As the Republicans continue their unrelenting assault on the last remnants of America’s social safety net, and as Democrats continue to criticize them (but without actually doing anything to stop them), America continues on its downward spiral.
The price of food is rapidly increasing. The price of gas keeps going up. Despite Obamacare, medical costs and prices continue to escalate. The poor are getting poorer and the middle class is nothing more but a shallow, hollow shell of its former pride and glory. The rich keep getting richer. And with each passing year, they pay less and less taxes, too. The burden of maintaining what remains of our tattered social contract increasingly falls on the broken backs of our already neutered middle classes.
Federal and state governments have stepped back from their historic role as guarantor of the social contract. They have resigned their position as protectors of the realm. They have opened up the city gates, allowing rabid, ravenous corporate wolf packs to swarm amongst us. To make matters worse, they have passed unjust laws preventing us from protecting ourselves from these vicious animals.
Countless new laws prevent citizens from access to jury trials, traditional homestead and bankruptcy protections. Additional laws, passed in the name of “homeland security” infringe on our very civil rights. As the corporate wolves dine on the corpses and living bodies of America’s middle and working classes, our elected leaders drink and dine and make merry, satiated on the newfound wealth, only enjoyed by America's tiny aristocracy.
They have sold-out their country for 30 pieces of silver. An additional nail is being hammered into our body politic as of late, the final blow that ensures the death of our nation and its ultimate crucifixion upon a cross of gold. This is the nail of extortionate, predatory rent.
The Harvard University Joint Center for Housing Studies released a report last month that analyzed the American apartment/renters market from 1999 to 2010. The study found that the costs of renting an apartment were rising at a highly inverse rate relative to peoples’ incomes.
What does this mean?
First, the real value of wages in America is decreasing. Sure, you might be making more than your father. But the value of the actual dollars you are making is nothing, compared to the dollars your father was earning. $30,000 today is not worth as much as $15,000 in 1950. Inflation is eating into peoples’ wages and their wages aren’t increasing in a manner sufficient to keep-pace with gradual, creeping inflation.
Second, the cost of rent is increasing at rates that exceed the ability of people to manage, given the stagnant and/or decreasing value of their real wages.
“Following the 2001 downturn real renter incomes failed to rebound and now remain below their 1980 level” the report said. “At the same time, real contract rents have climbed by more than 15% since 1980.” Rents rose dramatically from the mid 1990s, the report stated.
According to Christine Ricciardi of www.housingwire.com, “One in four renters—representing about 10.1 million households—spends more than half his annual income on rent and utilities. Another 26.2% of renters spend between 30% and 50% of yearly income on the same amentities. This data aptly depict what the report later notes about the socioeconomic breakdown of renters.”
http://www.housingwire.com/2011/04/26/harvard-finds-dwindling-housing-supply-abolishes-affordable-rentals
“While severe housing costs are still anchored among those in the bottom fifth of the household income distribution, over the last decade, the number of renters even in the next two higher quintiles facing such burdens increased by 1 million households,” she wrote.
Ms. Ricciardi stated that “about 56% of lower to middle-income families currently use one-third to one-half of their income for rent and utilities, compared to 38% of these families at the beginning of the decade. Some 23% of middle-income families now spend that much annually for these expenses, up from 10% a decade ago.”
She added that a “lack of affordable housing is also driving unfavorable renting conditions.” Apparantly, this doesn’t have to do with increasing occupancy rates of said low-income housing. Most likely, it has to do with the fact that developers are increasingly able to persuade local governments to demolish vacant or low-rent housing. According to the Harvard study, “of the 6.2 million vacant or for-rent units with monthly costs less than $400, almost 12% were demolished between 1999 and 2009.” The report stated that “more than 28% of the 1999 low-cost stock was lost by 2009.”
Ms. Ricciardi stated that “as the economic downturn wore on, the number of low-income renters grew to 18 million in 2009 from 16.3 million in 2003, increasing competition for affordable rental housing. People who would normally be considered high-income renters were now searching for more affordable housing because of macroeconomic factors such as job loss…However, this coincided with decreases in housing supply, widening what authors of the report call ‘the supply gap’—more demand for less supply.”
In effect, this will make all of us working class hamsters fight tooth-and-nail for all the precious apartmental table scraps left over.
According to the study, “this trend will continue.”
To what degree are these rising costs in energy, gas, food and rent indicative of a total breakdown in the so-called "social contract" between government and the governed? Is this failure indicative of the natural failings of government, as conservatives and libertarians claim?
