Jim Martin and Jim Wallis on the Financial Crisis’s Moral Roots
September 29, 2008, 12:28 pm
Posted by Cathleen Kaveny
Very interesting. But it’s the financial and economic background that I don’t get very well yet.
Can anyone recommend two or three good basic books for someone (me) whose idea of effectively coping with the crisis is limited to throwing Fidelity statements, unopened, into a box under the bed–no doubt unconsciously hoping that some leftover, under-bed monster from childhood will kill the crisis and make it go away?
Not looking at your Fidelity statements is actually a pretty good strategy if looking at them causes you to make grand gestures that are not backed up by any particular logic or long-term thinking. I have gone on-line to look at my current holdings and I have to gulp a little, but having endured two bubbles now, I have learned to leave things alone, unless I am changing as part of a clearly mapped out set of goals. Bottom line: If the crisis spurs you to adopt a long-term strategy, that’s all to the good, but you should never invest with a crisis mentality.
I would look to the basic Fidelity investment advisories, but I think that the NYT has had some really good reporting on the liquidity crisis, so I would also look at recent “what this means for you” type articles. While it’s true you should always be pursuing a longer term view, there are some times when it’s not a good idea to be buying particular classes of investment. I think Suzee Orman is telling people to keep things in cash just now.
One good basic book is Hilaire Belloc’s THE SERVILE STATE. Another is his ECONOMICS FOR HELEN.
As to the technical cause of the present crisis it seems simple enough. Banks were pushed to lend [other people's] money on assets that could not support the mortgages. To allow for this, the regulations governing creditability were relaxed. Two years ago, frineds who wanted to take a second mortgage of $30,000 to repair the roof were pushed by the bank to take more, up to $75,000. Wisely they refused.
And then to lend [other people's] money on the “stored value” of homes [home equity]. Anyone who has lived in such places as New York City knows that there is no certain value in real estate.
Part of this was the sale of houses [or apartments] by oldsters who were allowed to live in them until they died. My favorite story is that of the purchaser [a lawyer] who made such a deal. The house was eventually inherited by his grandson.
There is a good reason for not bothering with videos of commentators and commentaries. Consider how often Fr. Martin said “You know”.
Were he writing an article these repetitions would undoubtedly have been omitted.
Dr. Kaveny – I am no economist but my father is very knowledgable. I have learned a lot from Scott Burns and his co-author, Kotlikoff. Also, make sure that your Fidelity investments are covered by insurance – agree with Barbara, beyond that, I would do nothing.
Their writing style is easy to read even when discussing complex financial topics. Their best book is: The Coming Generational Gap.
Link: Shortcut to: http://en.wikipedia.org/wiki/Scott_Burns_(newspaper_columnist)
(link – just for you Ms. Mollie and under 200 words)
Much as I dislike videos as a source of information, one fairly clear account is that Mayor Michael Bloomberg’s which can be found on You Tube. [Sorry I can't figure out how to list the URL, but it can be found by doing a search on You Tube].
Gabriel: that is precisely the difference between a live interview and an essay. Your point is absurd.
Yikes! Now I know why Jim Wallis frightens the bejeebers out of Fr. Neuhaus.
You have Wallis with experience, insight, and truth….then, you have Neuhaus – a version of another talking head.