Awaking From the All-American Dream

Remember the ownership society? It was a vision woven by President George W. Bush when he was running for re-election in 2004, which saw every American family in a home, and a government that stayed out of the way of the American Dream. The families were, of course, conservative, or at a minimum traditional and nuclear, consisting of a heterosexual married couple and at least two kids living in a stand-alone home with a yard, a car or two and a multimedia room with a flat-screen television. OK, so the latter was a new addition, a 21st-century simulacrum of the 1950s "Leave It to Beaver" idyll. But the dream was the same.

The goal was to secure stability and prosperity, and the ownership dream was the way to achieve that. "America is a stronger country every single time a family moves into a home of their own," said Bush in a speech back in October 2004. To achieve that vision, Bush pushed new policies encouraging homeownership, such as the "zero-down-payment initiative," which was much as it sounds: a government-sponsored program that allowed people to get mortgages with no down payment. More exotic mortgages followed, including ones with no monthly payments for 24 months. Then there were mortgages with no documentation other than the say-so of the borrower. Absurd though this was, it paled in comparison to the financial innovations that surrounded those mortgages, derivatives built on other derivatives, packaged and repackaged until no one could identify what they contained and how much they were in fact worth.

As we all know by now, they've brought the global financial system to an improbable brink of collapse. Ironically, the Bush ownership ideology may ultimately end up having the same effect on the stable nuclear families that conservatives so badly wanted to foster.

The dream of a better society through homeownership didn't originate with George W. Bush. It was as American as Manifest Destiny. The Homestead Act in 1862 offered acres to anyone willing to brave it on the Western frontier. During Reconstruction, freed slaves were promised "40 acres and a mule." But until very recently, those hopes and dreams were connected to actual income and having gainful employment. No longer.

The Bush years built on the promise of the New Economy era that it followed, a promise perfectly encapsulated by a 1999 billboard in Scroggins, Texas, in front of a shining new subdivision filled with homes that most of their buyers couldn't really afford: YES, YOU CAN HAVE IT ALL! That dream took a sharp hit with the collapse of the Internet stock bubble in 2000–2001 and then with 9/11, both of which destroyed billions of dollars of wealth. But it came roaring back in 2002, encouraged by Bush's post-9/11 exhortation that Americans could do their patriotic duty by going shopping and paying lower taxes, even as government spending exploded. Shop they did, and homes they bought.

The spree wasn't confined to the United States. Across the pond, Britain had its own version of the ownership society, which had received a boost from Margaret Thatcher, who had promoted "a property-owning democracy" that her Labour successors, Tony Blair and now Gordon Brown, endorsed. Blair, for example, liked to talk of building a "stakeholder economy" with a big role for the ordinary property-owning citizen. More recently, Brown has spoken of creating a "home-owning, asset-owning, wealth-owning democracy." Millions were happy to buy into the vision that began with Thatcher. Tenants of local authority-owned properties gladly took up the Conservative government's offer to sell them their homes at knockdown prices. More than 70 percent of Britons now own their homes, compared with 40 percent of Germans and 50 percent of French.