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A hero for speculators: Davy Crockett
The 19th century pioneer knew a thing or two about flipping real estate. But he probably wouldn't have made the same mistakes some are making these days.
By Jim Jubak
What this country needs is a new national holiday.
We have a holiday to honor the founding fathers, with their stoic dedication to republican virtue. We honor a leader who showed moral strength under the extreme stress of the Civil War. We honor a visionary who had a dream of a better America.
But for the speculators, the gamblers, the go-for-broke players of long shots who bet the mortgage money on the 100-1 long shot? Nothing.
I have a nominee: David Crockett, born on Aug. 17, 1786. I can't think of a better hero for our times -- when real-estate speculation has become required backyard chatter, when Wall Street can't wait to throw money at lenders of any stripe and when the derivatives market is so busy creating new products to control risk that it can't be bothered to figure out the risk in the paper products it has already invented.
Why Crockett? If you know of Crockett at all, you likely know him as a coonskin-hatted man of the backwoods, and as a hero at the battle of the Alamo in Texas where he died fighting against hopeless odds. But Davy Crockett was much, much more.
A fast learner
Crockett was born into hardscrabble poverty on the North Carolina or Virginia frontier (there was dispute about which colony, and later state, actually had the better claim to the territory). But Crockett quickly learned two important lessons: First, there was a lot more money to be made in buying and selling land than in farming it; and second, to make money speculating, it sure helped to be politically connected to the powers that ruled the banks, the statehouses and the nation's capital.
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Crockett, from all accounts including his own, was a gifted stump speaker with the ability to convince his rural neighbors that he was one of them and that his opponent was a tool of the rich and powerful. He promised that he'd work to make sure his constituents got the riches they were due if they sent him to Washington. The evidence argues that Crockett was sincere. When elected to Congress, he did work for a land bill that would've given many of his poorest constituents ownership of the land they had settled as squatters.
But Crockett had also seen how the connected were able to buy land cheaply on credit, then quickly flip their purchases for a profit. He'd done that himself on a smaller scale by selling his farm, as his father had done, to move West to cheaper land. He finally wound up in Tennessee.
There Crockett had either the misfortune or the bad judgment to go up against the Democratic machine that General and later President Andrew Jackson had built on the Tennessee frontier. Facing the tough tactics of Jackson's political chief, James Polk, Crockett was first maneuvered onto the sidelines in Congress and then defeated in a bid for re-election.
With Tennessee firmly in the hands of his political opponents, Crockett did what so many Americans of his time did when they needed to revive their fortunes: He lit out for the frontier. He went to Texas, where he hoped to become a land agent and either work for a speculator or become one himself. He called Texas "the garden spot of the world," where anyone could make a fortune, where so much land was available at a small price. In fact, it was Crockett's hope to revive his political career in Texas -- the first step toward making money in real estate -- that led him to join the Texas volunteer forces and that eventually put him at the Alamo.
An icon for our times
Why Crockett now? Crockett's career combined politics and real-estate speculation, showed that no risk was too big, emphasized flipping assets and left the grinding hard work of building real wealth to others. He is exactly the icon for our times.
Today, despite all the worry about a "housing bubble" (or housing froth, in Alan Greenspan's words), there are few signs that the housing market is cooling down. In June, existing homes sales set a new record. The median price of an existing home rose at its fastest annual pace in almost 25 years, 14.7%. That was just short of the 15.1% year-to-year pace set in April.
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