I must preface this mad mentation with a full disclosure. I have never been one to subscribe to what has classically been termed "the American Dream." That is, it has never been a priority of mine to own property and to acquire things. At various points in my life, I've been well-off financially and I've been flat broke (which is my current status). I haven't rejected wealth when it has come my way, but by the same token it hasn't been my "dream" to own a home.
Nonetheless, it would be utterly foolish to recognize that many, and probably most, Americans do hold property ownership as the highest aspiration of their lives. It would be as heartless to not feel terrible for those people when their dreams are smashed to bits by economic reality which, in the current circumstances, is happening at an ever-accelerating rate.
U.S. Foreclosures Rose 53% in June, Bank Seizures Almost TripleContinuing to tout property ownership as "the American Dream" seems cruel in the face of all this. It's bad enough that people who bought into this in the first place have now lost everything. Have their lives become less meaningful because they've now been denied ownership in such a heartless, market-machine-efficient manner?
By Dan Levy
July 10 (Bloomberg) -- U.S. foreclosure filings rose 53 percent in June from a year earlier and bank repossessions almost tripled as deteriorating property values and higher payments on adjustable mortgages forced more people to give up their homes.
More than 252,000 properties, or one in every 501 U.S. households, were in some stage of foreclosure, RealtyTrac Inc., an Irvine, California-based seller of default data, said today in a statement. Nevada, California and Arizona had the highest foreclosure rates.
"The foreclosure problem is getting worse and will stay with us well into the next decade," Mark Zandi, chief economist for Moody's Economy.com in West Chester, Pennsylvania, said in an interview...
About $3.5 trillion in homeowner equity has been wiped out since the spring of 2006, when housing prices were at their peak, Zandi said...
"The year-over-year increase of more than 50 percent indicates we have not yet reached the top of this foreclosure cycle," James Saccacio, chief executive officer of RealtyTrac, said in the statement. Bank repossessions, which increased 171 percent in June, are rising at a "much faster pace" than default notices and auction notices, he said.
About 53 percent of borrowers with subprime loans, those with poor or incomplete credit histories, will have negative equity in their homes at the end of the year, and the number will rise to 63 percent in 2009...
Perhaps one thing that may come out of this disaster is a new set of priorities. Instead of stressing acquisitiveness, maybe it's time to rethink our aspirations. Maybe it's time to redefine the American Dream as leaving a positive mark upon the world through some sort of service not only to America but to humanity as a whole. Instead of a split-level ranch in some drab suburb, why not discover or invent something new without concern for how much profit it might net?
The old American Dream benefited markets greatly, at least for a long time. We see now, however, what happens when dreams confront economic realities. Nothing grows forever; all material things, we know, must come to their end. The idea of eternal growth driving an economy, and this being translated into the greatest good for individuals, is a fallacy in the end.
So maybe it's time for a new American Dream that isn't based on, in biological terms, something quite like cancer. Is it impossible to find meaning without the ownership of a house? I don't think so. We should learn from this crisis and find something more humane in its essence.