American “Individualism” and the Housing Market Collapse

Culturally, as Americans, we are imbued with since birth, strive to maintain throughout our lives, and tout, almost as a badge of honor, our “rugged individualism.” It’s that Lewis and Clark, from log cabin-to-the-White House, pull yourself up-by-your-bootstraps identity that separates us from our foreign brethren across the seas and over the borders, who are more accustomed to “welfare state” big governments (at worst) and “it-takes-a-village” communal societies (at best).

I’ve often been asked by my more socially democratic friends (both non-American and American), if our cherished concept of “Individualism” hasn’t been part of our problem, as if, Americans, left to our own devices and without Big Government to reign us in, are the root cause of all of society and the world’s ills, from corporate greed, to global warming, and even our so-called foreign policy misadventures. This is an interesting and complex question, which deserves an equally interesting but not-so-complex an answer.

American “Individualism,” as forged by our founding forebears and honed by generations of builders of our great nation, is not a blank check to run afoul of morality and religious, societal, and civic duty. On the contrary, the very nature, spirit, and purpose of American Individualism is the cheerful acceptance and almost pious adherence to the concept of personal responsibility, which many people today have discarded as an annoying hindrance to the accumulation of fast money and fame, irresponsible Big Government “welfare reach,” and pie-in-the-sky, social programs that are great for getting votes and headlines, but are designed to be run and funded by “someone else,” usually to the eventual detriment of American society.

Interestingly enough, the housing market collapse of 2006-08 may rightfully (and hopefully) someday be viewed in its proper context as a failure of traditional and responsible American individualism. While politicians and media finger-pointers laid the lion’s share of the blame for the burst of the housing bubble on banks, mortgage companies, and “greedy” corporate CEOs, the fact of the matter is that without greedy and irresponsible home-buyers, there would have been no inflated housing market, nor a market crash.

This is where the “personal responsibility” part of American individualism comes into play. Yes, part of the American dream is owning one’s own home, but it was a dream that was earned—worked toward with blood, sweat, and tears. Owning a home historically was never a “right.” If you couldn’t afford home ownership, you had to be content with renting or living at home with your folks, while working hard to save money to someday (hopefully) achieve the goal of home-ownership.

Short-sighted politicians in the1970s laid the groundwork for the dismantling of the core foundations of American individualism when they passed laws forcing mortgage companies to offer loans they otherwise wouldn’t have to low-income Americans, under the “value-of-hard-work”-defeating banner of “everyone should own a home.” Should everyone own a home? Not if you can’t afford it, and there’s the rub.

Greedy Americans, who had long ago abandoned the tenets of responsible, good old-fashioned American work ethic, who had foolishly stopped believing in the value of a college degree, who had let their minds be poisoned by the Dot.com “easy money” fantasy, and who later bought into the notion that anybody could be a real-estate mogul or “house-flipper” by buying a how-to book or taking a class, and worse, that you could actually get something for nothing—no money down home loans—and that there wasn’t a dreadful catch down the line, started buying houses they couldn’t afford.

I don’t care how many greedy CEOs there are, or how many unscrupulous bankers or mortgage lenders or stock brokers looking to get rich quick off so-called unsuspecting home-buyers there are. None of their actions could ever affect say, someone like me. Why? Because I know the value of hard work and that there are no free lunches. I also know my financial obligations and limitations, and I believe in individual responsibility, not get-rich-quick schemes. In other words, if I can’t afford a house, I'm not going to try to get one. I certainly couldn’t afford any mortgage scheme back then, no matter how too-good-to-be-true it seemed, so I didn't get caught up in the housing "gold rush." I’m also not materialistic and I’m not greedy.

So I exercised the not-so-glamorous aspect of my rugged, American individualism, and chose frugality, savings, and slow, methodical, tried and true roads to wealth accumulation, including hard work supported by the knowledge, skills, and talents that I had earned, accomplished, and honed along the way. I chose to rent because it was cheaper and more affordable. I chose to live with my parents once in a while. Someday I may be able to afford the house I want, but that someday wasn’t then or now, and no fast-talking mortgage lender or real estate guru will be able to convince me otherwise. And I didn’t need Big Government to protect me from them.

Sadly, many Americans today have subordinated our traditions of individualism and personal responsibility to the passive, victim mentality of the welfare state recipient. This tragic mindset has led many to believe that nothing they do is ever really their fault, that there is always a corporation, government entity, historical grievance, prejudice, drug, mental illness, economic or societal disadvantage, upon which they can blame for all of their bad behavior or lack of success. They placate themselves with the lie that only Big Government can protect them through hand-outs and legislation.

Americans need to get back on track and re-learn the value of hard work through education and persistence. We need to focus on feeding the heart and mind with knowledge, morals, and our spiritual or religious beliefs, and not our stomachs with fast food and soda. American individualism isn’t about getting some other entity to buck the system, tweak the law, or hide the devil in the details so that you can get something you can’t afford, it’s about earning what you need or want through a cherished work ethic, doing things the slow, methodical way, and sometimes walking the harder path, not because it’s easy (because it isn’t) but because it’s the right thing to do.