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<nettime> THERE CAN BE NO BAIL OUT
Dmytri Kleiner on Tue, 30 Sep 2008 15:47:47 +0200 (CEST)


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<nettime> THERE CAN BE NO BAIL OUT


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.

-
Copyfarleft 2008 Telekommunisten. Reproduce at will, with or without
attribution. Independent or collective commercial usage encouraged.

-- 
Dmytri Kleiner
editing text files since 1981

http://www.telekommunisten.net


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