Who's to Blame for the Bust? Me!

Up on time.com today, and in the issue on newsstands tomorrow, is a package on The 25 People to Blame for the Financial Crisis. (25, thanks to Facebook, now being the default number for lists of things.) 

I didn't work on writing the list, but there are nominees notorious and obscure from many fields. But I have a further suggestion: why not blame the media? Or let's be more specific: why not blame me? 

TIME's listmakers did include a pop-culture nominee, TV executive Burton Jablin, who founded HGTV and was behind much of their real-estate-focused programming. It's true that HGTV is a brand leader in its field, with shows like House Hunters helping real-estate agents do their jobs by getting people salivating over houses and treating the buying process as competitive entertainment. On the other hand, this trend had a lot of fathers—A&E, TLC, Bravo and many others had a lot of real-estate porn shows. (At last check, Jablin was the least-blamed candidate among time.com readers.)

But if we're going to blame entertainment TV, let's not forget that the news media did its own part to reinforce the idea that real estate was a runaway money train. Case in point: one James Poniewozik, who in 2005 wrote a cover story for TIME on the country's obsession with real estate, called "America's House Party." 

A little background on the story. I had been pitching the idea for a while of a cover—as is my wont, I was pitching it with the idea of someone else writing it—about how the inflation in home prices had affected America's culture and its attitudes toward homes and money. I was interested in it from more of a pop-culture perspective (see HGTV and the real-estate obsession, above). On HGTV, shows used to focus on how to decorate your home and make it welcoming; now they focused on how to make money off it. Likewise, Americans were looking at homes less as centers of family and hearth and more as the centerpiece of their financial planning. How did that change our culture and psychology? 

I ended up getting assigned to write the piece (assisted by voluminous files from stringers around the country). One directive from my editors was that they were not looking for an article that looked to decide whether housing was in a bubble, settle the argument over whether it was sustainable, or predict what was going to happen to home values in the future. They didn't want to be in the business of calling the market. Which was fine by me, because I was the last guy who should be calling any market. (I once bought Lucent stock.) 

Looking back at the article, there's a lot that I like about it. It aimed to be a snapshot of the mind of America as fixated on real estate at the time, and there were a lot of details that pointed up the feverish obsession. The lede was about a disc jockey in California who was flipping houses, talking at a Taco Bell with a colleague who knew a hairdresser moonlighting as a Century 21 agent: "The girl at the register heard us talking, and she told us she just got her mortgage broker's license."

A wise investor might have read that and concluded it was time to pull out of real estate. There was also a prescient sidebar, by co-Curious Capitalist Barbara Kiviat, on the case for renting. And the story made the point  that real estate was filling a void in America's nervous psyche:

You have to excuse homeowners for getting a little giddy. When they look at the rest of the economy, they see little else to be excited about. Employment has picked up, but wages haven't. Inflation has risen from the grave. The stock market is crawling to get back to where it was five years ago. Savings accounts throw off barely enough interest to feed a parking meter. Companies are cutting pensions, and politicians are making dire noises about Social Security. It's a scary message people are getting: We are heading toward a future in which we will need more money than ever to avert disaster, and there are fewer opportunities to get it. So people see their homes as their last, best hope for prosperity--as not just houses but also lifeboats.

But let's be honest: there was a picture on the cover of a dude hugging his house, with the tagline, "Home $weet Home." The story was also full of anecdotes about people making a lot of money in real estate. It was a picture of a country with a growing number of people banking on real estate. And it reiterated the message that real estate had been shooting up in value.

All of which was true—but didn't it mean it was going to keep going up. But from this, and numerous other stories about the real estate frenzy, plenty of people drew the inference that houses were a rocket to riches, and they had better get on board, all the caveats and mentions of too-easy loans (like the ones in my own piece) notwithstanding. 

In other words, my defensive first reaction, looking at my story is to say that it was just a portrait of where America was at the time. Which was true insofar as it goes. But in retrospect, maybe what America really needed at the time was not a cultural portrait. Or, at least, it needed something else too: a story that did try to call the bubble and anticipate where things were going, that came at real estate from a hard-headed number standpoint and said flatly—this can't keep going forever. (A story, needless to say, written by someone other than me.) 

So there you have it: I am the 26th person to blame for the financial crisis. I can only pledge that, should I be called before Congress to testify, I will not fly in my private jet.