Five myths about the American dream

By Michael F. Ford, Published: January 6

1. The American dream is about getting rich.

In a national survey of more than 1,300 adults that we completed in March, only 6 percent of Americans ranked “wealth” as their first or second definition of the American dream. Forty-five percent named “a good life for my family,” while 34 percent put “financial security” — material comfort that is not necessarily synonymous with Bill Gates-like riches — on top.

While money may certainly be part of a good life, the American dream isn’t just about dollars and cents. Thirty-two percent of our respondents pointed to “freedom” as their dream; 29 percent to “opportunity”; and 21 percent to the “pursuit of happiness.” A fat bank account can be a means to these ends, but only a small minority believe that money is a worthy end in itself.

2. Homeownership is the American dream.

In June, a New York Times-CBS News poll found that almost 90 percent of Americans think that homeownership is an important part of the American dream. But only 7 percent of Americans we surveyed ranked homeownership as their first or second definition of the American dream.Why the discrepancy? Owning real estate is important to some Americans, but not as important — or as financially rewarding — as we’re led to believe.

Federal support of homeownership greatly overvalues its meaning in American life. Through tax breaks and guarantees, the government boosted homeownership to its peak in 2004, when 69 percent of American households owned homes. Subsidies for homeownership, including the mortgage interest deduction, reached $230 billion in 2009, according to the Congressional Budget Office. Meanwhile, only $60 billion in tax breaks and spending programs aided renters.

The result of this real estate spending spree? According to the Federal Reserve, American real estate lost more than $6 trillion in value, or almost 30 percent, between 2006 and 2010. One in five American homeowners is underwater, owing more on a mortgage than what the home is worth.

Those who profit most from homeownership are far and away the largest source of political campaign contributions. Insurance companies, securities and investment firms, real estate interests, and commercial banks gave more than $100 million to federal candidates and parties in 2011, according to the Center for Responsive Politics. The National Association of Realtors alone gave more than $950,000 — more than Morgan Stanley, Citigroup or Ernst & Young.

Homeownership is more important to special interests than it is to most Americans, who, according to our research, care more about “a good job,” “the pursuit of happiness” and “freedom.”

3. The American dream is American.

The term “American dream” was coined in 1931 by James Truslow Adams in his history “The Epic of America.” In the midst of the Great Depression, Adams discovered the same counterintuitive optimism that we observe in today’s Great Recession, and he dubbed it “the American dream” — “that dream of a land in which life should be better and richer and fuller for every man, with opportunity for each according to his ability or achievement.”

However, the American dream pre-dated 1931. Starting in the 16th century, Western European settlers came to this land at great risk to build a better life. Today, this dream is sustained by immigrants from different parts of the world who still come here seeking to do the same thing.

Perceptions of the dream today are often more positive among those who are new to America. When asked to rate the condition of the American dream on a scale of one to 10, where 10 means the best possible condition and one means the worst, 42 percent of immigrants responded between six and 10. Only 31 percent of the general population answered in that range.

4. China threatens the American dream.

Our surveys revealed that 57 percent of Americans believe that “the world now looks to many different countries,” not just ours, to “represent the future.” When we asked participants which region or country is charting that future, more than half chose China. Nearly two-thirds of those surveyed mistakenly believe that the Chinese economy is already larger than the U.S. economy — it is actually one-third the size, with a population four times larger. China does own more than $1.1 trillion of U.S. debt, however; it is our largest creditor.

But the problem isn’t just one nation. Japan holds almost $1 trillion of U.S. debt. Britain owns more than $400 billion. In 1970, less than 5 percent of U.S. debt was held by non-citizens. Today, almost half is. Neither China nor these other countries can be blamed for U.S. choices that have placed our financial future increasingly out of our hands.

Still, no matter how much we owe, the United States remains the world’s land of opportunity. In fact, the largest international group coming to America to study is from China — 157,000 students in the 2010-2011 academic year. As recently reported in The Washington Post, the number of Chinese undergraduates at U.S. colleges increased 43 percent over the previous year.

5. Economic decline and political gridlock are killing the American dream.

Our research showed a stunning lack of confidence in U.S. institutions. Sixty-five percent of those surveyed believe that America is in decline; 83 percent said they have less trust in “politics in general” than they did 10 or 15 years ago; 79 percent said they have less trust in big business and major corporations; 78 percent said they have less trust in government; 72 percent reported declining trust in the media. These recent figures are more startling when contrasted against Gallup polling from the 1970s, when as many as 70 percent of Americans had “trust and confidence” that the government could handle domestic problems.

Even so, 63 percent of Americans said they are confident that they will attain their American dream, regardless of what the nation’s institutions do or don’t do. While they may be worried about future generations, their dream today stands defiantly against the odds.

fordm4@xavier.edu

Michael F. Ford is the founding director of the Xavier University’s Center for the Study of the American Dream.

Commenter ToddinHB asks:

How many of the 1% inherited their money, made their fortunes with a sizable trust fund, or made their money manipulating the financial system, without adding anything to the general welfare of the state?

