K
Kickin' Ass and Takin' Names
Guest
Disowned by the Ownership Society
by Naomi Klein
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?
http://www.commondreams.org/archive/2008/02/01/6778/
by Naomi Klein
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?
http://www.commondreams.org/archive/2008/02/01/6778/
