Underwater, But Will They Leave the Pool?

Some remarkable honesty about the class (although of course without using that term) dynamics of capitalism showed up in Saturday’s NY Times, in a piece by Richard Thaler about mortgage defaults:

Read the rest here.

An interesting detail from the piece is that in a number of states mortgages are “nonrecourse” by law, meaning the lender is entitled to the house but nothing else in case a borrower defaults. So borrowers in those states basically have the right to walk away, a right for which they pay an estimated $800 extra in closing costs per $100,000 borrowed.