Tear Down the Ghetto: The Price is Wrong
by BAR executive editor
Glen Ford
"If these ghetto houses cannot be financed at the bubble
prices demanded, then they must be torn down."
The final crisis of capitalism is no longer looming: it has
arrived with all the mad presence of a six-foot-seven transvestite at the head
of the parade at the stroke of midnight in Greenwich Village on Halloween.
Here's the latest criminal enterprise hatched by the ruling
sectors of U.S. society: tear down all that overpriced housing, the stuff that
was only recently built but can no longer be financed for sale. No, don't
convert it to useful purposes as rental units or reasonably-priced family homes
to satisfy the desperate needs of millions of families - and of people who wish
they could successfully constitute themselves as households in this jungle-like
environment. Just make it all go away, with the federal government paying the
bill for the massive destruction.
It is now proposed that the "excess" housing stock of the
United States be knocked down, bulldozed until a renewed shortage of shelter
will render the housing that survives worth something close to the prices
advertised before the bubble burst.
It has come to this: The U.S. economy can only heal itself
by destroying those few products it can still manage to create. This is what
happens when pure capitalists rule society, the people with no connection to
actual production of goods and services, but only to the uses of money, or the
recently coined phrase "moneyness" - stuff that can be made to act for a while
as if it were money. Like the $516 trillion in "derivatives" that big banks
have to hold on to because nobody knows what's in these strange "instruments" -
which were just as good as money as long as financial institutions pretended
they really were money-like.
"The U.S. economy can only heal itself by destroying
those few products it can still manage to create."
At some point, the derivatives will have to be disposed
of, but there's a problem. The yearly gross product of the United States is
only about $17 trillion, and the entire planet only produces about $50 trillion
in goods and services a year. Therefore, nobody can possibly bail out ten times
the Earth's worth in derivatives.
But the capitalist fools can start tearing down some
houses.
The Wall Street Journal's Holman W. Jenkins, Jr., in
the April 2 issue, suggests "using tax dollars to buy and demolish foreclosed,
unoccupied or half-built houses in selected markets," thereby driving up
prices by lowering availability. Jenkins points to ghettonomics - government at
its most destructive and least responsive to the citizenry - as the emerging
business model. "In highly depressed housing markets," Jenkins quotes
Federal Reserve Chief Ben Bernanke, "the worst-quality units are often
demolished to mitigate safety hazards and reduce supply."
But Jenkins' is not concerned about safety, only with
keeping supply down and price up. For example:
"Baltimore has been praised for efforts to keep borrowers in
their homes, but little mentioned is a program of demolition of foreclosed
homes. Cleveland spends $6 million a year to demolish buildings. Dayton plans
to demolish 550 this year. Only a small mental adjustment is required to begin
aiming these bulldozers at ‘new' homes too. Get over it."
What the misanthropic Jenkins calls a "small mental
adjustment" is actually a government-subsidized economy of destruction - rather
than production - divorced totally from human needs but instead dictated by the
demands of those who deal in "moneyness."
"Knocking down surplus homes would be the most efficient and
equitable way to spend taxpayer dollars. It can proceed experimentally. It can
be turned off quickly when the need evaporates. It would not be a lesson to
Americans that housing debt is not real debt and need not be repaid. It
wouldn't benefit the most irresponsible lenders and borrowers at the expense of
responsible ones. The housing market would still have to hit bottom, but the
bottom would be higher (and sooner)," said Jenkins.
"In this same sense, the problem with New Orleans was
‘surplus people.'"
"Surplus homes" in a country in which affordable housing is
disappearing. In this same sense, the problem with New Orleans was "surplus
people," who have now been scattered and exiled through a joint
public-private-meteorological venture that goes under the general heading of
Katrina. That which cannot be exploited by the Big Capitalists is, by
definition, surplus.
There can be no doubt of the insanity of late stage capitalism,
its absolute disconnect from every notion of supply and demand drummed into the
heads of innocent school children during crude early miseducation. Wall Street
and its servants in government purposely created a monstrous bubble of grossly
overpriced housing in order to build up debt that would make it appear that a
non-producing society is really doing things that are healthy and worthwhile.
There was never the slightest chance that the scheme, which violated every
lesson of recent and ancient history, could avoid absolute disaster. Suddenly,
that which was crazily overpriced one minute was transformed into a
near-worthless redundancy, the next.
Worthless? Well, it's not worthless to you or me or a host
of people we know well, who are desperate for a dignified place to stay at a
price that can reasonably fit the budget of the median household in the United
States: $35,000 a year for a Black family vs. about $60,000 for whites. The
houses exist, of course, and many, many more could be built - big ones, small
ones, urban ones, rural ones - but the conspirators that run the U.S. and much
of the world economy solely for their own benefit can only satisfy their
demands for ever-higher rates of return on investment by two methods: blowing
bubbles until they inevitably burst, and international theft through direct
actions of war or warlike coercion.
By the Wall Street Journal's Holman W. Jenkins'
reckoning, the wrecking balls and bulldozers need to get to work immediately in
much of Black America, where the subprime lending crisis hit hardest. If these
ghetto houses cannot be financed at the bubble prices demanded, then they must
be torn down, thus making housing in general more scarce. Soon, with scarcity,
prices will stabilize.
"Human beings and Wall Streeters have diametrically
opposed goals in life."
All three major presidential candidates are on great terms
with the madmen of Wall Street who have brought western "civilization" - which
includes Cleveland and Baltimore - past the edge of the abyss. We are in
freefall, contemplating tearing down perfectly good houses, as crazed
capitalists pile up human and material debris at the bottom of the hole, hoping
for an acceptably soft landing. But there can be no mutually acceptable outcome
to the current crisis, because human beings and Wall Streeters have
diametrically opposed goals in life. Humans want some degree of stability in
life, a reasonable chance that their children will experience a materially,
morally and intellectually better world, and a degree of social justice that
allows people to look one another in the eye. They require a roof over their
heads, under fair terms.
Wall Streeters want advantage, the opposite of justice and
fairness. We will soon be forced to go to war with these people. Their notion
of surplus is deadly.
BAR executive Glen Ford can be contacted at Glen.Ford@BlackAgendaReport.com.
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