Bling

Laxness warned you. Did you read Independent People? Did you make an effort to understand it? Did you realize that unless you are one of the 1%, you are Bjartur of Summerhouses. You don’t think you are? Really? Denial and vanity won’t keep you from being Bjartur.

Bjartur worked all his life to be independent. That’s in the title, right? Independent People. Owe no money to anyone. Never trust a money lender. I remember my grandfather saying the same thing. Both grandfathers, actually. They never believed that debt equaled wealth. Bling wasn’t their goal in life.

Yes, I know, Laxness was first a Catholic and then a Commie. He was looking for something, anything that would make more sense than the system in which he grew up. They didn’t. He threw them off. The way one tries on coats at the clothing store. That didn’t keep him from seeing the crazy way the Capitalist system worked. Boom and bust. Power to the bankers. Success judged by how much you can spend. He should be alive now, in the age of Bling.

When I bought my last house, I didn’t have much money for furniture and drapes, the kind of stuff with which you fill up a house. Stuff to sit on, eat off, eat with, sleep on. I saw an ad in the newspaper saying that some people were selling all their household goods. Second hand, I thought, maybe cheap enough for me to be able to buy a few things.

I drove out there. Mamma mia! Or whatever they say in Icelandic. Mega house. New. This couple had built it, furnished it. Nothing but the best. Twelve months had passed. They didn’t like their stuff anymore. It was piled up on the property and in the three car garage. When you’re competing for the blingiest of the bling, you’ve got to have the latest. You don’t want your blingy relatives and friends to see your couch, your mixmaster, your latte maker and sneer. I fought with the other peasants for whatever I could get. When you’re a peasant, you use your elbows and knees to claim and protect stuff that came from stores that wouldn’t even let you in the door.

What made Bjartur and you spring into my thoughts today was Garth Turner’s blog, http://www.greaterfool.ca/. This post is called geezernomics. Since I’m now a geezer, it caught my attention. He’s got advice on OAS and CPP, the sort of things that are important to geezers.

Bjartur, of course, never had OAS or CPP. What he had was a sheep ranch at a place called Summerhouses. The reason he was called Bjartur of Summerhouses is that there were a lot of Bjarturs and when you mentioned his name people needed to know which one you were talking about. In this case, it was the Bjartur who started to build a house with cheap money when the market for sheep products was good and had it foreclosed on when he couldn’t pay his loan.

However, there are people who feel they, unlike Bjartur, can never have this happen. After all, real estate always goes up. Except in Vancouver there is already a property being offered 40 % below assessment. 40%. 30% below assessment is common. Don’t roll your eyes. This is coming to you. There’s an ad on Craiglist by a couple who bought something they shouldn’t have. In the ad they say you, yes, that’s you, can rent their place for $2500.00 a month and they are going to live in the basement along with the washer and dryer. Their bling has blung. People think they may have bought another house before selling (houses always sell really fast for more than you paid for them, right) and they can’t sell house number one. Imagine having two mortgages and living in the basement along with the washer and dryer. Maybe they can take in washing.

I know that the most brothers and sisters of Bjartur are the young and the indebted but I also know of any number of geezers who bought or built bling, houses that said in spite of the fact that they’re part of the Viagra crowd, they’re going to have a pile more kids. I mean, why would a couple in their sixties build a place with four bedrooms, five bathrooms, unless they’re going to have more kids? Maybe they figure in tough times (have you been watching the stock market these last few days?), their kids and grandkids can move in. Or maybe they’re going to provide room and board?

Garth Turner says get liquid, sell your house, rent until whatever is happening quits happening. Only a short time ago, I could have done that. In my neighbourhood, when a For Sale sign went up, two days later a sticker went on saying Sold. Not no more, no more. DOM (Days on the Market) has gone from hours to months, many months. A beautiful house in our neighbourhood has been on sale for at least three months. Today, as I walked by it said “New Price.” Betcha, betcha, the price hasn’t gone up.