Or is it, rather, due to the fact that corporations are excercising "undue influence" on our government? A form of perfidious influence that is causing government to breach its sacred duties under the Social Contract? As such, are the inherent weaknesses of government truly to blame, or are the unscrupulous influences of corporate America the true source of our government's failure to act decisively in the face of such widespread and increasing misery?
http://en.wikipedia.org/wiki/Social_Contract
http://en.wikipedia.org/wiki/Undue_influence
The chief question of our day is this: If government is breaching the social contract by ignoring its duties and obligations to the governed, how can we, the governed, rectify the situation?
To me, the answer is clear. We must remove corporate influence from the halls of power. Both here, and throughout the world.
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It has major policy implications for the US, because large numbers of unemployed people who can't afford rent, food, gasoline, medicine, etc... can be very volatile, politically speaking...left or right...
Now, you can't do this with a college or graduate degree.
I feel like the USA and the American Dream are dead. We need a New Beginning.
Emma G. was right: If voting changed anything they would make it illegal. We have two choices : Not in my interest and Definitely not in my interest. We are choosing only the LESSER of two evils.
Call me when half a million march on Wall Street, break a few windows and fly red flags.
Nothing changes until a few cities burn. / R
The Christian Right was very successful with this re: the GOP.
Organized Labor did this in the Democratic Party, before it was co-opted by Big Business and eviscerated by a corporate-controlled NLRB.
As such, we need EFFECTIVE ORGANIZATIONS outside of the party. This will help us in many other things, not just formal electoral politics. But also in terms of forming
a. Alternative unemployment benefits
b. Alternative housing assistance
c. Alternative education assistance
d. Alternative debt relief/counselling, legal services
e. Alternative social work
f. Alternative job-placement, work-placement, etc...
We basically need a NEW MASS-MOVEMENT. NEW ORGANIZATION. New bodies that exist apart from and outside the traditionally accepted ones. Organizations that are not co-opted by the top, or the corrupt members of the status quo.
Sort of like the SALVATION ARMY, but more political. LOL
If they stop providing social benefits, then people need to group together and find a way of pooling resources and doing it ourselves. This way, we can help ourselves until we can tip the balance back in favor of a more progressive, New-Deal style government, once again.
Land developers in my city are also upcharging customers with higher deposits and other fees.
The average college grads owe $30k for student loans.
Each succeeding generation is having to foot the bill of economic disasters without realizing our legacies are ultimately becoming nightmares.
Foreclosures and consumer bankruptcies are rapidly rising. We all foot the costs in the long run.
50% of homeless people are women and children. 25% are veterans.
We have two wars which have cost us gazillions.
note: see Public Citizen for a grass-roots way to influence
fed agencies on the implementation of the Wall St Reform bill
note: rents; local zoning gifts to developers
And then I just think - but I'm so lucky! College degree, no debt, middle class background, parental support, underemployed but employed nonetheless. If I can't do it, what about the people who aren't so lucky?
http://blogs.wsj.com/economics/2011/05/03/about-1-in-7-americans-receive-food-stamps/
BUT, It really must also be considered that other reasons rents keep going up now are the fallout from the bubble: the sheer numbers of investment house buying 'flippers' who helped drive up the housing prices to an unsustainable level before the crash, accompanied by the endless shows on how to make more money off your house by remodeling superficially and selling for high profits....mortgages are usually higher than rents, maybe more of the extra costs of owning the house are being passed along to renters in trying economic times as well...the increasing property taxes on the owners...the huge numbers of homeowners who just walked away from their houses, not paying on them anymore...
All of these helped bring about this crisis as well...it's not just "them" that created this housing nightmare, although "their" culpability is important to relate and thank you for doing so.
But we all must admit, it's not just them, it is also US.
I mention the social contract occasionally in posts and comments. However, here I need to ask on a theoretical or philosophical level: What do we mean when we refer to the "social contract"? What are the elements of it? What "ought" to be the elements of the contract between the government and the governed? Has this changed over the las decade or so? over the last century? Is the social contract a "dynamic" agreement? Ought it be? Is there are difference between how the social contract is perceived/practiced between Democrat and Republican, liberal and conservative?
In an era when homeownership is declining and renting is increasing, how does the social contract relate?
Just wondering. Points to ponder.
