End points: banks ≈︎ foreclosure


Realization: rent

Talking to people I know; regular people – from those who make 30K to those who make 80K – the biggest, most immediate fear is also the most basic fear: if the place they work is shut down they will have trouble paying their rent come next month. If businesses are closed and people can’t go to work they will have trouble paying rent. And that is fatal.

Where I live there are many seriously excellent, lifetime, union jobs for working people. Jobs that are mostly – but not exclusively – in paper factories. They’re mostly hourly wages, technically, but they’re also really good, really good paying, really secure jobs. Jobs people are seriously lucky to get. But also jobs that are almost impossible to lose once you get them. Almost all of them are hard jobs that many workers work at once. Together. Unionized jobs. Jobs with great benefits. Jobs with great pay. Jobs with lifetime security. Jobs with pensions. But jobs that require manual labor by large, organized, specialized groups of workers.

And if social distancing is enacted in a widespread way – as seems likely – jobs that will get put on hold. Jobs that pay extremely well when one works regular hours, but pay nothing when one is not working.

Which leads me back to rent. Because

…shit rolls downhill.

If landlords still have to pay for mortgages, then tenants will still be on the hook for paying rent… with no wages to pay with.

That could mean mass evictions of people who are hard workers with steady jobs that are waiting for them and are only on hold because of this emergency.

The effect of masses of gainfully employed people being forced from their homes due to a global, viral, pandemic would be something unknown and so destabilizing that its effects – long term and short term – are simply immeasurable.

Whether by homeowners unable to pay mortgages or renters – as most in big cities like those around me are – unable to pay landlords because they aren’t getting paychecks, the hit on the economy as a whole would be devastating. It would make 2008 look like child’s play. That, at least, had a core fault line. Adjustable rate mortgages sold to those who were ultimately doomed because they were effectively priced out of their homes. They were not ever going to be able to repay. The market was a mirage.

But in this case…

…you have people who absolutely can afford their rent/mortgage. I can think of a half-dozen people who have been in their homes for decades. Neighbors who sometimes struggle, but nonetheless manage to scrape together that monthly cost each month by the sweat of their brow. Most of them have never considered anything but that they will die in their home. It’s their greatest, if not their only, permanence.

What I’m saying is that as we talk about methods of mitigation, perhaps the most critical one is government-guaranteed forbearance of these rental/mortgage payments. I’m not particularly keen on helping banks, but in this case protecting homeowners/landlords for the explicit quid pro quo trade-off of not evicting tenants who cannot pay during this pandemic is almost surely going to be necessary in order to have any hope of not crashing the entire system down around us. Maybe permanently. Irretrievably.

The government temporarily infusing capital into this very specific and unimaginatively vital sector of the economy seems not only critical to save America and Americans, but also a total no brainer.

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