The Deadman Night Rider

A forum for evening students of the SMU Dedman School of Law and other outlaws..

Friday, May 02, 2008

Someone finally had the guts to say it

To borrow a phrase from my younger colleagues, OMG (or, the more emphatic and profane, OMFG), I feel like I'm in the Twilight Zone--the New Republic is running this as their top story:

Too Many People Own Homes

Here's the opening paragraph from the article:

In the midst of the subprime crisis, there's an important question that analysts and policymakers have neglected: Did so many people need to own homes in the first place? The dream of home ownership has long been part of the American experience, but, as the federal government steps in to artificially support borrowers and lenders with tax credits that encourage more spending or with public spending that keeps over-indebted borrowers in unaffordable homes, we ought to consider whether it's time to wake up from that dream.

So far, all the comments left under the article are positive--which is surprising, since I've been beaten to all but a bloody nub countless times on this topic.

Rosner, the author, notes that, historically, home mortgages were a sort of forced savings mechanism, since they were relatively difficult to sell, and required at least a 20% down payment. We're all well aware--painfully aware--that this is no longer true, and probably won't be again. The "Flip This House" generation simply won't stand for it. The best we can hope for is to wring at least some of the silliness out of the system.

To that end, Rosner is right on another point--what he calls the 'stigmatization' of renting. If you think that's hyperbole, consider that financial planners used to advise parents to buy their children houses to live in while in college, rather than 'waste' money renting.

I've been taken to task several times on the American Dream rhetoric. The American Dream is--or should be--financial security (which is the only true form of freedom there is, in this country or any other). That used to be realized by owning a home--but only because of the process, not the physical thing. This whole thing went off the rails when the house became confused with the goal. Once that happened, naked greed for vaulted ceilings and picture-perfect lawns could be passed off as virtuous. To paraphrase Russell Crowe in Gladiator, people like George Washington and Thomas Jefferson had a vision for this country, but this is not it.


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