No Home Ownership for You!

We should have seen it coming.

After Medicare passed in 1965, the class-warrior plutocrats realized that the New Deal programs that built the American Middle Class were not going to be overturned overnight. Returning the country to the serf-powered rule-by-the-rich of the Gilded Age would require a long-term campaign of back-stabbing and sabotage.

First they poured sand in the engine of American prosperity by eliminating unionized manufacturing jobs.

Then they fanned racial resentment to keep the attention of the unemployed on fellow workers instead of the real enemy: the bosses.

Then they undermined the manufacturing foundation of the American economy by diverting investment away from real businesses that fuel Main Street into exotic financial gambles on Wall Street.

And then they blew residential real estate into a monster bubble that exploded and took the whole economy with it.

Now, all that's left is to round up everyone and stuff them back into the tenements where they belong.

karoli at Crooks and Liars reveals yet another layer in the destroy-the-middle-class onion:

In the wake of the mortgage meltdown, a dangerous theme is emerging. On its face, it seems perfectly reasonable and even attractive, especially to the youngest generation of workers, who is already mired in student loan debt, credit card debt, and struggling to find a job. It goes like this:

The U.S. has long seen home ownership as an unquestioned virtue, dating to a 1918 government "Own Your Own Home" campaign. Herbert Hoover, Franklin Roosevelt, Bill Clinton and George W. Bush all talked as if owning a home was the only way to join the middle class. Not only did it promote social stability—recall Mr. Bush's "ownership society"—and build well-maintained neighborhoods, home ownership became a hedge against inflation and a way to save for retirement. Until it didn't. [read more ...]

And also:

Some of those new homeowners, including those sold outrageously inappropriate subprime loans, should have remained renters. Many couldn't afford to maintain the houses they bought. Others were dependent on refinancing to keep their homes, an approach that worked only as house prices kept climbing. They didn't. At last tally, the U.S. home ownership rate was at 67.2% and sinking.

Even NPR has jumped on the story.

"The world we live in today is not quite the world that existed in 1950," he noted. "The nature of households and the rate at which they dissolve and reform, the nature of work and its transient nature across geographies are all things that suggest that maybe, just possibly, a middle-class American shouldn't stake themselves to an illiquid, very large, concentrated, leveraged asset —- that is to say, a house." [read more...]

Everything old is new again. Both of these articles blame Fannie Mae and Freddie Mac for the mortgage meltdown, when the opposite is true. It isn't the middle class, minority or lower income buyers who caused the meltdown. In fact, the wealthy walked away from their mortgages when they found themselves upside down in a weak housing market -- not the middle class.

SNIP

Make no mistake, someone will be an owner and someone will be a renter. The owner will make money and add to his wealth and portfolio. The renter will have a roof over his head for the time he or she pays the rent. The renter will be at the mercy of the owner -- will rents fly sky-high when property takes off again?

There was always more to property ownership than some pretty political platitude about white picket fences and the American dream. Home ownership is one of the best ways for the middle class to accumulate some assets for retirement, to not have to worry about where they'll live or what they'll have to pay to live in their retirement. It puts the individual in charge and in control.

SNIP

Home ownership isn't a boom-or-bust proposition. It can actually be approached sensibly, with moderation and common sense. This whole push against home ownership strikes me as another way to disenfranchise and de-fund the middle class.

Read the whole thing.