“No one can possibly have lived through the Great Depression without being scarred by it. No amount of experience since the depression can convince someone who has lived through it that the world is safe economically.”
Isaac Asimov
Economically speaking, the very fabric of capitalism requires economic booms and busts. This “boom-bust” cycle, as it is called, is taught in economics, as a macroeconomic constant – the way of things, and that it must be anticipated for, but never solved. In other words, the idea of solving this cycle is deliberately made to be unseen.
Of course, it is relatively easy for an organized working class to end the “boom-bust cycle” and achieve wonders. Look at the organized workers of the Union of Soviet Socialist Republics (USSR) who collectivized and industrialized food production, and ended the seasonal famines that had plagued their countrymen for most of history. In fact, if it weren’t for the reactionary, capitalism-loyal kulaks who hoarded as much of the grain as they could and burned the rest, the so-called “Holodomor famine” likely would have never happened. Even if it had, without reactionary interference to the Soviet systems and plans in place, far fewer lives would be lost. In other words, fascist interference was the cause of the Holodomor,, in both famine and devastation. Another example from the USSR would be the Soviets working collectively, and bringing their agrarian peasant-feudal society into the space age in three decades, and beating the good old USA at every space race metric, except a manned moon landing.
However, in the USA, capitalism is never blamed for the Great Depression, or the Dust Bowl famine that accompanied and worsened the Depression. If we blame Stalin and the USSR’s path to socialism for the famines of their time, why don’t we likewise blame FDR and the USA’s contemporary stage of capitalism?
The Great Depression was the largest formally recognized economic crisis in the history of the euro-colonial industrialized world. It remains so because it hurt the capitalists then, and selective memory of its conditions helps them now.
The American dream has long been defined by homeownership. Unlike Cuba, Laos, the USSR, China, and the DPRK, where homeownership is a right and land reforms were a cornerstone of post-revolutionary government programs, in the USA, one must “work to earn a living”, including access to the monies required to access homeownership. Basic human needs are not guaranteed as basic human rights in the United States, which stands in direct contrast to every current and former socialist project.
In the United States now, the year 2022, it is painfully obvious to most working people and even so-called “middle class” people that homeownership is increasingly out of reach. Without class analysis, however, they’ll never understand “why” or what purpose the lack of access to homeownership serves.
Permanent capital, including capitalist conspiracies, such as firms like Blackrock, has been snapping up homes above the already inflated market values and making homeownership impossible even to those who accumulated a meager enough amount of capital to bid for a home under the constraints of American capitalism. (Well, the former constraints.) It no longer serves the ruling class capitalists any purpose to allow us to own our homes or land, and it truly never has. The difference is, now they have the regulatory capture and other material conditions in place to sweep homeownership off the tapestry of possibilities.
If you think this is outlandish, consider the following comparisons.
First, in 1931, at the lowest waged point of the Great Depression, the average worker’s actual pay was $22.51 a week. At the current federal minimum wage, or the highest wage the capitalists that control the United States government believe workers deserve as a price-floor, a full-time worker would make a total wage of $290 dollars a week. Factoring inflation from 1931 to now, and the 1931 Great Depression worker made $425.77 a week in actual, take-home wages of today’s dollars. Because the average tax wedge is roughly 34.6%, the actual earnings of a modern minimum wage worker today is $215.76. In sum, despite two successive presidents (Trump, Biden) claiming unprecedented economic recoveries, the modern American worker is guaranteed to make no more than 50.6% of their Great Depression counterpart.
Compounding this is the price of homeownership. In 1931, the median price (in 1931 dollars) of a home was $5,609, which was roughly 249.5 weeks of work at the 1931 wage price-floor. In other words, even the poorest workers of the great depression only needed 4.79 years of income to buy a median home for their time. (The adjusted-for-inflation value in 2022 of the median 1931 home would be roughly $106,092.) The actual median price of a 2022 home in the USA is $390,000. At the wage price-floor, that’s 1807.56 weeks of work to buy a house, or 34.75 years of working at the wage price-floor.
The home-buying assumptions above assume 100% of a worker’s income being spent on a home. If one were to use the 30% rule the “budget gurus” and many apartment complexes use, wherein housing should cost no more than 30% of your income, those assumptions change as follows.
- The 1931 worker making the wage-floor of earnings would need 830.6 weeks of work to buy a median 1931 home, which is just under 16 years. (15.97)
- The 2022 worker making the wage-floor of earnings would need 6,025 weeks of work to buy a median 2022 home, which is 115.87 years. That’s 38.87 years longer than the average American lives.
In much simpler terms, homeownership is now impossible for the average American. Of course, that’s how the capitalists want it. Homes have been securitized thanks to capitalist conspiracies that take the form of firms like Blackrock. Capitalists get much more money – and more importantly, control of the social order – by making us all permanent renters.
Whether you want to call this “The Great Reset” – as some on the synthetic left, as well as the reactionary right, have done – is irrelevant. The purpose is capitalist domination, or a dictatorship of capital, of all aspects of human life on this planet. Calling it by some conspiratorial name does nothing to stop it, and in fact obfuscates the true nature of capitalism further, which only leads to a weaker working class in the face of the threats capitalism poses us.
