We can save the economy.
We have to throw the landlords under the bus to do it.
At this writing, 26.5 million Americans have lost their jobs to the national lockdown necessitated by the COVID-19 pandemic. Added to those who were unemployed before the coronavirus crisis, we will soon face jobless numbers equivalent to or greater than those at the height of the Great Depression. What’s going to happen to them? More specifically, where will they live?
Drawing from the experience of the collapse of the USSR in 1991, the droll writer Dmitri Orlov mused on what would happen here in a similar scenario. Surviving the fall of the Soviet Union, he concluded, would be easier than it would be to make it through the then-future implosion of the United States of America.
“In the United States,” Orlov wrote in 2011, “very few people own their place of residence free and clear, and even they need an income to pay real estate taxes. The real owners of real estate in the U.S. are banks and corporations. People without an income face homelessness. When the economy collapses, very few people will continue to have an income, so homelessness will become rampant. Most people in the U.S., once their savings are depleted, will in due course be forced to live in their car, in some secluded stretch of woods, in a tent or under a tarp. There is currently no mechanism by which landlords can be made not to evict deadbeat tenants, or banks prevailed upon not to foreclose on non-performing loans.” Residents of apartments in the former Soviet Union faced hardships, but no one evicted them for nonpayment of rent. Private property rights were valued less than human lives.
Avoiding a mass-eviction scenario must be the top priority of American political leaders.
Aside from mass human misery, the downsides of allowing banks and municipalities and landlords to evict large numbers of people became evident after the evictions and foreclosures of millions of homes following the 2008-09 housing crisis. Every foreclosure drags down the property value of neighboring homes. Abandoned houses become meth labs.
But let’s not forget about mass human misery. Even if you’re rich and not a humanitarian, the thought of tens of millions of homeless people wandering streets and highways, desperate and hungry, can’t possibly make you sleep soundly. Property crimes and violence designed to separate people from their possessions will soar unless we keep people in their homes, safe, fed and warm. And don’t forget about the coronavirus. Even after two years from now, when there may or may not be a vaccine, many of the poor will be uninsured and won’t be able to afford medical care. Kicking them out of their homes will spread the virus.
America needs a rent and mortgage holiday, not a lame moratorium that kicks the can of mass evictions down the road for a few months. That includes commercial rent. Empty storefronts become targets for burglary and squatters. Some become drug dens. Arson fires consume them and neighboring homes. Until COVID-19 is in our rearview mirror, we need everyone and everything to stay put for health reasons. Afterward we want to give the economy a chance to recover. We don’t need blight. We want restaurants and other businesses to reopen. We want individuals to return to work, not starve in the streets. Individuals and businesses who can’t afford it should withhold rent from landlords and mortgage payments from banks, without penalty, until both the public health and the economic crises are over.
What about the banks and landlords? I’m not suggesting that they should be stuck with the whole tab for COVID-19. Municipalities should waive real estate taxes. They should receive relief to cover their utility and maintenance expenses. Lobbying organizations for property owners point out that their members often have underlying mortgages themselves; those mortgages too should be subject to the payment holiday. Banks should receive infusions of interest-free cash from the Fed. But the U.S. can no longer afford to let these entities continue to collect real estate profits as usual.
Landlords should take the biggest bath for the simple reason that they are social and economic parasites. Value is added via the production process; landlords add no value whatsoever. If a revolution were to turn renters into homeowners by transferring titles, and abolish bank liens and property taxes and so turn homeowners into full owners, no one would miss landlords. Former renters and mortgage borrowers could easily assume the cost of maintenance that they currently pay to landlords and banks for pennies on the dollar.
You probably know a nice landlord. My father-in-law was one. I used to sublet a room in my apartment so I could make the rent, which made me a sub-landlord. But part of the reason my rent was too high was that I could sublet that room. Landlords are unnecessary at best, pernicious at worst.
In part, eviction is a remedy: it allows a property owner to try again with a new tenant. In a broader sense, it is a threat to remaining renters: unless you pay me, I will throw you out. That threat is the ultimate expression of the enclosure of the commons. I own this. You do not. Therefore I can force you to leave.
A depressionary spiral during a pandemic is no time to prioritize property rights. Eviction is a national suicide pact.
In 2014 a boy broke into what he thought was an abandoned house in my hometown of Dayton, Ohio. In a closet he found the mummified body of the homeowner, who committed suicide five years earlier out of despair that his $10,000 house had been foreclosed upon. He needn’t have bothered. The bank was so overwhelmed with newly acquired properties due to mass foreclosures that it never bothered to send anyone to investigate or take possession.
The guy died for nothing.
The last thing we need now is a million more like him.
