FacebookTwitterGoogle+RedditEmail

The Radical Extremists of the Building Industry

by ALAN FARAGO

“No better time to buy a new home, no better place” reads the faux headline in The Miami Herald paid advertisement section for real estate; describing a platted subdivision in Homestead, Florida. It is a line for suckers.

And another line, comes out as a whine:  “If families who want to buy a new home wait for the media to tell them things are better, it will be too late and the deals won’t be there.” It’s pure nonsense.

At Miamicondoinvestments.com, real estate consultant Jack McCabe notes: “There were 272 single family homes sold last month in Miami Dade County. … Puny Tallahassee and Pensacola sold nearly as many even though the areas population and housing stock are but a fraction of Dade.”

The reason there are few buyers in Miami is a massive oversupply of housing, fomented by zoning decisions at the level of the county commission, influenced by builders like Caribe Homes and their compatriots at the Latin Builders Association. To be sure, the builders couldn’t have pressed their case without cooperating mortgage brokers, a fair share of liar loans and fraud, bankers supplying easy credit like drug dealers to crack addicts, and freshly minted MBA math whizzes doing their seniors proud by taking a dollar of equity and turning it into twenty of debt, well outside the purview of regulators who- for their part–were cajoled and wheedled to let the “free” market do its magic.

In Miami, county commissioners whose campaigns were funded by wringing the supply chain of the builders, from suppliers of cement to paper products, never saw an application for housing that it wouldn’t turn down; fine tuning the run-up to the biggest asset bubble in housing since the 1920’s. (AP reports today that Lowe’s Home Improvement suffered an 18 percent drop in first quarter earnings: said one investment analyst, “We have yet to see trends get less worse.”)

In the past year, home prices in Miami have fallen nearly 22% (Case/Shiller S&P Housing Index), one of the most rapid declines in the nation. Loads of homeowners in Miami hinterlands, who thought they were buying cheap land undervalued near the Everglades, now find themselves with unaffordable commutes to distant places of work, stewing impotently in unrelenting traffic.

Today in Miami there is no bottom to the housing market in sight. Hundreds of acres of Mediterranean tiles coat subdivisions on former farmland in South and West Dade like ash from Everglades’ fires; those tiles are the pride of the Chamber of Commerce and the hoi polloi of Miami who blasted critics, at the time, as “elitist” and worse.

“If you don’t buy now, you’ll never be able to afford to” was how the early tranche of buyers were suckered in. There are other tranches of suckers, and their voices are going to be heard loud and clear in the Fall elections.

Those would be hard-working Americans, retirees, and people who balance their checkbook every month, only spend what they can afford on housing, and are now–because they are also US taxpayers–are on the hook for toxic mortgage debt sold by Wall Street and local bankers who already pocketed their billions in commissions and fees for engineered financial products that leveraged down deposits into confection.

Here is the lesson: if you are good and honest and set a good example for your children through fiscal prudence, the housing fiasco shows that as a taxpayer, you are complete sucker. Let’s total the cost, that may ultimately fall on your shoulders.

To the $300 billion in realized losses by investment banks, add $300 billion in private toxic debt accepted as collateral by the Federal Reserve– an unprecedented action by the “independent” lender of last resort– to keep JP Morgan and others afloat, add $300 billion now under consideration by Congress in the bailout of mortgage holders who are at risk of foreclosure.

The trillion dollar financial crisis may not ruin the US economy on which your job may or may not depend, but add to that the wars in the Middle East that the Bush administration claims cost only $600 million but that Nobel economist Joseph Steiglitz estimates at $3 trillion, and suddenly the calamity is a significant chunk of GDP, combined with the loss of investor confidence in the US dollar, and now the trillion dollar financial crisis has to be ratched up two or three times just to factor in malfeasance and other less worse inefficiencies of regulators trying to cover their asses.

And now you get a sense why Caribe Homes’ Leeward Isles II is leeward of nowhere and represents for all its false promise, the failure of the growth model for Florida.

If you want to know what voters think of the mess, just wait until the Fall  election because it is apparent– notwithstanding the tired advertising gimmicks that abound– that while ordinary Floridians were practicing conservative economics at home, in Tallahassee and Washington the party of fiscal conservatism, that would be the Republican Party, was doing the governmental equivalent of “Girls Gone Wild” with the nation’s economy.

The State of Florida, in the midst of the worst economic crisis since the Great Depression, is tapping a $3 billion reserve to cover this year’s budget deficits. No, it’s not the media’s fault.

It’s the builders’ fault for pushing an anti-citizen, pro-growth at any cost agenda, so hard– so massively, that the only way out of the crisis was to turn the Federal Reserve into a political arm of the federal government. And in Florida, the builders’ response to throttle Florida Hometown Democracy: the signature referendum to qualify a measure that would take growth plan amendments out of the hands of elected officials and put it in the hands of voters: who could possibly think it is a penalty to the economy when the Growth Machine has done such a fine and thorough job of running the economy straight onto the rocks?

