Source – naturalnews.com
– You may recall learning a little bit about medieval English feudalism while in World History class in school. It was a governing system introduced by William I, better known as William the Conqueror, in which he divided up land and gave it to “nobles” who fought for him and did well in battle. In essence, those who lived on the noble’s land were his vassals; in order to survive, they worked the noble’s land for a meager living and owed allegiance to him as well.
Feudalism has long since disappeared from Europe, but is it on the rebound in the United States? Perhaps, at least in an abbreviated form.
Increasingly, because of a historically slow recovery from the economic fiasco of the Great Recession of 2008, more and more Americans have been forced to forego the lifelong dream of owning their own home and instead have been forced to rent.
Much of the economic fall-out of the Great Recession came in the form of a collapse in the subprime mortgage industry, in which millions of Americans — thanks to Clinton-era housing policies — were permitted to “buy” homes they simply could not afford. Banks played financial musical chairs with the subprime mortgages, packaging and repackaging them and selling to each other, until there were no buyers left for the worthless notes.
The banks were rescued, but Americans were not
As noted by McClatchy DC:
In 2006 and 2007, Goldman Sachs Group peddled more than $40 billion in securities backed by at least 200,000 risky home mortgages, but never told the buyers it was secretly betting that a sharp drop in U.S. housing prices would send the value of those securities plummeting.
In the aftermath, millions of Americans either lost homes or saw the homes they owned severely devalued, a condition that, in some parts of the country, continues to this day. As for the big banks that were forced to make the loans (remember, this was government policy), they got a bailout under the auspices that, if they did not, the global economy would collapse as well, leading to a massive recession.
The result was that banks’ bottom lines improved while Americans’ bottom lines did not or, at least, not nearly as quickly, and not at all to the extent of the banks. And the housing market is still feeling the effects.
As reported by the blog Wolf Street:
The housing market has been healed by the Fed’s bold actions, we’re told incessantly. … Prices have soared over the last three years, and in some cities, like San Francisco, they have soared far beyond the prior crazy bubble peak. So we admit grudgingly that the Fed’s six-year money-printing and interest-rate-repression campaign, designed to inflate every asset price in sight even to absurdity, has worked.
However, an essential element in a healthy housing market — people who actually live in homes they own — has been dissipating. The homeownership rate peaked in 2004 at 69.2%. It was during the prior housing bubble. Speculative buying drove up prices beyond the reach of many potential buyers.
The American dream is collapsing
Others note that the collapse of the American dream of homeownership is proceeding apace. According to the U.S. Census Bureau,[PDF] homeownership in the U.S. stood at 64 percent last year, a figure that was 1.2 percent lower than the previous year, the largest annual drop in the history of the data series going back to 1980.
Younger households were hit the hardest, analysts noted. In the age group of homeowners under 35, the ownership rate plunged 1.5 percent to 35.4 percent; for ages 35-44, the rate dropped even further, 2.1 percent — and all in a single year — to settle at 58.8 percent. These age groups are normally targeted as first-time home buyers.
Will feudalism return to the United States? Maybe not quite in the same form as it existed in medieval Europe, but a form of it seems to be increasingly prevalent as more Americans are shut out of owning their own property and must instead exist dependent on the property of others.