Click amount to donate direct to CounterPunch
  • $25
  • $50
  • $100
  • $500
  • $other
  • use PayPal
DOUBLE YOUR DONATION!
We don’t run corporate ads. We don’t shake our readers down for money every month or every quarter like some other sites out there. We provide our site for free to all, but the bandwidth we pay to do so doesn’t come cheap. A generous donor is matching all donations of $100 or more! So please donate now to double your punch!
FacebookTwitterGoogle+RedditEmail

The Radical Extremists of the Building Industry

“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

Weekend Edition
October 19, 2018
Friday - Sunday
Jason Hirthler
The Pieties of the Liberal Class
Jeffrey St. Clair
A Day in My Life at CounterPunch
Paul Street
“Male Energy,” Authoritarian Whiteness and Creeping Fascism in the Age of Trump
Nick Pemberton
Reflections on Chomsky’s Voting Strategy: Why The Democratic Party Can’t Be Saved
John Davis
The Last History of the United States
Yigal Bronner
The Road to Khan al-Akhmar
Robert Hunziker
The Negan Syndrome
Andrew Levine
Democrats Ahead: Progressives Beware
Rannie Amiri
There is No “Proxy War” in Yemen
David Rosen
America’s Lost Souls: the 21st Century Lumpen-Proletariat?
Joseph Natoli
The Age of Misrepresentations
Ron Jacobs
History Is Not Kind
John Laforge
White House Radiation: Weakened Regulations Would Save Industry Billions
Ramzy Baroud
The UN ‘Sheriff’: Nikki Haley Elevated Israel, Damaged US Standing
Robert Fantina
Trump, Human Rights and the Middle East
Anthony Pahnke – Jim Goodman
NAFTA 2.0 Will Help Corporations More Than Farmers
Jill Richardson
Identity Crisis: Elizabeth Warren’s Claims Cherokee Heritage
Sam Husseini
The Most Strategic Midterm Race: Elder Challenges Hoyer
Maria Foscarinis – John Tharp
The Criminalization of Homelessness
Robert Fisk
The Story of the Armenian Legion: a Dark Tale of Anger and Revenge
Jacques R. Pauwels
Dinner With Marx in the House of the Swan
Dave Lindorff
US ‘Outrage’ over Slaying of US Residents Depends on the Nation Responsible
Ricardo Vaz
How Many Yemenis is a DC Pundit Worth?
Elliot Sperber
Build More Gardens, Phase out Cars
Chris Gilbert
In the Wake of Nepal’s Incomplete Revolution: Dispatch by a Far-Flung Bolivarian 
Muhammad Othman
Let Us Bray
Gerry Brown
Are Chinese Municipal $6 Trillion (40 Trillion Yuan) Hidden Debts Posing Titanic Risks?
Rev. William Alberts
Judge Kavanaugh’s Defenders Doth Protest Too Much
Ralph Nader
Unmasking Phony Values Campaigns by the Corporatists
Victor Grossman
A Big Rally and a Bavarian Vote
James Bovard
Groped at the Airport: Congress Must End TSA’s Sexual Assaults on Women
Jeff Roby
Florida After Hurricane Michael: the Sad State of the Unheeded Planner
Wim Laven
Intentional or Incompetence—Voter Suppression Where We Live
Bradley Kaye
The Policy of Policing
Wim Laven
The Catholic Church Fails Sexual Abuse Victims
Kevin Cashman
One Year After Hurricane Maria: Employment in Puerto Rico is Down by 26,000
Dr. Hakim Young
Nonviolent Afghans Bring a Breath of Fresh Air
Karl Grossman
Irving Like vs. Big Nuke
Dan Corjescu
The New Politics of Climate Change
John Carter
The Plight of the Pyrenees: the Abandoned Guard Dogs of the West
Ted Rall
Brett Kavanaugh and the Politics of Emotion-Shaming
Graham Peebles
Sharing is Key to a New Economic and Democratic Order
Ed Rampell
The Advocates
Louis Proyect
The Education Business
David Yearsley
Shock-and-Awe Inside Oracle Arena
FacebookTwitterGoogle+RedditEmail