4 ms·

I forgot that many people on HN can't distinguish between normative and positive claims, so let me clarify: I don't think this behavior is terribly ethical, but

I forgot that many people on HN can't distinguish between normative and positive claims, so let me clarify: I don't think this behavior is terribly ethical, but I do think it can produce more efficient economic outcomes. There are many of unethical acts that improve economic efficiency.

tptacek 16y ago
I agree with you that the likely effect of them turning in the keys to their houses is that those houses will be vacant probably for the better part of a year, which will damage other good-faith occupants of neighboring houses and produce no economic good for either the lender or the buyer. I think the only thing I could really wish for here is a system that captures some of the funds that these people are spending on trucks or business schemes and, in exchange for some long-term plan to keep them in their houses, get them to start paying back into their commitments. It is certainly true that the financial system shoulders some of the blame for this untenable situation. A pox on all their houses, then.
- MichaelSalib 16y ago
  a system that captures some of the funds that these people are spending on trucks or business schemes and, in exchange for some long-term plan to keep them in their houses, get them to start paying back into their commitments There have been several proposals that would accomplish this, including Dean Baker's Own to Rent ( http://tpmcafe.talkingpointsmemo.com/2007/08/19/own_to_rent_the_way_to_save_su/ http://tpmcafe.talkingpointsmemo.com/2007/08/19/own_to_rent_... ); I believe all of these proposals have been vociferously opposed by the finance industry. One reason is that it would probably force banks to mark down the values of their assets to something more realistic. I believe these proposals would be very popular though with the general public....

4 ms·

I forgot that many people on HN can't distinguish between normative and positive claims, so let me clarify: I don't think this behavior is terribly ethical, but

by MichaelSalib 16y ago

tptacek 16y ago
I agree with you that the likely effect of them turning in the keys to their houses is that those houses will be vacant probably for the better part of a year, which will damage other good-faith occupants of neighboring houses and produce no economic good for either the lender or the buyer. I think the only thing I could really wish for here is a system that captures some of the funds that these people are spending on trucks or business schemes and, in exchange for some long-term plan to keep them in their houses, get them to start paying back into their commitments. It is certainly true that the financial system shoulders some of the blame for this untenable situation. A pox on all their houses, then.
- MichaelSalib 16y ago
  a system that captures some of the funds that these people are spending on trucks or business schemes and, in exchange for some long-term plan to keep them in their houses, get them to start paying back into their commitments There have been several proposals that would accomplish this, including Dean Baker's Own to Rent ( http://tpmcafe.talkingpointsmemo.com/2007/08/19/own_to_rent_the_way_to_save_su/ http://tpmcafe.talkingpointsmemo.com/2007/08/19/own_to_rent_... ); I believe all of these proposals have been vociferously opposed by the finance industry. One reason is that it would probably force banks to mark down the values of their assets to something more realistic. I believe these proposals would be very popular though with the general public....