Providing affordable housing has been a bone of contention among the elite for at least a hundred years. If you were ever to read Aleister Crowley's autobiography, as I will continue to haunt you to do, you will see that they came under intense scrutiny between himself and people like Henry Ford, JP Morgan and John D Rockefeller during Crowley's trip to America shortly before its entrance into WWI. They have now abandoned any feeble efforts that they may have adhered to in America. They are confident in their mind control techniques having perfected them in the 50 years since the discovery of the Asch Paradigm so there is no longer any social contract as defined by their propagandists at Wikipedia. As for Abraham Maslow, art and creativity: these are the sworn enemy's off Thomas Hobbs Leviathan. Why on earth would you want to nurture them?
and the lowest-rent housing of all is ... yep, jail and prison.
The coporations know this and want to lock in more and more people into this situation all in the name of making good capitalistic profits. What it really is is rape. Mystifies me every day why anyone thinks there's a future in this.
if you won't rule yourselves, in democracy, you must take what your rulers give you. how's that working out?
I for sure saw that as an adjunct, if people make it work doing things that work, easier in some fields than others. healthcare is a big part of it, although I am not sure half the problem isn't that we seek treatement more and more, increasing costs, instead of accepting lifes sometimes ugliness, maybe often on the ugliness, because of increased expectations.
TV doesn't help here, as people see things they are supposed to have, and do in a very real sense feel worse for not having; keeping up with the Jones is hardwired into us, alas.
It would probably help if we could rehab housing more efficiently, maybe even to give away.
In American cities, there is a lot of housing you see in marginal neighborhoods that is abandoned. Maybe more sweat equity subsidies would help?
For example, if a small group of yuppies with access to large amounts of credit starts to spend this cheap money in an area over a period of time, this causes folks to raise prices, so as to cash-in, on said yuppies' access to vast amounts of cheap cash.
The problem is that these prices will also fall heavily on those least likely to bare it well.
Veblen wrote an essay about a resort in Norway and how the expensive prices they charged millionares for a certain type of whiskey, eventually spilled over into the local peasant village, to the point where they couldn't afford the once easily affordable peasant whiskey and had to buy it a few towns over.
We are seeing this, too, in terms of the rental community.
However, credit has dried up. So maybe rental prices will come down, but aren't, because they are "sticky" as Keynes said they would be (like all prices).
On the other hand, maybe they wont come down, because additional variable are working jointly to artificially maintain artificially inflated rental prices, such as speculation, decreased supply, etc...Perhaps the people making money from these high rents like this situation alot. Perhaps they don't want natural market forces to work, such that prices to come down. Perhaps they want to keep these unjust prices high for a long time to come.
If this is the case, then they are manipulating the so-called "free market" and preventing it from working. As such, perhaps government should intervene and create mandatory rent-controls and mandatory low income housing units, laws and measures for all communities, especially in big cities.
I see no reason why rent should be so high in NYC for working class families.
Becker odlly enough as a market guy saw that too in effect in social economics, a really good book.
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Let's say you have 6 people, with 5 of them working at low-paying jobs for $8 an hour, and 1 unemployed. They rent a three bedroom apartment for, say, $1000 a month. The 5 workers bring in around $5,500 net after taxes. There's $4,500 left over after paying for the apartment. The unemployed person stays home, cooks meals, does laundry, and cleans the apartment. The $4,500 is split 6 ways, or $750 per person. Everyone kicks in $100 for food.
The net result is that everyone has $650 in disposable income, and the 6 people are living on their own instead of living with mom and dad. It's not ideal, but everyone gets by. If someone is sick for a while, everyone kicks in and the sick person doesn't go broke.
In my younger days I lived in communes for 6 years, sometimes on farms, sometimes in houses. There are sacrifices, but it can work. Back in my commune days it was a lifestyle choice, but it could be that we'll see more of it again out of necessity.
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But I don't think those vacancy rates are typical. I don't mean to put words in your mouth but it sounds like you're arguing that because of the recession, enough people lost homes and/or jobs to the extent that their available income for housing fell much faster than the rental market reacted to. Consequently there was a surge in demand for low rent accomodation; supply couldn't and hasn't grown quickly enough; and all that's available are rental places that take up 40-50% of income. Sorry, just thinking out loud here.
If this is roughly what's happened, then there's a strong case for a government funded affordable housing program.
Just to be clear, I don't doubt for a moment that the gap between rich and poor is growing and aside from global warming, constitutes the greatest social problem of the day. And tax rates are much too low, especially for the rich. I've blogged about it myself.
People need to let go of their party loyalties and work to change our electoral system so that the people get a voice. We need to eliminate money from the electoral process otherwise we get policies that favor the highest bidder.
We are in for some dark times ahead.
