How The Effects of the 2008 Housing Crisis Can Still Be Seen Today

The 2008 housing crisis was an event that expelled people from the homes they have been familiar with throughout their entire lives, the jobs that allow them to provide for themselves or a family, and stripped several individuals of their hard-earned savings. Not only did the crisis result in great amounts of financial stress, but also took an emotional toll on many. Although this event may have come as a surprise to most, it was not completely unanticipated. According to the book, The Big Short, by Michael Lewis, a group of investors recognized the faults of major Wall Street banks when they realized that the subprime mortgage-backed collateralized debt obligations known as CDOs being sold for much more than they were worth were essentially worthless. These CDOs were viewed as an opportunity by banks to make a profit off individuals with low credit-scores and no other options. The group realized that as soon as the current housing prices stopped rising, these CDOs would be detrimental to the economy. The book states, “To Charlie and Ben and Jamie it seemed perfectly clear that Wall Street was propping up the price of these CDOs so that they might either dump losses on unsuspecting customers or make a last few billion dollars from a corrupt market. In either case, they were squeezing and selling the juice from oranges that were undeniably rotten. By late March 2007, ‘We were pretty sure one of two things was true,’ said Charlie. ‘Either the game was totally rigged, or we had gone totally fucking crazy. The fraud was so obvious that it seemed to us it had implications for democracy. We actually got scared’”. (Lewis 165-166). This clearly shows how apparent the fraud was and that there were people anticipating the fall of the housing and stock market.  It was their greed that influenced them to turn their findings into a profit. By purchasing credit default swaps, these investors anticipated that once the housing market inevitably crashed, their credit default swaps could be sold for much more than they originally paid.

            Although the crisis is largely centered around the economic effects that occurred, the emotional outcomes of the crisis reached many. Because several people were handed mortgages to purchase homes they could not realistically afford, they were forcefully expelled from their homes after the crash of the stock and housing market, and foreclosures had reached an all-time high. This left people finding themselves suddenly without a home, feeling desperate or hopeless, and running low on options. Not only did this have a negative impact on the mental state of those effected, but this also often resulted in further issues such as addiction. The novel, The Turner House, by Angela Flournoy exemplifies how expulsion can allocate one in the spiral into further issues. After being evicted from her apartment and fired from her job due to failure to pay back borrowed money from her coworkers, Lelah is left with no other options than to move into her vacant childhood home. Due to the position she is put in, Lelah begins to struggle with a gambling addiction. The novel states, “The chips looked like candy. Pastel, melt-away things that didn’t make sense to save. The feel of them, the click and dry slide of them in her palm, was gratifying. Some people in gamblers anonymous, a place she hadn’t been in months, claimed the tiny ball, spinning and spinning around on its wheel, was the reason they loved the game. ‘It’s like you get a bonus, little bit of show from that ball,’ Zach, a white man who always wore a suit and tie, once said. Other people in the group had nodded knowingly” (Flournoy 43).  Because of her lack of money and recent eviction, Lelah is an easy target in the world of gambling because money is what she needs the most.  Lelah’s situation was not an uncommon occurrence during the 2008 crisis. Feelings of panic and desperation following expulsion put many in a vulnerable situation, easily susceptible to addictions such as gambling. The crisis often left people with little to no places to turn.

            Not only did the crisis deeply impact big banks and investors, borrowers of subprime mortgages, and fictional characters, but also families across America like mine. I entered this class with a slight understanding of what this crisis entailed simply from my personal experience, but after learning about the crisis in-depth and relating several works of literature to the event, my knowledge flourished. I have been able to view this event from the perspective of many individuals besides myself who was four at the time. During the 2008 housing crisis, my dad was exclusively self-employed selling anti-virus and encryption software. Because of the crisis, his business never fully recovered from the drop in revenue. Overall, there were less businesses and therefore less demand for the software he was selling. In order to augment his earnings, he took on a full-time job at a water treatment plant working overnight while continuing to run his business. Because he was essentially working around the clock, my time with him was limited to brief family dinners. My family not only suffered financially but emotionally as well. Many families throughout America were reached by these issues. Whether it be parents taking on multiple jobs to supplement their usual earnings, struggling with mental health issues or addiction such as gambling, or even being expelled from one’s home, the effects were felt nationwide.

            Although set 16 years after the 2008 housing crisis, the novel, Parable of the Sower, by Octavia Butler can be closely compared to the crisis. Many of the issues that arose in 2008 are mirrored in the novel. The issues seen within Parable of the Sower can be attributed to climate change and economic crises much like the recession of 2008. One of the main ideas present in both the housing crisis and Parable of the Sower is the concept of expulsion. After her town is invaded, Lauren is forcibly expelled from her home and everything she knows. Lauren is stripped of her home, her belongings, and the safety that she once had of living in a gated community. She suddenly finds herself without a home or places to turn, much like those that were expelled in 2008. As she is fleeing her home, Lauren states, “I stood at the gate, staring in as strangers picked among the black bones of our homes. The ruins were still smoking, but men, women, and children were all over them, digging through them, picking fruit from the trees, stripping our dead, quarreling or fighting over new acquisitions, stashing things away in clothing or bundles… Who were these people?” (Butler 158). This image of people invading and taking Lauren’s belongings in and around her home directly compares to what many faced during the 2008 crisis. When evicted, people were forced to only take what they could and leave the rest behind. Lauren is looking behind her to see a mere skeleton of the house she once lived in with the knowledge that it is no longer her home, and she can never return. This is a similar concept faced by those expelled in 2008. Within The Turner House, Lelah’s eviction is comparable to the situation that Lauren is placed in. The novel states, “Lelah had received a few thirty-day notices but always cleared out before the Demand for Possession -a seven-day notice- slid under her door. Seven days might as well have been none this time around; before Lelah knew it the bailiffs we’re knocking, telling her she had two hours to grab what she could, that they would toss whatever she left behind into that dumpster outside” (Flournoy 13). The concept of losing one’s home as well as the majority of one’s belongings can be deeply saddening as our belongings are often what give us our sense of self. Lauren’s life in Parable of the Sower directly coordinates to the events of the 2008 housing crisis as she is forced to leave behind her home and everything inside of it, much like Lelah from The Turner House.

            The housing crisis of 2008 was enveloped by the fraud, trust washing, and detrimental mistakes of big banks and investors in which many people’s lives were turned upside-down. Greed also played a large role in the drive to make money off of unknowing victims as seen in The Big Short. The economical perspective of what happened in 2008 does not even begin to summarize the crisis as there was countless emotional issues brought about with it. Many families such as mine deeply felt the effects of the crisis and were forced to work multiple jobs in order to make ends meet. These emotional impacts often led to issues such as addiction during times of vulnerability and desperation which was exemplified in The Turner House. Many similarities can be found between the novel, Parable of the Sower, and the housing crisis. Despite being set in the future, expulsion is a prevalent theme within the novel, and it is comparable to the challenges faced by those that lived through the recession. The 2008 housing crisis was an event so impactful that it can be seen represented in several works of literature, and its effects still resonate today.

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