The fallout that started with sub-prime home loans spread to both Wall Street and Main Street. It ultimately caused the federal government to pass a $700 billion bailout bill to avert another Great Depression. How did we get here?

There are many factors, but the overarching reason is that Americans have a fixation on home ownership. Owning a home is part of the “American Dream.” People rationalize it by thinking about the tax breaks and the fact they have equity. And all this was buoyed by an irrational faith that housing prices will always go up.

“A home is a great investment,” we’re told by real estate agents, loan agents, and other homeowners. But let’s think about the key word “investment.” No intelligent person would plunk down an equivalently huge percentage of their net worth on a stock without pouring over the financials and analyzing risk. But people don’t think about their home the same way. Homes are different—they’re safe as, well, houses.

But buying a house is an investment—the biggest one most people will make in their lifetime. Just as overleveraged speculators bought overpriced stock in the 1920’s bubble market, overleveraged homebuyers paid more than they could afford for overpriced houses in a bubble market. Adam Smith would say they deserved to lose their investment because they made a bad decision. But when we’re talking about someone’s home, it’s just not that simple.

People made bad decisions, but they were also given bad advice from an institutionalized fixation on home ownership. The “Ownership Society” is how President Bush described it. “We’re creating…an ownership society in this country,” said Bush in October 2004, “where more Americans than ever will be able to open up their door where they live and say, welcome to my house, welcome to my piece of property.”

But while America has had a political, financial, and cultural drive toward home ownership, Europe has largely stayed a population of renters. Indeed, many Germans, French, and Dutch see private home ownership as aristocratic. One big difference between the U.S. and Europe is how FDR and his New Deal tackled the issue of housing. While Europe decided to build “council houses,” basically public housing, FDR created Fannie Mae to lower the cost of home mortgages.

This fundamentally different approach demonstrates how Roosevelt can be seen as a fervent capitalist when viewed from the other side of the Atlantic, but as a socialist by American conservatives. It also reveals how the seeds of American ownership-entitlement were sown so long ago that most people don’t remember any alternative.

Renting an apartment doesn’t make you less of a person. Not driving a SUV doesn’t make you weak. Taking mass transit doesn’t mean you’re a loser. Among the many paradigms Americans need to shift is that a house in the suburbs, 30, 40, or 50 miles outside the city, is not sustainable. What we call the American Dream needs to be reevaluated.