New York University economist Edward Wolff has done the best work I’ve seen on the contribution of inheritance to wealth inequality, and his latest paper, coauthored with the Bureau of Labor Statistics’ Maury Gittleman, is chock full of relevant data on the matter. In 2007, the last year Wolff and Gittleman look at, wealth transfers (mainly inheritances, but also including gifts) made up, on average, 14.7 percent of the total wealth of the 1 percent (more specifically, the top 1 percent in terms of wealth). Interestingly, inheritance’s share has declined over time. In 1992, 27 percent of the wealth of the top 1 percent came from wealth transfers.

Wolff and Gittleman also find that because wealth transfers generally make up a bigger portion of the wealth of poor and middle-class people, they actually reduce wealth inequality, in aggregate. “Our simulations show that eliminating inheritances either in full or in part actually increases overall wealth inequality and, in particular, sharply reduces the share of the bottom 40 percent of the wealth distribution,” they write. So while there’s no doubting that the rich are inheriting a lot of money — 14.7 percent of the wealth of the top 1 percent isn’t nothing, after all — it remains the case that inheritance does not increase wealth inequality.

from the NY Times

SQUARE FEET

Cities See the Other Side of the Tracks

Ryan Collerd for The New York Times

The Reading Viaduct, an old elevated railway line in Philadelphia, would cost $50 million to demolish versus $36 million to retrofit, according to the Center City District, a business improvement group.

By KRISTINA SHEVORY

Published: August 2, 2011

The High Line park, built on an elevated railway trestle inManhattan, has become both a symbol and a catalyst for an explosion of growth in the meatpacking district and the Chelsea neighborhood.

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• Times Topic: High Line (NYC)

Now cities around the country, including Chicago, Philadelphia and St. Louis, are working up plans to renovate their aging railroad trestles, tracks and railways for parkland. Cities with little public space are realizing they badly need more parks, and the High Line has taught that renovating an old railway can be the spark that helps improve a neighborhood and attract development.

The High Line’s first and second sections cost $153 million, but have generated an estimated $2 billion in new developments. In the five years since construction started on the High Line, 29 new projects have been built or are under way in the neighborhood, according to the New York City Department of City Planning. More than 2,500 new residential units, 1,000 hotel rooms and over 500,000 square feet of office and art gallery space have gone up.

“Cities recognize parks are good for their economies. They’re no longer a nice thing to have, but a must,” said Will Rogers, president and chief executive of the Trust for Public Land, a national conservation group in San Francisco.

The area around the park, sprinkled with small offices under 200,000 square feet, has become a draw for start-ups and creative companies.

“I think the High Line is a big attraction. It’s created a lot more buzz to the area,” said Matthew Bergey, first vice president at the commercial brokerage firm CB Richard Ellis in New York. “Like with any destination, people will come if it’s cool and has buzz.”

Though plans in many cities have a long way to go before becoming reality, a point in favor of reuse is that it can be cheaper to renovate old rail structures than to tear them down. The Reading Viaduct, an old elevated railway line in Philadelphia, would cost $50 million to demolish versus $36 million to retrofit, according to the Center City District, a business improvement group.

In Chicago, where a 2.65-mile elevated rail line slices through four residential areas, tearing down the line would be prohibitively costly. With 37 bridges and large earthen embankments, the Bloomingdale Trail, as it is now called, snakes east to west across Chicago and is simply too big to go.

“If you’ve driven around Chicago, you’ll have seen it,” said Beth White, director of the Chicago office of the Trust for Public Land, which is helping to build the trail.

As with other, similar rail lines around the country, passenger and freight trains have not operated on the Chicago line in at least 10 years. The only traffic most of these lines see is an occasional runner or bike rider, even though trespassing is usually forbidden.

The impetus for redevelopment has mostly come from neighbors rather than developers, because the vision is so grand and stretches across entire neighborhoods. “It’s hard for private development to be visionary unless it’s a large-scale development where you can create a community,” said Mr. Rogers, a former Chicago developer. “Instead, you’re responding to a small site and not a larger community.”

After years of grass-roots work, the Bloomingdale Trail is moving forward after Rahm Emanuel, who made completing the trail one of his campaign promises, was elected mayor in February. Over the next year, design concepts and engineering work will get under way. The Bloomingdale Trail will allow bikes and dogs, interconnect with new and existing ground-level parks and cost $40 million to $75 million.

In St. Louis, plans are in the works to renovate a 2.1-mile elevated rail trestle and turn it into a park as part of a larger waterfront revitalization project. The Iron Horse Trestle, estimated to cost $50 million, does not have a timeline. Organizers hope to have the first one-mile phase completed in five years.

“You have to be deliberate if you want this to last. It’ll reflect St. Louis and be unique to it,” said Susan Trautman, the executive director of Great Rivers Greenway District, a public group developing the Iron Horse Trestle.

Despite the High Line’s visibility and help in showing donors and residents nationwide what is possible with an abandoned trestle, most cities realize they cannot mimic it. The park runs through Manhattan, the most densely populated area in the country, and attracted large sums of money from celebrities.

