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.
Michael F. Ford is the founding director of the Xavier University’s Center for the Study of the American Dream.
Read more from Outlook’s Five Myths series:
Few ideas are as central to American self-identity as the “American dream.” Politicians invoke it, immigrants pursue it, and despite unremittingly negative economic news, citizens embrace it. But what is the American dream? We began regular study of how people define and perceive the dream three years ago, and have discovered many misunderstandings worth a second look.