Life’s funny. When I read Independent People it never occurred to me that I wasn’t any smarter than Bjartur of Summerhouses. Cripes, I thought, couldn’t he see what was coming? Nope. And neither could I and neither could you. We keep making the same mistakes over and over again.

Sorry Halldor, I ignored your good advice. You may have been a Catholic and a Commie but you got it right.

 

Independent People No More

Lately, I’ve been writing some posts about the drop in housing prices here on the foggy West Coast. I’ve been intrigued because it reminds me of something that happened to an old friend of mine, Bjartur of Summerhouses.

I went back to visit him, particularly that part of his life called Years of Prosperity. All his life, he struggled against poverty. He worked for eighteen years to save enough money to buy a scrappy bit of land with a falling down sod and rock hut. Like most of us, he couldn’t pay cash. He had to take out a mortgage. In Iceland, the way to independence was not by farming, for there were no crops grown except a bit of hay in the home field, but by raising sheep. Dairy cows were more a luxury because the sheep produced wool, meat and milk on less grass. As Bjartur says more than once, sheep are everything. The narrator of Independent People says, of the farmers, “They lived for their sheep.”

Bjartur allows neither himself nor his family any luxuries. He lives in his turf house and makes all his decisions based on how his actions will help to make him independent of the rich farmer at Rauthsmyri who sold him the land and holds the mortgage. He is plagued with bad weather, with sheep diseases such as tapeworm and lungworm.

But these were the times of hardship and this essay is about the times of prosperity. Some say every cloud has a silver lining. If a store burns down, a competitors business improves. If a tornado devastates a town, the contractors and building suppliers are guaranteed work. So it was in Iceland, except the fire and tornado struck in Europe with WWI. When millions of men are needed for warfare, they must be fed and clothed. They are not available for farming or manufacturing. The demand for supplies of all kinds increases by leaps and bounds and with demand, prices rise.

Bjartur and the other farmers (sheep herders) in Iceland found, with the beginning of the war in Europe that there was an insatiable demand for everything they could produce. Europe needed, demanded vast amounts of supplies that were consumed without concern for cost.

The Icelandic farmers don’t understand what is happening in Europe and when they discuss the war it is “This so-called World War, perhaps the most bountiful blessing that God has sent our country since the Napoleonic wars saved the nation from the consequences of the great Eruption and raised our culture from the ruins with an increased demand for fish and whale-oil.”

With unprecedented prices for everything they could produce, the “tenant farmers undertook the task of purchasing form their landlords the land they held, and those who already before the outbreak of hostilities had gone through fire and water to acquire t heir began now to think of renewing their buildings. Those who were in debt were given opportunities of incurring greater debts, while upon those who owed nothing, smiled with an incredible seductive sweetness….In some houses there were to be seen not one but as many as four china dogs of the larger size, even musical instruments; womenfolk were walking about wearing all sorts of tombac rings, and many persons had acquired overcoats and wellington boots, articles of apparel that had previously been contraband to working people.”

“Now, in this welter of money and joyous prosperity that had burst like a flood upon the country’s scattered homesteads, some, it was to be regretted, appeared to have lost their powers of sound judgment for there was no disguising the fact that holdings were being bought a prices which were ridiculously high, that the passion for building was exceeding the bounds of good sense.”

Bjartur, that crotchety old guy, doesn’t fall for any of it. He says “He who is without debt is as good as any king.”

However, fashion and profit that seems like it will never end, cause him to give up his life-long principles and when the Fell King stops by Bjartur’s croft, he says, “Someone was saying you were thinking of building yourself a house.”

They discuss the possibility of Bjartur getting the money to build a proper house to replace the rock and turf house that has provided Icelanders shelter from the wind, rain, cold and frost for hundreds of years. Left alone to make his decision Bjartur would probably have stayed with what he had but driven by pride, he says “Oh, I don’t suppose I’d need more than a year or two before I was square with them again. Some people thought prices could collapse at the end of the war, but the wool touched record heights in the spring there, and I’ve heard form a responsible quarter that they’ll be giving us more than ever for the lambs this autumn.”

