Awful truth #25: Honest, hardworking adults deserve a decent life. An economic system that fails at this is doomed.
“And the companies, the banks worked at their doom and they did not know it.”
—John Steinbeck, The Grapes of Wrath
“For the growing good of the world is partly dependent on unhistoric acts, and that things are not so ill with you and me as they might have been, is half owing to the number who lived faithfully a hidden life, and rest in unvisited tombs.”
—George Eliot, Middlemarch
A society must ensure the basic needs of its employed citizens are met. Many factors conspire against this: Inflation—including increases in housing prices and rents. Corrupt or incompetent leadership. Government intervention which terribly distorts natural market forces. A self-serving oligarchy.
For a society to function optimally, its working-age adults must want to work, be duly employed, and take pride in their job. The all-important social contract is that honest, hardworking adults can afford adequate housing, food, transportation, energy, healthcare, recreation, and other basic needs—in other words, a decent life. A secure retirement after their working life ends is another reasonable expectation.
Only a fool would actively thwart this foundational economic imperative. Too bad for us, we have a surfeit of fools who work tirelessly toward our collective economic doom.
Our elected leaders endlessly squawk about their concern for working people. They’d have us believe the middle class and the poor are their most favored constituencies and on whose behalf they strive mightily. Don’t believe them. The elite of both major political parties are incompetent morons who do the bidding of the donor class. They don’t give a rat’s ass about us proles.
“Well, that seems harsh,” you might be thinking, when, in fact, it’s not harsh enough.
The government wantonly fuels inflation. The donor class to which they are beholden demands it, as this artificially inflates the price of real estate, rents, and stocks; the actual underlying value of these assets be damned, the ability of the poor and middle class to afford a place to live be double-damned. If inflation makes the donor class come out further ahead than they otherwise would, even when accounting for inflation, they always shall choose inflation.
“But we have a Federal Reserve Bank, which is supposed to control inflation.”
The Federal Reserve is tasked (sort of) with controlling inflation, but this is largely Kabuki theater. Raising the Fed’s interest rate to “control” inflation is met with howls from our betters who want a free market and its consequences for the proles but demand corporate welfare for themselves.
The Fed’s targeted inflation rate (currently 2 percent) is a component of this welfare—some fools want it higher. Sure, the Fed sometimes meekly warns of asset inflation (stocks and house prices), but it does nothing to prevent harmful bubbles occurring in these two areas. In obeisance to our betters, the Fed prints money like crazy and calls it “quantitative easing” rather than what it actually is, fueling inflation.
Our betters contravene efforts to control inflation. They want a zero Fed interest rate and oodles of Monopoly money printed on their behalf, and they have the audacity to call themselves free market capitalists.
Rather than truly encourage stable prices, the government meddles in other unhelpful ways. A cruel carrot held out to the masses is the deduction of mortgage interest from one’s income taxes. This distorts the market and creates an artificial demand for home ownership, which is a factor in inflated home prices. Ditto government backed mortgages and artificially low mortgage rates. The caterwauling about mortgage rates is particularly comical because home prices are so high (and rising ever higher despite today’s mortgage rates), many folks can’t afford to buy one even if the home loan interest rate was 0 percent.
The financial tapeworms of Wall Street love this meddling because they parasitically benefit at every step in the home buying process. The government loves it because higher home values mean higher property taxes—and gives the homeowning proles a false sense of increased personal wealth. The result of this farcical effort to “help” people buy a house is that home prices and property taxes are far higher than they should be.
There is another pernicious factor related to housing costs: The oligarchs own increasing amounts of the housing stock. These purchases sure as shit aren’t done with stable rent costs in mind. Blackstone a benevolent landlord with the tenant’s best interests in mind? “Hardy Har Har” to that dangerously naïve notion.
The poor and middle-class are being crushed by increasingly expensive home prices and rents. Housing prices and rents which are disproportionately out-of-whack with wages is a deafening warning claxon that the economic system is dangerously destabilized. The same holds true for the cost of healthcare, energy, food, and other necessities.
Unfortunately, Wall Street and our other betters could care less about this so long as they profit from it. Our elected leaders yack out of both sides of their mouth. They claim to want “affordable” housing, but then strive mightily to keep housing price inflation going, which is called in Orwellian terms, appreciation. A house doubling in price is a wonderful thing—except for those wanting to buy one, and this includes the home seller who, after selling, himself requires a new place to live and which is now correspondingly more expensive.
Fools willfully ignore the awful truth that if we have jobs we want done and these jobs are done by adults, then it’s reasonable for these adults to expect a decent life. If a society ignores this truth, and its solution to getting these jobs done is illegal immigration, catastrophically insufficient wages, huge trade imbalances, unfair trade deals (offshoring our jobs and demolishing our own industrial base), or legal immigration in excessive amounts, it has put in place an unsustainable, destabilizing force which will have destructive consequences far beyond the money “saved” or the profits generated.
And our betters shall fully deserve these consequences, which include the inevitable revolution—possibly a violent one—whose seeds they sowed and watered with the sweat and tears of others.
The tragedy is that when this well-deserved comeuppance arrives, the poor and middle-class will have long since been crushed. And ready for revenge…
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