A periodic blog dedicated to providing commentary and encouraging debate on topics in Economics and Finance.

About Me

Age: 26 Occupation: Private Equity

Wednesday, March 28, 2007

The Decline and Fall of the American Dream

I suppose you'll have to forgive me for waxing philosophical (which isn't necessarily under my purview as a Financier and Economist - though I also have a degree (well, a minor) in Philosophy), but there's something that I've just now come to realize that's almost beyond disturbing to me. Unlike my normal, data-centric posts, this one is an opinion piece, but one that I beg you to read.

Home Ownership's Recent, Twisted Introduction to the Concept of the American Dream

The idea of the American Dream can be traced back to an autobiography written by a fellow Philadelphian, Ben Franklin, who documented his rise from "poverty and obscurity into which [he] was born and bred to a state of affluence." The story tells of how Mr. Franklin effected his meteoric rise to fame and fortune through hard work, stubborn perseverance, inventiveness and God-given talent (which you and I may or may not have). Horatio Alger wrote countless books on the topic, and the ideal still rings true in the ranks of a good portion of the 3,000,000 millionaires alive in America today.

The American Dream, by the very two words which make up the phrase, is above all an ideal that should sit at the very core of what it means to be American. It is supposed to represent all of our hopes and dreams rolled up into one - the sparkling flagship of noble ideas in a land of limitless opportunity. Instead, the mighty American Dream, the powerful force that roused my grandmother and millions of others to leave their homes behind in search of better lives, is now synonymous in the mainstream psyche with the purchase of a single material good.

In a sign of the times, this once-sacred ideal has been twisted by the titans of industry into a mere slogan, its beautiful melody perverted into a siren song, relentlessly luring unsuspecting passersby into its grasp. The promise of prosperity and a better life has been cruelly twisted by the forces of unfettered consumerism and the dire certainty of debt.

The ultimate concept has been displaced by the ultimate asset. The permanent and sublime has been replaced by the transient and tangible. What's more, I didn't even realize that it had happened until today. To those in the real estate industry who managed to pull off this masterfully insidious feat, I can only tip my hat to one of the greatest marketing movements in recorded history. The very idea of the American Dream has been turned against us.

This, folks, is the American Dream: No matter where you c0me from, or who your parents are, if you got the goods, you can make it. No, folks, "making it" does not mean entering into a ruinous financial commitment to purchase a large, pretty box that slowly rots away over a period of 100 years (I put it in such terms to highlight the absurdity of the notion). In fact, under the loose lending standards up to this point, you needed hardly any "goods" at all to achieve that dream. The American Dream is certainly not confined to ownership of a house, as its new common usage implies. This narrow definition so tragically shortchanges the phrase's meaning that it's nearly comical and wholly demeaning. In fact, it's true that the American Dream includes owing a house only coincidentally, a choice (not a requirement) that's part of a much larger success. Millions of overextended families flailing at water's edge on a financial waterfall, or simply crushed under a mountain of debt, hardly fits anyone's definition of success - except for the lenders, agents and brokers who reap the obscene profits from this darkening field.

The actual country that we live in may not be all that its cracked up to be. We all certainly don't have an equal shot at fame and fortune, and we all may not be treated equally under the eyes of the law, yet, but a dream is supposed to be something truly great, a paradigm toward which we strive and will one day perhaps transcend. What's always made America great is certainly not its reality, but the unique set of ideals, including democracy, liberty, opportunity and equality, toward which that reality has slowly marched over the past 230 years. If those ideals now include the newly redefined American Dream, then we're marching the wrong way.


- eternitus


__k said...

Well, we're definitely marching the wrong way. Both the original American Dream and the REIC version are harder to achieve than they were several years ago. But at least this "new" American Dream is at least somewhat achievable; the American Dream as you stated it has never been at all true in this society. I also find it ironic that, if the American Dream is now home ownership, my best chance of achieving it is to leave the country.

Today, the American Dream might be considered to be home ownership, but I think that it is so only as a slogan, not as the actual American Dream. I think that the concept of the American Dream is still present -- it's just no longer called the American Dream.

eternitus said...