(Ted Rall (Twitter: @tedrall), the political cartoonist, columnist and graphic novelist, is the author of the biography “Bernie.” You can support Ted’s hard-hitting political cartoons and columns and see his work first by sponsoring his work on Patreon.)
12 Comments.
The guy who killed himself? I suspect it’s possible he simply didn’t want to live anymore. Eviction, whether you actually end up on the sidewalk or are told only that “some guys are coming,” is pretty much the end of the line emotionally regardless of whether there’s a knock on the door or not. If you don’t have anywhere else to go, you’re left with the clothes on your back and whatever you can carry away. With luck–and if you had luck, you wouldn’t have gotten evicted–you have a big enough car to load things into. How much can the average person carry in two hands indefinitely? Maybe 15 pounds per side? A 30-lb. backpack? Sixty pounds sounds like a lot, until you realize a yearbook weighs about a pound. Your laptop? About five. Cat? That’s 10, give or take. Add the carrier and a little food, and you’re at 15 easy. Essential documents, a toothbrush, the pen your grandfather gave you at high school graduation? (Oh, by the way, at the shelter, you’ll be forbidden to bring any of that in: the pen could be a weapon. But don’t worry. What the people running the shelter lack in basic human decency, they also lack in compassion and intelligence.)
However, in this column’s case, I think you are not looking deeply enough into the problem. I would suggest that everyone who loses their job–sorry, everyone who is “right-sized right out the door”–turn the knob up to 11 and rip it off.
What happens to the economy if 26 million people stop paying rent? And stop paying their credit card bills (after maxing them all out)? And stop paying their student loans? And then declare bankruptcy? Every. Single. One. Of. Them?
Your credit rating? Oh my God. Like was once said in “Get Fuzzy.” You’re dimmer than a one-star restaurant.
If you think your credit rating will help you now, you are beyond all hope, friend.
As the Peter Capaldi incarnation of Doctor Who said in one episode. “Do you know why I always win at chess? Because I have a secret move. I kick over the board.”
So kick over the board. If you’re about to lose everything, why not deliberately push the system to its breaking point? What have you got to lose? Dignity? Oh that died a long time ago. It did for me, at least. So go on welfare. Screw up the paperwork. Resubmit it. Tell them you need assistance filling it out. Tell them you don’t understand it. Go to the doctor and tell him it hurts when you wave your arm like this. Ask a lot of dumb questions politely of everyone they send you to. Make everything take a long, long time. Use the bathroom a lot in government buildings. Fart loudly in waiting rooms. If you feel like crying, do so. Cry a long time. Collapse if you have to and have a good cathartic cry on the floor. If they put you on a computer, take a long time to fill everything out. Break the pencil point and take something like five minutes sharpening it back to the finest point you can manage. Aim for a one-atom apex on that sucker. …
When I go under this time? I’m taking everyone I can with me.
“Residents of apartments in the former Soviet Union faced hardships, but no one evicted them for nonpayment of rent.”
…Presumably because no one was living in rented apartments. They were simply allowed to privatise the apartments the state permitted them to live in earlier, and then in many cases they were conned or forced out of them, but that was indeed not for nonpayment of rent. It was enough for the homeless population to explode from 150 thousand to 4 million, though it could, of course, always be worse, and perhaps it will be in your country. It’s not that human lives were valued more (in 90s Russia? ha!), it’s that this particular threat angle didn’t exist yet. (One might add that private property rights were indeed valued at very little as well, which certainly didn’t help when families got illegally thrown out of their property.)
Maintaining the stock of housing was certainly not among the success stories of the Eastern block.
For individuals, there was a clear lack of incentive to invest in housing as they had only a weak claim to ownership vis-a-vis the state. Conversely, the state tended to invest mostly in those somewhat ugly huge concrete apartment blocks – in keeping with the official fetish for mass solutions over individualized “bourgeois” luxury.
So when it came to the rush to plunder anything and everything of value – I believe you are correct, housing just wasn’t that high on the list. Though what you are saying is that they got round to it as well eventually.
Nowadays In the U.S. it may be the exact opposite?
The Federal government also needs to pass a law that excludes March through at least the end of the year from things such as credit scoring
Many States have huge unemployment insurance backlogs. Delays of at least two months are not uncommon. These same States are running out of money which will create additional delays or partial payments.
The stimulus checks are still going out, and officially expected to take until September to send them out. I expect corrections to these payment will continue for months afterwards.
Millions of people are going to have zero income for at least 2 or 3 months. Just wait, every news outlet will have stories about people returning to work after being unemployed, and having their first new paycheck arrive before their first government payment.
Well, yes.
