Wages remain stagnant but housing prices, propelled by speculating investors, are shooting upward. How will the housing market avoid crashing after all the investors get tired of holding on to their properties? Well, this is where we start to look at 2007 again…
Here We Go Again
Ted Rall
Ted Rall is a syndicated political cartoonist for Andrews McMeel Syndication, WhoWhatWhy.org and Counterpoint. He is a frequent contributor to The Wall Street Journal, a graphic novelist and author of many books of art and prose, and an occasional war correspondent. He is, recently, the author of the graphic novel "The Stringer."
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«Guess which one gets promoted ?» The chaps outside cleaning the windows – oops, the platform seems to have swung out of view : https://www.youtube.com/watch?v=voiHvPbLUvI ?
Henri
More debt, the sure cure for an economy strangled by debt.
What other tool do the bankers have to drive the nail home?
Any other cure would reveal that the misery they inflicted was not necessary from the start. This admission would unravel their excuse for being allowed to breathe.
Speculators perhaps?
Don’t forget the tried-and-true illegal foreclosure program.
http://tinyurl.com/ofujll2
Hey, if the DoJ of President Twelve-Dimensional-Chess says its too complex to prosecute,
then you have clear sailing!!! http://tinyurl.com/ntj6mov
And, from the real-world predators, err..rrr innovators: mobile homes!!!
http://tinyurl.com/n2mp4ek
Don’t forget the tried-and-true illegal foreclosure program.
http://tinyurl.com/ofujll2
And compare the resources that the ordinary homeowner has to contest the issue to those possessed by the bank in question when those predatory practices come to court !… 🙁
Henri
Hey, if the DoJ of President Twelve-Dimensional-Chess says its too complex to prosecute,
then you have clear sailing!!! http://tinyurl.com/ntj6mov
Hey! It’s *Thirteen*-Dimensional-Chess! Give the grandmaster every dimension he is due!
And, from the real-world predators, err..rrr innovators: mobile homes!!!
http://tinyurl.com/n2mp4ek
The powers that be want empty houses bulldozed, rather than auctioned off or rented out.
Housing can’t be both a good investment and also a cheap commodity that everybody can have.
http://money.cnn.com/2014/11/13/real_estate/cleveland-destroying-homes/
http://www.slate.com/articles/technology/future_tense/2012/03/vacant_houses_owned_by_the_federal_home_finance_agency_should_be_destroyed_.html
http://abcnews.go.com/US/destroying-detroit-city-demolish-10000-homes/story?id=13830479
“Putting all these vacant homes on the rental block will drive down prices in already depressed markets.” Housing costs must not be allowed to drop. Your landlord is entitled to ALL your money.
«Creative destruction» à la Schumpeter ?…
Henri
The question I have, which is beyond my math abilities…
If home ownership cost is rising 13 times faster than wages, what are the mathematical realities?
Seriously.
How long before it becomes mathematically impossible to afford a house?
By what rate would salaries have to increase/housing costs have to decrease/both for a house to become affordable?
> what are the mathematical realities?
We keep making new people, but we aren’t making any new land. Every house we build decreases the amount of land available to grow food or to provide habitat for those we share this planet with.
Malthus was right – in the long run we’re screwed. We’ve staved off starvation by finding new ways to produce food, but we’ve already reached the point of diminishing returns.
Dang I got wrapped up listening to myself talk & didn’t answer your question. (Like that’s never happened before)
Let’s say we started out even & this 13x has been going on for one year. Okay, if we want to close the gap by the end of next year, then our salaries will have to increase 169x as fast as they did previously.
If, OTOH, housing prices continued to rise at the 13x rate, and our salaries increased at a rate of 14x it would take around 34.6 years to catch up.
Home prices should reflect supply and demand – neither the supply nor the demand are fluctuating so rapidly – so why are prices? Obviously there are other forces at play. If you want to know what those forces are, the first thing is to ask cui bono?
Anybody seen the Invisible Hand around lately? He hasn’t been doing his job, yet the supposed capitalists still swear by him. I call those people “Capitalarians” – those for whom capitalism is a religion, rather than a science. Like many religionists, they’ve never actually read their holy books; nor do they understand how their religion is supposed to work. Time and again they see their rituals fail…
… yet still they believe.
They repeatedly cut taxes on the rich while claiming it will benefit the poor. Yet for decades we’ve seen the rich get richer while the poor get poorer. Their answer? Cut rich peoples’ taxes even more.
They deregulated the banking industry and the entire world’s economy collapsed. Their answer? More deregulation.
Call it what you will, CrazyH – capitalism or capitularianism – it sounds like a religion that delivers – at least for the super rich that are both its devotees and its clergy. Others do not – and are not supposed to – get in the door….
Henri
That’s ANOTHER great way this analogy works.
Sermon stuffers like to refer to themselves as “Shepherds” and their congregations as their “flock”
The sheep follow along meekly, always believing that this arrangement is for their benefit.
Note that I have any direct experience of this field, CarzyH, but I have never understood that shepherding was a profession that was run for the benefit of the sheep…. 😉
Henri
The proposition that «… the sheep never think that the arrangement isn’t for their benefit» would seem to contradict the proposition that «[w]e can see the end of the road, and we all just keep trudging along, pretending that, somehow, we’ll be okay». Surely, if «[w]e can see the end of the road», then it can’t be the case that we «never think that the arrangement isn’t for [our] benefit» ! Perhaps the point here is that it’s not a question of «thought» – i e, we avoid thinking about these matters because doing so (and acting upon these thoughts) would mean confronting immediate dangers, rather than future ones, which are easier to dismiss….
Henri
Correct me if I’m in error, but I think I was taught that lambs are led to the slaughter, but sheep to the shearer. (Not that it makes either less of a victim.) 🙂
But, mein verehrter Lehrer, what about mutton (Hammelfleisch) ?…
Henri
😀
http://mideastfood.about.com/od/tipsandtechniques/f/lambmutton.htm
As pointed out earlier, the sheep never think that the arrangement isn’t for their benefit.
The arrangement IS for the sheep’s benefit. Right up until the slaughterhouse doors. I think that’s where the middle class is right now. We can see the end of the road, and we all just keep trudging along, pretending that, somehow, we’ll be okay.
Capitalism is NOT a science.
At best it’s an economic system.
Essentially its a con job.
Today’s implementation is certainly a con job.
Specifically, a pyramid scheme. Those at the bottom think they have the same opportunity to get rich as those at the top.