Thoughts on Home Ownership

And the Conflicting Ideals of Freedom and Equality

Whether it's buying a ready-made 3-bedroom ranch in the suburbs or "settling" some land in the country, the privilege of home ownership is not universally shared around the world. I'm not saying similar things do not happen elsewhere. We know the hill tribes of Northern Thailand carve villages into the hillside wherever they go. But they do not "own" that remote land, they simply occupy it until the ever-changing Thai government decides what to do with them.

In communist countries for much of the 20th Century the thought of buying a piece of property and making it home was unheard of. The government attempted to provide "equal" housing for all its workers, and since everyone worked for the State, home ownership was not needed. Slightly further back in time, there were various cast systems where "lords" (from which we get the term "land lord") allowed peasants to exist on their land--for a price or share of their crop.

In some respects, American history is the story of personal land ownership slowly moving westward from sea to shining sea. It wasn't always pretty. At first, explorers came at the pleasure of kings to expand wealth and empires. Then, after the Revolution, ownership was associated with slavery on southern plantations, and elsewhere there was all that "we were here first" stuff to settle with the Native Americans. See what I mean? There were some ugly lessons to learn along the way.

But by the end of the Civil War the plot line begins to turn to themes romantically depicted in works like "Far and Away" and "Little House on the Prairie." For over a hundred years, home ownership has been realized by more Americans per capita than any other country in history. Farm couples and factory workers alike can save their pennies for someday, and when they've saved enough money or earned enough "good credit" to borrow from a bank, they can buy a "starter home" or the land on which to build a dream.

Lately, the term “affordable housing” has risen to the ranks of words like freedom and equality. Ironically, "freedom" and "equality" are conflicting ideals. The "freer" man is to pursue happiness the sooner he becomes less "equal" with those around him, because freedom allows each individual to rise above his current position; it allows for both self-improvement and self pity; it allows one man to build a tire factory, another man to sell rope, and yet another man to put up a tire swing. All three enterprises can be profitable in different ways, but the last one will likely put less in the bank.

Freedom begins at equality but allows excelling. It begins at an even starting line without guaranteeing a tie. For instance, when Ray Kroc decided to start the McDonalds franchise in 1955, his idea was to excel--to be more than equal to--other hamburger joints in America. The same holds true for athletes and athletic teams. Show me the team that strives merely to be equal to its competition, where winning doesn't matter or improve contracts, and I'll show you some happy bench warmers.

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The ideal and responsibility to love our neighbor and treat all men equally will never change, but "created equal," as Jefferson put it, is a starting point not a material outcome. Each of us is free to strive toward the risks and rewards of self improvement even if it means we may be unequal in the end. That is the essence of freedom and its flaws, when they arise, rest in fallen human nature.

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Governments should ensure that all starting lines are equal, but when they change starting lines to "equalize" outcomes, it underscores the conflict between the ideals of freedom and equality. In the name of "fairness," they become as unfair as referees who bend the rules of the game or overlook disqualifications, in order to even the score. Enduring such games inevitably leads to apathy and/or anarchy.

[A month later this op-ed piece confirmed the above thoughts.]

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What has this to do with home ownership? Land and home ownership is part of the "pursuit of happiness" that Jefferson described in the Declaration of Independence. It is not an entitlement. It's not even a right. It must be earned; risks must be personalized if the potential gain means anything at all.

When the government gets into the “land lord business” through giant "Federally-controlled-publicly-traded" lenders like Fannie Mae and Freddie Mac, when they bend the rules, overlook disqualifications, and basically suspend common sense about human nature, the dream of home ownership can become a nightmare for the homeowners who actually play by the rules, buying only homes they can afford, and faithfully making the monthly payments. When the government motivates lending agencies to make sub-prime loans to borrowers with bad credit or who have not yet demonstrated the ability to save money, when they pay multi-million-dollar bonuses to CEOs for peddling those bad loans, when those leaders walk away pointing their fingers at those who tried to sound the alarm, why should anyone be surprised when foreclosure signs start springing up like plastic flamingos in front yards everywhere?

