Borrow - The American Way of Debt

Zusatztext 77508436 Informationen zum Autor Louis Hyman attended Columbia University, where he received a BA in history and mathematics. A former Fulbright scholar and a consultant at McKinsey & Co., he received his PhD in American history in 2007 from Harvard University. He is currently an assistant professor in Cornell University’s School of Industrial and Labor Relations, where he teaches history. Klappentext In this lively history of consumer debt in America, economic historian Louis Hyman demonstrates that today's problems are not as new as we think. Borrow examines how the rise of consumer borrowing-virtually unknown before the twentieth century-has altered our culture and economy. Starting in the years before the Great Depression, increased access to money raised living standards but also introduced unforeseen risks. As lending grew more and more profitable, it displaced funds available for business borrowing, setting our economy on an unsustainable course. Told through the vivid stories of individuals and institutions affected by these changes, Borrow charts the collision of commerce and culture in twentieth-century America, giving an historical perspective on what is new-and what is not-in today's economic turmoil. A Paperback Original Introduction: Everything Old Is New Again   “Dick” and “Jane” Smith met shortly after they had both moved to the city, coming upon each other in the park on a sunny Sunday afternoon. Romantic sparks flew, declarations of love were exchanged, rings and vows followed—and then they began their search for a home of their own where they would start their new life together. Dick hadn’t gone to college, but he had recently found work in a new industry that was sweeping the country. The company’s IPO a few years back had been one of the most successful in history and he was going to help manufacture the killer product that, as one of his executives had said in his firm’s annual report, had “given us all something worth working for.” Dick and Jane, like the rest of the country, were caught up in the heady optimism of what newspaper pundits said was a New Era. Flush with love and short on cash, the Smiths went their local bank to find out if they could get a mortgage. The home that they wanted was expensive, like all houses these days, but the Smiths knew that houses were a good investment. Prices had gone through the roof in the past few years and real estate was always a sure thing. “You can’t make more land!” Jane remembered her father always saying. At the bank, the Smiths met with a well-dressed mortgage officer. Looking over the application, the mortgage officer asked them far fewer questions than they had expected: how long had he had his job, how long had they lived at their address, how much did he make? After a few calculations, the mortgage officer somberly informed Dick and Jane that an “amortized” mortgage—one in which they repaid against both interest  and  principal every month—would not get them the house they wanted. Dick’s income was just not enough to cover it. But the Smiths didn’t have to worry. The bank offered another, better option that most smart people were using these days: an interest-only “balloon” mortgage. With a balloon mortgage, Dick and Jane could buy the house immediately, sleeping soundly with the knowledge that their household income had nowhere to go but up, right alongside real estate values. And, when the time for bigger payments finally came a few years down the road, they could simply refinance with a new loan that was just as affordable as the first. Why pay off the house when they would probably just sell it in a few years, anyhow? In fact they would have to refinance since the loan was only for four years, but that wouldn’t be a problem at all. The mortgage officer explained, in confident tones, that refinancing would never be a problem aga...

Product details

• Authors: Louis Hyman
• Publisher: Vintage USA
• Languages: English
• Product format: Paperback
• Released: 31.01.2012
• EAN: 9780307741684
• ISBN: 978-0-307-74168-4
• No. of pages: 304
• Dimensions: 132 mm x 202 mm x 20 mm
• Series: VINTAGE BOOKS
• Subjects: Non-fiction book; Social sciences, law, business > Business > General, dictionaries