Economy

My Town’s Lowly Movie Theater

“Oh my god, aren’t you freezing?” asks a young woman standing next to me in line for a movie. The movie theater is Statesboro, GA is so small the box office is between the two entrance doors. I turn toward her and see she is dressed like Randy from A Christmas Story (you know, “I can’t put my arms down!”). “No, it’s like 60 degrees.” I reply politely with a bemused look on my face. Bouncing on the balls of her feet to generate warmth, she says with bemusement equal to mine, “Okay? But it’s November and I’m freezing!”

Sitting in the movie theater, it occurred to me; this is the most approachable illustration of relative deprivation that I can think of. When it hits 60 degrees in the spring damn near every student on campus has flip flops and shorts on, but when the thermometer drops to 60 degrees in the fall it’s not uncommon to see people dressed for a blizzard. It’s the same 60 degrees, the only thing that changes is your relative assessment of how cold/warm it was just a few days ago.

Ultimately, this is a simple illustration of relativity, but from here it’s not a giant pedagogical leap to relative deprivation.

Standing in the wake of the economic devastation created by the 2008 housing crisis, the world wanted a neck for the noose. The way the rich and socially powerful parried the responsibility for the sub-prime meltdown onto low income home owners, especially homeowners of color, is one of the most illustrative examples of hegemony and how our problems are socially defined. I feel a moral obligation to teach this in my social problems courses.

After the crash of ’08 the question on everyone’s mind was, “how on earth did this financial crisis happen?” One popular answer, if not the most popular, was, “people who have no business owning homes bought houses they couldn’t afford with sub-prime mortgages.” In a sense this logic is saying the economy fell apart, “because of the greed of irresponsible poor people.”

An Inside Job

Another answer to the “why did this happen” question should be, “because no one paid attention to banking regulations, loan practices, etc. because they are mind-numbingly boring.” They are supremely important, but painfully boring. Thankfully, there are some fantastic resources to help you teach your students about the ’08 housing crisis. There are many, many more, but I feel Griftopia and Inside Job
balance depth of coverage with approachability best.

GRIFTOPIA

Matt Taibbi is one of my favorite writers and political reporters[1]. He wrote an astoundingly approachable book on the banking shenanigans leading up to the 2008 financial crisis. I read it cover-to-cover and as a financial lay person I felt I understood the crisis to a depth I couldn’t have previously imagined.

I used Griftopia’s third chapter, Hot Potato: the Great American Mortgage Scam because it connects the individual level story of a man, with the pseudonym Eljion Willams, to the practices of large banking firms such as AIG and Goldman Sachs. Each step along the way Taibbi shows how each player in the financial system was incentivized to “put a torch” to the players one rung beneath them.[2] Taibbi asserts that the answer to, “how on earth did this financial crisis happen?” should be, “because it was profitable for the socially powerful actors and institutions.” Taibbi connects the individual level with the macro level and at the same time shows us how decisions at the institutional level had a cascading series of consequences at every level of our society. For this reason alone, it’s a must read/teach.

INSIDE JOB

The Oscar award winning film Inside Job explains the complexities of the credit crisis in a simple yet compelling manner that feels closer to a “who done it” mystery than a film about financial deregulation. Narrated by Matt Damon, the film interviews some of the industry leaders and decision makers who were in the driver’s seat as the economy went over the cliff.

At times I writhed in my seat as the filmmaker scathingly interrogated the reckless leaders and decision makers. At other points in the film we hear from the academics and analysts who warned of the unsustainability of the deregulated market (who were at the time dismissed as Chicken Littles).

Given that I showed this film at the university level, my class and I were most interested in the film’s argument that the economics/finance/business side of higher education has been co-opted by corporate America. To quickly summarize the point; these professors are highly compensated to serve on boards or in another advisory capacity for the big banks and then they publish research that legitimates the practices that best suite the needs of these same big banks. After showing the film my students were on the edge of their seats, ready to vent their frustration and no more so than the frustration they felt about the role academia played in the collapse.

Teaching How Power Hides In Plain Sight

In my search for videos about the housing crisis I was recommend the video below. I watched the first few minutes of it and was enthralled. I was set on using the video, but not because of what the video overtly teaches, but for what it teaches subtlety.

The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.

I told my class I wanted them to watch the video closely and that I was going to ask them a peculiar question afterwards. As the film ended I asked them if anything they saw in the video seemed incongruent with what they read about in Griftopia or what they learned from Inside Job. They sat perplexed and answerless. So I ponied up 10 extra credit points to anyone who could analyze the film to find thematic discrepancies between the clip and our other class material (directions here: Word | Pages | Pdf)

The class struggled to find any discrepancy. When they came back the next day many of my students protested saying they, “watched the video over and over and there’s nothing.” I threw the clip on the projector and fast forwarded to the seventh minute. Here the video posits that the “turning point” of the credit crisis was “irresponsible” home buyers who bought a “big house” they “not surprisingly” defaulted on.

