The Great Gatsby is Really About the Housing Crisis
The Great Gatsby got a modern upgrade last week thanks to Baz Luhrmann’s directing, Leo’s acting, Jay-Z’s soundtrack, and Prada’s costumes, but those aren’t the only reasons the film should resonate with a 2013 audience. Gatsby’s Roaring 20’s lifestyle—full closet, extravagant parties, boats, cars, and especially his mansion—has something to teach us about an era of more recent cultural memory: the Clinton-Bush boom years and the Great Recession that followed.
I’m sure you’ve all seen/read it by now, so you know the gist: (The Great) Jay Gatsby rose from economic obscurity to a life of luxury, defined by his towering house and the raucous parties he throws there. He believed his success would be enough to win back the love he had lost: Daisy Buchanan, who married another while Gatsby fought in the war. But even his gorgeous house wasn’t enough for Gatsby to get what he really wanted.
Fitzgerald might not have known it in 1925, but he was really writing a novel about America’s obsession with real estate. It’s common to read The Great Gatsby as Fitzgerald’s attempt to shatter the illusion of the American Dream, but that term, “the American Dream,” wasn’t even used yet at the time Fitzgerald wrote his novel. As an idea, it was clearly a part of the national mindset, and Fitzgerald wanted to tell us something about it. Gatsby is a warning of material obsession, not a celebration of success, and his untimely demise (spoiler alert) seems to cement Fitzgerald’s point: The American Dream is easily mistaken for what it isn’t. There is a long history in this country of confusing the two, and a 2013 audience will surely be reminded of one of our greatest material obsessions resulting in Gatsby-level failure: our houses. Coincidentally, or not, this obsession began just around the time Fitzgerald was writing his novel.
In the shadow of the first world war, two future presidents, Calvin Coolidge and Herbert Hoover, were doing their best to sell a Gatsby-like dream to the masses. The men, then Vice-President and Secretary of Commerce, teamed up with Marie Meloney, the editor of a popular women’s magazine of the time, The Delineator, to launch the Better Homes in America movement in 1922. The home-ownership campaign was designed to address the housing shortage caused by the extreme circumstances of war – a year and a half without domestic building and millions of men returning from battle overseas. The premise of the campaign, a partnership between the government and several industry groups, was to keep America from economic and cultural disaster by inspiring Americans into dreaming of homeownership.
As the pages of The Delineator were filled with short stories glorifying home-making, a national advisory council led by Hoover and Coolidge began organizational work in Washington, DC. Local committees were encouraged to set up Better Homes Demonstration Weeks in their towns. The main attraction of these would be a “model home” available for the public to visit – an example of a proper home, as defined by the council. Guidelines were written about how many feet of yard each house should have, how many windows should be in each room and in what walls, and helpful tips like: “Stair climbing is reduced by having the laundry on the same floor as the kitchen instead of in the basement or cellar.” During the campaign, a model home was even built on the lawn of the White House.
Fitzgerald’s novel was set in 1922, the same year the Better Homes campaign began. Imagine, those flappers who attended Gatsby’s parties, wandering through a perfect model home, with fifteen feet of yard on each side, and the windows all in the right place. Was this their dream—to have the laundry room and the kitchen on the same floor so the number of stairs they had to climb per week might be reduced?
Throughout the following decades, the federal government would become a more formal mouthpiece for homeownership. Presidents with legacies as diverse as Hoover, Lyndon B. Johnson, and Ronald Reagan all could agree that the dream of homeownership was worth promoting. With government incentives, the development of the suburbs and the rise of the American consumer culture, homeownership rates rose steadily in the ‘50s, ‘60s, and ‘70s. Following a pair of recessions in the 1980s, homeownership rates experienced a small dip before steadying around 62 percent, a figure maintained into the 1990s—this flat line, instead of an up-tilted one, not a housing shortage, nor a poor economy—was enough to convince the federal government to take action. In 1995, President Clinton made a pledge to increase the homeownership rate in the country to a record 67.5 percent by the year 2000.
“More Americans should own their own homes, for reasons that are economic and tangible, and reasons that are emotional and intangible, but go to the heart of what it means to harbor, to nourish, to expand the American Dream,” President Clinton said, making the direct connection between our houses and the dream.
Clinton hoped to give American families living in poverty a way to save, build wealth, and pull themselves up the American class-structure. His administration realized that these families might not have sufficient incomes or savings to put a down payment on a house or to maintain monthly payments at standard loan terms. But instead of looking to the root of the problem, encouraging a higher living wage, for instance, the administration partnered with the real estate industry to come up with another solution. An official Department of Housing and Urban Development planning document produced during a meeting between private and public housing organizations in 1994, praised “the creativity” of new financing strategies cropping up in the mortgage industry to address these “barriers to homeownership.”
That creativity bred the financial products and practices that led to the market crash of 2008 (think subprime mortgages and mortgage-backed securities). One of few similarities between Clinton and his successor, George W. Bush, can be found in their homeownership strategies. Bush, too, advocated for the private financial sector to develop more risky mortgage products, cloaking his request in charity: “Corporate America,” Bush said, “has a responsibility to work to make America a compassionate place.”
But this request didn’t take compassion at all. Companies could help potential homeowners achieve the American Dream and profit at the same time. In many ways it was a perfect scam, a bipartisan solution to poverty, class disparity, and wage stagnation that made industry lobbyists as happy as local constituents.
The term “the American Dream” was actually coined six years after Gatsby was written, in 1931, during the Great Depression. Historian James Truslow Adams’ Epic of America, was an international bestseller that detailed America’s history. In Epic, Adams became the first person to specifically name that American belief in equal opportunity, struggle and reward. The “American Dream,” he wrote,
is that dream of a land in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement … It is not a dream of motor cars and high wages merely, but a dream of social order in which each man and each woman shall be able to attain to the fullest stature of which they are innately capable.
As Adams describes the well-known sentiment, he, like Fitzgerald, offers a warning as to the nature of this dream. He writes that it “is easy to say a better and richer life for all men, but what is better and what is richer?” In other words, owning a house is not actually equal to the achievement of the American Dream, despite what you might have been told your entire life.
At the height of the housing boom, home-ownership for all had replaced Adams’ goal of a society that would truly offer these middle and lower class Americans equal opportunity to earn and succeed. The dream was no longer being dreamed. Americans stopped asking “what is better and what is richer?” They just swallowed the prescription for success whole, and signed a mortgage.
Here’s the really incredible part about The Great Gatsby: Fitzgerald saw, even before the spawn of suburbia, before McMansions and subprime lending, the danger of mixing up these symbols with “the dream.” Fitzgerald reveals toward the end of the novel that Gatsby was a bootlegger, who made his millions illegally. We do not live in that social order that Adams defined, a myth that has been propagated for at least the past century: America, the land of equal opportunity. When the homeownership rate became more important than that dream, like Gatsby, we built our mansions on a lie.
Blurring the numbers on millions of mortgage loans convinced us the dream was real, but it didn’t last. The homeownership rate in the U.S. hit record highs, almost 70 percent in 2005, just before the market came crashing down. Millions of Americans lost their homes to foreclosure. Between 2007 and 2010, median net wealth in the U.S. declined by almost 40 percent. The greatest loss was felt by families whose homes had been their major financial asset – that same middle-class who thought that their homes were the achievement of their dreams.
Now that our Gatsby-like mansions are foreclosed and the party of the Clinton-Bush years has long died down thanks to the Recession, Luhrmann’s film gives us the chance to reconsider Fitzgerald’s prescient message in our own context. Will we listen this time?
Maggie Mertens is a writer who lives in Brooklyn and is working on a book about homeownership in America.