If You Ever Thought the American Dream Was Real, Do You Now?

Simple answers to simple questions: Maybe yeah, but you really shouldn't anymore.

Somebody's dream home.

The American Dream was based on the idea that we all have a shot. We all don't have a shot. In fact, the shot that some of us had was so hopelessly gamed -- most especially during the housing bubble -- that many of us never had a chance. It took dumb luck, like I had, to not get crushed. And even then, the odds were stacked against us.

I remember the 1968 Democratic Convention in Chicago in which hundreds of demonstrators were beaten and arrested. They were carted off in droves, with the "authorities" saying it was the protestors' fault. Later, after an extensive investigation, the mayhem was declared to have been a "police riot." That's right, the police went crazy, beat and gassed people, drove them into corners where they couldn't escape, and then arrested them for resisting arrest. It was a travesty.

What happened during the housing bubble was very much the same. The usual suspects -- here's one of them, and another one -- say there was nothing the government could do to protect the homeowners that got swept up. But it's not true. Basically, the housing bubble was a bank riot, a bunch of banks that ran wild, issuing loans willy-nilly, then robo-signing their foreclosure papers, and avoiding millions in property and deed transfer fees by creating a fake electronic transfer system that no one really approved -- as far as I know -- and in the end, the Fed or Fannie or Freddie ate all the bad paper. The banks were made whole. The people? Not so much. The towns and cities, with the crap foreclosed homes falling apart? Not so much.

My family was not immune. We were actually damaged by it. One of my brothers, who was virtually unemployable and hadn't held down a job in several years, was offered a no-doc loan for $350,000. When I told him I seriously doubted it, he was so insulted, he stopped talking to me. (And I was wrong: Washington Mutual had pre-approved him for the no-doc loan.) My other brother, when I told him there was bubble and that we should sell the family home before it was too late, didn't believe me (our last parent had died, this was in the process of unraveling an estate). Instead, he borrowed heavily -- yep, a virtual no-doc loan from, yep, Washington Mutual (this brother hadn't worked in seven years, long story) -- and bought the family home for himself. He poured money into updating it, lived in it for a couple of years, and then put it on the market. He lost more than his entire worth at the end of the whole process (sold it for more than $200,000 LESS than an offer he turned down in 2007). He was sixty-six, with no income other than Social Security. He, too, doesn't talk to me.

I've made this personal to make a point, and that's that the collapse of the American Dream can break families in ways that aren't always obvious. I can live with the estrangement of my older brothers. What else am I going to do? Imagine all the other myriad ways the housing collapse shattered families. They're countless, each its own individual tragedy.

It didn't have to be this way, but the Big Boys Who Make the Rules said so, yes, this is too the way it goes.

So bye bye American Dream.

Former Treasury Secretary Timothy Geithner, left. Said he'd help homeowners,
then didn't. Said he couldn't. Right. That must have been it, he couldn't.