It's A Wonderful Life for Dark Comedy

It's A Wonderful life - my favorite movie. I’ve spent some time this holiday season thinking about the movie, not the suicide part, the part that pertains to our financial crisis.

And now we’re hearing that subprime mortgages were just the start. Now it’s time for two other types of home mortgages to hit the wall. The foreclosure wall.

Who’s going to be in the market to buy a car when they don’t know if they’re going to lose their home? Who’s going to be in the market to buy a new home if they fear for their job? It’s all interconnected.

I hear people say that if you don’t understand your mortgage you deserve what you get. And things like, if you can’t pay for a home then you shouldn’t buy a home. But these folks are missing an important point. At some point we’re all in this together. Where do the dominoes stop? The answer is, potentially they don’t.

The unemployment rate reached 25 percent during the Great Depression and the job market only revived because we had to spend a lot of money to fight World War Two.

"Right now, the unemployment rate would be more than twice as bad if you go back to the way this figure used to be calculated.
In 1994 the Clinton White House decided that the unemployment rate needed to be modernized.

So anyone who had been out of work for at least a year was no longer counted as unemployed - they were just too lazy and discouraged to find work.

John Williams, an economist who tracks this stuff on his Web site ShadowStats.com, says today's unemployment rate would be 16.5 percent if we went back to the old way of measuring it.

Already, the share of men older than 20 with jobs was at its lowest point last month since 1983, and very close to the low point of the last 60 years."

We certainly have resolved the subprime mess, only 85,000 people lost their homes in October. In fact some banks are not even evicting foreclosed upon homeowners during the holiday season. But what happens January 2nd?

I heard on the business channel that this mess started with the housing market and that it won’t end until the housing market crisis ends. With this in mind let’s see what Jimmy Stewart as George Bailey says –
"Just a minute - just a minute. Now, hold on, Mr. Potter. You're right when you say my father was no businessman. I know that. Why he ever started this cheap, penny-ante Building and Loan, I'll never know. But neither you nor anyone else can say anything against his character, because his whole life was - why, in the twenty-five years since he and Uncle Billy started this thing, he never once thought of himself. Isn't that right, Uncle Billy? He didn't save enough money to send Harry to school, let alone me. But he did help a few people get out of your slums, Mr. Potter, and what's wrong with that? Why - here, you're all businessmen here. Doesn't it make them better citizens? Doesn't it make them better customers? You - you said - what'd you say a minute ago? They had to wait and save their money before they even ought to think of a decent home. Wait? Wait for what? Until their children grow up and leave them? Until they're so old and broken down that they... Do you know how long it takes a working man to save five thousand dollars? Just remember this, Mr. Potter, that this rabble you're talking about... they do most of the working and paying and living and dying in this community. Well, is it too much to have them work and pay and live and die in a couple of decent rooms and a bath? Anyway, my father didn't think so. People were human beings to him. But to you, a warped, frustrated old man, they're cattle. Well, in my book he died a much richer man than you'll ever be."

Perhaps if these thoughts influenced our decision-makers then we’d put the brakes on the housing crisis. And when people don’t think they’re going to lose everything then they’ll begin to buy something. And when they begin to buy the snowball of optimism will gain some momentum and things will turn around. Do we really need another world war to stop this?

If that’s not darkly comical enough here’s my take on It’s A Wonderful Life.

The movie is a finely crafted story about the power of witchcraft. Mary Bailey, played exquisitely by Donna Reed, throws a rock breaking a window in the old house killing George Bailey’s father triggering a cascade of events trapping George in Bedford Falls.

She then takes advantage of a run on the savings and loan during the Great Depression to bewitch Bert and Ernie into helping her abscond with the rundown mansion.

This interpretation of the movie doesn’t make me like it less and I’m sure 99% of the people who love the story would disagree. But the next time you curl up on the couch to see this classic consider for a moment that this could be the correct interpretation. The dark comedy interpretation. It still has a happy ending but George Bailey never does escape Bedford Falls.