I am sensitive to the times we live in. There is financial wreckage all around us, I understand survival instincts, and am sympathetic to the many who have been screwed, whipsawed, and browbeaten by the markets. There’s a million places to point the blaming fingers. At the end of the day, there is damage, on a wide scale and at the individual level.
But there’s also a spectrum here. And some people are in dire straits, losing their homes. And there are others who are financially stable, but are letting go of investments that didn’t work out. These cases introduce an interesting moral quandary in a paradoxical situation: what’s good for the individual is not good for the collective.
Meaning, at the individual level, default makes sense when you’re upside down. Or at least it might. We do the math, sometimes it says let go, sometimes it doesn’t. But strategic default isn’t just about you and some big evil corporation. It affects your neighbors. And neighborhoods. And collectively, the entire fabric of the US housing market. And then the broader economy. There’s a ripple effect here. More defaults lead to more defaults, when you think it through.
So what moral obligation does one have when addressing this equation individually? I first wondered about the fading social stigma associated with strategic default back in December of 2009.
What if that individual is in a position of public service, like a city supervisor? Does it change? What do you think? As an interesting juxtaposition, the first link under the article is to a story about Oakland mayor Jean Quan, another public servant across The Bay, and how she took a massive pay cut.
I’m going to leave it at that. I only wish to introduce the topic. Tell me what you think?