Ground causes accidents, claim pilots!

Newsflash - Pilots blame ground for accidents! A new federal study has revealed what was long suspected - the ground is responsible for most airline crashes. A working commission will release Guidelines in January for proposals to prohibit having ground in or near airports. "If it wasn't for the ground, we'd still be in the air!" commented First Officer Spock.

That last paragraph of invented news seems absurd, doesn't it?

But, every year, as my wife will confirm, around the time of the first snow, I will be bouncing off the walls at some newspaper headline stating "Ice causes accident" or "Ice causes 23 car pile-up on freeway, 8 dead."

To me, the claim "Ice caused the accident - I hit the brakes but couldn't stop in time!" is in the same category as pilots blaming the ground for accidents. Yes, there was ice present. No, the ice did not reach out, grab the 23 cars, and smash them into each other.

Actually, one of the first things they teach you in pilot training is that "Bad weather does not cause accidents. What causes accidents is the decision by the pilot to continue operations into conditions beyond their skill and ability to handle. "

The place to stop such accidents, then, is not at the point where the plane meets the ground, or the car smashes into a telephone pole -- but way back at the point where an incorrect decision was made to get on the road or in the air in the first place - given weather conditions.

The denial of blame and responsibility in the excuse "There was nothing I could do!" needs to be countered with - "Yes, there was, but it was earlier and further upstream. The outcome was sadly predictable."

I say all this leading up to another day's look at the Mortgage and Foreclosure crisis unfolding around us, particularly hard hitting in Michigan and Ohio.

I will grant that there were "predatory practices" at work in aggressively pushing very bad mortgages on people with zero chance of paying them and no idea what they were signing up for. That's bad in its own right, and should be outlawed.

Still, I and many others are struck by the attitude and mental model shown by some of the "victims." Talking to one homeowner who ran into trouble in the Cleveland Ohio area (Cuyahoga County), the New York Times today reported several comments, which I'll repeat here:

Can the Mortgage Crisis Swallow a Town?
by Nelson D. Schwartz
New York Times
September 2, 2007
Maple Heights, Ohio

TAMMI and Charles Eggleston never took out a risky mortgage, never borrowed more than they could afford and never missed a monthly payment on their neat, three-bedroom colonial in the Cleveland suburbs. But that hasn’t prevented them from getting caught in the undertow of the subprime mortgage mess now submerging this town.

Over the last 18 months, the Egglestons have watched one house after another on their street, Gardenview Drive, end up foreclosed and vacant...

It is a scene being repeated in cities and towns across America as loans that were made to borrowers with little or no credit history, many of whom could not even afford a down payment, fail in ever-growing numbers....

Indeed, what was once a problem confined mostly to economically struggling areas is quickly becoming a national phenomenon. ...At current rates so far this year, RealtyTrac expects foreclosure filings to hit two million in 2007, or roughly one per 62 American households — a rate approaching heights not seen since the Great Depression.

Analysts also say that the fallout from mortgages gone bad is spreading well beyond borrowers now in default. It has begun to engulf middle-class communities like Maple Heights, where nearly 10 percent of the houses — or 910 properties — have been seized by banks in the last two years...

“I don’t think we’ve hit bottom,” says Michael G. Ciaravino, the mayor of Maple Heights. “My fear is that foreclosure rates could go to double where they are today.”

IN terms of the subprime mortgage meltdown, Ohio has been among the hardest-hit states, according to the Mortgage Bankers Association....

For a mayor presiding over a town in crisis, Mr. Ciaravino doesn’t seem angry, but beneath an affable exterior is barely concealed frustration that the danger of subprime debt became a national issue only after Wall Street began to wake up to the threat this summer. “We’ve been warning of problems for years,” he says. “I’m just a small-town mayor. Where was the foresight?”

“There’s plenty of blame to go around,” warns Mr. Ciaravino...

It is also clear that the Sweets bear some responsibility for their predicament. “I do blame myself a little bit,” Mrs. Sweet acknowledges. “I feel dumb.” She explains that she was focused on the monthly payment when she borrowed from Countrywide, not the interest rate or taxes due. “Once we got the loan documents at the closing, I just came home and stuck them in a drawer.”

So, when her monthly payment requirement doubled, "There was nothing she could do." Hmmm.

