More trouble for the US housing industry. Public funds will be needed to bail them out again.

A "How to create more misery" manual

The propaganda from the capitalist class is designed to convince us that all forms of social crises are caused by individuals; or small groups of individuals. The economic crisis was a lack of regulation. The sub prime collapse was the fault of ignorant borrowers and a few---just a few mind you----unscrupulous lenders.

The Asian economic crisis of 1998 was “crony capitalism”. Not capitalism, but “crony” capitalism. Behind all the rhetoric, the failure of the former colonial countries to develop “bourgeois democracies” along the lines of the advanced capitalist world lies the insidious argument of racism; they simply cannot rule in that way.

Yet when the totalitarian Stalinist bureaucracy collapsed in 1989, western capitalists hailed it as the failure of a “system” a system of production. “Communism has failed” they said in chorus. The so-called free market had triumphed. Stalinism was a monstrosity that held back the development of socialism and a truly communist existence and silenced and murdered any individuals or force that stood in its way, especially the working class, the force it feared most.

We are taught not to think that we live in an economic system, a system of production that has not existed for all time but was preceded by other systems of production each with its own set of social and property relations, governmental institutions, philosophy and religion. Each ruling class teaches that their system is the only way of organizing society.  

But like all these systems, capitalism, our global economic system where the means of producing the needs of society are privately owned and set in to motion for private gain, is in deep crisis. Wars, disease, poverty and the environmental disasters are a product of the way society is organized, and the solution to ending them is to change the organization of society, to change the system itself. If plants are in bad soil they wilt. If our social organization is unhealthy and anti-social as capitalism it, it makes us sick.

Capitalists invest their capitals in the marketplace not for the good of society, but in order to increase their capital and accumulate more of it. The system forces them, drives them to do this 24 hours a day, 7 days a week, 365 days a year; it is a truly never ending process. Any capitalist that slacks off, will lose his position in the ranks and in the end his role as a capitalist.

If we take meat, or the production of food, animals are raised and slaughtered under the most brutal conditions. They are fed hormones to fatten them quicker, get them to the slaughter-house and in to the supermarket as fast as possible. The sale is an important aspect for the capitalist as the money advanced returns, profit realized, and more cattle fattening and further profits made possible. Any interruption, or prolonging of this process is an attack on the capitalist’s interests.

I was reading about the US housing industry in the February 14th issue of Business Week. A bit of a crisis is mounting around the construction boom that followed the 2001 recession and preceded the subprime crash of 2007, when “10 million apartments, condominiums and single family homes” were built says BW. The housing boom was financed by cheap credit, trillions of cheap dollars that needed a home.

And like the cattle killing business, the quicker a house gets to market, the quicker the advanced capital returns, profit is made and more profit making production can continue--until the market is saturated, the credit dries up and the whole lot comes crashing down. The home building capitalists, just like the mortgage lenders and the meatpackers and the meat producers, have to compete with others in their industry so they are driven to get their product to market first for fear of extinction

Houses weren’t fed hormones but we know damn well that corners were cut, safety undermined on the job, shoddy material used if they could get away with it. The cows pass on the hormones and chemicals to the kids that eat the stuff at MacDonald’s and the rest of us that eat too much mass produced meat. But what’s happening with housing is that homeowners are making claims for repairs on faulty workmanship as problems arise within the usual ten-year warranty period.

The faulty Chinese drywall that we read about a few years ago is estimated to cost some $15 billion to repair, with another $20 billion or so for other claims that have been filed due to faulty construction. In the frenzy of the boom years “Buyers often didn’t ask for inspections which some mortgage companies didn’t require” adds Business Week. One homeowner noticed that her house was sinking, that nails were “sliding out of the sheetrock” something the builder claims occurred because “workers hammered the nails incorrectly”. Hmm! I’ve heard this sort of explanation before; buyer's fault, workers’ fault.

But the real problem is that building and development of human shelter, which is what housing is for most of us, is a business to invest in. Housing should not be an investment opportunity, nor should medicine or education.

So there is what looks like a $50 billion bill that homebuilders won't  be able to cover as the other investors and speculators that live in the insurance industry introduced so many exceptions that the builders don’t have the insurance to cover the liabilities and are grossly under-funded.

Looks like the “vibrant” market economic system we call capitalism is in a bit of trouble here and the capitalist class will be coming to the taxpayer for public funds to bail out their home building buddies pretty soon so they can start the process all over again. Or we can draw the conclusion that the system of production we live in is bankrupt. It can’t feed people, clothe them, provide housing for them, health care, or the inklings of a decent life. And it will, if not stopped, destroy life as we know it on this planet.

If we take a little time to study history from our point of view, from workers point of view, we can see that, as Marx said, the only thing constant is change. Things that seem permanent can change as the uprisings in the Arab world have proven in three months. But what they change to is dependent on us.

Workers have to take the reins of society and fulfill the historic role that history hands us.