Right, but you obviously get the point of my commentary. Humorous point about leaving the country.

But I do believe the American Dream is partially true, though the rise is not meteoric. It's a slow, difficult climb from generation to generation, but its a climb...

ghu206 said...

That's some heavy stuff... but good points!

Anonymous said...

You should write for the New York Times... I think this is a very nice piece of work!

Unfortunately, mainstream media's advertising dollars (from real estate) would demand your ouster as soon as this would hit the wire!

Keep up the good work!

Priced OUT!!!! said...


dxm113 said...

Thusfar, I have appreciated your statistical work. Not everyone has the ability to make heads or tails, or understand the significance (or lack thereof), of a given data set.

I like the fact that your approach, at least to this point, has no agenda other than education and debate. Keep up the quality analytical ("data-centric") work, and people will respect your opinion.

I have also enjoyed reading your opinion about the American Dream. I'm sure everyone has their own American Dream. Mine involves both personal and professional accomplishments, as well a raising a family. The American Dream may be a complex idea, however I distinctly remember hearing something about a home with a white picket fence . . . I absolutely agree with you eternitus. The American Dream speaks to home ownership, as much as it speaks to other ideals of a better life.

eternitus said...

Thank you... Your remembrance, I believe... Is a product of marketing's influence in our thought (of the American Dream)...

Believe it or not, the one English class that I took in College was entitled "Legal Fictions," but it was almost entirely devoted to the concept of the American Dream.

It has always been about striking it rich through hard work, dedication, ingenuity (and a little luck)... Recently (last 50 years)... It has come to mean a little pink house with a white picket fence, two cars in the garage, and very recently a Sony 937-Inch HDTV with Dolby 25.9 surround sound, pumped through a Bose 25 speaker, 9 subwoofer system... and two more cars in the driveway for your 1 kid.

eternitus said...

All bought on credit... that is.

Anonymous said...

We live in a country where "stuff" is important. Integrity, education and the qualities of a human being are disregarded in favor of stuff. People have forged and lied just to purchase homes they will lose to foreclosure. When a bank robber goes in the front door and steals a paltry amount of money, he goes to jail for years. When he goes in the back door with an embellished and forged real estate loan application, he can walk away freely with hundreds of thousands of dollars. Only in America!!

Nuttin2Show4 said...

Can "we" really say the American dream is home ownership? Let's face it ... even if one does ever manage to pay off ones mortgage, one still does not truly own what one has spent, likely their entire life paying for. Don't believe me ... stop paying your property taxes and tell me who owns your home. Keep up the blogs! Finally something worth reading on the world wide wibble!

"Any society that would give up a little liberty to gain a little security will deserve neither and lose both."

-Ben Franklin-

repo4sale said...
This comment has been removed by a blog administrator.
kumanari said...

Alas, the operative word is DREAM. which is something your supposed to wake up from, face reality THEN pursue.If one chooses to sleep while standing up...well. There is no free lunch. No new math, no new economics,.work hard, play hard, save, be honest, ethical etc. etc. etc., it's as old as time nothing has changed. People just want to believe in anything easy because life has gotten harder. we know a person doesn't deserve millions of dollars for catching/hitting/kicking a ball, movie, song,(or for pushing papers across a desk) or whatever. You buy into the system you become part of it, it morphs you just like drugs. Turn off your tv,open your mind think for your self, stop accepting/buying/selling/wasting crap. Take the higher road god knows there are no traffic jams there. It is not very easy to do but nothing is that is worth doing right. I was taught this by my father and grandmother in 1967 at the age of 9. It is my keel. I have always felt kind of sorry for the sheeple who believed in the founding fathers, The Amerikkan dream and all that because i've always known it's an illusion. It can be achieved but it is an illusion. Don't chase the dream, strive for it attain it but don't chase it.

Holter27 said...

New Post! New Post! New Post!

We want MORE!

eternitus said...

Sorry Holter - I've been side-tracked by this darn job thing... working like a dog!

Anonymous said...

Good job, eternitus. Keep the words of wisdom and insight coming. LO

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