My first encounter with mortgages was when I first played the video game Animal Crossing. The premise of the game is that you play as a human who arrives at a town of animals. The first thing you do is pick out a one-room house. A racoon named Tom Nook is the one who sells it to you, and the price is outrageous because he is a greedy crook. But there is no other choice, so you agree to take out a large loan that can be paid off in increments. It’s just a video game, so it is not nearly as complex as the real-life mortgages we have been reading about in The Big Short and The Turner House, but it is the basis of my knowledge about mortgages.When our class first started reading The Big Short many of us outwardly agreed that it was confusing, and Dr. McCoy pointed out that of course it is confusing, because the situation the people in The Big Short are dealing with does not make sense. Steve Eisman and company spend much of the book attempting to get to the bottom of it, and they realize that banks have been giving nearly all mortgages good ratings in a nonsensical manner. The CEOs of the banks didn’t understand it either, but they seemingly did not care to understand it since they were profiting.
As “king of wall street” John Gutfreund said to Michael Lewis, “the people in a position to resolve the financial crisis were, of course, the very same people who had failed to foresee it.” Gutfreund is referring to the CEOs, and while I can’t claim to understand the thought processes of any of these CEOs, what is evident is the result of their actions: the financial crisis. I truly cannot comprehend how they could not care enough to even consider the impact their decisions have on millions, if not billions, of families. Families such as the Turner’s. This is what The Turner House does: it offers a look into how the financial crisis did not just affect the economy. The Big Short did not show how the financial crisis affected families and individual lives. These families were the ones left to sort through the mess of the financial crisis, because while the big banks were bailed out, individual families were not. There are many sides to the story of the financial crisis, and the more of them that I take in the better an understanding I can have.
But as much as the logistics of the financial crisis confused me, what confuses me more is how a handful of people can have so much power to affect others, while also having such an immense lack of compassion and empathy. But are these CEOs really to blame, or is more a result of the capitalistic system we have in place that so greatly encourages greed? Lelah’s gambling addiction in The Turner House got me thinking about the effects of greed, and how it may function in the economic system we have that lead to the financial crisis. After doing some research on different definitions and effects of greed, I found this:
“By overcoming reason, compassion, and love, greed undoes family and community ties and undermines the very values on which society and civilization are founded. Greed may fuel the economy, but, as recent history has made all too clear, uncontrolled greed can also lead us unto a deep and long-lasting economic recession.” (Psychology Today)
Lelah describes the reason she plays Roulette as this: “It was about knowing what to do intuitively, and thinking about one thing only, the possibility of winning, the possibility of walking away the victor, finally.” Lelah so desperately wanted to be the winner, but once she won money she only wanted to win more. Greed seems to be a never-ending cycle, one that fed Lelah’s addiction. Lelah acknowledged she had a gambling addiction but felt unmotivated to fix it even though she was spreading the consequences of her actions to her daughter Brianne. She loves Brianne, but as Psychology Today said, greed overcomes “reason, compassion, and love,” and “undoes family and community ties.”
Taking it back to The Big Short, John Gutfreund also acknowledged that greed played a role. He said, “the cause of the financial crisis was simple. Greed on both sides — greed of investors and the greed of the bankers” But Michael Lewis thinks “Greed on Wall Street was a given — almost an obligation. The problem was the system of incentives that channel the greed.” I’m not sure if Lewis is right or not, and I still don’t have a definitive opinion on it because I am still learning, but I do think if anything, greed has to be controlled to some degree. It evidently has the power to destroy lives, both at both small and large scales. I also don’t believe getting entrapped in greed means there is no hope for redemption, because both Gutfreund and Lelah felt remorse for their actions. Lewis stated that “He [Gutfreund] advised the students to find some more meaningful thing to do with their lives than go to work on Wall street. As he began to describe his career, he’d broken down and wept.” Lelah cried too. Near the end of the novel she wept, “I hate myself, Cha-Cha, I don’t have anything and I’m tired of it. It’s disgusting.” It’s interesting how tears can represent remorse, as if they could wash away what was done.
I think that considering greed has allowed me to understand at least a little why the CEOs of the banks acted as they did. I can’t know their motivations, but our current economic system seems more than anything like a free for all, which encourages people to only think of themselves. I believe it’s important to look at the larger picture of things, and practice empathy. The Big Short and The Turner House serve as a reminder that there are always more than one side to a single story, and it’s important not to neglect them before judgements are too quickly made.