring son out into the world with provisions (as God did by clothing Adam before sending him out, and Abraham did by provisioning Ishmael before sending him out) and welcoming the same son home in the absence of repentance.
Thus, I would favor assisting those struggling with their mortgages with making it easier to access low income housing. Similarly, laws that would permit them to rent their homes from the bank for a year at market rates, instead of being evicted might be useful. Nobody wishes to see homeless families, but it is not necessary to subsidize yuppies in their extravagance to avoid this.
As to myself, John, I’m not really worried about my reward. The Catholic church has Purgatory, and I am quite comfortable with that outcome. I know my faults.
[blockquote]On another topic, what do you think of the story of the Prodigal Son? I suppose the father had heartburn as well. [/blockquote]
If a Roman centurion had been there with his men demanding, at spearpoint, that the fatted calf be slaughtered and a ring be put on his son’s finger, it sure would have taken the gloss off the parable, don’t you think?
We, JW you can’t take the fact of the prodigals repentance out of the story. The son does more than simply return.
[blockquote] Luke 15:17-21 17 “But when he came to himself, he said, ‘How many of my father’s hired servants have more than enough bread, but I perish here with hunger! 18 I will arise and go to my father, and I will say to him, “Father, I have sinned against heaven and before you. 19 I am no longer worthy to be called your son. Treat me as one of your hired servants.”‘ 20 And he arose and came to his father. But while he was still a long way off, his father saw him and felt compassion, and ran and embraced him and kissed him. 21 And the son said to him, ‘Father, I have sinned against heaven and before you. I am no longer worthy to be called your son.'[/blockquote]
So we have both repentance and unmerited forgivness. The father also forgives before he hears the words of repentance, yet the son speaks them anyway. I don’t think that you can seperate seperate the elements of the story and play one off against the other. The elder brother comes off looking bad because of his unwillingness to forgive even after the son’s statement of forgivness.
In fact, the prodigal son IS going to get a second whack at his brother’s inheritance. The estate has already been divided once, and the prodigal has spent his half. Now the father is welcoming him back as a son. Clearly, when the father dies, the prodigal will again get half the estate. It’s pretty clear why the elder brother is ticked. And it’s completely human. “He got his share and he blew it. Now you’re giving him what should be MY share??” The problem of the elder brother is, IMHO, the most interesting and challenging part of the parable.
#24. Not really.
“‘My son,’ the father said, ‘you are always with me, and everything I have is yours. But we had to celebrate and be glad, because this brother of yours was dead and is alive again; he was lost and is found'”
There is no US legal system. When the father dies, the elder brother will take his place as head of the household. His younger brother will “live in his tent” and will have a home. Similarly, Easau was ticked that Jacob got his blessing. Isaac got all the family goods. Abraham gave his other sons gifts, but Isaac got the overwhelming portion.
So I don’t think that the elder brother is ticked because he’s worried about his inheritance. In point of fact it was unheard of for somebody to demand his “inheritance” before the death of his father anyway. It was tantamount to saying “I wish you were dead”. Similarly, if one of our kids came to us and said “I want whatever I would get if you were dead up front now, we’d probably not be too pleased, unless we had a terminal illness or something.”
I think the elder brother simply feels neglected and unloved. (Not uncommon among siblings, especially in families that have a problem child).