The Financial Times is not too excited about the Obama administration’s housing plan. * It isn’t sufficient to stave off the crisis and will interfere with the natural market tendency to first bring misery and death before revival and birth. It will, “interfere with the purgative process by which prices fall to clearing levels and postpone the moment at which a genuine economic recovery can commence” the Lex column advises its readers.
This is undoubtedly a law of the market. Capitalism overproduces and every few years has to go through these deadly convulsions that have dire consequences for millions of people as their means of subsistence is removed from under them. Marx described the process over a hundred years ago:
“In these crises, there breaks out an epidemic that, in all earlier epochs, would have seemed an absurdity — the epidemic of over-production. Society suddenly finds itself put back into a state of momentary barbarism; it appears as if a famine, a universal war of devastation, had cut off the supply of every means of subsistence; industry and commerce seem to be destroyed; and why? Because there is too much civilisation, too much means of subsistence, too much industry, too much commerce. The productive forces at the disposal of society no longer tend to further the development of the conditions of bourgeois property; on the contrary, they have become too powerful for these conditions, by which they are fettered, and so soon as they overcome these fetters, they bring disorder into the whole of bourgeois society, endanger the existence of bourgeois property. The conditions of bourgeois society are too narrow to comprise the wealth created by them. And how does the bourgeoisie get over these crises? On the one hand by enforced destruction of a mass of productive forces; on the other, by the conquest of new markets, and by the more thorough exploitation of the old ones. That is to say, by paving the way for more extensive and more destructive crises, and by diminishing the means whereby crises are prevented.”
Leaving aside some of the terminology that was common among political people at the time (and is still used more frequently in other parts of the world and in the pages of the big business press here in the US) this description of market breakdowns caused by overproduction, is as accurate today as it was then. Look at GM.
The strategists of capital are very selective about when to obey or violate the laws of the free market. The paper has championed the massive injection of public funds to save the banks but housing is a different baby. The writes in the Times won’t lose their houses most likely so let the market sort it out.
Despite a frank admission that, “Compared with the resources lavished on Wall Street, $75bn for subsidies to homeowners at risk of foreclosure is a bagatelle.”, they are worried that there will be no end to this government intervention. Home prices nationwide have declined more than 25% since 2006 and unemployment is on the rise which will strengthen the foreclosure tide. According to the report, the Boston Federal reserve estimates 8.4 million homeowners will join the ranks of the unemployed in the coming period, 35% of them with negative equity. “The foreclosure tide”, the writer adds, “is probably unstoppable.”
So why throw money at it? There has to be bloodletting. Some of their colleagues would answer that the danger of social unrest grows each day with figures like these and that has to be avoided at all costs.
The writer concludes: “The fastest way to get the housing market moving again is not to limit foreclosures, tempting though that is, but to allow prices to fall rapidly to market-clearing levels. This package will squander public funds in delaying that process.”
It is the height of hypocrisy of course for the strategists of big business to make such proposals seriously given the multi trillion dollar bailout that they have all received over the past year. But we have to remember that when they talk about a housing market they are not talking about it in the same way workers are. Housing to working people is shelter, it is not a “market” despite all the social pressure for us to think of it that way and to a certain extent participate in it that way; it’s where we rest our head at night. It is the same with education. The student loan market last year was an $85 billion dollar market, the financial papers reported. Why is there a student loan market? What sort of society as rich as the US has an education crisis or a homeless problem with multiple families forced to live in one apartment as it has 18,000,000 vacant homes?
One that needs changing that’s what.
*Lex column, Financial Times 2-19-09
No comments:
Post a Comment