Entitlement

So, did you hear about the government bailout of AIG?  I’m no economist, and don’t know much about Wall Street, but even I could see this disaster coming. My theory is that it all has to do with the pervasive feeling of entitlement in our country.  I am a part of it too, thinking things like, “I’ve been married for 12 years and have 4 children, don’t I deserve to own my home?” or “This old mini van is looking so ghetto next to the nice Odysseys and Siennas. I should really get a new one.” Or even the smaller ones I actually give in to like, “This sweater is so cute, and it’s on sale.  I’ll just put it on my credit card.” Now excuse me while I vent:

Several years ago when Rob finished law school and we moved to LA for his job, we were astounded at the cost of housing.  There was no way we could buy in a market where small 3 bedroom/1 bath homes were selling for $720,000 and up. So we found a home to rent that was three bedrooms and one bath.  It was a downsize from what we were able to have as students in North Carolina and we couldn’t help but notice the irony in that.  Wasn’t that education he just put in supposed to improve our lifestyle?

Well, after about a year in that house the owners told us they were planning to sell the home, and offered us first dibs. We had no money for a down payment, and were already paying mortgage sized payments on our student loans. The mortgage agent we worked with said he could get us a crazy loan for 90% of the price where we paid less than the interest and then for the remaining thousands we could find an individual who would loan us money.  Apparently there were guys out doing that sort of thing working in conjunction with the mortgage banks. We liked the little house which we were close to outgrowing already, and had a great school and awesome neighbors. We were aching to own this home. The agents asked if we happened to have a rich uncle we could borrow from for a down payment or an inheritance we could collect early.  Both answers were big fat “NOs.”  The  price tag was just too high for us to pull off. We looked around the housing market and said to each other, “Who is buying at these prices? And who is giving them the loans to do it? There is no way people are going to be able to pay those banks back.” It was so frustrating to have put in so much work on education, and get a great paying job, only to be stuck as renters, but we moved into another rental house.

That house was one that the owners bought simply to fix up and flip.  But by the time they got in there and fixed up all of the outward cosmetics, they had spent another $100,000.  Now they were stuck with a huge mortgage and a house that was overpriced.  We offered to rent it out while we looked for a bargain house to buy.  It all turned out for the best for us because it wasn’t long after moving into that home that Rob found a new job in Orange County.  The home prices are just as ridiculous here and we are still renting. I can’t help but feel like those of us who work hard and deal honestly are being punished and paying for (literally) the mistakes of the foolish.

Now that the market is “softening” we are still unable to buy because we still have no down payment and the banks are getting strict on loans (finally).  Now they are actually verifying your income and stuff like that (Grrrr). So why do these banks that willingly gave risky loans to people being bailed out now?  And more importantly, what are we teaching the rising generation about accountability?  There is something wrong when a person feels no guilt about getting themselves into a financial mess and then just walks away saying something like, “but we have no money to pay!” expecting someone else to clean up after them. Remember when all of the department stores had layaway counters? You never see those now, because nobody has to wait for anything. The message seems to be, “Do whatever you want, buy whatever you ‘need’ and someone will come to bail you out eventually.” What happened to “you made your bed now sleep in it!”