Did 'Home Sweet Home' Lead To Financial Crisis?

Scott Simon reflects on the how America's focus on having a home may have played a role in the current financial mess.

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SCOTT SIMON, Host:

When we were children many of us tried to make a lot of money on the "Monopoly" board so that we could buy little green houses. We put them down on the board to increase the value of our properties. So many genuine experts to analyze America's recent financial meltdown, I'm hesitant to suppose that I have anything original to say. But as I've traveled around over the years, I've gotten to appreciate that there is something especially important and maybe even sacred about owning a home or apartment in the United States.

It's considered almost an unalienable right to make enough money to own our own place in which we can paint the walls red if we want, play whatever music we choose without disturbing the neighbors. After all, it's our home.

A chance to own a home or apartment is one of the reasons that people all over the world can be so eager, even desperate to live in America, to own a piece of the strongest, freest place on earth. Owning a home has been considered good, not just for ourselves but our community deep in the country. We will care more about and care more for our homes or apartments because they are ours. We will feel more connected to those around us because we've made an investment in our surroundings, and in a way, to each other.

Owning our own place makes us want to keep the streets clean and safe, make sure that the schools are good and that everyone around us has rewarding work so that our neighborhood is strong and desirable. Owning a home or apartment has always been considered a step towards growing up, a way of having a stake in the long term, a way of being a real citizen, not just people passing through.

Owning a home is the largest investment that most families ever make, and over the years, many of us began to regard it as a kind of inhabitable savings and retirement account. You buy a house or apartment, live in it as it grows in value and sell it for more than you paid to buy some place bigger or better, help your children through school or enrich your retirement.

It was naive to think that homes and apartments always increase in value. But the emotional and financial importance of home ownership is what made it precious to people who were looking for new ways to make - and I pointedly won't say earn - quick bags of cash. No doubt, many people with bad credit histories leapt at the chance to buy homes they couldn't afford to turn a quick buck. But I wonder how many got caught up in a crisis that began with mortgage losses because they saw the chance to buy a house cheaply as their one best chance to give their families better lives? They hoped that buying the house would turn around their fortunes.

Their dreams played into the schemes of speculators, short sellers and more than a few outright swindlers for whom homes were just pieces on a game board.

(SOUNDBITE OF SONG "HOME")

SHERYL CROW: (Singing) And this is home, home. This is home. I found you standing...

SIMON: Sheryl Crow. This is NPR News.

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