“The High Line is not easily replicable in other cities,” said James Corner, principal of James Corner Field Operations, a New York architecture firm that designed the High Line with Diller Scofidio and Renfro. “It’s not just, ‘Build a cool park and they will come.’ It’s, ‘Build a cool park and connect it to a framework.’ ”

Developers are hesitant to rely on these potential parks as they assemble new projects. In October, Mike and Matt Pestronk pounced on a 10-story office tower next to the Philadelphia viaduct when it fell into foreclosure and bought it for $5 million. The brothers, who had been watching the building for years and waiting for its price to drop, bought it because it was a good deal. The developers plan to renovate the vacant office tower for $25 million and turn it into apartments.

“The rents we project are that it doesn’t happen,” said Mike Pestronk, principal of Post Brothers Apartments in Philadelphia, referring to the viaduct project. “If it does, it’ll help us get higher rents.”

Still, the brothers are trying to improve the area and have done some “guerrilla improvements” to the viaduct, such as weeding and putting down plywood to cover holes, and installing artwork and live video projections on two sides of their building.

Plans for the viaduct are slowly moving ahead after nearly 10 years of grass-roots work. By the end of the year, the City Council is expected to approve a neighborhood improvement district that, among other things, would help oversee construction and fund-raising. As a first step, a small section of the trestle owned by a regional transportation authority would be redeveloped for $5.5 million.

“What we want to do is build the first phase, like New York, and have people say they love it and want to do the rest,” said Paul R. Levy, the president of the Center City District. “We do not need the Mercedes-Benz that they built in New York.”

The city is in talks with Reading International, a public company based in Commerce, Calif., that owns most of the viaduct.

James Corner’s firm is riding his New York success to other cities, even if their projects only marginally resemble the High Line. In Seattle, an old elevated highway that runs along the waterfront and is at risk of collapse during an earthquake will be torn down and replaced with a series of parks, open areas and new transit. Traffic will be routed away from the area. Final designs and a cost estimate will be ready by the middle of next year.

“We weren’t hiring them to come to Seattle to recreate the High Line,” said Steve Pearce, the project manager of Waterfront Seattle, a civic partnership. Our effort is to create a new front porch for the city, a social mixing chamber.”

Atlanta also hired Mr. Corner to help redevelop a 22-mile rail corridor encircling the city. In the next 25 years, Atlanta plans to add 1,300 acres of parks and green spaces, public transit and trails along the necklace, increasing Atlanta green space by nearly 40 percent. The project’s cost is put at $2.8 billion.

“The High Line is a park, and they made a conscious decision not to interact with private development,” said Ethan Davidson, a spokesman for the Atlanta BeltLine, as the rail corridor is known. “Atlanta is the kind of city where one project can transform a city. This very much knits the city together.”

This article has been revised to reflect the following correction:

Correction: August 2, 2011

An earlier version of this article did not mention Diller Scofidio and Renfro, designers of the High Line project in Manhattan.

Posted at 11:00 AM ET, 08/01/2011

A sugar-coated Satan sandwich, with a side of peas, please

By Melissa Bell

The U.S. Capitol building on Monday morning. (Mario Tama/Getty Images)

With a debt deal reached after weeks of negotiations, the country might be breathing a sigh of relief that an end to the political posturing is near. But what posturing it was.

We were going to cover the moon in yogurt. President Obama was a jilted lover left weeping at the alter. There were reports of hobbits and trolls infiltrating the Capitol.

Oh, the merry-making wordplay wound its way straight into this journalist’s heart. Thanks to Rep. Emanuel Cleaver (D-Mo.), chairman of the Congressional Black Caucus, the festivities have yet to end, despite a deal being reached.

Cleaver declared the deal “a sugar-coated satan sandwich.”

What is a Satan sandwich exactly? According to a 2004 Urban Dictionary definition, it’s “The chiefest of hell’s dark delights, it is said that just one bite of it arouses an unspeakable lust of terrific potency.”

I’m not sure that’s what Cleaver meant, or I’ve been following the debt debate all wrong. The Twitter peanut gallery is already gleefully embracing the new meal. It seems to be a bigger hit than Obama’s peas.

This Beelzebub Burger with Mephistopheles Mayo and Lucifer Lettuce on a Ba'al Bun really needs some Azrael Arugula cc: @daveweigelless than a minute ago via web  Favorite  Retweet  ReplyOlivier Knox
OKnox

Nono, he meant seitan. Probably. RT @AndrewKroll: can't get over the fact a US congressman called a bill a "sugar-coated Satan sandwich."less than a minute ago via Echofon  Favorite  Retweet ReplyBrian Beutler
brianbeutler

What's the calorie count in a "sugar-coated Satan sandwich?" Worse than a Beelzebub melt, right?less than a minute ago via web  Favorite  Retweet  ReplyFrank Bruni
FrankBruni

Which restaurant in DC adds a "Sugar-Coated Satan Sandwich" to its menu first? Imagining charred meat, mad hot sauce, crackly/sweat breadless than a minute ago via TweetDeck  Favorite  Retweet ReplyJoseph Weisenthal
TheStalwart

By Melissa Bell  |  11:00 AM ET, 08/01/2011