Today the Obama Administration will host a conference on the future of housing finance. It’s a great topic, considering that Fannie Mae and Freddie Mac are more than $150 billion in the hole. But this is about more than what to do with the GSEs.
There are bigger questions to ask about how we approach home ownership in the U.S. For decades, buying a house was seen as the ultimate socio-economic accomplishment. The real estate collapse has gotten plenty of people–including myself and members of the Obama Administration–wondering if this is really how we want the national psyche to be oriented. By one account, housing represents between 17% and 18% of GDP. Can you imagine what it would be like if we plowed that much money and focus into education and training and the creation of quality jobs?
Anyway, I have plenty of thoughts on the topic, which you may some day be able to read about in Time magazine, but until then, let me point out one fun piece of history I unearthed during my reporting: buying a house has nothing to do with the American Dream.
At least not in the strict constructionist sense. While it’s true that we often take home ownership to be a key part of the American Dream–or the American Dream itself–that’s not at all what historian James Truslow Adams had in mind when he coined the term in 1931.
The phrase first appeared in the epilogue of a book called The Epic of America (always read to the end of books), and went like this:
… the American dream, that dream of a land in which life should be better and richer and fuller for every man, with opportunity for each according to his ability or achievement. It is a difficult dream for the European upper classes to interpret adequately, and too many of us ourselves have grown weary and mistrustful of it. It is not a dream of motor cars and high wages merely, but a dream of a social order in which each man and each woman shall be able to attain the fullest stature of which they are innately capable, and be recognized be others for what they are, regardless of the fortuitous circumstances of birth or position.
Adams next tells a story about a friend of his, a Frenchman, who visits America and is struck by how everyone looks him right in the eye, “without a thought of inequality.”
The core American Dream, then, is living in a land of social and economic opportunity where talent and hard work can take you places, no matter who you know or which college you went to. Owning a house is great if that’s something you want to do–and home ownership as a policy goal is really handy since it’s so easy to measure–but the American Dream, at least in its original rendering, is exponentially loftier.