Penn historian Tom Sugrue has a long column in today’s Wall Street Journal about the evolution of the homeownership dream in America. Given the format, Tom paints with a broad brush, and much of the details are probably well-known to WSJ readers. But like all of Tom’s work (and here I should note that he’s a good friend, who blurbed my book), the gold lies in his thorough analysis and decisive conclusions. For example:
It’s a story riddled with irony—for at the same time that Uncle Sam brought the dream of home ownership to reality—he kept his role mostly hidden, except to the army banking, real-estate and construction lobbyists who rose to protect their industries’ newfound gains Tens of millions of Americans owned their own homes because of government programs, but they had no reason to doubt that their home ownership was a result of their own virtue and hard work, their own grit and determination—not because they were the beneficiaries of one of the grandest government programs ever. The only housing programs prominently associated with Washington’s policy makers were underfunded, unpopular public housing projects. Chicago’s bleak, soulless Robert Taylor Homes and their ilk—not New York’s vast Levittown or California’s sprawling Lakewood—became the symbol of big government.
As they say, the greatest trick the devil ever played was making you believe he didn’t exist. Unfortunately for the federal government, the trick worked too well. An entire political realignment, the rise of the New Right in the 1960s and 1970s, was borne by the illusion that America–not the government, but “America”–had achieved its dream of rampant affluence. The trick worked so well, in fact, that today many Americans think the government is out to take away the very things it made possible in the last century.
The question Tom leaves open is whether, post´-housing bubble, the government should now take away some of those things. If Washington made possible the explosion in home ownership and real-estate speculation, it follow sthat Washington can also work against those things. It could eliminate tax preferences for homeowners, it could scale back its guarantees through Fannie Mae and Freddie Mac, it could reduce road-building funds, the list goes on. Politically it would be a disaster. The question is, does the political risk outweigh the risk of another housing bubble?