Maybe, one thing she might have done was not put her foot into the bear-trap in the first place. There's little doubt that it was a trap, and it was mis-represented, and she was taken advantage of , and the bait looked very inviting, and the trap part wasn't obvious.

But, then again, that is how traps for the unwary are always designed, isn't it? Find some kind of attractive bait, cover up the steel jaws with dead leaves or something, and put it right in the path where people will come upon it frequently until they "give in" and decide to reach for the cheese in the mousetrap.

This was some kind of surprise, that there are financial traps for the unwary out there? Or that "Fools and their money are soon parted" ? From here, that looks about as unexpected as discovering that ice on a road is slippery.

Again, I'm not saying she wasn't taken advantage of. The same article has a few words from a banker, Marc A. Stefanski, the chief executive of Cleveland's Third Federal Savings and Loan, worth quoting:

“The model has shifted,” says Mr. Stefanski. “It became very lucrative. But it was totally irresponsible for the sake of greed.” Not that Mr. Stefanski didn’t notice the profits to be had. “Absolutely, we were tempted,” he acknowledges. “We arm-wrestled and talked, but we decided not to change the model. We felt it wasn’t the right thing to do.”

Mr. Stefanski is no social worker. He lives in an affluent suburb of Cleveland and earned nearly $2 million last year. But he does not hide his feelings about just what went wrong in places like Maple Heights. “The whole system was based on raping the public,” he says, matter-of-factly. “Not everyone should own a home — just those who can afford it.”

Third Federal has a branch in Maple Heights, Mr. Stefanski says, and in the past, “we owned Maple Heights.” But in recent years, he says, “The predators just jumped on it.”

But what I am saying is that Mrs. Sweet mentioned above was an adult, surrounded by millions of other adults, libraries, the Internet, places of worship, bars, supermarkets, or other places where this kind of thing could be discussed. Oh yes, then there are also schools and continuing education courses. And TV specials. And weblogs.

And, Mrs. Sweet is not alone. Quoting that article again,

At current rates so far this year, RealtyTrac expects foreclosure filings to hit two million in 2007, or roughly one per 62 American households — a rate approaching heights not seen since the Great Depression.

So, this is to me the most surprising and curious part of this whole situation. In this day and age, how can it be that two million households, probably more like 4 million people, could be so naive that they would make a $100,000 or more purchase, probably the largest amount they had ever dealt with in their entire lives, with so little caution or so little getting good advice?

And, this is not just on the poor end of the spectrum. There were also people buying million dollar homes that couldn't afford them by any rational scenario -- people that already owned $400,000 homes, lived in good neighborhoods with good schools and libraries, and probably had high-speed internet to their home and wireless connections to their four laptop computers.

So, while poverty can surely diminish available resources or make them more expensive, it's not an adequate explanation for this. We know predators are out there and greedy - that's nothing new to this century or this country.

But, why did all that social wisdom, and all those resources in the books and internet, have so little beneficial effect?

There is an obsession in education with math and science and problem solving, but it seems those don't help much without this lesson:

"When you are thinking about doing something new, first seek out the tribal elders and talk to them and get their advice."

In turn, when I consider why people don't do that, one thing that keeps coming up is the wide-spread social attitude that we are not responsible for the bad results of our own actions, or expected to have or use any foresight or planning or judgment.

In other words, "Ice causes accidents."

We need to dig deeper into how this total collapse of responsibility has worked its way into being so commonplace. I have a suspicion that the term "freedom" has been confused with "anarchy", and that what people think they can obtain is "freedom from consequences of their own choices and actions."

Rich people seem to think that their wealth, or their attorneys and doctors and pills can provide freedom from consequences. Poor people can blame bad schools, or poverty, or fate for being trained repeatedly that any sort of self-control is either impossible or pointless.

That concept of "freedom" is more like the freedom of a jellyfish or slug from the "constraints" of having bones that are not flexible.

The truth is that you are free to run a lot faster with bones than without them. And, without bones, you are free to be a free lunch to whatever predator comes by next.

We get to pick what kind of freedom we prefer.

Pick wisely.


also see my post from last December: Honey, We're losing the house.
Quotes from that:

[Consultation] is also an intervention point, a leverage point, a place were we can fix something. We could take some of those same people who figure out how to sell us cars and pills, and put them to work selling us on the simple idea that it's ok to ask for help, and it's ok to not know everything, and it's ok to need each other to get by.

