“Extraordinary to reflect that I have lived long enough to see communism die and then the capitalism that replaced it too; to see the nation state and the empire wither away in Europe, and now to return in Asia, and that I have managed to do this without getting very old at all.”
–Andrew Brown, U.K-based writer commenting on a recent Financial Times article.
I can’t claim any special understanding of what’s going on in Wall Street. But Andrew Leonard’s “The Way the World Works” column at Salon.com brought the above quote to my attention, so I read the referenced FT article. It didn’t clarify much for me, but I’ve linked it so you can read it too, if you like.
What I do understand about our current, massive economic crisis is that it comes as no big surprise. I remember being stunned when Alan Greenspan encouraged prospective homeowners to take out adjustable rate mortgages. He said they were safe. A whole lot of people believed him, too.
I didn’t, and I’m no financial whiz. But having spent most of my adult life working hard but still only scraping by each month, I knew instinctively that “Here There Be Dragons” when it came to venturing into ARM territory. You just can’t get something for nothing. It’s against the law of nature. So way back then – what was that, 2003, 2004? – I knew that the “real estate” bubble was real and nothing to laugh off. I knew that one day, it was going to pop.
As the editor of a weekly newspaper in a suddenly booming bedroom community, I watched with a sort of morbid interest as the developers moved in and started building like there was no tomorrow, covering the beautiful, empty, golden California hillsides that rose all around the community with plastic McMansions. I wondered how in the world the people who bought them could afford to – these houses on their postage-stamp lots were ludicrously overpriced. A great many of them were selling for at least half a million dollars, and that was on the low end. It dried my throat, estimating what it would cost to heat and cool these 3,500-square-foot monstrosities with their cathedral ceilings and “open” floor plans. It gets explosively hot in California in the summer, and if the temperature drops below 75 in the winter, most of the Californians I know complain that they’re “freezing.”
The whole thing was dreamlike, but it was really happening. And it wasn’t just huge houses. I saw people tootling around town in gas-guzzling SUVs and Hummers, playing with their Blackberries and bragging about their new flat-screen TVs and home theaters, countertop espresso machines and “spa” tubs in their gigantic bathrooms. Writing stories for the paper’s real estate section, I visited homes that had walk-in closets the size of my kitchen and living room combined.
When I was in a really snarky mood, I used to joke that if God suddenly took all the realtors to heaven at the same time, there’d be almost no one left in the entire county.
The real estate bubble took a lot longer to burst than I expected, but it finally did. What I didn’t realize was how devastating it was going to be, not just to the real estate market, but to the entire economy. And not only our economy here in the U.S.A., but all over the world. It’s a scary thought, but from everything I’m reading and hearing, it’s pretty sure that what we’re seeing right now is only the beginning of the full disaster.
I’ve always been fascinated by the old Chinese curse, “May you live in interesting times.” And I’ll be honest. There have been periods during my own lifetime that I wished I did live in “interesting times.” My day-to-day, ordinary life seemed so routine, so mundane. A little shake up would have been great, right? I was born in 1956. I grew up watching Westerns and WWII movies on TV. It seemed like things were so much more exciting in the decades before I came along that I almost felt gyped.
Well, without much effort on my part, I got my wish. I am – and we are – now officially living in “interesting times.” But Mr. Brown is right – he’s lived through some pretty amazing times already. So have I, though it didn’t seem like it from the inside. It’s only now, having lived for a half century, and fearing for my children and theirs, that I begin to really understand the real meaning of that convoluted, wise old curse.