We see the perfidious influence of HIGH FINANCE in real estate, too, in the form of REITs (Real Estate Investment Trusts), which are basically large real estate holding companies that act in highly unethical ways.
Mind you, TR engaged in much trust-busting. But today, trusts are TOTALLY LEGAL. They operate either as normal trusts, per se, or as "holding companies," and they rarely, if ever, operate in the interests of the general public.
They must be regulated, disciplined and, if need be, smashed, whenever and wherever, they combine, collude and conspire against the general interests and welfare of the American People.
I've found that it's best to rent a small house somewhere and take really good care of it. The landlords will appreciate you and never raise your rent.
The housing market is in a similar situation right now. Since unemployment rose and the mortgage bubble burst, there are simply more people looking for low-cost housing. Renting is more attractive than owning to many people right now because of the uncertainty of the job market and life situations (recent college grads, people in temp jobs, etc.). Demand outstrips supply and any armchair economist can tell you that this causes prices to rise. Keep in mind that prices may be rising due to the extra burden placed on property owners as well. State and local governments have been forced to raise property taxes to make up for revenue shortfalls because they are not getting as much cash from the federal government. Sure, the landlord pays the tax bill, but they will pass on the costs to their tenants. Higher tax bills, higher maintenance costs, higher construction costs, higher utility costs, etc. all lead to higher rents. Someone has to pay for it.
So what’s the solution? The government subsidizes housing for everyone? HUD already subsidizes over 2 million households through the Housing Choice Voucher Program and we’re having trouble paying for that. Maybe the rich should pay more in income taxes, but nearly half of households don’t pay anything, and that’s not exactly fair. I think people need to be more realistic about what they “need” and what the government should pay for. I mean really, what is “affordable housing”? Everyone has a different definition. Where I live in the DC area, there are plenty of places that are “affordable”, but people don’t want to live there because it’s not big enough, doesn’t have a swimming pool, is too far away from work, not close enough to school, etc. We can’t have everything. We want the government to lower gas prices, protect us from terrorism, keep the roads in good condition, provide quality education, get us a good job, find us a place to live, etc. etc. etc. But nobody wants to pay for any of it. The poor point to the low marginal tax rates on the rich and the rich point out that half of households pay no federal income tax, and in many cases, receive credit payments like the EITC. Nobody wants to pay the bill, but we’re unwilling to settle for less.
Housing costs are a very real problem and I don’t pretend to have the answer. I just hate it when everyone wants to turn around and blame the government for all of our problems. Or, when they want the government to step in and do something, but they don’t really have a plan for what exactly the government should do, or how we are going to pay for it.
The people from the older neighborhood that was ripped out had to go somewhere, so they moved into the "better" neighborhoods across town, in the few apartments, duplexes and rental homes they could find. So...in a few years...another neighborhood springs up, either further outside town or in the place of another demolished older area so that people fleeing from those neighborhoods now being "taken over by renters" have somewhere to go. Who builds that next new area up? Take a guess.
Until communities start demanding decent long-term urban planning and stop electing people who stand to gain financially from real-estate development in their community, we will not see an end to the decline in affordable housing.
Great post - congrats on the cover!
The people from the older neighborhood that was ripped out had to go somewhere, so they moved into the "better" neighborhoods across town, in the few apartments, duplexes and rental homes they could find. So...in a few years...another neighborhood springs up, either further outside town or in the place of another demolished older area so that people fleeing from those neighborhoods now being "taken over by renters" have somewhere to go. Who builds that next new area up? Take a guess.
Until communities start demanding decent long-term urban planning and stop electing people who stand to gain financially from real-estate development in their community, we will not see an end to the decline in affordable housing.
Great post - congrats on the cover!
Another point is the laws re supply and demand. When consumers' demands for goods and merchandise are high, the prices they'll pay will also be higher. When consumers don't want or need an item, the suppliers' charges for same will be lower. What that tells me is troubling on many levels. What happens when there is no money or credit lines available? Unpaid creditors are passing on unpaid debts as well. This floating of debts isn't restricted to the real estate markets. The same events are occurring in our manufacturing and automotive industries. Remember the Cash for Clunkers dud?
If there's one thing we can all agree on it is that our priorities are premised upon what I think amounts to a throw-away society. If it breaks, instead of repairing it, we replace it with another piece of junk which is obsolete the second it comes off a conveyor belt in China. Same principles apply to Wall Street thieves whose speculation is a reason why prices at the gas pumps are rising...is this deja vu or am I the only oldie who remembers this phenomenal occurrence during the 1970s? Seems some have selective memories or amnesia, but I'd swear the banking and financial institutions have also failed us during the 1980s.