Citizens in South Florida have every reason to be angry that land speculators, under water, are rushing to turn plans for subdivisions into mines for lime rock; gutting the Everglades to save their hides; and still, in the case of Jeb Bush’s Miami ally Ed Easton and Lennar, trying to get zoning rammed through for thousands additional homes edging westward.

Americans are angry, without fully knowing why. This is a teaching moment, and it is the responsibility of the free and independent press to show exactly how the political forces behind the housing boom caused the entire economy to veer crazily–straight to the point of systemic failure.

And it is important for Florida’s media to show how the influence of our state’s builders and Growth Machine in Washington nurtured this national economic calamity, predicated as it was on the abandonment of regulation or, at the very least, the gutting of regulatory agencies to smooth the way for creative destruction.

Today, the US economy is not leeward of any safe shore. If you think now is the best time to buy into US housing: think again. After foreclosures set new pegs for the housing markets and inflation is supported by the Federal Reserve to be de facto monetary policy, you will see a different set of values– and new values in American politics.

Note: If you would like to learn more about how the radical extremists from the building industry, like Miami’s Latin Builders Association, got away with it: click here.

ALAN FARAGO lives in south Florida. He can be reached at: afarago@bellsouth.net

Alan Farago is president of Friends of the Everglades and can be reached at afarago@bellsouth.net

More articles by:

CounterPunch Magazine

minimag-edit

bernie-the-sandernistas-cover-344x550

zen economics

February 22, 2017
Mike Whitney
Liberals Beware: Lie Down With Dogs, Get Up With Fleas
John Grant
On Killers and Bullshitters*
Peter Linebaugh
Catherine Despard, Abolitionist
Patrick Cockburn
The Bitter Battle for Mosul
Ted Rall
Sue the Bastards? It’s Harder Than You Think
Yoav Litvin
The Emergence of the Just Jew
Kim Scipes
Strategic Thinking and Organizing Resistance
Norman Pollack
Mar-a-Lago, Ideological Refuge: Berchtesgaden, II
Fred Donner
Nixon and the Chennault Affair: From Vietnam to Watergate
Carl Kandutsch
Podesta vs. Trump
Ike Nahem
To the Memory of Malcolm X: Fifty Years After His Assassination
Jesse Jackson
Trump’s Tough Talk Won’t Fix Chicago
Paul Donnelly
Betsy DeVos and the War on Public Education
Ebony Slaughter-Johnson
The End of an Alliance for Police Reform
Richard Lawless
Wall Street Demanded the Nuclear Option and the Congress Delivered
Liaquat Ali Khan
Yes, Real Donald Trump is a Muslim!
Ryan LaMothe
“Fire” and Free Speech
February 21, 2017
Sharmini Peries - Michael Hudson
Finance as Warfare: the IMF Lent to Greece Knowing It Could Never Pay Back Debt
CJ Hopkins
Goose-stepping Our Way Toward Pink Revolution
John Wight
Firestarter: the Unwelcome Return of Tony Blair
Roger Harris
Lenin Wins: Pink Tide Surges in Ecuador…For Now
Shepherd Bliss
Japanese American Internment Remembered, as Trump Rounds Up Immigrants
Boris Kagarlitsky
Trump and the Contradictions of Capitalism
Robert Fisk
The Perils of Trump Addiction
Deepak Tripathi
Theresa May: Walking the Kingdom Down a Dark Alley
Sarah Anderson
To Save Main Street, Tax Wall Street
Howard Lisnoff
Those Who Plan and Enjoy Murder
Franklin Lamb
The Life and Death Struggle of the Children of Syria
Binoy Kampmark
A Tale of Two Realities: Trump and Israel
Kim C. Domenico
Body and Soul: Becoming Men & Women in a Post-Gender Age
Mel Gurtov
Trump, Europe, and Chaos
Stephen Cooper
Steinbeck’s Road Map For Resisting Donald Trump
February 20, 2017
Bruce E. Levine
Humiliation Porn: Trump’s Gift to His Faithful…and Now the Blowback
Melvin Goodman
“Wag the Dog,” Revisited
Robert Hunziker
Fukushima: a Lurking Global Catastrophe?
David Smith-Ferri
Resistance and Resolve in Russia: Memorial HRC
Kenneth Surin
Global India?
Norman Pollack
Fascistization Crashing Down: Driving the Cleaver into Social Welfare
Patrick Cockburn
Trump v. the Media: a Fight to the Death
Susan Babbitt
Shooting Arrows at Heaven: Why is There Debate About Battle Imagery in Health?
Matt Peppe
New York Times Openly Promotes Formal Apartheid Regime By Israel
David Swanson
Understanding Robert E. Lee Supporters
Michael Brenner
The Narcissism of Donald Trump
Martin Billheimer
Capital of Pain
Thomas Knapp
Florida’s Shenanigans Make a Great Case for (Re-)Separation of Ballot and State
FacebookTwitterGoogle+RedditEmail