The Republic of T.

When George W. Bush first spoke of “the ownership society,” he led most Americans to believe, and many did believe, that he was talking about them. Now, four years later, it’s easy to conclude that the president, his party and conservatism itself has failed to deliver the ownership society.

But the very crises now described and decried in both the new media and the old can actually be taken as signs of conservatism’s success, depending on one thing: identifying who really belongs to the ownership society. Conservatism, depending on how you look at it, has successfully built the ownership society — a very small, narrowly defined one — and strengthened it by building or expanding its essential support: the society of the owned.

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Consider this scenario. You’re standing at a busy street corner when you see someone about to step off the curb right into the path of an oncoming bus. You have just enough time and you’re close enough to reach out and stop them before it’s too late. Do you? Conservatism says, no.

Now consider this scenario. You’re standing at a busy street corner when you see someone about to step in front of a speeding bus. Someone else beside you is about to reach out and stop the other person from becoming roadkill. Even if you don’t attempt to stop the person from stepping in front of the bus, would you actually stop the would-be rescuer from stopping them? Even if the driver was deliberately aiming for the would-be victim? Conservatism says, yes.

Conservatism apparently holds that some people should end up under the bus, or at the very least no one should try to keep them from ending up there.

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Let’s return to our metaphorical street corner from the previous post, because to understand the current economic crisis it might help to consider how many have been run down at that economic intersection, as conservatism stands by and watches. There’s another lending crisis that’s gone on for a while now, making far fewer headlines than the subprime crisis, the credit crunch, or the housing slump—because of the people it affected. But as those crises intensify and affect more and more people, this one may become even bigger news than it has been so far.

Back in December 2006, when the subprime crisis was just getting started, The New York Times ran a story about short-term “payday” loans and their devastating impact on the poor, who get caught in a never ending cycle of debt.

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Let’s return, once more, to our metaphorical intersection from parts two and three of the series. Except, where we once imagined a doomed pedestrian just preparing to cross the intersection, let’s imagine a group of pedestrians stuck in the middle of the intersection. When they started across the intersection, they had the green light. As far as they knew, it was safe to cross. But — as luck would have it — they were just halfway across when the signal changed. Now, traffic whizzes by them, on both sides, heedless to their plight as they find it impossible to finish the journey to the other side of the street, and difficult to go back whence they came.

It’s not a stretch to imagine those pedestrians as representing the middle-class, buffeted by the credit crisis on one side and the subprime crisis on the other, and finding themselves caught in the middle, with no real options except to hope the signal changes again, so they can either scramble to the other side of the street, or make a hasty retreat.

Upward mobility in the American economy has always been something like the popular 1980s computer game, “Frogger,” in which players had to maneuver their frogs across a busy street. Doing so successfully often meant taking two hops backward of sideways for every one hop forward. Failure to move fast enough meant getting squashed flat by oncoming traffic. Today, after hopping sideways for as long as possible, America’s middle class is getting flattened, or — for the lucky — taking several hops backwards.

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Something’s happening out there. It’s happening quietly in some places and not-so-quietly in others. It’s happening around kitchen tables and in living rooms across the country, as Americans come to grips with new — or, to them, newly-revealed — economic realities. For some, it’s just impossible to deny or ignore what most have known for weeks about the economy. Even the Bush administration — famous for simply ignoring reality (see part two of this series), as the president himself recently demonstrated by denying we’re in a recession — is showing vague signs of concern.

Maybe someone in the White House has been reading the news over the last several days, and maybe even reading it to the president. (Though until a reporter asked him about it, Bush hadn’t heard that gas might soon cost $4 per gallon.) But even the president might not have needed his news predigested this time, because even a perusal of the headlines in the last few days indicates that something — like that middle class anger in the last post — is building, and it’s reaching a point where more and more people have almost nothing left. And, it follows, nothing left to lose.

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When free market fundamentalists like those in the Bush administration start at federal government action, after two interest rate cuts didn’t do much to stall stop the economy sliding into recession, you know things have reached a crisis point. By the time they start taking baby steps towards a bailout, you can bet that — as with another disaster — many people are well underwater, some have drowned, and some aren’t so much saving themselves as letting the tide carry them.

