Here's a forward of a reworking of some of the things I've said here. Apologies I was unnecessarily surly, in the earlier thread, maybe this one can be more focused.
Cheers.
-------- Original Message -------- Subject: THERE CAN BE NO BAIL OUT Date: Tue, 30 Sep 2008 15:27:04 +0200 From: Dmytri Kleiner <dk at telekommunisten.net> To: Nettime l <nettime-l at kein.org>
THERE CAN BE NO BAILOUT. Dmytri Kleiner
The housing bubble caused housing prices to rise by making money cheap.
The boom in demand for housing attracted developers who wanted to cash in on high housing prices and the heavily government subsidized system of highways and big box retailers that is the life-support system of ever more remote satellite suburbs.
The increase in housing prices is the byproduct of money created by the banking system and government subsidized development, neither the banks nor the government have the economic basis to continue for ever. Driving up location rents by increasing money supply and subsidizing irresponsible development has no end-benefit, like any pyramid scheme, money just flows up the chain, or up the "property ladder," until no more suckers can be found to build up the downline. In the end, prices must fall. Deflation is inevitable. There can be no bailout, a pyramid scheme can not be rescued, not even if public funds are used to add one more, one final, level to the pyramid. Of course, a new publicly funded level, thereby forcibly roping-in the many who did not choose to get in on the Ponzi scheme in the first place.
In every somber corner, from parliament to board room to coffee shop, the debate over a false dilemma rages on. Bail out the home owners not the lenders! First of all: AS IF! As if, a political class dripping wet with financial industry campaign contributions will really be interested in doing anything but soaking the small mortgage-holders further. This crisis, like any financial crisis is an opportunity for wealth to concentrate even more, and those who are in favorable political and economic proximities will happily take any public funds they can get to reduce the costs of all the juicy acquisitions while leaving the public holding assets no willing buyer would buy at any price.
Even so, bailout the Home owners? I'm sorry, it may be pointless to reject something that is never going to happen in any case, but fuck that too. How many people lack adequate housing or pay an unreasonable portion of their income for housing? If we're throwing trillions around, shouldn't that be the fundamental issue? In the same way that the farm subsidy lobby uses the myth of the independent rustic farmer to justify subsidies of massive corporate conglomerates, no doubt the hard working family will be used as the poster child for the "bailout" lobby. In truth, many of the "Home owners" are as driven by greed and delusions of the "property ladder" as the lenders, why should they be rewarded over renters and residents of co-operative and public housing? There is a lot of profit-motive speculation in the housing market among "home owners" and this is just as much money-for-nothing greed as that which motivates the money lenders. Private home ownership in ever-expanding satellite suburbs is neither socially, economically nor environmentally desirable and has been far over-subsidized already.
Bailout people with sustainable housing in livable communities with effective social benefits. Create a society where people do not require life-long wage-slavery to pay life-long debt for the privilege of having a place to live.
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