Theory Teacher's Blog

Why House? Economic Crisis and the Drive to Home Ownership

In his first speech to the Joint-Session of Congress [text and video],  President Barack Obama observed that one of the causes of our economic crisis was that, “People bought homes they knew they couldn’t afford from banks and lenders who pushed those bad loans anyway.” The causes of our current economic crisis are complex, and I started to try to understand them last fall in my blog [here]. I can’t say that I succeeded, but I found lots of good sources and links… and all things considered, it seems to me that Obama’s explanation of what precipitated the crisis and his rationale for why we need strong credit markets — and therefore some kind of socially responsible stimulus bill — was generally consistent with what most economists have said.

But the politicians and economists often seem to be talking in circles, recognizing that spending beyond our means causes problems but then passing legislation that artificially props up a market system that enables and encourages the same problematic behaviors. In other words, it’s easy to observe that people are buying houses they can’t really afford, but what would motivate somebody to do that in the first place? Obviously, to explain all this is beyond what anyone would expect a president to talk about, and we should give credit to Obama for at least recognizing the problem and talking about it. But, if we understand that people are buying houses when they shouldn’t, why does the government then want to prop up this market? Shouldn’t we just let the market forces naturally correct?

One way of looking at it is that the market basically works just fine except for a few bad apples that ruin it for everyone, but I don’t think it’s useful to just blame individual greed or individual error since the phenomenon is so widespread. Clearly, there is something more systemic here, and I suggest that Lacanian psychoanalysis (which my class is studying right now, having just read “The Agencyof the Letter in the Unconscious Since Freud“) might offer us some useful insight into what both Obama and economists have noticed is an excessive “drive”  to own a home. 

While economists (and Obama in his speech) use the word “drive” simply to mean what drives the market, for Lacan the term Drive is a complex concept, and the important thing to realize about the Drive is that it’s not just instincts or repressed desires as pop psychology would have you believe, and neither is it just ideology or culture. So, what is it?

Before, I give the pat answer to that question, let’s acknowledge that there is something rather unnatural about the housing market, because it’s clear that people don’t just buy houses because they need a place to live. That would be the “natural” reason to own a home, but in our modern society today, when young adults are so mobile, it’s in many ways easier and more sensible to rent an apartment. It’s also a more efficient use of resources and space, if one cares about the environment. But “the house” seems to mean (or signify) a whole lot more than just a place to live. It also signifies that you’ve made it, that you have control of your life, that you have not just a house but also a “home” with all the lovely Norman-Rockwell-painting connotations of home… that you are now a responsible member of society.

As George Bush even argued in a somewhat famous speech in 2004, “We are creating an ownership society.” That speech is well-known enough to have an entire wikipedia entry dedicated to it [here], and our favorite journalist Naomi Klein has critiqued it [here]. Bush’s argument is that our economy would be stronger, and citizens would be more invested in our nation’s future, if they owned a home. Now, this is the interesting thing here, that in a sense home ownership is not just about home ownership, but is also a metaphor for something else. In other words, to put it in Lacanian terms, the home is a metaphorical compensation for what is lacking in our core being. Just as romantic lovers will say to each other, “you complete me,” so too in the postmodern ideology of home ownership, we can say of the home that it completes us, that it gives us citizenship. (Incidentally, back in the 18th and 19th centuries, ownership of land was a prerequisite for the right to vote. This perhaps made sense in a society that was largely agricultural and that lacked the technological means for tracking its citizens such as the modern identification card and census. But, if the home ever had some kind of real relationship to citizenship in the past, today the home as an expression of citizenship is purely metaphorical.) And so, one part of the Lacanian drive is how it works metaphorically.

But this is just one part of the drive. It also works metonymically, and this is why the Drive is not just a mystical ideology or false consciousness, but something very, very real. What the government did at this moment in 2004 was actually encourage a housing bubble, and it did so with all sorts of artificial incentives such as tax breaks, special loan programs for first-time home buyers, lax regulation of hedge funds and other investment firms, etc. In other words, what made the home valuable was not its value as a place to live or even its real market value, but a speculative future value. Even first-time home buyers who really didn’t have enough money saved could still buy the home because they believed they could count on its value going up. And, likewise, the bank who lent them the money believed they could count on its value going up, so it was willing to take risks with the loan.

You may think I’m just being paranoid, but back then there was a real push for the housing market, and many of my friends, who never considered buying a home before, suddenly bought them in 2004 and 2005 — and what was striking about these particular friends of mine buying a home is that they were all graduate students who were earning very little money and knew they would have to sell their house and move in just a few years. But it was hard to resist the housing-market buzz; one felt foolish for not taking advantage of it, except that it was being pushed so hard by the President and media hype that we all should have been at least a bit skeptical.

The upshot of all this is that people bought homes because of an artificially stimulated housing market. They assumed that the value would increase, and so it was worth making a risky investment. And this is a metonymical relationship, because as Lacan argues, the meaning of a signifier is not just in what it represents — its “signified” (which, in this case, is simply a place where one lives.) It’s also its relation to other signifiers. And here is why it is a mistake to think that Lacan’s analysis of language and dreams is not about real stuff… to think that it is not materialist. To the contrary, it is materialist because these signifiers (which, in this case, is the market value of the home) are the symbolic relations through which people and things relate, i.e., the social relations between things and material relations between people, as Karl Marx put it in his famous chapter on the commodity fetish. And more importantly, they produce real world effects. This is why Lacanian theorist Slavoj Žižek observed in a recent, and already freqeuntly cited, op-ed for The London Review of Books [here] that even left-leaning Democrats and socialists had to support the bail-out of the finance sector because of the extent to which the lives of working-class people were entangled in it.

