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Richard Florida and I discussed this issue, in part, in a series of articles: Florida, Richard L., and Marshall M. A. Feldman 1988. "Housing in U.S. Fordism." _International Journal of Urban and Regional Research_ 12 (2): 187-210. Feldman, Marshall M. A., and Richard L. Florida. "Economic Restructuring and the Changing Role of the State in U.S. Housing/. _Urban Affairs Annual Reviews_ 36: 31-46. Basically, we argue that mass homeownership arose as public policy out of class conflict during the late nineteenth and early twentieth centuries. After World War II, it really took off because of various factors in the national political economy (lack of international competition for U.S. business, oligopolistic markets, large-scale but conservative unionism with contracts pegging wages to productivity increases, removal of women from the workforce, Glass-Steagall, national Keynesian policies, etc.). By the 1970s, most of these conditions were no longer present. The economy went into crisis (see Robert Brenner's _Economics of Global Turbulence_ and _The Boom and the Bubble_ for some of the best empirical work on this), and the "postwar accord" between capital and labor collapsed. Businesses increasingly globalized, wages came under attack, and then Reagan came into power. Although we don't address it, in a paper I gave last spring, I argue that neoliberalism replaced Fordism as the logic of accumulation. In this climate, banks that had lobbied against Glass-Steagall almost since its passage became increasingly successful in their efforts. During the seventies, high inflation coupled with new financial innovations, like money market funds, increasingly squeezed S&L's, and they became more amenable to ditching Glass-Steagall. As profitability tanked, capital shifted from what David Harvey calls the "primary circuit" (production of goods & services) to the "secondary circuit" (finance, the built environment, land) of capital. (There's a long history of this: see _The Long Twentieth Century_ by Giovanni Arrighi.) With wages stagnating, land prices escalating, and newly deregulated financial institutions looking for ways to make inroads in existing and new markets (cf. Latin American and Asian financial crises), and with house prices escalating through a series of regional and general bubbles, both the banks and borrowers became more willing to use other savings instruments. In our articles, Florida and I used terms like "until the bubble bursts" and point out how the U.S. mortgage market of the 1980s increasingly began to look like the market of the 1920s. Of course this was all before subprime mortgages were invented, but the seeds were there and the trajectory, predictable. There are less radical accounts, such as Shiller's _Subprime Solution_, but I do not find them very satisfactory. From time to time, people may act with irrational exuberance, but there's a rhythm to these patterns, and they were virtually unknown before the modern era. We therefore have to locate the causes in the structure of the modern world, which leads us to the structure of the capitalist economy. As for data and trends, many sources on the Web will give you data on the growth of subprime lending. See, for example, HUD's "Subprime Lending and Alternative Financial Service Providers: A Literature Review and Empirical Analysis" (March 2006) at http://www.huduser.org/publications/hsgfin/sublending.html/. You can also access Home Mortgage Disclosure Act data and analyze the growth yourself. However, this is just the tip of the iceberg. Non-standard loans (i.e., less than 20% down, 30-year, first mortgages) have become increasingly common since the late 1970s. When my landlord tried to sell the property in which I lived, I bought my first home as a graduate student living in Berkeley in the late 1970s and took a second mortgage from the seller to make the down payment. Not coincidentally, this was during the first of several real estate bubbles in California occurring over the past forty years. I plan to write about this subject (the crisis, not my mortgage), but so far a heavy teaching load and various administration-imposed drains on my time have made this difficult. Hopefully, things will be different in the spring. [Ed: Here are the full citations for the books Marsh Feldman suggests: Brenner, Robert. _The Boom and the Bubble: The U.S. in the World Economy_. London: Verso, 2002. http://www.versobooks.com/books/ab/b-titles/brenner_r_boom.shtml Brenner, Robert. _The Economics of Global Turbulence: The Advanced Capitalist Economies from Long Boom to Long Downturn, 1945-2005_. London: Verso, 2006. http://www.versobooks.com/books/ab/b-titles/brenner_r_econ_turbulence.shtml Arrighi, Giovanni. _The Long Twentieth Century: Money, Power, and the Origins of Our Times_. London: Verso, 1994. http://www.versobooks.com/books/ab/a-titles/arrighi_century.shtml Shiller, Robert J. _The Subprime Solution: How Today's Global Financial Crisis Happened and What to Do About It_. Princeton, N. J.: Princeton University Press, 2008 http://press.princeton.edu/titles/8714.html ] Marsh Feldman Dr. Marshall Feldman, PhD Director of Research and Academic Affairs Center for Urban Studies and Research The University of Rhode Island H-Urban: http://www.h-net.org/~urban/ (including logs & posting guidelines) Posting Address: h-urban@h-net.msu.edu / mailto:h-urban@h-net.msu.edu (Click)
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