I think that would be a better investment than many others we're currently doing trying to clean up the messes that avoidable bad decisions have created.

There are some initiatives underway. One example is the Baha'i faith's emphasis on the process of local "consultation" among regular people trying to figure out how to make hard decisions in an increasingly complex world. In my mind we need a lot more energy put into such initiatives by many more groups, more collaboration, more social networking.

In it's own way, that attention will produce an "emergent" solution to many problems that formal analysis and huge government programs would never address.

Put another way - on a personal, corporate, and national level, it's a really bad idea to toss overboard things like integrity, honesty, self-discipline, and respect for wise people (some of which may be old people or even dead people..) It's a bad idea to be so taken with "face" and "pride" that one can't consult with others on big decisions. That's a bad road to go down. The consequences will always come back to haunt you.

Oh, and one last thing. Today's Washington Post's article on the mortgage crisis has this advice.

And beware of mortgage rescue scams.

"The worst thing people can do is bury their heads in the sand," said Jean Constantine-Davis, a senior attorney for AARP Foundation Litigation, a legal advocacy group in the District. "The second-worst thing is dealing with people that are making promises that will make matters worse."

Yep, now the people who show up with a deal too good to be true to rescue those who fell for the first trap can be actually setting a second trap. Now is a time to be very very careful.

Related Post: Mental Fog causes 100 car pileup

(photo by crowbert )

Rising rates and the soon to be homeless

(This and other photos of homeless in Chicgago by crowbert )

The housing boom in the US appears to be over in a big way. Now they estimate that 1 to 2 million families will lose their homes this year to foreclosure, unable to pay the mortgage. It's a good time not to be prejudiced against the homeless.

Anywhere, here's a summary of the bad news, and then some reflection on what's going on here from a public health perspective.

The local reason is that their monthly payments will jump, and in some cases by a lot, meaning they will go from affordable to "not enough to buy food and pay the mortgage."

This is how today's New York Times put it today in
Rising Rates Squeeze Consumers and Companies
by Gretchen Morgenson and Vikas Bajaj

Now that party may be coming to an end....
The fallout is likely to be widespread, and felt most immediately by homeowners and people looking to buy a house.

Particularly hard hit will be consumers with weak credit — known as subprime borrowers — who are faced with mortgage rates that will soon reset to higher, in some cases double-digit, levels.

How many is that in real numbers?

Higher rates are already contributing to an increase in foreclosures. ...Foreclosures in May were up 90 percent from the period a year earlier... the total foreclosures of 176,137 in May were sobering. [ my note - that's a rate of over 2 million a year already]

For struggling homeowners, the rise in rates could not come at a worse time.

And even that number is low compared to what's coming, because many of those sub-prime loans had a 3 year grace period of low rates and the 3 years is just about up.

Last year, adjustable rate loans accounted for 25 percent of mortgage applications, up from 11 percent in 1998, Freddie Mac said. Demand for adjustable rate loans peaked in 2004 at 33 percent; many of those are at or near the reset point....Some $100 billion in subprime loans are scheduled to reset between now and October.

And we have this thought:

“I don’t think they are panicked,” he said. “But now they are wishing, ‘Why didn’t I take a fixed rate three years ago when I had the chance and rates were low.’ ”

Well, first we need to look at whether this problem is going to get worse before it gets better. Sadly, the answer is almost certainly yes.

The unusually low interest rates of the last three years have been an enormous boon to almost every corner of the American economy....The recent rate move came as something of a surprise to Wall Street. It is the result, traders say, of heavy selling by foreign investors...

The first thing I notice is that the article talks about "unusually low rates of the last few years" and then shows a graph of the last few years. Well, that's not very helpful. What are we talking about here? What's the "usual" rate? What's behind curtain number one, Johnny?

The media have done this consistently, and fed this short-term mentality. It took me quite some time to dig out what the long-term trend actually looks like, because almost every news story just had the last few months or years.

I did that for my piece "The Mortgage Trap Begins Closing" that I posted here December 11, 2006. and "Honey, we're losing the house" where I said

As, one analyst put it, people seem to have turned their houses upside down like piggy banks, shaken all the money out, and spent it already, and now there's nothing left to use to pay the new bills. To top that off, the monthly mortgage payment magical 3 year grace period has expired, and the minimum payment they're demanding just doubled. How can that be?

