Speaking of debt and responsibility . . . Before we blame the schmucks with the bonuses, we should check our own loans.

Professor Stan Liebowitz did some fairly extensive research (30 million loans) and concludes that the single most important factor in determining whether a home loan will head into foreclosure was negative equity, i.e., a home worth less than the loan. Zero money down means no skin in the game.  No one ever washes a rental car.  We want to blame the economic crisis

More on those execs and their greed, but neither they nor their minions can make loans unilaterally.  It does take some chutzpah to accept a loan with no risk or a loan that stretches your budget, even in the good times. Were it not for the foreclosures what kind of melt-down would we have had?  The mortgage-backed instruments based on performing loans have higher values.  Without foreclosures, market prices do not fall.  We don’t want to think of ourselves as responsible, but perhaps we all stretched ourselves a bit, taking more than we were entitled to because it was offered.  Sound familiar?  It’s the same charge we have been flinging at executives who accepted bonuses.  It’s the mote and beam thing writ large.

About mmjdiary

Professor Marianne Jennings is an emeritus professor of legal and ethical studies from the W.P. Carey School of Business at Arizona State University, retiring in 2011 after 35 years of teaching undergraduate and graduate courses in ethics and the legal environment of business. During her tenure at ASU, she served as director of the Joan and David Lincoln Center for Applied Ethics from 1995-1999. In 2006, she was appointed faculty director for the W.P. Carey Executive MBA Program. She has done consulting work for businesses and professional groups including AICPA, Boeing, Dial Corporation, Edward Jones, Mattel, Motorola, CFA Institute, Southern California Edison, the Institute of Internal Auditors, AIMR, DuPont, AES, Blue Cross Blue Shield, Motorola, Hy-Vee Foods, IBM, Bell Helicopter, Amgen, Raytheon, and VIAD. The sixth edition of her textbook, Case Studies in Business Ethics, was published in February 2011. The ninth edition of her textbook, Business: lts Legal, Ethical and Global Environment was published in January 2011. The 23rd edition of her book, Business Law: Principles and Cases, will be published in January 2013. The tenth edition of her book, Real Estate Law, will also be published in January 2013. Her book, A Business Tale: A Story of Ethics, Choices, Success, and a Very Large Rabbit, a fable about business ethics, was chosen by Library Journal in 2004 as its business book of the year. A Business Tale was also a finalist for two other literary awards for 2004. In 2000 her book on corporate governance was published by the New York Times MBA Pocket Series. Her book on long-term success, Building a Business Through Good Times and Bad: Lessons from Fifteen Companies, Each With a Century of Dividends, was published in October 2002 and has been used by Booz, Allen, Hamilton for its work on business longevity. Her latest book, The Seven Signs of Ethical Collapse was published by St. Martin’s Press in July 2006 and has been a finalist for two book awards. Her weekly columns are syndicated around the country, and her work has appeared in the Wall Street Journal, the Chicago Tribune, the New York Times, Washington Post, and the Reader's Digest. A collection of her essays, Nobody Fixes Real Carrot Sticks Anymore, first published in 1994 is still being published. She has been a commentator on business issues on All Things Considered for National Public Radio. She has served on four boards of directors, including Arizona Public Service (1987-2000), Zealous Capital Corporation, and the Center for Children with Chronic Illness and Disability at the University of Minnesota. She was appointed to the board of advisors for the Institute of Nuclear Power Operators in 2004 and served on the board of trustees for Think Arizona, a public policy think tank. She has appeared on CNBC, CBS This Morning, the Today Show, and CBS Evening News. In 2010 she was named one of the Top 100 Thought Leaders in Business Ethics by Trust Across America. Her books have been translated into four different languages. She received the British Emerald award for authoring one of their top 50 articles in management publications, chosen from over 15,000 articles. Personal: Married since 1976 to Terry H. Jennings, Maricopa County Attorney’s Office Deputy County Attorney; five children: Sarah, Sam, and John, and the late Claire and Hannah Jennings.
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One Response to Speaking of debt and responsibility . . . Before we blame the schmucks with the bonuses, we should check our own loans.

  1. David Counts says:

    Dang it!!! We enjoy blaming people too much to accept the truth that we are all responsible for the mess. Recently I read an analysis that concluded that President Clinton started to dismantle (with help from a Republican Majority Congress) the checks and balances that ultimately helped the crisis along. President Bush (with help from a Democrat Majority Congress) didn’t stop the dismantling and so it appears that both sides of the aisle had a hand in the creation of the mess and have to be part of the solution for the solution to work.
    But, again, Dang It!!! We are responsible for the messes and our personal greed?!?!? What a horrible thing to say when we like to blame “fat cats” for the mess.

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