Thomas Sowell points out the interconnectedness of federal housing policy and unemployment:
Our current economic meltdown results from the federal government, under both Democrats and Republicans, declaring home ownership to be a “good thing” and treating the percentage of families who own their own home as if it was some sort of magic number that had to be kept growing– without regard to the repercussions on other things.
We are now living with those repercussions, which include the worst unemployment in decades. That is the price we are paying for increasing home ownership from 64 percent to 69 percent.
How did we get from home ownership to 15 million unemployed Americans? By ignoring the fact that there was a reason why only 64 percent of families owned their own home. More people would have liked to be home owners but did not qualify under mortgage lending standards that had been in place for decades.
That isn’t the half of it. We’ve had federal government policies along these lines in place for a half century. They’ve increased the demand for single family housing, large furniture, roads, and large gas-guzzling cars. They’ve kept interest rates high.
We have built an entire way of life around sprawl and indebtedness, we’re understandably reluctant to relinquish them since, for many of us, they’re the only way of life we’ve ever known, but relinquish them we will because the policies that subsidized them cannot be sustained.
Something I think that we should remember that home ownership is not of itself a good worth subsidizing. It is a proxy for other things that actually are good like civic responsibility, low rates of violent crime, and self-sufficiency. Perhaps we should start looking for ways of subsidizing the things we actually want rather than inefficient proxies for them whose subsidization produces unforeseen secondary effects that we definitely do not want.
