Not My Financial Crisis -- I've Got Literally Nothing to Lose
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In a literal sense, the financial meltdown has hit me close to home. The smoking ash piles on Wall Street lay just a 10-minute walk from my front door in New York's Chinatown. But my sense of proximity to events stops there. In terms of their impact on the soundness of my sleep, at least so far, the economy in question might as well be North Korea. My feeling of remove from the crisis is a product of the fact that I don't have much to lose. Like millions of Americans, I own nothing -- not property, not stock, not a 401(k) plan, not health insurance, not a car, nothing.
Like most people I know in their 20s and 30s, it takes a stretch of the imagination to understand that I have a stake in the national economy. In terms of day-to-day life, my only ties to large financial institutions are a Bank of America checking account, a single low-limit high-fee Visa card, and a Kilimanjaro of student debt, which I have come to accept as something I will die with, not from, like a benign but grapefruit-size tumor or peaceable parasite dwelling in my large intestine. When people use scary terms like "unchartered territory" and "total meltdown," my first thought is, "Would an economic cataclysm wipe out my student debt? If so, then let's press reset and start the whole damn thing over! Burn it clean!"
I haven't heard much from or about people like me in the last month. Watching the media report on the crisis, you'd think the United States had achieved the Republican dream of becoming a full-fledged "ownership society" populated by an upwardly mobile class of home-owning day traders sitting on fat nest eggs. But it hasn't. So here's a news flash from the young-and-indebted demographic: Those of us without retirement plans or health insurance, who just barely make rent and buy food in the real economy, a lot of us aren't as scared as maybe we should be. We have our own gut take on the disappearance of $9 trillion in electronic NYSE casino chips. And that is, we could give a shit.
There is even less angst when it comes to the popped housing bubble and fractured sub-prime mortgage mess that triggered the cascade. To paraphrase Stalin: no mortgage, no problem. If you occupy your home -- in my case, a small loft that I share with seven people -- on the basis of a month-to-month lease, you're not going to mourn a steep drop in housing prices. You are going to throw a party and hang a piñata in the shape of your landlord. If my landlord faces foreclosure on his property and I am evicted, my next crisis-era apartment will be that much cheaper, assuming I can find enough work to make rent. But what else is new?
I realize at some level that it's facile to think I don't have a stake in a stable economy, or that further meltdown will affect only those with the most to lose. As the economist Max Wolff told Josh Holland in his weekend roundup of progressive expert opinion on the crisis, "The banks' pain is ours. Millions will be fired. When it rains on the top of the hill, those who live on the bottom of the hill drown." I get that. Scraping by will likely become even harder in the days ahead for people in my income bracket. But it seems to me that a decade of scraping by is good practice for whatever's coming. And it's just a fact that this particular era of capitalism hasn't been very good for those of us at the bottom of the wealth pyramid. If it takes some creative destruction to herald a new, more egalitarian, better regulated economy, then so be it. Millions of us are waiting for the reckoning with belts already tightened. They've been tightened for as long as we can remember.
Even though I don't own a home and likely never will, I sympathize with those now trapped into mortgages they can't afford. I made the exact same mistake 16 years ago, when I signed a bunch of dotted lines in order to attend a private college. I learned my lesson early and have lived within my means ever since, getting by hand to mouth on an average freelancer's salary south of $25,000. Eighteen was a good age to learn the massive-debt lesson. Unlike all those foreclosed homes, nobody can take away my fancy if useless liberal arts degree. The best side effect of the tightening credit crunch is that U.S. banks are closing down their private student loan operations, saving a new generation of high school grads from borrowing tens of thousands of dollars at high interest rates just so they can play the prestige name game with a bunch of prep-schooled future investment bankers.
Make that "once-future" investment bankers. Whatever pain is in store for the poor and middle class, surely we can agree that something that rids the world of high-flying i-bankers can't be all bad. Here in New York, there is extra joy in seeing this species of professional join the endangered list. Aside from playing craps with the national economy, the bankers have been driving local rent inflation with their grotesque salaries and bonuses since the last days of disco. As Daniel Brooke noted in The Trap , his study of contemporary post-college penury, the rapid expansion of the financial sector and investment banking in particular -- the ultimate no-experience, high-pay industry -- correlates directly with the decline of affordable housing in the city. (It also correlates pretty well with the rise in popularity of the term "douche bag.") Nothing could be better for New York's low- and middle-income renters than the thinning of the overcompensated, fresh-out-of-Yale Wall Street greed herd. Finally, that day seems to be at hand. In a poetic coda to the i-bankers' three-decade run, Variety reported last month that Johnson-Roessler has acquired the rights to adapt "American Psycho" for Broadway, where Bret Easton Ellis' serial-killing i-banker can bring a literal curtain down on an era. Like the old saying goes, It ain't over 'til the headless hooker sings.
As sad as it is to see Lehman Brothers and Merrill Lynch enter the history books, it's not like former investment bankers and derivatives metaphysicians won't have fulfilling career options to consider. For example, fishing. The Wall Street Journal reports that in Iceland, following last week's government seizure of that country's private banking industry -- after it had had ruined the krona, triggered massive inflation and brought the country to within sight of bankruptcy -- many newly unemployed finance cowboys are returning to the wild sea, pulling cod and herring out of the North Atlantic as did generations of their forefathers. The story quotes Iceland's prime minister describing investment banking as a "fairy tale" at an end. It also quotes the director of the Reykjavik port. "Overnight, the emphasis is going from banking over to solid products," he said, "(like) fish and aluminum."
That's great for Icelandic i-bankers, but what national "solid product" industries will their American counterparts turn to? Sitcom scripts and ab-crunch machines? If it turns out to be a problem finding homes for all those i-bankers, I volunteer to take one in and help him adjust to recession-like conditions, to a world of marginal employment with no benefits other than freedom. I'll show him how to spend a whole day without checking the NYSE ticker, how to find roommates on Craigslist, how to clip coupons. If the crisis does grow from recession to Depression 2.0, my i-banking buddy and I can learn how to deal with this harsh new reality together, as a team. We can travel the country on boxcars, gather around trash fires and sing protest songs in support of sheriffs who refuse to enforce eviction orders. We can Dumpster dive, sneak into movies and work on community farms, where we'll put in a day's honest sweat in exchange for two square meals and a hot bath.
But hopefully it won't come to that. Hopefully we'll figure out a way to retool and rebalance the economy before severe pain is inflicted upon society's most vulnerable. But whatever scenario unfolds, my offer to take in an unemployed banker stands. In return for helping my new buddy adjust to this brave new world, I request only a pinch from his remaining liquid assets to help pay down my student debt. Because while people with foreclosed homes and repo'd cars can declare Chapter 8 and clean the slate, student loans offer no such hope of escape. Like diamonds and herpes, those dotted lines are forever.
Alexander Zaitchik is a freelance journalist.