A Subprime Parable By Michael Lewis

Satisfactory Essays

In his essay “The Mansion: A Subprime Parable,” Michael Lewis reveals the truth about the
American real estate problem. Millions of Americans have purchased homes they cannot afford. Banks have lent out mortgages that people cannot pay back. Brokers have promised that real estate prices will always rise. Some days it seems that half of the nation is financially underwater. It is no doubt certain that ratings agencies, mortgage brokers, and multiple large firms can be blamed for this crisis, but they cannot be blamed for everything. Most of the blame, Lewis argues, has to be given to us citizens. The truth is that Americans are greedy creatures. We desire extravagant things that we can show off to everyone around us to prove how well we are …show more content…

Not only does Lewis show the truth of this crisis in his essay, but he also gives his own testimony. He confesses the results of his own greed, and he provides examples of others who had the same problems he did. When Lewis decided to move back to New Orleans, where he had grown up, he was in need of a house. Ever since Hurricane Katrina hit New Orleans, the real estate market has been doing poorly. When the leading real estate agent offered to lease him a mansion that he had admired ever since he was a child, he could not resist the temptation. Lewis had always considered himself upper middle class, but now he felt was a good time to make an upgrade. Not only is the mansion the biggest and most extravagant house on the street, but the inside is even more breath-taking. The living
room is a huge ballroom with an $80,000 gold-paneled ceiling. Not only are there enough bedrooms and bathrooms for your entire family, but they are the size of large living rooms. He did not stop to think about the consequences of renting such a large house. The consequences of moving his middle class family into a mansion appeared in many different forms. First of all, the house starts to change him. Before he lived in the mansion, he was …show more content…

Not only could he fit all of his clothes inside one of them, but he can also fit his wife's clothes and shoes as well. Staring at an empty closet filled him with the desire to buy more clothes. The house also changes him socially. There is a lack of privacy in the mansion. People stumble across other people's space and frighten each other. Not only that, but the mansion comes with a gardener, a pool man, a caretaker, and a housekeeper who can show up at unexpected times and startle you. Another consequence of buying a mansion when you cannot afford it is how quickly it drains one’s savings. Lewis's money seems to be going out faster than it is coming in because the mansion itself comes with many unintended expenses. His rent already costs him thirteen thousand dollars a month, but on top of that, utilities were another several thousand dollars a month.
People start to think he is rich and assume he can donate several hundred thousand dollars at a time to charity when in fact he cannot even pay to keep his pool clean. With all of the trouble that he is having with the mansion, Lewis decides to do some research on the history of the house. The mansion was built in 1912 and everyone who had owned the

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