Harvard Professor Finds Shocking Facts

In a remarkable study ProfessorRAFAEL DI TELLA of Harvard Schol of Business has examined South American land owners who acquired their land from being squatters. This study gets at the basic premises which are harder to establish in a country where land ownership is the norm. In Buenos Aires where the poverty level is high and land ownership is not high, this select set of circumstances presented themselves to the eyes of the researchers. It provides a very pure base from which to examine the difference in specific attitudes and outlooks between people who own land and those who do not.

"The researchers asked survey questions to gauge the squatters' stance on beliefs common to a capitalist society. For example, did the squatters agree that it is possible to be successful on one's own, or did they think it necessary to have a large group supporting one another? To what degree did they believe money was important to be happy? Do people who put effort into working end up better, worse, or much worse than those who do not? Finally, did the squatters believe that other people could be trusted?"

[DiTella, 2007]

What makes this report special (?) or significant is the base review set of the data, it's rather like being able to answer the question of aggression by having some cave people to speak with. They'd have little cultural or socio-economic flavorings to their responses, and that would be significant because it would show a base from which other studies could then proceed. DiTella has discovered a rich set of very basic and uninhibited respondents to bring out specific points. These close to the root responses will be available for economists, for example, to examine in light of Keynesian theory. They will be available to financiers, as an example, to consider in light of diminishing returns. This report is significant for the provided data is root in nature.

If you are like me you grew up hearing about owning not renting, and in the U.S. it is emphasized to own a home, but many people do not. While exacting statistics on home ownership are huge and therefore likely inaccurate, there is much information being propagated by the National Multi Housing Council to suggest that owning a home isn't for everybody, nor is it necessarily good for the U.S.. "A growing number of economists worry that the current level of consumer indebtedness, including mortgage debt, is unsustainable, and that a pending consumer credit crash could usher in the next recession or prolong the current economic slump. We learned that lesson the hard way in the mid-1980s when low- and no-downpayment mortgages led to an increase in foreclosures when the economy turned down. Today the warning signs are mounting. Low- and no-downpayment mortgages are back; marginal households are being pushed into purchasing homes; and consumer credit is reaching all-time highs. In addition to credit card debt, Americans hold more than $700 billion in home equity loans and have cashed out more than $100 billion from their homes by refinancing. No one gains when people are put into a financial situation they cannot sustain, and the economic signs suggest now is not the time to "push the homeownership (and credit) envelope."

[NMHC, 2007]

Professor DiTella at Harvard has done many people a tremendous good in this report. The far reaching ramifications of this report will undoubtedly illustrate its value, but for the time being, we have a set of responses which will aid in clarity and begin to help people re-think the hype about home ownership and where it stands with them. Where do you stand on the issue of owning a home? Write Dana at: drichard1@hotmail.com to let him know what you think about this subject.