Then of course, as now, Wall Street analysts were baffled and surprised by this. I'm not sure why that is. Long term trends? Here's what the savings rate looks like, long-term, for individuals:

The last time the personal savings rate was negative was in 1933. (Source EBRI Databook, US Department of Commerce.)
US Trade Deficit (From BEA, quoted at invisibleheart. "Does the Trade Deficit Destroy American Jobs, Russell Roberts, George Mason University, Nov 2006.)

These aren't perfectly on the mark, and I get complaints from economist that I'm not using these correctly, but I think the overall point is the same regardless - whether we look at individuals or corporations or the USA as a whole, we've been living way beyond our means and "charging it" but the bills for the party are coming due now.

But let's do some "root cause" analysis and look beyond the surface here. So we have that many actors on every level have been spending like there's no tomorrow, writing checks against an empty bank account. And we have that foreigners, who have a lot of dollar-denominated IOU's, are starting to bail out and get rid of them, even at a loss, because they're getting worried that the dollar will be devalued another 30% or so, and they don't want the value of their IOU's to fall 30%, thank you, when there are other options and other places in the world to invest in.


And that entire process seems to be fueled and encouraged by the media, the banks, the credit card companies, television, all encouraging people to ramp up their debt and buy more stuff.

Aside: Back to the "yellow boxes" on the complicated flowchart I put up yesterday (see below) The "yellow boxes" are where "stories" or "narrative" have direct impact in the feedback control cycle that manages our lives, but that's sufficient to completely alter perceptions (lower right) and external reality and how others relate to us and act toward us (upper right).

-- this whole cycle is driven by a myth and mental story, a mental model, that makes such behavior "OK" or even "GOOD". First, there is the story that "things are cyclical and this is just a downturn and it will turn up again soon because it always does." (That story doesn't play too well in Flint, Michigan, where the GM plants closed and don't seem to be coming back.)

Then there is the story that a huge amount of debt is fine. Everyone's doing it. That always sounded a little too good to be true, but it was pleasant to the ears.

Then there was a popular misconception by probably millions of buyers that couldn't do basic math and slept through all that life-skills-math nonsense in high-school. If Johnny's adjustable rate mortgage is at 5% and he pays $500 a month, and the rate goes up a little, just 5 %, what will his new payment be? $505? or $1000. Most people were willing to buy the story that $505 was the right answer. Wrong.

Then there was that nagging suspicion that something else was too good to be true. How could these ads be right? Buy a $400,000 home for $500 a month? Better RUSH! SALE ends Tuesday!

OK, so, what's my point? A lot of people got "caught up" in this land-office business and thought they could get something for nothing, and that the rules normal mortals lived by didn't apply to them, and that tomorrow was a long long way away, so far away it didn't matter. Except that it IS tomorrow now, and we all live in our own wake of our own past decisions, and Sunday morning those Saturday night decisions aren't looking very good any more, and what a headache, and how did the couch end up in the front yard anyway?

With my annoying "Five Why's" (after Toyota's practice), again, I'll ask, "Why?" Why were people so gullible yet again? Why don't we get smarter as time passes? Why isn't the country a "learning organization?"

Well, some of the country is learning. The part that figured out it could rush in, sell a trillion dollars worth of junk mortgages, and rush out again before the door closed is learning. They just got a lot of positive reinforcement.

But the poor people, heavily minorities, didn't learn.

Why?

Why didn't they learn from history? Why didn't they learn from their own past? Why didn't they pay attention in school? Why didn't they ask around in church and see if everyone else thought this was a good deal or not?

Why are the poor, who most desperately are in need of making as few mistakes as possible, not organized to learn from experience so they don't have to repeat it?

Or is it the other way? Those who don't learn from experience end up being poor and exploited?
Well, some of both, most likely. It's a spiral that feeds itself.

There is a known remedy for gullibility, and that's "consultation". Have some sort of social system in which wiser people are identified and consulted with before rushing into some sort of precipitous action that you'll end up regretting that will, literally, cost you the farm.

This is not a difficult concept, and it costs zero dollars to bring to pass, but it is one that seems hard to carry through on.

Why is that? (I'll keep asking, and keep on going upstream towards the "distal" cultural issues that are generating all this downstream trauma.)