The problem, of course, is what Lacan reminds us all along (and which economists and banks should have known from their own Econ 101 textbooks), that the market can’t just go up and up… and up. Or, as Lacan put it, the metonymic chain of desire is a displacement of a fundamental “lack.” We know that ultimately there is something missing from the equation, and that we are building castles partly out of air. Or, as my favorite Lacanian theorist, Mick Jagger of The Rolling Stones, put it, “I can’t get no satisfaction.”

Admittedly, I’m being a little simplistic here, but this is part of how Drive works in our society. It’s not just natural instinct, and it’s not just ideology or culture. It’s more complex than that.

I could stop my analysis there, but since I began this blog post with Obama’s observation that there was something excessive about the drive to own a home, I want to speculate a bit further about the nature of what seems to me to be a pathological excess. Following the theoretical model of Lacan and Žižek, I suggest that the drive to own a house is a psychological symptom… but a symptom of what?

There is something, after all, a little bit creepy about the irrational desire to own a nice house with a picket fence and all of that lovely loveliness at a moment when global warming has been discovered to be a real threat. Houses in America have been getting bigger and bigger (obscenely large, just like SUVs), as Americans have moved from the cities to the suburbs and now to the exurbs. Indeed, the recent creation of the exurb seems to suggest a changing American geography just as the creation of the suburb in the 1950s did. And as such, these houses not only require more and more energy for heat but also create a society completely dependent on the gas-guzzling automobile. Not only do these houses and cars consume more than the world’s fair share of oil, they also take up land that could be used for farming or just left for forest. Ironically, it is often the nature-and-animal-loving individuals who push suburban life outward in their quest for that authentic, natural feeling, and in the process disrupt the very ecosystems they want to protect.

It should be pretty obvious that cooperative living arrangements are more efficient and increasingly necessary. No amount of technological innovation such as hybrid cars or ethanol is going to solve what is essentially a cultural problem — and not a scientific one. Unfortunately, these kinds of reasonable, cultural solutions are not encouraged by government investment like technological solutions are, nor do they receive the kind of artificial incentives that home-buyers receive. In fact, there are even laws on the books in some places that discourage cooperative and alternative living arrangements.

But there is more to the issue than that. When one looks at the history of the American suburb, one can easily discern two basic causes. First, Ford’s development of the affordable automobile, the Model T, in 1908,  and the Federal Aid Highway Act of 1956 that committed the government to an automobile-based infrastructure. But another spur to the growth of suburbs was the Brown v. Board of Education Supreme Court decision two years earlier in 1954 and the Civil Rights Act in 1964. As soon as the government began to force schools to integrate, the nation experienced something popularly known as white flight. As a result, according to census data, the United States is more racially segregated now than it was in 1954, despite years of civil rights legislation and the election of a black president.

Now, we can return to the metaphorical aspect of the drive to own a home. As Lacan says, the metaphor (or condensation, to use Freud’s term) is a cultural symptom, and it is symptomatic of our relation to so-called others — others who are psychically, socially, and politically constructed as others… as others supposedly different from ourselves. For theorists such as Slavoj Žižek and Ernesto Laclau, who use Lacan to analyze political relations, such metaphors might be symptoms of social antagonism. In this case, the metaphor of the home, with all its connotations of citizenship, responsibility, and safety, is a symptom of America’s racist history. After all, if I asked you to picture in your mind the perfectly safe, idyllic community full of educated citizens, what would you imagine? And then if I asked you to picture the opposite of that, what would you imagine? And would not race factor into those images, despite all your noble, politically correct intentions?

Hence, though it would be quite a leap of logic to claim that our current environmental problems were entirely caused by a deep, unconscious racism, I don’t think it’s too much of a stretch to argue that the Drive for home ownership and idyllic suburban life is a symptom of that racism. I would argue that it is. Moreover, this is a racism that still exists but which Americans repress, not wanting to believe it’s still a factor.  But, it exists powerfully in the housing market, as shown by a recent study about how racial discrimination in the lending practices of many banks exacerbated our current housing-market crisis. Liberals eat their organic food, go camping, vote for Obama, and wring their hands about the environment… but they also buy into the racist, environmentally destructive logic of the ever-expanding, suburban and exurban housing market.


February 27, 2009 - Posted by | finance, race


  1. Wow…yes, that helped quite a bit. And another connection between the Rolling Stones “Satisfaction” and the housing market crisis is that, just as “the man” tells us our desires (whether they are about detergent or girls) in the song, the government and Bush told Americans about their desire to own a home.

    Comment by Amy VH | February 27, 2009 | Reply

  2. Great post. I especially like the closing portion on the race aspect of the housing bubble. As you know, I’ve written about this here:

    and here:

    But I really appreciate the framework you’ve set up here. Very well done.

    Comment by topspun | March 18, 2009 | Reply

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