A few months ago, I chose as the Ebook of the Week, “Other People’s Money by Emile Gaboriau, who was a popular mystery writer before the days of Sherlock Holmes. In reading that book, I was struck by the similarities between late 19th century Paris and present-day America. Many of the characters have no conscience, no sense of wrong doing when dealing with “other people’s money”. Along the way, the author describes a Ponzi scheme and also a business that today we would label “trading toxic assets”.
I included that observation in my cover email, and Ian Carter, in the UK, responded: “Some interesting thoughts there, Richard, especially about the similarities between Paris then and America now. How do we identify what’s gone wrong with our countries (or rather, the people in them) and attempt to redress the balance?”
That started me thinking, and I woke up the middle of the night with the idea that become the following story.
This story has not yet been published in printed form. To correspond with the author, send email to seltzer@samizdat.com or snail mail to Richard Seltzer, 33 Gould St., West Roxbury, MA 02132.
“What’s wrong?” boomed the Chairman.
“Madoff.”
“Wall Street.”
“Main Street.”
“The moral fabric of society has been ripped apart.”
“There is no moral fabric left at all.”
“And what good do answers like that do us?” the Chairman boomed again. “They offer no hint of what we could do to fix this mess.”
“Gossip,” came a whisper from the far end of the table.
“What was that? Speak up!”
“Gossip,” she repeated louder. Everyone stared at her in disbelief not
at what she had said, but that she had said anything at all. This was the
first time in over a hundred years that she had spoken at a board
meeting.
“Gossip? What kind of answer is that?” insisted the Chairman.
“The lack of gossip is the problem.”
“Lack of gossip, you say? With all the tabloids and celebrity magazines and television shows? There’s more gossip today than ever in the history of mankind.”
“I don't mean tabloid gossip. And I don't mean nosey busy-body gossip. I mean neighborhood gossip. Talk by ordinary people who are concerned about the doings and feelings of their friends and neighbors. It's how a community holds together and knows who is in trouble and how to help. How the community regulates itself. Today, most people don't know their neighbors enough to talk to them or about them. The lack of that kind of gossip is the problem, and bringing back that kind of gossip is the way to rebuild the moral fabric of society.”
The silence was only broken by the numerous involuntary twitching of wings, dozens of pairs of wings.
“Explain, young lady, whatever your name is.”
“Prudence. My name is Prudence.”
“And your role and rank?”
“Gossip Specialist, First Class.”
“We still have gossip specialists? I thought the advance of technology and the growth of global awareness had eliminated gossip as a major source of trouble.”
“Unintended consequences.”
“What?”
“Reducing gossip to isolated social ponds led to the problem you are talking about. Now the issue is too little gossip, not too much.”
“Gossip! You want to encourage more gossip? What, in the name of Saint … Saint … in the name of Myself, are you talking about?”
The Second Deputy Chairman, sitting at the left hand of the Chairman added, “Gossip is people nosing into one another’s business. Nasty mean-spirited talk.”
“No,” Prudence continued. “Gossip is people discussing standards of behavior and deviations from it. It means looking beyond the surface of what happens and speculating on the real meaning of events and gestures and words. It builds social intuition at the same time as curbing disruptive behavior.”
“It’s the opposite of freedom and independence,” pursued the Second Deputy Chairman.
“Exactly. It’s the slow cumulative process of building a social sense, of valuing social coherence and responsibility.”
“And what of the sacred right of privacy?” objected the Second Deputy Chairman.
“No, she’s right,” added the First Deputy Chairman, sitting at the right hand of the Chairman. “We need balance. We need balance between the rights of the individual and of society.”
The Chairman interrupted, “We don’t need a theoretical debate. We need a plan of action. Prudence, what possible use is this gossip idea of yours?”
“Just let me try.”
“Try what?”
“To restart the web of gossip on a small scale, to prove that it can be done and that it affects people the way I believe it can.”
“Done!” exclaimed the Chairman, with a bang of his gavel.
__________________
The Second Deputy Chairman introduced Prudence to her assignment. "Silver Street, South Roxbury, a Boston suburb. McSweeney, Smith, Mirijanian, Maxwell, Darby, Dwight, Kazantzakis, Lopez, O'Leary, Donahue, Mason, Rodriguez... There's the complete list. Twenty families in all. These are all two-story clapboard, single-family homes, built between 1920 and 1940. Those that were appraised two years ago, for refinancing, came in at between $400,000 and $500,000. Half the families have young children and have lived on this street for less than ten years. The others have grown children who have moved away. Those have lived here for more than 30 years.
