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Disowned by the Ownership Society
By Naomi Klein
04/02/08 "The
Nation" -- -- Remember
the "ownership society," fixture of major George W. Bush
addresses for the first four years of his presidency? "We're
creating...an ownership society in this country, where more
Americans than ever will be able to open up their door where
they live and say, welcome to my house, welcome to my piece of
property," Bush said in October 2004. Washington think-tanker
Grover Norquist predicted that the ownership society would be
Bush's greatest legacy, remembered "long after people can no
longer pronounce or spell Fallujah." Yet in Bush's final State
of the Union address, the once-ubiquitous phrase was
conspicuously absent. And little wonder: rather than its proud
father, Bush has turned out to be the ownership society's
undertaker.
Well before the ownership society had a neat label, its creation
was central to the success of the right-wing economic revolution
around the world. The idea was simple: if working-class people
owned a small piece of the market--a home mortgage, a stock
portfolio, a private pension--they would cease to identify as
workers and start to see themselves as owners, with the same
interests as their bosses. That meant they could vote for
politicians promising to improve stock performance rather than
job conditions. Class consciousness would be a relic.
It was always tempting to dismiss the ownership society as an
empty slogan--"hokum" as former Labor Secretary Robert Reich put
it. But the ownership society was quite real. It was the answer
to a roadblock long faced by politicians favoring policies to
benefit the wealthy. The problem boiled down to this: people
tend to vote their economic interests. Even in the wealthy
United States, most people earn less than the average income.
That means it is in the interest of the majority to vote for
politicians promising to redistribute wealth from the top down.
So what to do? It was Margaret Thatcher who pioneered a
solution. The effort centered on Britain's public housing, or
council estates, which were filled with die-hard Labour Party
supporters. In a bold move, Thatcher offered strong incentives
to residents to buy their council estate flats at reduced rates
(much as Bush did decades later by promoting subprime
mortgages). Those who could afford it became homeowners while
those who couldn't faced rents almost twice as high as before,
leading to an explosion of homelessness.
As a political strategy, it worked: the renters continued to
oppose Thatcher, but polls showed that more than half of the
newly minted owners did indeed switch their party affiliation to
the Tories. The key was a psychological shift: they now thought
like owners, and owners tend to vote Tory. The ownership society
as a political project was born.
Across the Atlantic, Reagan ushered in a range of policies that
similarly convinced the public that class divisions no longer
existed. In 1988 only 26 percent of Americans told pollsters
that they lived in a society bifurcated into "haves" and
"have-nots"--71 percent rejected the whole idea of class. The
real breakthrough, however, came in the 1990s, with the
"democratization" of stock ownership, eventually leading to
nearly half of American households owning stock. Stock watching
became a national pastime, with tickers on TV screens becoming
more common than weather forecasts. Main Street, we were told,
had stormed the elite enclaves of Wall Street.
Once again, the shift was psychological. Stock ownership made up
a relatively minor part of the average American's earnings, but
in the era of frenetic downsizing and offshoring, this new class
of amateur investor had a distinct shift in consciousness.
Whenever a new round of layoffs was announced, sending another
stock price soaring, many responded not by identifying with
those who had lost their jobs, or by protesting the policies
that had led to the layoffs, but by calling their brokers with
instructions to buy.
Bush came to office determined to take these trends even
further, to deliver Social Security accounts to Wall Street and
target minority communities--traditionally out of the Republican
Party's reach--for easy homeownership. "Under 50 percent of
African Americans and Hispanic Americans own a home," Bush
observed in 2002. "That's just too few." He called on Fannie Mae
and the private sector "to unlock millions of dollars, to make
it available for the purchase of a home"--an important reminder
that subprime lenders were taking their cue straight from the
top.
Today, the basic promises of the ownership society have been
broken. First the dot-com bubble burst; then employees watched
their stock-heavy pensions melt away with Enron and WorldCom.
Now we have the subprime mortgage crisis, with more than 2
million homeowners facing foreclosure on their homes. Many are
raiding their 401(k)s--their piece of the stock market--to pay
their mortgage. Wall Street, meanwhile, has fallen out of love
with Main Street. To avoid regulatory scrutiny, the new trend is
away from publicly traded stocks and toward private equity. In
November Nasdaq joined forces with several private banks,
including Goldman Sachs, to form Portal Alliance, a private
equity stock market open only to investors with assets upward of
$100 million. In short order yesterday's ownership society has
morphed into today's members-only society.
The mass eviction from the ownership society has profound
political implications. According to a September Pew Research
poll, 48 percent of Americans say they live in a society carved
into haves and have-nots--nearly twice the number of 1988. Only
45 percent see themselves as part of the haves. In other words,
we are seeing a return of the very class consciousness that the
ownership society was supposed to erase. The free-market
ideologues have lost an extremely potent psychological tool--and
progressives have gained one. Now that John Edwards is out of
the presidential race, the question is, will anyone dare to use
it?
Copyright © 2008 The Nation
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