The Subprime Marriage Crisis – An Analogy Between Same-Sex Marriage and the Credit Crisis

In this post I intend to draw a controversial analogy between the subprime mortgage and credit crisis and the resulting economic upheaval and the potential societal upheaval that could result from the redefinition of marriage.

To set things up, let me share my personal experience with the economic crisis.


In January 2009 I found myself sitting in a conference room of the company I had worked for during the last four years listening to the chairman of the board of directors explain that the company was running out of money and that they were replacing the company founder and president with a new, hand-picked CEO.

Only six months earlier the company had been on top of the world: honored with prestigious awards and accolades and a three-year sales growth of 620 percent.

As if the mood wasn’t somber enough, the chairman then went on to explain that the economy was in a very bad way, and that it wasn’t just a cyclical recession, but it was going to be a depression.  He expected that many, many companies would fail but that those companies that survived the depression would be wildly successful afterward.

Now, from any board chairman this kind of talk would be alarming, but from our chairman, Mark H. Willes, it was downright horrifying.  You see, Willes had been president of the Federal Reserve Bank of Minneapolis from 1977 to 1980.  He had been President and CEO of of General Mills, Inc., President and CEO of The Times Mirror Company, director of Black and Decker, and a somewhat controversial publisher of the L.A. Times.

In other words, he was very, very well connected to insiders across a large number of industries. He had been involved with recessions from various angles for nearly four decades.  He said that neither he nor his associates had never seen anything like what was happening in the economy in their lives.

Within a month or two of our meeting, Mark was named as the new President and CEO of the Deseret Management Corporation by the First Presidency of The Church of Jesus Christ of Latter-day Saints. The Deseret Management Corporation oversees all of the church’s for-profit commercial enterprises.

Within three months of the depressing company meeting with Willes, my award winning company had dwindled from layoffs and resignations.  I was fortunate to find employment with a more stable company.

Now, experts will certainly argue with Willes about whether the current economic crisis actually constitutes a depression.  In fact, a good number believe that the economy is already well on its way to recovery from a severe recession. Others disagree and are predicting that the supposed recovery is superficial and will not last.

I have no idea who is right.  Though, as I watch increasing numbers of friends lose their jobs, I am not very optimistic.  But regardless of whether this is an actual depression, everyone seems to agree that it is among the worst economic crises we’ve had in a very long time.

The Causes of the Economic Crisis

In order to draw my analogy, it is important to first look at how this economic crisis came about.  As usual, even experts disagree about some of the roots of the crisis, and like the Great Depression, I am sure that they will be arguing about them for decades to come.  However, most of the explanations I have seen point to the Housing Market Bubble , Subprime Mortgages and Mortgage Backed Securities as the crux of the crisis.

Perhaps the most layman-accessible explanation I have seen is an 12 minute video entitled “The Crisis of Credit Visualized” by Jonathan Jarvis.

I encourage you to watch the video.

Now, one thing that I should point out is that the video puts the blame for subprime mortgages squarely on the lenders and investors without mentioning that government programs intended to promote home ownership among lower income, minority families as a form of social engineering created artificial incentives for lenders to lend to subprime applicants.

It also neglects the Gramm-Leach-Bliley Financial Services Modernization Act passed by the Republican controlled 106th Congress and signed by President Clinton in 1999 which repealed part of the Glass-Steagall Act of 1933 which had prohibited individual institutions from acting as both an investment bank and commercial bank, or as both a bank and an insurer; prohibitions that had been enacted specifically to prevent the kind of circumstance they believed led to the Great Depression.

The key point here is that the the credit crisis was incubating for a long time before it actually hit.  Laws and policies enacted nearly a decade ago, if not more, did not bear fruit until this last year.

A decade ago  I was newly married and worried more about school, work, and family problems than obscure shifts in banking law and social initiatives being made by the Clinton administration and my Republican representatives in Congress.  I would have never believed that the bad subprime lending practices of lenders and the greed of investment bankers far away from my simple, honest attempt to make a living could damage my own job and threaten the value of my home.

And that is why the subprime credit crisis provides a good analogy for the potential dangers of redefining marriage.

An Analogy

Over and over again I hear supporters of same-sex marriage ask derisively how a same-sex marriage could possibly destroy anyone else’s marriage.  More recently they point to Massachusetts, where same-sex marriage has been legal since May 2004, and declare triumphantly that the societal meltdown prophesied by opponents has not materialized.

But as the subprime mortgage crisis demonstrates, in complex systems seemingly small policy changes, and millions of individual decisions, can over a longer time-scale cause disastrous results for even those who were not involved in the bad decisions, even if things look peachy in the interim.  Five years ago we might have asked derisivly “How can my neighbor’s subprime mortgage hurt my mortagage?”  And now we know how.

Redefining marriage to include same-sex couples is analogous to redefining lending guidelines to offer mortgages to applicants who under previous definitions would not qualify.  We are creating subprime marriages.

The motivation for changing the definition is also similar.  Home ownership is a stabilizing institution.  Government programs sought to lower the standards for mortgage qualifications in order to encourage the stabilizing influence of home ownership among lower-income families and minorities.  Plus everyone wants the benefits of home ownership, and the government and businesses wanted the increased revenue by lending and taxing people who were previously not eligible.

But by lowering the standards they set up a system that in the long term destabilized the entire housing market.

Likewise, marriage is a stabilizing institution.  Some same-sex marriage proponents argue that by allowing homosexuals to marry they will stabilize relationships that are at the present notoriously unstable.  They want the benefits of marriage. Who doesn’t?  But just like home ownership, but even more so, marriage is a long term investment.  It is an investment in the next generation of citizens consisting of the children raised by marriages, and by proxy an investment in society.  By redefining marriage, we potentially destabilize the entire system in the long term, even if things look peachy in the interim.

Of course, same-sex marriage is only one type of subprime marriage.  For decades now we have been investing in other forms of subprime marriages as we grow increasingly tollerant of pornography, infidelity, abuse, and divorce.  In many ways same-sex marriage is as much a result of these existing subprime marriages.

To look at five years of same-sex marriage in Massachusetts and declare triumphantly that there are no deleterious consequences is like declaring in 2005, at the height of the housing bubble, that extending homeownership to people who were previously inelligibe and breaking down the barriers to banking, the whole country has benefitted across the board.  It’s short term thinking.

The possible effects of subprime marriage may not be felt for decades, or even two or three generations.

While I empathize a great deal with same-sex couples and their desire to redefine marriage and claim its benefits, like subprime mortgages, in the long run investing in subprime marriage is a bad investment with the potential to be amplified through the complexity of society with disasterous long-term results that affect everyone.

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