"The kids, with few exceptions, go to different schools -- half to private and half bussed to other parts of the city. In the summer, the kids go to camp -- half to day camp and half overnight. With few exceptions, the wives as well as the husbands work. On summer weekends, if the weather is good, the young families leave town to relax and have fun elsewhere. The older couples stay inside with their air conditioners on. Aside from the occasional lawnmower, the street is quiet.
"The average resident can name no more than three other families on the block, and might not recognize any of their neighbors if they chanced on them in a different context.
"At Halloween, half the kids go to parties in other neighborhoods. The other half trick-or-treat at the houses of neighbors who probably wouldn't recognize them even if they didn't wear masks.
"A realtor would describe this as a quiet friendly neighborhood. Stable. Racially and culturally mixed. An ideal 21st century community.
"And you want to transform this modern Eden into a hotbed of gossip, with all the neighbors meddling in one another's business? I sincerely doubt that you can do that."
"Thanks for the vote of confidence, sir."
"You have just five days, and everything you do must appear both natural and legal, from a human perspective."
"Of course, sir."
"So what do you propose to do?"
"I'll move in."
"What?"
"I'll take the empty house on the corner.
"The one that's foreclosed and up for auction today?"
"Yes."
"And what?"
"That's all. Human nature will do the rest."
_______________
The original owners had moved back to Indiana to live with family and prepare for a fresh start. Two speculators had planned to go to the auction. One had severe stomach pains -- probably a virus or maybe it was the peppers in his mother-in-law's spaghetti sauce. The other was stuck on Route 128, with an over-heated radiator. He had been warned it should be replaced, but had put off the work because money was tight. The bank representative, who was supposed to establish the minimum bid, was immersed in family squabbles, trying to save his marriage. The auction slipped his mind.
Prudence was the only buyer who showed up for the auction. She bid and paid $100.
A few minutes later, a moving van pulled up with her furniture. The van's gears ground with a penetrating shriek, and it maneuvered into a parking space by the curb, with loud beeping backup noises.
Neighbors came to their doors; and, within seconds, word had spread from one stranger-neighbor to another -- $100, just $100."
"Well, she certainly is one lucky lady," said Mrs. Darby. "That's like winning the lottery."
"That's way beyond luck," said Mr. Mason. "She must have connections upstairs."
"Upstairs?"
"Like way upstairs. Miracle upstairs."
"Somebody must have screwed up royally," said Mr. O'Leary, who worked for a bank. "Things like that don't just happen every day. The bank should have set a minimum bid, say $200,000. Enough to cover their investment. What an unthinkable mistake!"
"That's great for her, sure. But for us..." Mr. Rodriguez began.
"We're screwed," confirmed Mrs. McSweeney.
"What were the last two sales on this block?" asked Mr. Mason.
"The Dowlings for $430,000 and last year the James's for $420,000," answered Mrs. Mirijanian.
By now at least one adult from each house on the block was standing in the street, watching the movers in action.
"$137,000," concluded Mrs. Lopez, who worked part-time as a realtor. "That's what this sale just cost each of us. $137,000."
"What?" asked Mr. Donahue.
"She's right. $137,000," confirmed Mr. O'Leary, who worked for a bank. "When you want to buy or take out a home equity loan or refinance, banks depend on appraisals to establish the market value of homes. That market value is based on an average of three recent 'comparable sales' in the neighborhood. for us, that average just dropped from about $420,000 to $283,000."
"That's what I said," repeated Mrs. McSweeney. "We're screwed."
Prudence interrupted the financial speculation, shaking hands, introducing herself and inviting everyone to a spaghetti dinner that night at her new house. She had a new recipe she wanted to try.
_____________
All of the couples showed up for the dinner, but they left their children at home. At first, aside from formalities, all the conversation was between husband and wife, quietly, cautiously -- smiling at their neighbors, but reluctant to initiate real talk, embarrassed to have lived so near them for so long and never have gotten to know them.
They walked around, with drinks and food, checking out this house they had never been in before. Structurally, it was very similar to their own homes. None of them had known, except by name, the people who had lived here for more than 20 years. No one had suspected that they had had financial problems.