The videos seems to suggest that the sub-prime home buyers purchased homes they couldn’t afford because they were greedy and/or irresponsible. It doesn’t acknowledge that many of these sub-prime home buyers were victims of predatory lending practices (see Broke, USA for more on this) or that many sub-prime borrowers actually had credit scores that warranted a prime loan (which would have saved them loads of money). Recently Bank of America paid a $335 million settlement to avoid going to court and face charges of what Attorney General Eric Holder described as, “systematic discrimination against blacks and [H]ispanics”

Finally this ignores that predatory banking practices often sold loans at one rate and then used a variable interest rate to ratchet up the rate quickly; in doing so they would “put a torch” to the family, as Taibbi puts it, to collect on the insurance money. All of these behaviors were incentivized by our social institutions and that is painfully overlooked in this film. This is not to say there was no greed or irresponsibility at the lowest level of the banking system, of course there was, but to tell half the story is… wait for it… irresponsible.

And that’s just what was said. Given that this was supposed to be a “visualized” accounting of the crisis, we should expect that a great deal of intent went into the selection of the images used to depict it. I put the slide below up on the screen and asked my class to break it down:

They quickly noticed that “irresponsible” home buyers were fat, had lots of kids, smoked and drank alcohol. If you look closely at the video, the children of the irresponsible home buyers wiggle on screen, which could be interpreted as they are less well behaved. Again, if you find yourself saying, “who would put that level of attention into something like this?” I would argue, a graphic designer who was visually depicting a story.

What’s remarkable about the video is how easily the mischaracterization of the poor went unnoticed. Some of my students reported watching the video, “over and over,” but couldn’t find a thing. And they weren’t alone the video was featured on NPR’s Planet Money and was watched nearly 3 million times without drawing much ire.

After our discussion they saw it clear as day. We then talked about conflict theory’s argument that power hides in plain sight and they got it. We finished by talking about the tenet of conflict theory that argues that those with social power use it to deflect blame away from themselves and onto the less powerful. It was a fantastic conversation to end our discussion of the housing crisis.

Environmental sociology is great because it focuses on the biggest social system we have, the natural environment. The natural environment is at the center of culture, the economy, and every other social institution in one form or another. To understand environmental sociology is to understand social systems. The Story of Stuff is the best video I’ve found for explaining how individual actions, social systems, and the natural environment all intertwine. The video is just 21 minutes and available online making it an excellent resource to use in class or as a homework assignment.

If you teach Marx you need to show this video to your students. I’ve spent multiple classes trying to explain how capitalism (a linear system) and the natural environment (a finite resource) can not coexist long term, but it wasn’t until my students watched this video that they truly understood what Marx was trying to say. Furthermore, students seem to grasp how capitalism generated inequality and social injustice both in the U.S. and globally.

I’ve also used this video to teach my students about the difference between what we value and what we spend our money on. I’ll start class by asking students to write down a single item they possess that could never be replaced if it was lost. The item has to be something they would be heartbroken if they lost it forever. In the past students have written things like family photos, something a loved one passed on to them, or something mundane that holds a great deal of sentimental value to them because of who they were with when they first got it. After we watch The Story of Stuff I ask the students to flip the paper over and write down what items they spend most of their discretionary money on. Students write down things like clothes, video games, and smart phones. Then we start a class discussion about why the sentimental things we value are not the things we spend most of our money on.

This video is the gift that keeps on giving. Even if you don’t teach environmental sociology, this video would be a great inclusion for an Intro to Sociology class, a Social Problems class, and any class dealing with global issues or inequality.

Teaching sociology students to see beyond the individual and toward the social is challenging, but crucial. For the last few semesters I have started this conversation by talking about the economy. I have my students come up with a list of qualities we assume a person has if they are unemployed. “Lazy!”, one student chimes out. “They want to live off of the system,” another says. “It’s their fault,” another student inevitably says. Every class is a little different, but the list of personal qualities almost always paints the unemployed as lazy individuals who either made bad choices (e.g. failing a drug test) or were not good workers (e.g. habitually being late to work).

This week I showed my classes this map of unemployment in the United States from January 2007 to May of this year:

As the map becomes consumed with the dark shade of unemployment I ask them, “Is laziness contagious? Is making bad choices or being a lousy employee contagious?” After a few chuckles from the students I say, “Of course not, so something bigger than the individual is happening. Something social is occurring that individuals can’t escape.” I then ask the class to break up into small groups and answer this question, “How have you or a loved one been affected by the downturn in the economy?”

This question is a sociological question. For students to answer it they have to think about how their individual lives have been affected by social conditions. When students start sharing some of the hurts that they have experienced in this economy it helps the entire class break free of a solely individualistic world view. It also lays the ground work for creating a classroom environment where sharing how you have been affected by society is acceptable. I have yet to have a student be anything but supportive for their fellow classmates.