Homeownership is overrated and the government went too far in pushing it on the American people, Paul Krugman writes in today's New York Times. He suggests it's time for America to "drop the obsession with ownership."
We couldn't agree more. Four months ago we wrote: "The social engineering program entitled the 'ownership society' has failed and ought to be abandoned."
It's important to remember that however greedily mortgage lenders piled into the ownership society with their liar loans and interest only, adjustable rate loans, the underlying policy was a special kind of compassionate conservatism--that is, a policy informed by the good intentions of people who believe in harnessing the market to enrich themselves while encouraging social progress.
Now it may be going to far to say that all roads paved with good intentions lead to Hell but a traveler looking back on the roads travelled by American society over the past few decades could be forgiven the overstatement. This isn't the place to run through the entire gamut of well-begotten social engineering programs. The list is too long for workday reading, and the results too depressing for a day in which the Dow has flatlined.
So let's stick with the one on everyone's mind. We termed it The Great Homeownership Experiment. The proximate cause goes back to the early years of this decade, when the newly elected George Bush decided to make the increase of homeownership a central part of his presidency. Indeed, he declared that those who resisted the call to push homeownership beyond the natural limits of the marketplace un-American, un-Christian and very possibility racist.
"The only way we can have a better society is to make sure those who don't have a house have the opportunity to get one," Angelo Mozilo said. The fact that he could, as the head of Countrywide, become fabulously wealthy while doing this is evidence, we suppose, of the conservatism of this compassion.
Krugman points out, however, that our obsession with ownership goes back far further. Through tax breaks and other incentives, we punish renters in favor of owners. Renters are somehow treated as second-class citizens, perhaps event dangerous dissenters from the American dream. But now that the dream is fast becoming a national nightmare thanks to the well-intentioned plan to make it a reality, we can't help but nod our heads when Krugman urges that its high time we "try to open our minds to the possibility that those who choose to rent rather than buy can still share in the American dream -- and still have a stake in the nation's future."
Home Not-So-Sweet Home [New York Times]