CNBC has a show on the subprime mortgage crisis that takes a methodical look at all the players. House of Cards is a solid and consistently appalling look at one slice of the big, bad pie: the self-indulgent home-buyers and the abusive mortgage writers who enabled them. After watching it last night, I was more pissed than ever about using tax money to bail out the financial system, but utterly unmoved in my belief that that's exactly what we have to do.
Still, there were moments when I felt like throwing something at the TV. They were not, perhaps surprisingly, when Wall Street millionaires admitted that yes, they knew the whole thing wasn't sustainable and that they shouldn't be writing the loans they were writing or issuing the securities they were issuing. The thing is, they explained, it was just so damned profitable they couldn't resist. Call me old fashioned, but I'm one of those people who thinks profitability isn't justification for corruption.
No, my most infuriating moments were when the helpless homeowners told their hapless stories. One segment of the show had a parade of formerly-cheerful dimwits who didn't understand basic things like: money isn't free. One after the other, these dreamers of the American Dream paraded across the screen surprised to discover that they'd hocked their lives for shiny object purchased at a shopping mall and only now learning what most people with IQs over 40 know instinctively: salesmen lie.
There on my screen -- the 20-inch, low-def screen we have because we've spent the last four years paying down debt rather than buying things like HDTVs -- is a helpless, totally-screwed, soon-to-be-former homeowner explaining that he'd done what anyone else would have done. He expected, as everyone else did, that housing prices would go up forever, so it made perfect sense for him to take all the equity out of his home to build a backyard swimming pool. It would pay for itself! Except that, no, it didn't, and now housing prices are in the tank and there are his kids, happily splashing away as dad explains to the news crew that they're going to lose the house any minute and have to move to an apartment, if they can get anyone to give them a lease with their crappy credit rating.
Pardon me, sir, but you're a fucking idiot. What's happening to you is exactly what should happen to people like you -- and the fact that I have to pay for your swimming pool in order to keep my wife's TIAA/CREF account from going up in smoke pisses me off to no end. So do me a favor: shut up and feel a decent sense of shame. Don't come on my TV and plead for sympathy while your kids splash and paddle in your private pool.
One of the basic divisions in our discussion about bailouts is whether we prop up failing banks or failing homeowners. It's an understandable first instinct to answer neither, but in the end we're going to have to get someone out of trouble in order to save ourselves. Me? I come down on the side of propping up the banks. People who are as stupid as the homeowners on House of Cards need to learn a hard lesson, and those of us who, by (in my case) grace and pure dumb, luck avoid the devastation need to learn from the suffering of others. Those lessons will stand us in good stead for a couple of generations, until another crop of giddy optimists comes forth to announce that economic laws and cycles have been repealed and the boom times will last forever.
Unfortunately, the best way to protect those of us without backyard swimming pools seems to be to protect the financial system as a whole, which means propping up banks and -- inevitably -- the people who run the banks. Collateral damage, in war, is innocent stuff that gets blown up when when bombs hit their targets. What's the opposite of that? There needs to be a word for people and institutions who don't deserve preservation but are preserved anyway when society comes to the rescue of people who weren't stupid and self-indulgent. "Collateral salvation," maybe. Saving the banks will, inevitably, save lots of people and institutions that don't deserve it.
That said, I have absolutely nothing against zeroing out the shareholders of those banks who went blithely along, enabling a culture of short-sighted self-dealing that made possible the payment of out-sized bonuses to people who knew they were building an unsustainable, as the title says, House of Cards. As mad as I am at the Orange County homeowners who borrowed and borrowed again to buy themselves toys I, personally, can't afford, I'm madder still at the Wall Streeters who got rich bundling loans they knew were no good and selling them around the world as perfectly safe investments. I'm convinced there's a special place in hell for the ratings agencies who went right along with the swindle, and government, which declined to step in and put an end to things.
House of Cards does a good job of walking viewers down what the MBAs call "the value chain," as unfettered capitalism fills a (self-indulgent) need and dishes off (thoroughly disguised) risk, leaving all of us holding the bag. It's infuriating and enlightening at the same time. It's on tonight at 8, and a couple of more times after that. Watch.