In the past week, the Bush administration and Federal Reserve chair Ben Bernanke have been making vague gestures that open the possibility an increased government intervention in the aftermath of the subprime debacle. That may be due to a trend which suggests some people caught in the crises spawned by the subprime disaster have found a outlet for their anger that, if number of those who chose that option reaches critical mass, could have consequences beyond what most of us could ever imagine.

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Imagine that you’ve come upon two people who have somehow fallen into a very deep hole, which neither of them can climb out of on their own. (Nor, for some reason, can they help one another climb out.) In the course of figuring out what to do, you learn how they each came to be in that hole.

One of them fell in because he either didn’t see the hole or should have seen it but wasn’t paying attention. OK, so he could have avoided falling into the hole if he’d been more careful. The other person, you find out, apparently dug the hole for the one who fell in first, and then fell in himself.

Which one do you help out of the hole? The careless one who fell in first? Or the one who dug the hole in the first place? Which one do you leave in the hole? Which one do you help out first?

Conservatism says you definitely help the guy who dug the hole in the first place climb out of it. Not only that but you give him a brand new shovel and send him on his way. Maybe you leave the other guy in the hole, and maybe you don’t. In the latter case, there are serious moral questions to consider.

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Remember subprime mortgages? They’ve been nudged out of the headlines by gas prices lately, but they — and the crisis catalyzed by the collapse of the subprime market — are still news.

Bears Stearns (Remember them?) is finally, quietly sold to JP Morgan — to the tune of $2.2 billion, with taxpayers kicking in $29 billion via the Fed, to guarantee Stearns’ subprime mortgage assets.

Bank of America has been cleared to buy Countrywide Financial (Remember them?), and apparently still wants to seal the deal. (BofA didn’t want Countrywide’s no. 2 executive, and it only took them about $28 million to get rid of him.)

Meanwhile, more than 1 million homes are now in foreclosure.

We all heard the outcry when, in the midst of rising foreclosures, our government moved to bail out one of the biggest (and most reckless) Wall Street players in the subprime debacle. We know that president Bush backed the move, though he’s sworn to veto the supposed foreclosure relief bill that’s heading his way after a Senate deal saved it from oblivion. The treasury secretary defended the Stearns bailout again in mid-May. (A “preemptive strike” in light of the impending final sale, perhaps?)

But do the defenses and explanations why the Fed had to bail out Bear Stears boil down to “love they neighbor”?

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In a post-9/11 America that no longer “does” irony — or nuance, for that matter — it’s not surprising that one of the significant ironies of the George W. Bush era went largely unnoticed. Six years after declaring the dawn of an “ownership society,” intended to create more homeowners (who would theoretically support conservative economic policies), and in the same month that president Bush declared National Home Ownership Month we learned that increases in home ownership have been erased — particularly among minorities — as a direct result of conservative economic policy.

Driven largely by the surge in foreclosures and an unsettled housing market, Americans are renting apartments and houses at the highest level since President Bush started a campaign to expand homeownership in 2002.

The percentage of households headed by homeowners, which soared to a record 69.1 percent in 2005, fell to 67.8 percent this year, the sharpest decline in 20 years, according to census data through the end of March. By extension, the percentage of households headed by renters increased to 32.2 percent, from 30.9 percent.

The figures, while seemingly modest, reflect a significant shift in national housing trends, housing analysts say, with the notable gains in homeownership achieved under Mr. Bush all but vanishing over the last two years.

…The confluence of factors has largely derailed what Mr. Bush called “the ownership society,” his campaign to give millions of people — particularly minority and lower-income families — a shot at homeownership by encouraging lenders to finance more home purchases.

“We’re not going to see homeownership rates like that for a generation,” said Mark Zandi, the chief economist at Moody’s Economy.com, a research company.

(We’ll address the full impact of the subprime mortgage debacle on minorities a bit later in this series.)

Plainly put, policies that were supposed to create more stakeholders in the U.S. economy have actually pushed more people to its margins, and many out of it entirely. Whether that was the intention probably depends on who you ask. But it raises some important questions, one of which was recently posed by New York Times columnist Paul Krugman.

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