Sunday, October 12, 2008

House: Wonderful life to Boomer nightmare

Ross Duthat has an interesting piece in today's Washington Post about the origins of America's romantic obsession with home-owning. He picks an interesting culprit, one George Bailey -- yes, that one -- and traces the consequences in our tax code, public subsidies, zoning laws, transportation systems, and much else. Real estate is undoubtedly our true religion.

But I don't agree with his conclusions. He seems to think oil will remain at $140 a barrel, while the new deflation means oil will actually continue to drop in its dollar price -- it's already virtually half its peak price now. And there's no evidence that mass transit or other "new urbanism" is affordable or even desired by most Americans. (See here for California's breathtaking rail boondoggle, for which the state wants federal help and which it should absolutely not get.) And until the 1990s, the federal agencies for helping people buy houses (the VHA and FHA) did act in a conservative way. They were regular government agencies, founded by people who lived through the Depression and largely insulated from direct Congressional pressure, that also did not lobby Congress in turn -- very different from the quasi-private but government-backed patronage-graft extravaganzas of Fannie and Freddie.

What will result instead is probably a more sensible version of the automotive-suburban dream: more hybrid and other efficient cars (we had more efficient cars in the 80s!), smaller houses, and more compact development. Nor is so-called "sprawl" unique to America: it's increasingly common in other countries too, like France (see here). The "new urbanism" is largely a reactionary, elite fantasy.

The debt-based consumption excess of the last 15 years is really a generational tale, of Boomers and their kids gone wild. They treat what their parents and grandparents viewed correctly as a dream requiring hard work and good choices as a mindless and easy entitlement.

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