Well, the USA seems to have a culture that is revolted by the idea of working together, or learning from one's elders, or consulting before action, or otherwise limiting personal "freedom" by being burdened with lessons from the past. We bail on our parents, we discard our history books, and we want to be "free", even if it means "free to crash and burn and be exploited." "the past has nothing to teach us!! Everything today is NEW!!!" Oh, really?

Or do we really want that, or did that idea get into our yellow boxes and internal story some other way? Where exactly did this idea come from, and when did we vote on it and agree to it, anyway?

Rejecting every constraint doesn't make us free to run with the wind or sail the skies -- it makes us into jellyfish or slugs that have no bones, and are easy to eat for lunch because they have no shells either. Rejecting discipline and wisdom makes us exploiter-bait. Rejecting all that annoying math and school textbook learning makes us exploitable and gullible.

But, most of all, rejecting each other's consultation makes us end up broke, homeless, and dead.

So, why do we do that then? Don't get a guilty look and say "something inside me didn't work." This isn't a local, personal thing. It's a global, social, cultural thing that's broken here.

If the simple idea of pooling what brains and knowledge we have, and consulting with each other before taking action is such a hard thing, we need to stop, flag this point, and call a meeting to understand exactly WHY that is. Something is broken here that should be working. It can be fixed, but first we need to understand what it is and where it is.

And the something is at a higher level than people, and that's what makes this hard to see and hard to fix, unless you have tools to do "systems thinking." And, of course, you need to believe that there are levels higher than people that matter. I'm convinced of that.

Whatever cultural forces have conspired to cause us to reject education, understanding, discipline, and consultation need to be fought off and rejected, because that is not the way to freedom at all -- it's the way to the homeless shelter. No, they'll be full and overflowing. It's the way to dissolution and death. Social disconnection leads to death. Rejecting the past means rejecting the future, and also leads to death. Life is too complex to try to learn it all on your own dime, at your own expense.

So, we need to ask, if my current story, if our current internal story makes "consultation" seem wrong or impossible, what's a better story and where can I get one? Where can we get one? Can we all get in with one ticket if we come in the same car?

This conversation makes me think a little of a Peanut's cartoon strip, where Lucy walks by Linus, who is playing the piano (Is that Linus?) Anyway, he says "My fingers hurt." and she says "maybe your fingernails are on too tight" and walks away. He sits and looks at his hands in surprise and finally says "I didn't even know they were adjustable!"

Well, yes Linus, we all have internal stories. Some are helpful and some are harmful, but all of them can be changed. Some stories make it hard to do the right thing, and some stories make it easy to do the right thing - they affect that axis. Some stories motivate us and some stories suck the energy and life right out of us -- they affect that axis too. Some stories reach back all the way to our perceptions, and twist our perceptions around so we don't see things truly, but we see a distorted reality, a selective reality, that supports the story. It's as if the story was alive, and wanted to live, and didn't want to fade away, so it twists what we look at and what we see so that it adds up to something that supports that myth and story.

Suddenly, those who've been reading this for a few days may go, "Oh. Another S-loop."

Yes, another S-loop. Stories get into our head and live off our psychic energy and survive by twisting around our perceptions to support themselves, and sometimes even by twisting our actions around to support themselves, or by twisting our actions so as to cause other people to do things that support our self-concept and justify it.

The yellow boxes in my diagram can reach out and change the green boxes. Internal stories can change the lower right corner, and distort perceptions so that we only see things that support our myth.

We can never be free of stories -- they are part of how we operate. But we can change the story, we can reprogram the computer. If we can't have a palace, we can at least have an internal story that supports rational action and prevents us from harming ourselves or doing totally stupid things over and over again.

Such stories are far stronger, of course, if they are shared stories, supported not only by ourselves, but by our friends and family and neighbors.

Hmm. This is sounding a lot like the role religion plays. Or science. Those are each ways to put a story in place that can help stabilize us and make us figure out how to work together and consult and learn together what we can't learn separately.

That was one saying of of the American revolution, that if we didn't "hang together" we'd all "hang separately."

Some stories are way better than other stories. Pick a good one, since you'll have to live with it.

Or die from it.

The summer is gone,
The ground's turning cold,
The stores one by one they're a-foldin'.
My children will go
As soon as they grow.
Well, there ain't nothing here now to hold them.

North Country Blues (1963)
Bob Dylan