Affordable Housing Institute : US

And after the Pajama Game, the Debtor Game

 

So many of the stories we read about subprime home buyers sinking under the weight of their high-interest-rate loans have one nagging flaw: the borrowers whom they cite were in debt trouble before they got the subprime loan.  As a consumer advocate puts it:

 

“A typical subprime borrower is not someone buying a house, but someone refinancing,” says Mary Moore, a spokeswoman from the Center for Responsible Lending, a nonprofit that advocates curbs on predatory lending.  “A typical subprime borrower is someone who has a lot of credit-card debt, and is refinancing to pay some of it off.”

 

That’s a consumer advocate, folks!   Admitting that people used the equity in their homes as a cheap piggy bank, literally betting the farm on their ability to pay off their debts — debts they incurred on credit card expenditures.  Why are they in trouble?  Because they could not control their expenditures.

 

You must learn to control your impulses

 

Saving is a habit, and so is loan paying.  As I’ve pointed out, they are economically equivalent actions:

 

When it comes to homeownership, housing and housing affordability are intertwined with savings, not just to accumulate the down payment, but also because savings are practice to develop the habit of making monthly financial payments. 

 

Saving means making regular equal payments to build up a cash balance.

Borrowing means making regular equal payments to pay down a debt.

 

Since the cost of borrowing is always higher than the rate of savings, any given fixed monthly payment will accumulate to a higher savings balance than the loan it will support.   So if we want to move the poor economically upwards, both financially and in their housing, they have to learn to save.  This isn’t easy, because lots of people claim they will change their behavior if only you give them their cookie first. 

 

 

Economically, saving and loan repaying are equivalent: a fixed amount, every period.  The only difference is who imposes the discipline.  When I save, I impose discipline on myself, and I become economically visible.  When I repay a loan, someone else imposes the discipline on me. 

 

List of savers, Kibera co-operative

 

That’s part of why Slum Dwellers International insists on daily savings as a core behavioral and organizing principle.

 

So stories that ask us to weep for poor insolvent borrowers, who turn upon careful review to have dug themselves into this hole by spending well beyond their means on credit cards, have had me alternately peeved and depressed, because they suggest that in some strange way people become addicted to debt — such as that most exploitive form, payday loans.  

 

Evidently popular, judging by all the places it’s legal

 

And then I found myself re-reading Eric Berne’s Games People Play (1964), and hit the following passages describing The Debtor Game.

 

Congratulations, you’ve just mortgaged your future!

 

“Debtor” is more than a game.  In America it tends to become a script, a plan for a whole lifetime, just as it does in some of the jungles of Africa and New Guinea.  There the relatives of a young man buy him a bride at an enormous price, putting him in their debt for years to come.  Here the same custom prevails, at least in the more civilized sections of the country, except that the bride price becomes a house price, and if there is no stake from the relatives, this role is taken on by the bank.

 

SO, when did you start having these feelings toward your mortgage?

 

Berne is suggesting that the tangible symbols of wealth are more important than the reality of wealth, and that indenturing oneself to the bank, in exchange for a physical object, is psychologically liberating even as it is economically enslaving.

 

Thus the young man in New Guinea with an old wrist watch dangling from his ear to ensure success, and the young man in America with a new wrist watch wrapped around his arm to ensure success, both feel that they have a ‘purpose’ in life. 

 

Berne, like many a psychoanalyst, feels himself qualified to pronounce on other people’s motivations over and above their own stated desires.  He does this in the name of ‘transactional analysis,’ a behaviorist approach to psychology that could be loosely defined as ‘watch what they do, not what they say.’

 

The big celebration, the wedding or housewarming, takes place not when the debt is discharged, but when it is undertaken.  What is emphasized on TV, for example, is not the middle-aged man who has finally paid off his mortgage, but the young man who moves into his new home with his family, proudly waving the papers he has just signed and which will bind him for most of his productive years.  After he has paid his debt — the mortgage, the college expenses for his children and his insurance — he is regarded as a problem, a ’senior citizen’ for whom society must provide not only material comforts but a new ‘purpose.’  