Sources:
https://www.oecd.org/unitedstates/taxing
https://www.minimum-wage.org/federal
https://www.nber.org/system/files/chapters/c2256/c2256.pdf
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4015056
9 thoughts on “Permanent Capital Captures Housing”
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What an eye-opener. Brilliant. It isn’t fair for capitalists to deprive Americans of homeownership. And while doing so they have also made it more difficult for many homeowners to get refinancing or money to borrow on their homes (thanks to increased equity). They have a formula borrowers must meet re: income, DTI, and a certain credit score. If we can’t meet their standards (which they themselves have written into law) our homes go into disrepair and we may, or probably will, lose our biggest asset –and most likely to those who are now buying up as many as they can as fast as they can (Wall Street hedge fund investors and bankers). Is that phase 2 of their grand plan? Is our government unwilling to stop this madness? Where does it end? In the biggest recession the world has ever experienced?
It is useful to establish one’s credentials as a Real Progressive, and blaming Ukrainian peasants for their own deaths in the course of the Soviet-enforced ‘collectivisation’ of their farms certainly achieves that.
“The so-called ‘Holodomor famine'”? What an eye-opener!
In fact it is well-documented that starvation was only one of many horrors visited upon ordinary Ukrainians, over years, during Soviet operations to ‘eliminate the Kurkul class’, which were ultimately successful. But those small property-owning, and highly productive farmers clearly deserved their hideous fate. As anti-Soviet elements, their group guilt was well-established, and the charges against them are stated by Artemis Douglas exactly as if they tripped from the lips of Josef Stalin.
Wilma, with all due respect, everything you think you know about the Holodomor is quite literally Nazi propaganda.
Thank you. And with all due respect, Ms Douglas, that is precisely the reply I had anticipated. After 45 years in the field I have come across many persons who have trotted out that phrase in response to any and all discussion of the Soviet assault on the Kurkuls (note that I am old enough to have spoken face-to-face with a number of the victims, as well as many of their descendants). Some of those seeking to deny Soviet history have spoken with lots of modulation and dramatic expression to make the biggest impression, some were more diffident (perhaps suspecting they were making idiots of themselves), but all were stuck with the same narrow repertoire of stock phrases, the favourite being “Nazi propaganda! Nazi propaganda! Nazi propaganda!” What a pity that Lenin and Stalin, and many others in the Soviet hierarchy, were not the least bit coy about their murderous intent. How terribly inconvenient. In December 1929, for example, Josef Stalin spoke at length about the whole enterprise:
“The characteristic feature in the work of our Party during the past year is that we, as a Party, as the Soviet power, a) have developed an offensive along the whole front against the capitalist elements in the countryside; b) that this offensive, as you know, has brought about and is bringing about very palpable, positive results.
What does this mean? It means that we have passed from the policy of restricting the exploiting proclivities of the kulaks to the policy of eliminating the kulaks as a class. This means that we have made, and are still making, one of the decisive turns in our whole policy.”
(And again…)
“… Now we are able to carry on a determined offensive against the kulaks, to break their resistance, to eliminate them as a class…”
And eliminated they were, by all means necessary, including starvation.
Here is the thing: to be ‘of the Left’ it is not remotely necessary to defend a regime which trumpeted universalistic egalitarianism and a collective life in solidarity, whilst erasing the autonomous conduct of life and emancipation, the individual morality of conscience, human rights and free expression, and imprisoning or murdering all who dissented.
Wow! A few out of context quotes with no attribution! When the synthetic left sent you, they clearly didn’t send their best!
I searched for “Stalin on the liquidation of the Kulak” and found quotes, with attribution. Source: Michigan State.
https://soviethistory.msu.edu/1929-2/collectivization/collectivization-texts/stalin-on-the-liquidation-of-the-kulak/
Quote from Stalin, at this link: “Consequently it is now ridiculous and foolish to discourse on the expropriation of the kulaks. You do not lament the loss of the hair of one who has been beheaded.”
Who is this “synthetic left?” Is it bad to be critical of Stalin? I do not mean this as an attack, just speaking as a member of the Real Progressives team in search of answers. I am accustomed to questioning everything from whatever source, as you may infer from the name of my personal blog: “Everything I Knew Was Wrong.”
It is the time of no reply, Jay. Conclusion: Everything Artemis Douglas Knows Is Right!!!
I was unaware of Ms Douglas’ little rejoinder until today (having returned to this website to hear the Michael Hudson podcast) and it appears she suffers from a chronic sneering disorder, which is spreading among so-called ‘progressives’ unchecked by any vaccine. It is a sad affair.
Failure to acknowledge one of Stalin’s most infamous speeches (due to ‘lack of attribution’), and failure to engage with its content (which could hardly be more germane), is also sad. My diagnosis (should anyone be interested) is to be found under Ms Douglas’ latest diatribe, “Ukraine is chock full o’ Nazis, and deserves all it gets” – or words to that effect.
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