Michael Lewis 'Essay The Mansion: A Subprime Parable'

Have you ever wondered what life is like for people in specific social classes and all the baggage that comes with being wealthy? In the article “Amber Waves of Green”, author Jon Ronson has sit downs with hard working americans making a income of $200 a week all the way up to $625,000 a week. In another writing titled “The Mansion”, written by Michael Lewis, allows the reader to get insight on what life is like as a middle class individual taking on a higher style of living. Within the two articles the reader can point out that both Jon Ronson and Michael Lewis disagree on living styles, what wealth can do for you, and how it can affect the people around you.

Statistically, one out of seven families live in severe physical deficient housing. In fact, the housing and stock market revealed in July of 2009 that the Great Recession further widened the gap and income disparity between the average, hard-working Americans and the top 1% of wealthy Americans. Edward N. Wolff suggests that the average American produced a massive 36.1% drop in overall marketable assets while the top 1% of wealthy Americans only lost 11.1%. This income gap disparity ensures that ever-increasing need for affordable housing as the economic crisis worsens.

The foreclosure crisis in America is only an effect of a much deeper underlying problem: egotistical materialism. The “American Dream” has unfortunately promoted this problem by affecting Americans everywhere, convincing them that it is possible to get whatever they want, at whatever cost. In itself the dream to succeed is not completely wrong—but the cost it often takes is devastating. Americans are realizing that merely getting what they want is not always enough; there are factors which must be considered beyond the end they strive for. These factors often include the ability to provide monetary support and upkeep…taxes, anyone? However, inflation has made the success of even the most meticulous planning exceedingly difficult. In

The 2008 financial crisis which displaced many home-owners created a new market for rent to own real estate properties. The recession caused home ownership to become unaffordable for average middle- and working-class citizens. This resulted in a clamor for affordable housing for millions of Americans who had lost their savings, their investments (homes), and their reputations (credit.)

Yet, to some this may come off as simply a Marxist perspective of contemporary society, however, the American Financial crisis of 2007–2008 is a case which is evident that the financial elite (base) are in control of the American superstructure. At this point in time, people used credit for expensive home loans, which created an economic bubble causing the prices of houses to increase. Due to this increase in wealth, banks made it easier to get a loan, regardless of credit history, these were known as subprime loans. Additionally, during this time, homeowners refinanced their homes, causing their mortgage to change, and lowering interest (Bosworth, Flaaen 2009, p.147). After they refinanced, homeowners took out other mortgages to use as pocket

Owning an average American home for the middle class in the USA has become increasingly difficult of late, owing to the huge financial responsibility that mortgage strain on the prospective owners. Land for example has appreciated a big deal of late, and thus any middle class person with a desire to buy their own homes has found the costs very unfriendly.

It does not take much attention focused at the media to see that our great nation is struggling economically. One of the major contributors to this current economic meltdown is the rapid increase in foreclosures across the country. The country’s immense housing crisis can be addressed by referring to not only the accumulating irresponsibility of the individual American loan borrower, but also the growth of greed at the corporate level which led to the financial market’s negligence. To stop the spread of this issue we should look at closer government watch of the market and specifically focus on consumer education.

In "The Mansion: A Subprime Parable," by Michael Lewis, we are told the story of the author who went from an "upper" middle-class house to a huge, luxurious mansion. Although in theory, it sounded like an excellent idea, in practice it was the beginning of a troubling realization, as well as an expensive one. Michael Lewis and his family live in the upper middle class, or so they think. Like many Americans that fall victim to misclassification, the Lewis family fell into the same trap. After talking with a real estate agent they were recommended an enormous mansion that they most certainly could not afford. Regardless, they went through with it. After a few weeks of egregious expenses, from utilities to faulty air conditioning, they finally