 

This is wrong, to be sure.   Those people who are seen as elderly for whom society must provide are not those who are economically solvent and intellectually lucid, but those who are indigent and infirm.

 

If destitute, you get sent to the poorhouse

 

As in New Guinea, if he is very shrewd, he may become a big creditor instead of a big debtor, but this happens relatively rarely. 

 

Most young Americans, however, take their mortgages very seriously only in times of stress. 

 

He’s writing about 1964. 

 

Consistency in pursuit of mortgage payments is no vice

And tolerance in pursuit of delinquency is no virtue

 

Plus change ….

 

If they are depressed, or the economic situation is bad, their obligations keep them going and may prevent some of them from committing suicide.  Most of the time they play a mild game of “If It Weren’t for the Debts”, but otherwise enjoy themselves.  Only a few make a career out of playing a hard game of “Debtor.”

 

Berne’s analysis does not stop with the psychological comfort of being self-indebted.  He turns around the moral superiority by focusing on how the debtor can make the creditor feel guilty:

 

“Try and Collect” (TAC) is commonly played by young married couples, and illustrates how a game is set up so that the player ‘wins’ whichever way it goes.  The Whites obtain all sorts of goods and services on credit, petty or luxurious, depending on their backgrounds and how they were taught to play the game by their parents or grandparents.  

 

I should clarify that Berne uses White and Black in their sense as chess pieces, with White having the first move.  No other inferences should be drawn …

 

White moves first, that’s all

 

If the creditor gives up after a few soft efforts to collect, then the Whites can enjoy their gains without penalty, and in this sense they win. 

 

Berne sees many human interactions in terms of games, psychological encounters that follow well-prescribed and mutually understood rules, like “Get The Guest” and “Hump the Hostess.”

 

Are you winning “Humiliate the Host”?

 

If the creditor makes more strenuous attempts, then they enjoy the pleasures of the chase as well as the use of their purchases.  The hard form of the game occurs if the creditor is determined to collect.  In order to get his money he will have to resort to extreme measures.  These usually have a coercive element — going to White’s employers or driving up to his house in a noisy, garish truck labeled in big letters COLLECTION AGENCY. 

 

If only it were this easy!

 

We have all had friends like this, those who seem to thrive on managing one step ahead of the financial posse.

 

At this point there is a switch.  White now knows he will probably have to pay.  But because of the coercive element, made clear in most cases by the ‘third letter’ from the collector (”If you do not appear at our offices within 48 hours …”), White feels peremptorily justified in getting angry; he now switches over to a variant of “Now I’ve Got You, You Son of a Bitch.”  In this case he wins by demonstrating that the creditor is greedy, ruthless, and untrustworthy. 

 

Are you making me look heartless?

 

It was about at this time I found Berne’s forty-year-old words deeply distressing, for this is precisely the tone taken by many of the delinquent borrowers sympathetically profiled in recent subprime articles.

 

The two most obvious advantages of this are (1) it strengthens White’s existential position, which is a disguised form of ‘All creditors are grasping,’ and (2) it offers a large external social gain, since he is now in a position to abuse the creditor openly to his friends without losing his own status as a “Good Joe.”  He may also exploit further internal social gain by confronting the creditor himself.  In addition, it vindicates his taking advantage of the credit system: if that is the way creditors are, as he has now shown, why pay anybody?

 

Why pay anybody, indeed?  Why not whinge about the relief you have been offered?

 

‘Creditor’, in the form ‘Try and Get Away With It’ (TAG-AWI), is sometimes played by small landlords. TAC and TAG-AWI players readily recognize each other, and because of the prospective transactional advantages and the promised sport, they are secretly pleased and readily become involved with each other.

 

Though I wish Berne’s analysis could be discounted, it rings true.

 

Regardless of who wins the money, each has improved the other’s position for playing ‘Why Does This Always Happen To Me?’ after it is all over.

 

I’m cursed

 

Money games can have very serious consequences. If these descriptions sound facetious, as they do to some people, it is not because they relate to trivia but because of the exposure of trivial motivations behind matters people are taught to take seriously.

 

It’s discouraging to think that some people experience financial bankruptcy because the turmoil it creates provides a psychological refuge. 

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