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

More articles by:

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

CounterPunch Magazine

minimag-edit

bernie-the-sandernistas-cover-344x550

zen economics

Weekend Edition
June 23, 2017
Friday - Sunday
Jeffrey St. Clair
Democrats in the Dead Zone
Gary Leupp
Trump, Qatar and the Danger of Total Confusion
Andrew Levine
The “Democracies” We Deserve
Jeffrey St. Clair - Joshua Frank
The FBI’s “Operation Backfire” and the Case of Briana Waters
Rob Urie
Cannibal Corpse
Joseph G. Ramsey
Savage Calculations: On the Exoneration of Philando Castile’s Killer
John Wight
Trump’s Attack on Cuba
Dave Lindorff
We Need a Mass Movement to Demand Radical Progressive Change
Brian Cloughley
Moving Closer to Doom
David Rosen
The Sex Offender: the 21st Century Witch
John Feffer
All Signs Point to Trump’s Coming War With Iran
Jennifer L. Lieberman
What’s Really New About the Gig Economy?
Pete Dolack
Analyzing the Failures of Syriza
Vijay Prashad
The Russian Nexus
Mike Whitney
Putin Tries to Avoid a Wider War With the US
Gregory Barrett
“Realpolitik” in Berlin: Merkel Fawns Over Kissinger
Louis Yako
The Road to Understanding Syria Goes Through Iraq
Graham Peebles
Grenfell Tower: A Disaster Waiting to Happen
Ezra Rosser
The Poverty State of Mind and the State’s Obligations to the Poor
Ron Jacobs
Andrew Jackson and the American Psyche
Pepe Escobar
Fear and Loathing on the Afghan Silk Road
Andre Vltchek
Why I Reject Western Courts and Justice
Lawrence Davidson
On Hidden Cultural Corruptors
Christopher Brauchli
The Routinization of Mass Shootings in America
Missy Comley Beattie
The Poor Need Not Apply
Martin Billheimer
White Man’s Country and the Iron Room
Joseph Natoli
What to Wonder Now
Tom Clifford
Hong Kong: the Chinese Meant Business
Thomas Knapp
The Castile Doctrine: Cops Without Consequences
Nyla Ali Khan
Borders Versus Memory
Binoy Kampmark
Death on the Road: Memory in Tim Winton’s Shrine
Tony McKenna
The Oily Politics of Unity: Owen Smith as Northern Ireland Shadow Secretary
Nizar Visram
If North Korea Didn’t Exist US Would Create It
John Carroll Md
At St. Catherine’s Hospital, Cite Soleil, Haiti
Kenneth Surin
Brief Impressions of the Singaporean Conjucture
Paul C. Bermanzohn
Trump: the Birth of the Hero
Jill Richardson
Trump on Cuba: If Obama Did It, It’s Bad
Olivia Alperstein
Our President’s Word Wars
REZA FIYOUZAT
Useless Idiots or Useful Collaborators?
Clark T. Scott
Parallel in Significance
Louis Proyect
Hitler and the Lone Wolf Assassin
Julian Vigo
Theresa May Can’t Win for Losing
Richard Klin
Prog Rock: Pomp and Circumstance
Charles R. Larson
Review: Malin Persson Giolito’s “Quicksand”
David Yearsley
RIP: Pomp and Circumstance
FacebookTwitterGoogle+RedditEmail