Prudence smiled at each of them as she served the spaghetti. She knew their foibles, their weaknesses, their ambitions. She saw the way Mr. McSweeney's eyes wandered to Mrs. Lopez, and that other couples noticed that and commented. She saw Mr. Kazantzakis and Mrs. Dwight at the back window, admiring the garden they had never seen before. She saw the Masons and the Maxwells take out and share pictures of their children who went to different schools and different summer camps. She saw Mr. Rodriguez in a Red Sox cap scowling across the room at Mr. Darby in a Yankees cap. It wouldn't take much for these strangers to become friends and rivals, for small incidents in their lives to be magnified and transformed in the conversations of their neighbors, for them to become aware of and concerned about what their neighbors might think and say of them. Her purchase and her spaghetti were just catalysts. These strangers living near one another by chance could and would become a community.
"What a mess. What a stinking rotten mess," Mrs. McSweeney muttered outloud to herself She was too upset to eat. "This Pru may well be a fine person and a social neighbor. But the fact remains, her windfall is our downfall. The way I figure it -- $137,000 times 20 houses -- we have collectively lost over $2,700,000 today."
"But that's collectively," Mr. Lopez corrected her, after a few inspiring forks full of spaghetti. "We're not alone. And as long as we're not alone, we're not helpless."
"Meaning?"
"Well, the fact that this house sold for cheap has dropped property values. But if this same house sold again for its old value, we'd be right back where were yesterday."
"And who is going to buy it for such a price in today's market?"
"Why not us?" Mr. Lopez suggested.
"Sure, mister. We've got $400,000 sitting around. Or some bank is likely to lend us that on a house that just sold for $100."
"Well, there are twenty of us -- twenty families. If we could each come up with $20,000..."
"I don't know about you and the others, but to me $20,000 is more than pocket change. How am I supposed to come up with that kind of money?"
"Well, you only need to commit that money for a few weeks. Then you'll get it back."
"You mean you expect to resell this house at full value in just a few weeks? It's people like you who made Madoff rich."
"We've all got a stake in this. And if we pull together..."
Mrs. McSweeney paused to reflect, ate some spaghetti, ate some more, then smiled broadly. "Come to think of it, you're right. If each one of us could come up with the short-term cash, one way or another, we could do it. We could buy this place out-right. That would prop up the market value of our houses and this house as well. We could then mortgage this place and use the proceeds to pay off our $20,000 investments."
"But how would we pay the monthly mortgage bills?" asked Mr. Mirijanian, who had overheard this interchange.
"Divide that mortgage payment by twenty and it becomes manageable,"
Mrs. McSweeney answered. "At today's rates on a $400,000 mortgage, that's
probably less than $150 per month per family. And when the economy
turns around, we can sell and pay off the mortgage."
______________
Prudence returned to the board room, triumphant.
The Second Deputy Chairman humbly congratulated her. "Not only did she do all this in less than five days, but her efforts will yield a profit of $400,000, which could finance some very important charity work."
"Well, not quite. There is, of course, the matter of income tax -- state and federal."
"Yes," he admitted, "that could be substantial. It's unfortunate you couldn't have used the money to buy another house and so avoid the tax."
"Or I could have given the money back to the people who paid it to me."
"But that would have negated the effect of the second sale on the market value, and it could have led to some nasty legal problems."
"Yes. Instead, I bought another nearby foreclosed house."
"You didn't spend all the money, did you?"
"Not on that one. That would have been foolish since I could buy it for a fraction of its former market value -- though higher than the first one because, of course, the bank and the local speculators had learned from the first experience."
"So you now own another house?"
"Actually, three more houses. The first one sold for so much less than $400,000 that there was plenty of money left, and since I wasn't going to be able to make the tax problem go away, I had to factor that cost into the project."
"But if this approach worked for one neighborhood, it could work for another and another. The neighbors of those other houses will band together to buy back these other three houses from you and that could give you enough money to buy nine or ten more houses. And the money from that... Why in a few months you could buy every foreclosed house in the city. And then you could expand to other cities, then other countries. Why this is like Madoff in reverse. You're creating value and the benefits snowball."
"No. Everything you do has consequences you can't foresee. People knowing this happened before will get in the way of it happening again. But this little experiment could have a lasting effect."
"How?"
"The story spread on the news -- print, broadcast, and online.
And it seems likely that legislation at least at the state and maybe at
the federal level will change how homes are valued for mortgage loans.
Foreclosures won't be counted, and now they'll average 30 instead of just
3 recent sales, making the values much more stable, without any need for
federal funds.
Other short stories by Richard Seltzer
Children's stories by Richard Seltzer
Other fiction by Richard Seltzer
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