Episode Details

I.

This summer the median American home sold for $440,600. Prices are up more than 50 percent in 6 years. 77 percent of listings are out of reach for a middle-income earner, and nearly half of all renters pay more than a third of their income for shelter.

NPR reported this on July 30. Read it for what it documents rather than what it says.

Matt and Amanda Mracek live outside Orlando. He bought a foreclosed house in college after the 2008 crash, on a federal tax credit. She bought a 900-square-foot fixer-upper for a little over $100,000 with $5,000 down. A few years later their realtor told them it had gained $50,000. They traded up, then traded up again. In 2021 they locked at 2.6 percent, weeks before rates spiked.

They are decent people and they worked hard. But look at the sequence. No good was made. No process was improved. No customer was served. The wealth arrived because they were standing in a particular place at a particular moment, and most of it arrived while they slept.

Then read what the President said at a Cabinet meeting on January 29 of this year.

“People that own their homes, we’re gonna keep them wealthy. We’re gonna keep those prices up. We’re not gonna destroy the value of their homes so that somebody who didn’t work very hard can buy a home.”

It would be easy, and wrong, to make this about one administration. Protecting homeowner equity is neither recent nor partisan — the mortgage interest deduction, the 1997 capital gains exclusion, Fannie and Freddie, and local zoning defended with equal energy by municipalities of every political color. What is unusual is not the position. It is the plainness.

But hold that last clause.

Somebody who didn’t work very hard.

Paul Blumberg described this in 1982. He called it the Las Vegas syndrome: citizens observing that security no longer rests on the old virtues of work and saving but on inflationary currents nobody controls. He wrote it in Inequality in an Age of Decline, 44 years ago.

So the ledger reads as follows. The largest source of middle-class wealth in America is produced by timing, defended as federal policy, and described as desert.

Hold all 3.

II. 1984

In 1984 a woman in Augusta, Georgia bought a house.

No college degree. A single income. A job at a local manufacturing plant. Her realtor told her that in about 5 years she would call to thank him, and she did. She is still in that house. It is worth close to $300,000.

Her son is 38. He graduated into the 2009 job market with a degree from a for-profit college later sued over deceptive practices, cycled through underemployment, went back for an associate’s degree, then a second bachelor’s. He has a good job in information technology and cannot assemble a down payment. He says he feels like he is surviving. He is not certain he will ever own a house.

This is not a story about a lucky mother and an unlucky son. It is proof of feasibility. A single frontline manufacturing wage, in 1984, with no credential attached to it, converted labor into a transferable appreciating asset. The plant did that. Not a degree, not an inheritance, not a windfall. A job on a floor.

Which forecloses the first objection anyone raises to what follows — that wages are simply what the market will bear, that the arithmetic does not permit more. The arithmetic permitted it once.

III. The serious objection

There is a second objection and it deserves a straight answer.

The Wall Street Journal ran a column the same morning as the NPR report, making the point that this complaint recurs. In August 1982, New York magazine put “Downward Mobility” on its cover: You Thought You’d Live Better Than Your Parents Did. Wrong. Fran Schumer interviewed people in their 20s and 30s about their financial distress. Those pe