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Regardless of how you're voting this fall, Folks, if we hope to change this mess, we must first take a good look at how we got here and who’s most likely to prevent it from ever happening again.

In this excellent article by Thomas Sowell [right] he asks Do Facts Matter? Here are the video clips that support Sowell's findings. Here is a similar report. This must-see clip from 2005 shows the connection between liberal good intentions and their shortsighted practices. As you may recall, the Feds bailed out those two failed mortgage giants (150 Billion Dollars) two weeks before the $700,000,000,000 bail-out last week. While I'm not a fan of Bill O'Reilly and question the theatrics of his anger in this exchange, listen closely to what Barney Frank says in the first clip. He does say the "prospects going forward are very solid" and then later says he never said it. He also acts as if he and Dodd and Maxine Waters did not continually mock concerns and block legislation for years. There are only a handful of "stars" in Hollywood who dare to support McCain. Yesterday Jon Voight asks the press to do its job in telling the history of this Fanny Mae/Freddie Mac mess.

I say these things not to be political, not to point fingers, but to explain the fundamental financial flaw that brought us to this point. It was not so much a failure of true "free market" policy. It was years of the "refs" changing the rules and overlooking disqualifications to the tune of billions of dollars in bad loans. True, greed was at the heart of it, but not all of the greed was on Wall Street. Sowell said, "Franklin Raines made $90 million while he was head of Fannie Mae and mismanaging that institution into crisis. Who in Congress defended Franklin Raines? Liberal Democrats, including Maxine Waters and the Congressional Black Caucus, at least one of whom referred to the "lynching" of Raines, as if it was racist to hold him to the same standard as white CEOs." I wince at including that quote, but it helps explain why so many are slow to talk about this subject. The only thing worse than racism is when it is falsely charged.

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Believe it or not this very current topic ties directly in to this story I’ve been telling.

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My father was a hard-working middle class guy. The chapters you’ve read thus far and those yet to come, are about a man and his family who didn’t live beyond their means. This story from barn to house takes seven years, because Dad was so opposed to debt that he “paid as he went” with every one of these projects. Eventually when we get to the part about building the house, he never took out a mortgage, and it took three years to finish the house AFTER WE MOVED INTO THE BASEMENT to live. During that time, he also scraped together enough to pay half the college bill for four kids. (We paid the other half ourselves with the money we’d saved and earned working our summers and holding jobs on campus.)

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So when I fondly revisit the hard work in these chapters, I am again thankful for the values and world view I picked up from Dad along the way, and I'm reminded that in this imperfect, broken world the cure is sometimes worse than the sickness. Not all change is good.

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I have written favorably about some of the qualities of both candidates in the past, I have friends on both bandwagons, but over time I've seen something that has made my choice clear. The best of leaders can inspire individuals to excel in their freedom regardless of elections; they elevate American ideals and disassociate with those who do not. [Follow-up link. Here's another and another. And this one from Time Magazine that puts it in a simple question. Explained here.] Leaders value this republic/democracy because to "empower" people is a greater good than being put "in power." They are humbled by their influence and do not strut or cock the head as if to charm a hen from its nest.

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When you consider history and how quickly things mushroom when throngs of partisan people, fraudulent hired hands, blind judges ignoring voter fraud, vulgar celebrities, marching youth, global enchantment, and singing children put all their hope in "the one" man who will "change the world," you begin to wonder if this electrified but polarized electorate will have the civil composure to accept either outcome on November 4th. You begin to wonder if we'll recognize in four years this nation that on its worst day is still the first choice that millions of onlookers would love to call home.

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WSL in the comment section has directed our attention to this non-partisan article that echoes many of these thoughts about freedom and the America that will "pass" if we don't realize what we're about to lose. I've not read Joe before, but I like this article:

"The Truth on the Bailout" by Joe Soucheray.

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Coming soon: Chapter 8: Dad's Bridge

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