Douglas Rushkoff – author of the book Life Inc: How the world became a corporation and how to take it back – is a guest blogger.
Here's a terrific piece by Steven Malanga of City Journal, summarizing the long history of misguided housing policy in the United States. It goes over a lot of the same material I do in a big chapter in Life Inc. called "From Place to Property," and I can vouch for the factual accuracy of Malanga's work – at least as far as the Congressional Record goes.
What continually amazes is how both well-meaning housing policy and ruthless speculation-driven markets quite often lead to the same place. That's because, in both cases, the goal of "home ownership" is really just a stand-in for a much more complex relationship between people and the places in which they live. While owning a home might, in itself, be a noble thing to help people do, in most cases it's still a bank owning a home, or a person's retirement savings depending on the maintenance of redlining rules.
In December, the New York Times published a 5,100-word article charging that the Bush administration’s housing policies had “stoked” the foreclosure crisis–and thus the financial meltdown. By pushing for lax lending standards, encouraging government enterprises to make mortgages more available, and leaning on private lenders to come up with innovative ways to lend to ever more Americans–using “the mighty muscle of the federal government,” as the president himself put it–Bush had lured millions of people into bad mortgages that they ultimately couldn’t afford, the Times said.
Yet almost everything that the Times accused the Bush administration of doing has been pursued many times by earlier administrations, both Democratic and Republican–and often with calamitous results. The Times’s analysis exemplified our collective amnesia about Washington’s repeated attempts to expand homeownership and the disasters they’ve caused. The ideal of homeownership has become so sacrosanct, it seems, that we never learn from these disasters. Instead, we clean them up and then–as if under some strange compulsion–set in motion the mechanisms of the next housing catastrophe.
