Saturday, December 15, 2007

Maxed Out

Let it snow, let it snow. I feel like a thin, sexy version of Roger Ebert after posting multiple movie reviews in a short span of time. I caught another documentary with the wife, Maxed Out, and this is a documentary that should get airtime in schools or on cable channels like MSNBC, Fox News, or CNN. It is far better than a lot of the schlock that they air that passes for news investigation. This documentary focuses on debt and its place in modern American society. The movie shows how modern banks, credit card companies, and even the judicial system is rigged to bleed consumers just enough to keep them making those payments.

Maxed Out exposes some of the darker side of credit cards, consumer lending, and how the system itself has changed to hamper consumers. There are some gut wrenching moments like the focus on the extremely poor families who have their mortgages changed because of an aging relative or rising costs of other goods, only to see the house go up for foreclosure shortly thereafter. The scene where the poor family explains how the lender from Citigroup told the mentally retarded man to copy the name she had written so he could 'sign' the documents. It really upset my wife and I to know that went on. Kudos to the newsreporter who was talking to that family and doing reports for his paper down south. At least ONE reporter is doing some investigating. That scene highlights how perverse some of the lending practices and behaviors have become. A family could be way behind in payments, but they will get a new offer for a credit line from the same company the next week. Hunh?

There are some bits to this movie where they show people in trouble who are in trouble more because of their behaviors (or were in trouble for those who died). Maybe like CNN running this article, which is a slap in the face to all of the real middle class families feeling the squeeze. These stories could tug at your heart strings, but there were holes to them. Two teenagers, who went off to college and ran up credit card bills, killed themselves and left behind grieving families. Yes, it is wrong that the credit card companies kept sending them cards. Yes, it is shady that the credit card companies are on campus trying to sign kids up, but I think it's creepier every company out there uses sex to sell products. Let's change that first. My point is, those kids could have stopped spending anytime they wanted. They were college kids with no income and no expenses. Credit cards were not going to pay the tuition bills. Those charges were elective. They could have stopped but did not. I have friends who did the same while in college and left school with 5K or so in credit card debt. Tough lesson to learn, but eventually the light came on and spending slowed.

Two other stories that did not make sense were the Army MP whose family filed for bankruptcy and the widow who fell behind on mortgage payments, took cash advances to pay the mortgage and was holding garage sales for income. I am a huge supporter of our military and the families left behind when our men and women serve. I contemplated applying to the Naval Academy until my Navy friends talked me out of it. I believe they deserve more pay, and they deserve to be integrated into our society more than they are now. It is a shame how With all of that knowledge, the story of the family that filed for bankruptcy when the dad went to Iraq did not make so much sense. Why did they have a mortgage when they could have base housing? Why carry the truck payment when he is going to be gone over a year? What was the mysterious burden they were carrying which forced them to file for BK? Something was amiss with their story. My buddies who have been to Iraq or abroad while in the service did not sound like this guy and his wife. I feel the inclusion of this story was to get emotion from viewers and to exploit a vet's story for the movie.

The widow was far far worse. She openly cried on camera. She was selling collector plates. She talked of getting cash advances to pay her mortgage because she could not afford it after her husband's death. 1. This family did not plan or else there would have been a life insurance policy that adequately covered debts. 2. This 57 year old was in a huge house all by herself. 3. She was in California and it was 2005 when it was filmed which was the peak of the Bubble for real estate. This woman obviously did not plan anything. Her husband poorly planned for his possible death. Now that behavior is probably why she was dumb enough to take cash advances to pay a mortgage rather than sell her house that was way too big for one person in the best selling environment in American history. Where were her kids or friends to maybe advise her to sell the gold mine she was sitting on? Where is the common fucking sense to sell the home since it is way to big for you? I know they chose to include this story to show a family ruined financially by one death, but this woman was also really fucking stupid.

There is a lack of financial commen sense in this nation. This guy writes about it far better than I do, and he and I have had "comment" conversations about it. Combine this with a neverending quest to have more stuff than the next guy, and the society might develop a spending problem. This lack of common sense with finances might seem like a recent problem, but look back at the Depression or the real estate run-ups in Florida from back in the day. It appears that right now the potential to mess up your entire life can happen at a younger age, involve far greater sums of money, and have a much more lasting impact. I am one of those people that thinks you learn money habits from your parents, and that the schools should stay out of it. I would propose a short class, not even semester long, for all high school seniors as part of graduating. Some things to consider, what to watch out for, and what some terms mean on documents would be things to learn. A money skills class or whatever you want to call it. Sure, the sex education classes are marginally successful, but this one is even more important. It involves money.

1 comment:

"AG" said...
This comment has been removed by the author.