Still, there are some tricky technical issue involved… so let’s imagine we somehow get organized and manage to transfer ownership of homes from the absentee landlords to those who actually use them. Whose “property” did we just confiscate?
Say a given home belonged to some financial entity, itself owned by another entity and so on down the rabbit hole. After they taken their “bath”, a lot may happen: pension funds may stop paying out money. A coalition of lender countries may start confiscating stuff, so world trade grinds to a halt. Uncharted territory (btw not an argument not to do this, just to also somehow address possible consequences).
Say a given home belonged to someone who worked for decades to set some savings aside. Considerably less moral clarity. Should we really just take it all? Note that we are now specifically penalizing those people who decided to sink what little money they could grab from the machine into physical buildings. What about those who instead “invested” it into bits of paper that say they own a part of something intangible (or are hoarding gold like leprechauns of lore)? Are they somehow less parasitic?
Therefore eventually one would have to confiscate not just buildings-owned-on-paper, but essentially all “property” that cannot meaningfully be held by an actual person: land and rivers, factories, malls, airports, universities, so-called intellectual property, and so on. Rent is extracted on pretty much every transaction these days by absentee owners in all aspects of life…
Why confiscate anything? A rent and mortgage holiday sounds like the right idea to me. Though perhaps the landlords could be compensated by the government, assuming it can somehow find the money – perhaps in the defense budget? But if it really just cannot then preventing the described social catastrophe should still take priority. As for assigning “parasite” roles, that is surely one of the most disgusting and petty aspects of Western economical puritanism, both left and right. Somewhere, someone might be living better than they deserve! I, for one, wish that all people could be parasites, if it were only possible to attain that blissful state of society without crashing the thing they would parasite off.
You’re right, Ted (mostly) stopped just short of confiscation in the article (though it is kind of implied).
However, having a renter who does not pay rent and cannot be evicted turns home ownership into a largely meaningless paper deed.
Likely, prices for homes would plummet as a consequence. Arguably a positive for (inter-generational) fairness. Still, what’s left of the middle class has most of their savings in home ownership…
Regarding parasites, the issue for the left isn’t so much morality, it is regulatory capture: Essentially e.g. US Senators are almost all either directly or through their major donors connected to some business practice/scam that siphons a large cut off the top of a section of life. Most of that are (near-)monopolies on everything from tomato ketchup to credit cards, telecommunications, military contracts – and indeed concentrated home ownership through mass evictions.
These guys then happen to pass laws that further shield those conglomerates from competition while making sure the rest of us are subject to market forces.
The sheer amount of cuts they take – which are extracted, not re-invested – has driven the system itself to the point of collapse, even in the absence of epidemics…
Andreas raises an interesting point. Apply ît to the larger scale. What happens when we can no longer service the collective global debt? How much longer until we reach the point where there just isn’t enough money left to go around? Do the national economies start collapsing like dominoes?
All original title is by violence.
Money is the violence of diremption.
Money is the symbolic representation of a conceptual object of belief held by those who facilitate exchange with it.
The greatest theft of property is the theft of slaves from their independence.
The greatest theft of property from Americans in the United States history may have been the post civil war theft from slave owners of their human property.
Who mourns the failure of the 13th Amendment to abolish slavery? The states still reserve the right to themselves to own slaves and to lease them to those who may no longer legally own them.
I am amused by the opposition to theft by people naively and innocently claiming rightful shares of ownership of the proceeds of greatest thefts in history, amused almost as much as by the “moral” opposition to civil violence within the world’s the greatest purveyor of violence in the world.
The “lawful” evictions during the 2008 recession left homeless people in the streets and empty houses declining into uninhabitablity, all in the name of the “market discipline” imposed by the least disciplined masters of money.
Black Sabbath:
“A politician’s job they say is very high
For he has to choose who’s got to go and die
They can put a man on the Moon quite easy
While people here on Earth are dying of all diseases”
“Even if you’re rich and not a humanitarian, the thought of tens of millions of homeless people wandering streets and highways, desperate and hungry, can’t possibly make you sleep soundly.”
I suspect there are people who are already getting erotically aroused at the thought.
And today was the 50th anniversary of the Kent State shootings. The world is a very cruel place. Those who commit atrocities are rarely punished, and those who are the victims rarely force the issue. So the atrocities continue.
The state kills with impunity.
No person is held accountable for Kent State, the assassination of Fred Hampton, or the millions killed in the name of (imperial) democracy.
People still watch Rambo movies in order to luxuriate in the lust for vengeance for the alleged crimes of Vietnam against America’s democratic benevolence.
That Rambo is still profitably relevant means the situation in some quarters is absolutely hopeless.