The problems of the American economy are growing every day. An economy in ruins causes ripple effects within the country; whether it is an increase in crime, borrowing money, or the loss of jobs. One of the most devastating effects of the economic problems we are facing is the one directly related to their cause: the foreclosure crisis. More than 2.7 million homes have been foreclosed since 2007, and the number continues to climb. One of the first steps to solving the crisis is identifying how it started. During the last decade, people across America were encouraged to obtain mortgage loans and become home owners, rather than renters. Unfortunately, the booming housing market led to an environment where lending practices were slipshod and

A house is not just brick and concrete, but rather a haven with which our lives and our memories are forever connected, but the economic downturn of 2007 reminded us all that this haven should not be taken for granted because it can all go up in smoke in an instant. When the economy collapsed, many qualified individuals lost their jobs, and thereby lost their means for making their monthly mortgage payments, and ultimately ended up losing their homes. The ARM’s that the banks had extended to subprime borrowers ended up crippling and debilitating them even more. What appeared to the banks as smart business ultimately ruined our housing market.

Due to such events as the subprime mortgage crisis, the auto market and Wall Street’s failure, the United States suffered a severe economic blow. Looking at the situation from an economic view, supply is supposed to equal demand. Due to the mortgage crisis and the careless attempts of some to make money, there is a superfluous amount of empty homes throughout the United States. In the subprime mortgage crisis, the nature of the failure was the inability to account for money given to individuals, who lack the appropriate requirements. In order to obtain a loan, collateral is needed. References were not being checked and poor credit history went ignored. People were obtaining loans and not paying attention to the interests rates associated. “This time around, the slack standards allowed millions of high-risk borrowers to get easy home mortgages. When this so-called subprime market collapsed beginning about a year ago, ordinary working people bore the brunt” (Gallagher, 2008). Companies were so anxious to place people in homes, that it cost them billions of dollars and

Like all financial markets, the United States housing market is characterized by its cyclical nature. Markets have ups and downs, peaks and troughs, and without variation, the housing market would not contribute to economic activity in the way that it does. Still, while fluctuations are a necessary and often beneficial truth, housing disasters and market crashes are crises that should and can be avoided with proper foresight. The 2008 housing market crash had consequences for the consumer and corporate sectors as well as for the national government’s international reputation. Through consumer education, corporate responsibility, and government regulation and safeguards, the future housing market can serve to support, rather than hinder, the the United States and international economy.

The United States economy is currently experiencing the worst crisis since the Great Depression back in the decade that was preceding World War II. The crisis started off from the home mortgage market, especially the market for so-called “subprime” mortgages, and has already spread beyond subprime to prime mortgages, commercial real estate, corporate junk bonds, and other forms of debt. This paper critically illustrates the factors that account for the crisis, who was affected by this crisis, and how it was spread to the rest of the world.

An adequate understanding of the American cultural predisposition is required to analyze the actual reasons for the subprime crisis of 2008 and the author, Michael Lewis tries to illustrate this by describing his own personal experience of renting a luxurious mansion in New Orleans in his essay ‘The Mansion: A Subprime Parable’. Although it is true that, the money lending business did facilitate the American desire for unaffordable houses, it cannot be held responsible for it as the author feels that it was the average Americans lust for bigger houses that was truly responsible for this crisis. To illustrate, the author describes his own experience with renting a luxurious mansion which reflects the model of the subprime crisis in general

The housing crisis in 2007-08 was characterized by the low classes being unable to pay for their mortgages. The housing bubble, reaching its greatest size in 2006, prepared this particular crisis. Decisions made by financial institutions combined with consumers’ decisions about borrowing played major roles in the inflation and burst of the bubble. Many decisions were made because of political influence. Yet, it is as Thomas Sowell stated in his book The Housing Boom and Bust that, “There was no single dramatic event that set this off… A whole series of very questionable decisions made by many people, in many places, over a period of years, built up the pressures that led to the sudden collapse of the housing market and of financial institutions that began to fall like dominoes as a result of investing in securities based on housing prices.” Sowell continues, “The causes of the housing boom and bust have been as general as the flaws and shortcomings of human beings and as specific as the effects of Federal Reserve System policy on interest