“You’ll own nothing. And you’ll be happy.” This leading prediction for 2030 from the World Economic Forum, based on the input of its Global Future Councils, is even more staggering than it seems on the surface. How can an organization littered with the world’s elite politicians, business leaders, and other influential people be predicting the end of private property?
And given that throughout history, in those societies where people did not have property, people were not only unfree but also miserable, why would they expect you to be happy?
Making you believe that you will be happy and having you buy into the concept that supposed convenience and indentured servitude are preferable to freedom, independence, self-reliance, and creating wealth are an important part of their agenda.
The attack on home ownership is an ongoing effort, one that Glenn Beck and I have both researched and shared from different angles in our upcoming books ("Dark Future" and "You Will Own Nothing").
The American dream is symbolically represented by home ownership. This is not a coincidence. As I recount in "You Will Own Nothing," according to the Federal Reserve Board’s 2019 Survey of Consumer Finances, across households, a home (aka primary residence) was the largest asset by dollar value.
Home ownership is a major driver of wealth creation. But that has come under attack from the media, Wall Street, and the Federal Reserve, among other forces.
A recent New York Times magazine piece exclaims, “Imagine a Renters’ Utopia. It Might Look Like Vienna,” spending paragraph upon paragraph glorifying how great and convenient it is to own nothing while selling you a new American “dream” that is really a nightmare of dependence.
Glenn Beck’s "Dark Future" co-author, Justin Haskins, muses, “Why would the author — and the Times — want to run a story like this? Why would they act as though people are better off renting than amassing wealth for themselves? We all know the answers to those questions, of course. This is part of a larger effort to glorify the concept of a renter society, and I fully expect it to pick up pace in the near future. It's not enough to force people out of the possibility of ownership — you have to make them believe they will be much better off too.”
The Times piece is fraught with bad economic arguments, including suggesting the concept of rent control, an idea so bad that even economist Paul Krugman, known for his progressive stances, says it’s a terrible, disproven idea, sharing (in the Times, of all places), “The analysis of rent control is among the best-understood issues in all of economics, and — among economists, anyway — one of the least controversial. In 1992 a poll of the American Economic Association found 93 percent of its members agreeing that ‘a ceiling on rents reduces the quality and quantity of housing.’ Almost every freshman-level textbook contains a case study on rent control, using its known adverse side effects to illustrate the principles of supply and demand.”
The piece also fails to correctly identify the root causes of increasing costs of assets, including homes, which is Federal Reserve and government policy that has transferred trillions of dollars in wealth from Main Street to Wall Street.
With that policy-enabled transfer, Wall Street has doubled down and is now competing with individuals for single-family homes.
During the great recession financial crisis, the cronies of the well-connected benefitted while the average American was punished. While both individuals and financial institutions took on too much risk vis-à-vis housing, their outcomes were starkly different. Individuals lost their homes, while financial institutions received a bailout.
The wealthy and well-connected benefitted during the crisis in multiple ways. Some received direct bailouts. Many were given access to cheap capital. The financial institutions were able to foreclose on homes — taking away the wealth of the individual. These homes were flipped to capital-rich buyers who bought up these assets at bargain prices.
While millions of Americans lost their homes to foreclosure or short sale, backed by the Fed’s easy-money policy, a new phenomenon emerged. Institutional money started buying single-family homes for the first time.
And these Wall Street players aren’t looking to flip these houses; they are buying tens of thousands of single-family properties across the U.S. for the express purpose of renting you back the American dream.
That doesn’t sound like Utopia; that sounds like the rich getting richer and the middle and working classes losing out.
In the fourth quarter of 2021 alone, corporations bought 80,000 homes, which was about 18% of all single-family homes sold during that quarter. While not all of those corporate buyers were large corporations (some were small landlords with corporate entities), it is a staggering number and more than 24,000 units higher than the same quarter in the prior year.
And, according to data from CoreLogic, investors purchased an estimated 22% of all U.S. homes in 2022.
The investors own something, you own nothing, and they collect the rent on the difference.
While the wealthy and well-connected tell you how great non-ownership is, I don’t see any of them giving up their mansions and multiple houses (even Bernie Sanders still has three homes).
You must not buy into the hype (or rent the hype, for that matter). Ownership, including owning a home, has been a key to families building wealth. Don’t make the elite even richer at your own expense.
Carol Roth's new book, “You Will Own Nothing,” is available for pre-order now.