This post seeks to address the grassroots community response to the foreclosure crisis in the Springfield, Massachusetts region. The response has centered around the local sister organization of a Boston-based movement "No One Leaves/Nadie Se Mude," which has constituted the Springfield bank tenants organizing campaign (at: http://www.springfieldnooneleaves.org/). The term "bank tenant" in this circumstance connotes individuals or households renting apartment space in post-foreclosure, bank owned properties and/or former property holders in bank foreclosed properties. In my understanding, the group does not contest the foreclosure process, per se. Rather, it challenges the eviction of bank tenants through direct confrontation (blockades, occupation, vigils) with law enforcement officials attempting to enforce eviction orders and, further, facilitates the use of legal remedies for bank tenants to prevent or stall evictions, and to advocate for a renegotiation of the principle for mortgages in which the collapse of housing prices has left homeowners under water. In this manner, the group has achieved small victories in a region characterize by a fairly substantial rate of mortgage foreclosures relative to the total housing stock, particularly within lower income areas.
Organizations like No One Leaves/Nadie Se Mude hold a special place in my heart for several reasons. Most notably, the group's mission hearkens back to that of the committees of the unemployed and tenant anti-eviction committees organized within numerous U.S. cities during the 1930s, in many cases through the work of activists associated with the Communist Party of the United States (a big reason, alongside the defense of the Scottsboro boys, why I briefly joined this organization until I discovered the anachronistic and unrealistic nature of their take on communism). These organizations stood up for the fulfillment of a basic need for housing among unemployed or low income populations subjected to the indignities apparent in the regular functioning of an integrated market system where the everyday lives of the most vulnerable people are frequently laid waste by the buying and selling decisions of investors a thousand or more miles away. Market systems can be wonderful for the entrepreneurship they inspire and the variety of goods and services they generate, but they can also be torturous for the tumultuous effects of shifts of supply and demand they inflict. During the early 1930s, as today, when the state neglects the negative impacts of market processes on vulnerable populations, doing little or nothing to mitigate the adverse effects of a changes in housing markets on low income groups, we need grassroots fighting organizations to stand up to private financial sector entities in the name of social justice, peace, and sustainable, equitable economic development.
This is not to say that low income people should be given free property in housing stock at the expense of lenders. Rather, we need to more fully examine the unique context of the mortgage market meltdown to evaluate what exactly happened here and why we cannot simply allow the financial sector to dictate the ongoing course of the transition in the U.S. housing market back to economic health. For my purposes, ownership of residential property is never a right - it is always a privilege conferred on individuals and households capable of making sacrifices in organizing their intertemporal consumption portfolios to make durable consumption investments. Today, as a result of the mortgage market meltdown, fewer households will be able to make the choice to buy residential property than was the case a decade ago because the income and wealth-based thresholds for access to mortgage markets have increased, as a stung financial sector seeks to exclude the higher risk, lower income households that left them holding non-performing mortgages and large inventories of foreclosed properties. When we look back at much of the first decade of the Twenty-first century, however, history may present us with the high tide of residential property ownership in the U.S., a time in which more people than ever were admitted to indulge in the fantasy (the "American dream") of being a homeowner, whether or not they could sensibly afford to engage in housing markets.
It is tempting, especially for homeowners in middle income groups who "played by the rules," got traditional mortgages with substantial down payments at closing, and made sacrifices in intertemporal consumption to make timely mortgage payments and accumulate equity, to place 100 percent of the blame for the mortgage meltdown on foreclosed homeowners. For middle income homeowners who feel secure in their property, the fault in our extended housing market crisis lies with the irresponsible borrowers who simply failed to make the consumption sacrifices necessary to pay their mortgages according to their loan agreements. Maybe it was because they had to have luxuriant cable t.v. packages or they had to go out and buy new cars or they had to eat lobster and filet mignon when they should have been eating hamburger and mac and cheese - for some reason they just spent too much money on other things they didn't need when they should have been paying off their mortgages every month just like every other responsible suburban homeowner. When this basic framework in the assessment of who is to blame for the housing situation in America is taken as a point of reference, a predictable evaluation emerges on the work of an organization like No One Leaves - they want the government to step in and give irresponsible households who pissed their money away on extravagant, profligate living free housing when I worked my ass off to earn every penny of equity in my home!
The emergence of this very reaction among a number of my coworkers to a No One Leaves action in West Springfield gave me the impassioned impetus to write this post. Notwithstanding my best efforts to argue the point that, yes, foreclosed low-income homeowners were at least partially responsible for the situation with the housing market, I could not get around the seeming insistence of my coworkers that, in defending what No One Leaves stands for, I was actually trying to absolve them of any responsibility. The most that I could elicit in a recognition that foreclosed households were not completely to blame was the typical right wing argument that the government enjoyed some of the blame for forcing the banks to stop redlining poor neighborhoods! Truthfully, I can recognize that there is a fairness issue involved here ("I played by the rules, so why should they get free property for breaking them?"). It is difficult getting around the righteous indignation of someone who honestly believes that someone else is getting something they don't deserve while I have to earn everything I have.
In his New York Times commentaries, Krugman often scolds the average American for analogizing the fiscal situation of the federal government to that of individual households, neglecting the "big picture" that any effort at government austerity/deficit reduction is going to deprive lots of Americans of an income. After all of the semesters of graduate level economics that I have sat through, I certainly get his point, but I can't help but think that he still just comes off to readers who aren't already approaching with a nuanced appreciation for the role of government in the contemporary macroeconomy as an ivory tower liberal who doesn't get it. It isn't enough to quote statistics and point out the economic impacts of allowing the housing market to continue to accumulate foreclosed property. The argument that I advance here isn't going to be satisfying to my friends simply because they've worked too hard to accept the logic of the economic "big picture" explanation when, in the end, it still leaves them feeling like they've gotten screwed.
That said, I am not going to suppose that I can change the mind of anyone who rejects, as a matter of morally buttressed personal spite, the logic of measures like principle renegotiation. I am writing, in a manner of speaking, out of my own personal moral indignation, to defend the worth of organizations like No One Leaves, because I want to make that point that there is plenty of blame to go around for the mortgage market meltdown, and the financial sector not only deserves to be taken to task for their role, but forced to pay up by accepting losses from making irresponsible investments in a housing market with vastly overinflated prices and allowing the effects of a collapse in prices to spread like a cancer from primary mortgage issuers to the heights of investment banking. Moreover, I want to make the larger point that we need to get beyond the basic assignment of blame to ask the larger question of what is now best for the health of the housing market and for the fiscal health of municipalities affected by high foreclosure rates. Until we turn the corner and accept that assigning blame is not very helpful, our local economies will continue to suffer adverse effects.
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