I think this article on the "crisis" of housing oversupply is an excellent example of a number of things rather wrong with capitalist economics. It suggests that somehow too many houses have been built. That is now causing problems because housing prices have dropped (which makes house owners sad) and there are too many empty houses scattered about (which also makes the house owners sad). There is another problem with all the construction workers who were building those house. They no longer have jobs because nobody is building new houses anymore.
The ingenious solution to this problem, is to pay all those construction workers to knock down all the houses they have just built. This is presented as a solution that, at face value, sounds absurd but in practice is a solves the problem wonderfully. I certainly agree that it sounds absurd at face value. But I would go further than that. I would say that the idea is absurd in every respect. The solution also suggests a wondrous contentedness with the original problem. The core problem was that the time horizon relevant to decision-making in our economy was about six months. The decisions made were totally stupid and invested money in all the wrong things and almost none of the right things. The solution is not to waste a lot bunch of additional effort undoing all that work. Our economy is now facing a whole lot of real problems far more substantial than wealthy people having to cope with lower asset prices that were fictional anyway.
We don't have a problem finding work for people. If we need to keep people busy so they don't get sad (which we do), we can keep building solar power stations. Or fix up our existing houses to make them better. Knocking down houses can only "create value" if you're a perverted individual who has managed to link his own happiness to the House Price Index. Some people might get excited at the idea that knocking something down can make prices go up, but I doubt it's most people. Prices are not the issue. Despite all their magic, they didn't get us anywhere good when we thought they were working. They're certainly not going to save us now we've realised they were wrong the whole time. And fucking around with the real world purely to give us some sense of financial planet stability is not what we need.
People just like this fellow were and are in charge our of economy and society. What the hell are we doing?
I share your frustration my friend. To add to the annoyance people go homeless because houses are so expensive. But because no really cares about that stuff and homeless people should just get a job we want to knock down houses to make the prices go up again and again. It is really selfish and nasty and makes me angry. Capitalism sucks but with perverted individuals who link their happiness to the House Price Index communism doesn’t stand a chance. You would think laws and rights could help but it doesn’t seem so.
gemma / 5:29pm / 21 May 2009
The only thing wrong with your argument is that you said “lot bunch”. And even that made me laugh. so it’s OK :-)
Jason Grossman / 10:12pm / 21 May 2009
Omigod, omigod, it’s totes Keynesian, isn’t it? Digging holes and filling them in again? That Frank, he sticks in your head! Well, we all know the solution to empty houses, and it’s no tragedy in my opinion… maybe all the construction workers without jobs should be given free squatting licences, along with everyone else of course…
Libby / 12:46pm / 25 May 2009
It’s pretty Keynesian I suppose, although I suspect Keynes might have hoped for some more productive government stimulus.
I don’t know if squatting licenses would work. I reckon people would just start selling them and you’d have more market-like problems. Best keep the government uninvolved.
Ryan / 4:29pm / 5 June 2009