Only the strong will survive. Are we strong enough? I'm not sure. I do know, however, that my survivor is and always will be my first priority. I'm not one who keeps up with the Jonses. I don't buy things because these things don't make me money, they don't put food on my table, and they don't provide sufficient returns which are basically taxing my heirs' disposable incomes.
Another point is the laws re supply and demand. When consumers' demands for goods and merchandise are high, the prices they'll pay will also be higher. When consumers don't want or need an item, the suppliers' charges for same will be lower. What that tells me is troubling on many levels. What happens when there is no money or credit lines available? Unpaid creditors are passing on unpaid debts as well. This floating of debts isn't restricted to the real estate markets. The same events are occurring in our manufacturing and automotive industries. Remember the Cash for Clunkers dud?
If there's one thing we can all agree on it is that our priorities are premised upon what I think amounts to a throw-away society. If it breaks, instead of repairing it, we replace it with another piece of junk which is obsolete the second it comes off a conveyor belt in China. Same principles apply to Wall Street thieves whose speculation is a reason why prices at the gas pumps are rising...is this deja vu or am I the only oldie who remembers this phenomenal occurrence during the 1970s? Seems some have selective memories or amnesia, but I'd swear the banking and financial institutions have also failed us during the 1980s.
Only the strong will survive. Are we strong enough? I'm not sure. I do know, however, that my survivor is and always will be my first priority. I'm not one who keeps up with the Jonses. I don't buy things because these things don't make me money, they don't put food on my table, and they don't provide sufficient returns which are basically taxing my heirs' disposable incomes.
Congratulations on the EP
http://www.wsws.org/articles/2011/may2011/pers-m07.shtml
yeah.
-R-
In which case, all I can say based upon AMPLE observations is; YES! SHE ABSOLUTELY DID!! She finally figured out what to do with all the otherwise utterly useless tissue squarely between her ears and directly behind her eyes. NOW, she’ll finally be elected, for like most of us here on OS knew before, the rest of the world will discover that bran matter jiggles quite well when outside the confines of a THICK SKULL.
The long, insidious corporate creep into our lives is all but complete, RW; they have slowly dismantled the unions, “sarhaptitiously” taken control of our governing boobies, our once-trusted media; they’ve convinced the working class poor that voting republican is the right thing to do.
The elite have taken us from a one-time, semi-functional government to a corporacracy designed and built with no human resources department, no health care benefits at all and a guarantee of minimum wage for everyone regardless of their disabilities.
They have also ensured me that easy to obtain $200,000,000.000 mortgages will conyintinue for us minim wager-earners so we can continue to pretend that there is no class separations and we can assist the elite with their long-term goals of relieving the useless lower class folks of the world of the burden of property, thus power.
Well hell! It appears that nothing has changed around this country but the phrase “brainless boobs.” It seems that has taken on a whole new meaning now.
The assessed value of housing is said to be continuing and may continue for another decade or more, yet those corporate powers who now hold much of the housing are set to reap another pound of flesh from the working class. When we are all starved out, who will clean their nasty toilets?
Seriously, it is absolutely obvious that political action of any kind is impotent. The deck is stacked against us.
Unfortunately, because of our political structure, there's nothing for us to attack either because our entire social structure is so decentralized that there's no single pressure point that we could lay siege to with any possibility of a positive outcome.
Back in the 1960s, when we took to the streets, we actually lengthened the Vietnam war rather than shortening it. While Johnson, who was, really, a good man, resigned rather than continue in office against the opposition of the anti-war movement, Nixon thrived on that dissension and perpetuated the war precisely because he didn't want to be seen as weak by caving in.
To my warped way of thinking, the only form of collective action that has any possible merit is precisely that, collectivism.
Not the collectivism of the Paris Commune, nor that of Lenin's Revolution, but more akin to the hippie thing of the sixties and seventies. Turn on, tune in, and drop out....into something better.
I think many of us get turned on by the idea of the struggle but if it s really the struggle for survival that motivates you, then the most direct means of helping people to survive - if not thrive - is to promote collective work and living situations and withdraw en mass from the consumerist society in which we are trapped.
Here's a thought for you to ponder. The largest privately-held company in America is Publix Super Markets, which is an employee owned collective with 150,000 associates.
Collectivism is the essence of direct democracy, but it is also the essence of true commune-ism and, essentially, out Rand's the Objectivists by really seceding from the society in order to form that more perfect union.
Just my thoughts.