17 Aug 2008

The Sub-Prime cohabitation crisis and "The Emperor's New Clothes"

"An emperor who cares too much about clothes hires two swindlers who promise him the finest suit of clothes from the most beautiful cloth. This cloth, they tell him, is invisible to anyone who was either stupid or unfit for his position. The Emperor cannot see the (non-existent) cloth, but pretends that he can for fear of appearing stupid; his ministers do the same. When the swindlers report that the suit is finished, they dress him in mime. The Emperor then goes on a procession through the capital show off his new "clothes". During the course of the procession, a small child cries out, "But he has nothing on!" The crowd realizes the child is telling the truth."

The conflation of cohabitation and marriage - strongly promoted by HMG [Her Majesty's Government] - with its mantra "We shall not promote one type of family structure over another" is bringing its chickens home to roost. HMG - indeed many politicians and City and Wall Street "insiders" - are faced with a dilemma. Do they admit they were inept and have been proved profoundly wrong in their acceptance of the mantra, or do they continue to ignore the research evidence and hope what is a still "a cloud no larger than a man's hand" evaporates?

Cohabiting couples who are in arrears with their mortgage payments have precipitated the mortgage/credit/economic crisis. Why them more than married couples? Well, the research evidence - though not yet conclusive - points in the direction of cohabitants as the culprits. Please follow these links:

[1] "Are the Sub-Prime, Northern Rock, Fannie Mae and Freddie Mac fiascos connected with the increase in cohabitation?" [article and comments]

[2] "Cohabitation is not the same as marriage; most importantly, cohabiting couples break up at a much higher rate than married couples".

[3] "Cohabitation vs. Marriage: How Love’s Choices Shape Life Outcomes" [Top Ten Findings]

The Economist reports "For much of this financial crisis, America’s Securities and Exchange Commission (SEC) has cut a pathetic figure, relegated to the sidelines as a hyperactive Federal Reserve tried a variety of creative measures to keep the system afloat. When the market watchdog finally did get in on the act, it was highly controversial: a temporary order restricting short-selling the shares of 19 financial firms deemed systemically important, including Fannie Mae and Freddie Mac, the two troubled mortgage agencies" [Not to mention Northern Rock in the UK].

The "short-selling" of marriage has been the real scandal, and this goes way above and beyond the Securities and Exchange Commission. All the "Emperors" who have all allowed themselves to be deceived about this will need to address the issue sooner or later. The institution which is "systemically important" is marriage. Attempting to legislate against bucket shop type operations without attending to the real issue is futile.