The Co-op manager meets with him again, tells him that they’ve got a large load of cement and that lambs will sell for fifty crowns a head. “and there on the paving, before the crofter has quite waked up to the fact, lie the first loads of cement for building.”

Bjartur is proud that no matter how bad the situation at Summerhouses, “we never ate other folk’s bread. Other folk’s bread is the most virulent form of poison that a free and independent man can take; other folk’s bread is the only thing that can rob him of independence and the one true freedom.” Yet, having decided he will have a house, he wants “A big house or nothing at all.” He is persuaded to have a basement and two stories.

No granite countertops, no swimming pool, no Macassar Ebony flooring, but there were four rooms and a scullery on the main floor. Money ran out before the upper storey and the roof were built. So many people were building that there was a shortage of corrugated iron for roofs and there was little window-glass. Lamb prices held up that fall and Bjartur got another loan and bought timber and window-panes and corrugated iron. There were the kitchen “a range with three grates” plus a concrete stairway. The doors had been overlooked and could not be obtained and Bjartur’s suggestions of knocking a few boards together, using some ordinary door-hinges were rejected by the builder. After all, when you build a real house, you need nothing but the best.

There’s no furniture, either. You don’t have furniture in a croft. You’ve beds along the walls. People sit on them to eat, sleep in them. The stove was a hole in the floor. There was nothing to move into the concrete house.

The narrator says, “People take more upon themselves than they can manage if they aim higher.”

It was, the narrator says, usual for people to owe a merchant money and when they owed too much, to be refused any more credit for coffee, rye flour, a needle and thread. People, refused credit, did die of hunger. Bjartur, owing money to the bank, sells his better cow to pay wages, some money off the loan and interest.

In the autumn when Bjartur’s house was one year old the market for wool and meat collapsed. No longer killing each other, the Europeans had time to raise their own sheep.

The big farmers, the ones with political power, who were able to arrange large financings for modernizing their farms, arranged for people like Bjartur to be put on rations on credit, the equivalent of a today’s soup kitchens or food banks, so they could keep paying the interest on their loans. However, the day came when Bjartur could no longer pay interest. He was no longer of any use to the money machine.

The bank forecloses on Bjartur’s property. It is to be sold by auction. The eighteen years he has spent working to raise a down payment, the interest he has paid on the mortgage, the principle he has managed to pay off, all is lost. When land was rising in value, when lamb and wool were bringing high prices, the sheriff had offered Bjartur 15,000 crowns for his property but Bjartur turned it down for prices were going up, prosperity was everywhere, prosperity had arrived and would stay. Instead, she proved fickle. What he could have sold for a small fortune, he held onto, he abandoned his belief that owing nothing meant independence and freedom and built a house that he could not afford.

Only the rich prospered. What they had sold, they collected interest on and when they could no longer collect interest, they took back. Those who had worked, who had struggled, lost everything in their desire to own a modern house.

It is a cycle that occurs over and over again. What would Laxness have said of the kreppa? Of the housing crises in the USA, of the housing crises that is descending on the West Coast, that may very well spread across Canada? What would Bjartur of Summerhouses, having left Summerhouses for Urtharsel, the croft abandoned by his mother-in-law many years earlier, think if he were watching land falling in value by 55% in Maple Ridge, BC?

What would Bjartur think as he watched house after house foreclosed on, as he watched people walking away from their homes as he walked away from Summerhouses? That the banks always get everything? That the banks have not changed? That as they pushed easy money out the door with their advertisements, as they drove up prices with easy credit and liar loans, as they encouraged people to use their houses as ATMs to pay for holidays, vehicles, new furniture, that they were already getting ready to take back what they’d sold to people who wouldn’t be able to afford what they’d bought as soon as there was the slightest downturn.

Would Laxness think that the bankers and financiers of today, the wealthy elite, the one percent, are any different from the bankers and rich farmers of Bjartur’s day? Or would he only think that now that they have a larger reach, they are able to grab more for themselves?

(All quotes from Laxness, Independent People)