That was then:
From George W. Bush’s 2005 inaugural address on January 20, 2005:
To give every American a stake in the promise and future of our country, we will bring the highest standards to our schools, and build an ownership society. We will widen the ownership of homes and businesses, retirement savings and health insurance – preparing our people for the challenges of life in a free society. By making every citizen an agent of his or her own destiny, we will give our fellow Americans greater freedom from want and fear, and make our society more prosperous and just and equal.
From the White House, Bush Discusses Home Ownership at Indiana Black Expo on July 14, 2005:
I like the idea of home ownership, and I hope you do, as well. Three years ago, I set a goal of creating 5.5 million new minority home owners by the end of this decade. And we’re getting results. We’ve already added 2.3 million new homeowners, minority homeowners, putting us ahead of schedule. Today, nearly half of all African Americans own their own homes.
This is now: News stories from March 6, 2008.
Washington Post, Home foreclosures hit record high
|Associated Press, Minorities hit by foreclosures
George W. Bush’s “Ownership Society” was nothing more than a wealth-extraction scheme for his base. America has forgotten that people do not fully own their homes as long as they are paying a mortgage to a bank. The bank owns a percentage of the house.
So it wasn’t ownership that Bush was championing, it was “owe-nership“, meaning we owe the banks.
The people who had the least, the people who had the most to gain by being able to buy a house, were the same people that are most vulnerable to predatory banks and the mortgage lending scheme. Even people who could afford a traditional mortgage were preyed upon by then banks according to the AP story above. “Advocacy groups have said poor and minority borrowers who qualified for traditional loans were nevertheless steered into risky adjustable mortgages.”
According to 2007 U.S. Census Bureau statistics, people “owning” homes increased was up 5.2 percent to an all time high of 69.2 percent in 2004. Historically, the ownership level was stable at 64 percent roughly between 1980 and 1994.
The subprime lending inflated the value of houses, fooling people into believing they owned something and encouraged them to take greater, financial risks. According to an article in The Economist, “Between 1997 and 2006, according to the S&P/Case-Shiller national home-price index, American house prices rose by 124%.” After all, if a house keeps appreciating in value each year by 10%, 20%, or more, a person with a ballooning mortgage rate could always refinance at better terms later, right? So spend your equity!
As the economy started to crash, Bush wanted people spend their bubble wealth. “I encourage you all to go shopping more,” he said. But, he wasn’t alone. Patriotism is equated to consumerism in America. Spending on borrowed money and maxing out credit cards was how the U.S. reacted to the terrorist attacks of September 11, 2001. It helped parts of the economy in 2001, so Bush was trying it out again in 2006 and in 2007. But now in 2008, buying our way out of recession is not working. The dollar’s weak, inflation is rising, our credit stinks, and most people have no money and little equity left.
The problem is Bush and the wealthy have wrung the sponge dry. Americans are broke.