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End of Personal Responsibility   December 28th, 2008
Reduced responsibility leads to reduced freedom       

 
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We have a lot of problems in this country. Virtually all of them have to do with the fact that, more and more, people do not want to take personal responsibility for their own actions.

Justifying Irresponsibility

I was inspired to write this article after reading an article at MSNBC that essentially made the case that, sometimes, "walking away" from a mortgage is ok.

Diane Shackle found it gut-wrenching to walk away from a mortgage she took out in times that were better for both her and the U.S. economy.

But the reality was undeniable: While she was keeping up with the monthly payments, she said she could no longer afford to buy food for herself or even kitty litter for her two cats.

So the 44-year-old cocktail waitress walked away from her two-bedroom condo in southern California last July, turning her back on a debt of nearly $200,000...

Mortgage and financial experts hesitate to recommend a voluntary action that not only threatens to wreck your credit score for years but can result in authorities coming after other assets. But depending on state laws, they acknowledge it makes sense to at least look at it in certain situations.

"You have to make the best decision for yourself, business-wise, which could be walking away from the house," said Nicole Gelinas, a chartered financial analyst and senior fellow at the Manhattan Institute, a conservative think tank...

The financing consisted of two interest-only loans with initial rates of about 7 percent and 10 percent. Her monthly payment, including an escrow account for property taxes and insurance, was about $1,400 a month. That was manageable until she had serious problems with asthma and missed a lot of work...

Shackle moved out of the condo in July and rented an apartment for $750 a month. Foreclosure still hasn't taken place. But without the burden of a mortgage gone bad, she says, now "I sleep a lot better."


I found this disturbing on many levels.

First, as a conservative, I was astonished to read a quote from Nicole Gelinas at a "conservative think tank" advocating a lack of personal responsibility by walking away from a house. That's the exact opposite of conservative ideology. Ironically, the Manhattan Institute's banner reads: "The Manhattan Institute is a think tank whose mission is to develop and disseminate new ideas that foster greater economic choice and individual responsibility." That mission statement is great... but the advice of Gelinas flies in the face of that very mission. Walking away from a home that the owner can pay for is the exact opposite of individual responsibility.

Second, it appears the article proffers the idea that homeowners being "underwater" (owing more on their house than it's worth) is a legitimate reason to consider walking away from a mortgage. The article doesn't specifically say that, but it's implied. That's effectively saying it's acceptable to wager someone else's money that the value of the house you like will rise in the future and you collect the profits if it does, but the lender takes the losses if your wager was wrong. That's a breathtaking lack of personal responsibility and extremely selfish.

Third, while I'll admit that if it's really a decision between eating and paying the mortgage, eating has to come first. However, I wonder how often that's the case?

In the case of Diane Shackle, the owner highlighted in the article, she said she was "able to sleep a lot better" without the "burden of a mortgage gone bad." How did the mortgage go bad? The problems Shackle had appeared to be health-related. How does that make the mortgage bad? And apparently lowering her payment from $1400 to $750 (saving $650/month) was enough to solve her problem... did she consider giving away her two cats to reduce her expenses? Did she put her second room up for rent? A search at RoomateNation.com for Calimesa, CA returned potential roommates willing to pay no less than $500 and all the way up to $1300/month, while roommates.com indicated monthly payments of $350-$600 for rooms in nearby locations. What about a combination of giving away the cats, taking in a roommate, and maybe working a few extra hours or getting a secondary part-time job? Or how about moving out but renting the property in its entirety to cover (or nearly cover) the mortgage payment? Was this really a choice between eating and paying the mortgage or was she just not willing to make some undesirable sacrifices?

The article in question ends, again, with the supposedly conservative Gelinas being quoted:

Gelinas of the Manhattan Institute says it would be unfair to portray mortgage walkers as villains because it's not unethical to take a loss and walk away from a bad investment that might keep you stuck in a "money hole" for a decade or two.

"Certainly you shouldn't commit fraud when taking out debt," she said. "But when it comes to sacrificing for years and years to keep servicing debt on an inflated asset when the bank lent money against the inflated asset -- you can't blame the homeowner for that."


Yes I can blame a homeowner for that! It's not unethical to take a loss and walk away from a bad investment of your money, but that's not what we're talking about here. We're talking about walking away and leaving someone else with your loss and your bad investment. That's completely unethical if there is anything the borrower can do to avoid it.

I understand that situations change and can require some creative--perhaps downright uncomfortable--lifestyle changes. And if someone has completely lost their job and has drained their savings trying to make good on their commitments, I can understand bankruptcy and the resulting default on their mortgage.

But the suggestion that someone who has any alternative whatsoever would choose to default on their loan is to condone flagrant personal irresponsibility. There is nothing responsible or excusable about gambling with someone else's money and taking the profits but leaving any losses with the lender. If there is any other solution, walking away from a mortgage isn't just irresponsible. It's downright unethical.

Abandonment of Personal Responsibility

The whole article is symptomatic of what appears to be a frightening change in American culture: The abandonment of personal responsibility. We can see it everywhere and it leads to so many of the problems we have.

The problem and issue of abortion would be significantly less pressing if people were more responsible when having sex. Most abortions are not of pregnancies resulting from rape or incest, or due to health risks to the mother; rather most abortions are because the couple was not responsible when engaging in sex.

The issue of gun control laws basically assume that citizens won't exhibit personal responsibility in handling those weapons. Draconian DUI laws which essentially prohibit any alcohol consumption function to eliminate the possibility of a citizen exercising personal responsibility in determining whether or not he or she is in a condition to drive. Mandating seatbelts or motorcycle helmets again amounts to the government usurping personal responsibility. Legislation that drivers may not use cell phones while driving prevent the driver from evaluating conditions and exercising personal responsibility in determining whether or not he may safely use the phone. Social Security, which threatens to bankrupt the federal government, effectively absolves citizens of their personal responsibility to provide for their own retirement, and absolves families from their moral responsibility to take care of other family members. Political correctness serves to condemn anyone that a group of people disagrees with rather than simply allowing people to accept personal responsibility for the things they say.

In short, the government is taking on more and more responsibilities while absolving individuals of theirs. And society seems all too eager to condone or excuse individuals for failing to live up to the individual responsibilities that still remain in their hands.

This is a truly dangerous road we seem to be going down. Freedom presupposes responsibility. As we continue to cede responsibility to the government and excuse others for failing to live up to their individual responsibilities, we need to understand that every time we sacrifice personal responsibility, we're also sacrificing freedom.

It is not reasonable to believe that we can have freedom without personal responsibility. So we better get back to demanding responsibility or we'll have no-one to blame but ourselves when our freedom disappears right along with our personal responsibility.

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