“Only one in four households that is income-eligible for federal housing assistance receives any. The annual cost to taxpayers of the federal income tax deductions for home mortgage interest and property taxes, which mainly benefit relatively affluent households, is double what the government spends on all lower-income housing programs combined.”
— Stockton Williams, executive director of the Terwilliger Center for Housing at the Urban Land Institute.
On February 28, Oregon Governor Kate Brown signed into law a statewide rent control bill, the first of its kind in the nation. The provisions of the bill put a cap on yearly rent price increases at a percentage above inflation, and do not apply to all rental units. Tenants’ rights groups believe the bill is better than nothing and puts an end to price gouging in a tight housing market, and they will continue to push for a more comprehensive bill in the future.
Political cartoon from the Chicago Labor newspaper from July 7, 1894, showing the condition of the laboring man at the Pullman Company. The 1894 Pullman Strike was a pivotal event in redressing the imbalance between labor and capital during the first Gilded Age. In the current second Gilded Age, weakened labor unions have had difficulty increasing wages for members, and the ad hoc affiliation Fight for $15 has achieved piecemeal success.
Arguments over whether rent control laws really work in favor of tenants go back and forth between the usual advocates for the free market on one side and advocates for at least limited government intervention on the other. “Supply and demand” is the linchpin for argument. Points less noted are low wages and income inequality, as in too many people have too little money while the rich continue accumulating more for themselves. And with more money comes more power in equal measure.
Free market arguments ignore how over time the rich, with help from their friends in government, put their thumbs on the scales of capitalism, creating an ever more favorable environment for themselves. To conceal from the lower classes how they are being preyed upon, the rich and their enablers in academia and government concoct formulas such as “a rising tide lifts all boats”, and “trickle down economics”. The Earth is not an infinite place with infinite resources, however, and even if it were, the rich in their greed would still grab for themselves with one hand while swatting the lower orders with the other hand. In their pathology, it’s just as important that others haven’t enough as it is that they have too much.
The same Wall Street financiers and speculators who created the housing bubble and consequent financial crisis in 2008 are responsible for skyrocketing rental prices around the country. None of them went to jail or were even indicted and prosecuted, and they were free to take advantage of the mess they had created by using their wealth to buy up property at rock bottom prices, helping themselves to favorable government regulations they themselves had largely written. That is more than just putting a thumb on the scale, it is sitting on it like a fat cat. It’s not unusual for the rich to profit off an economic downturn because they have the money to buy when everyone else needs to sell to have any money at all. This latest example of the rich getting richer has simply been more blatant and egregious than in previous financial crises.
A World War II era sign declaring rent control rules in some localities, a program administered nationwide by the Office for Emergency Management during the war and for several years afterward to prevent price gouging.
Conservative pundits are likely to denigrate rent control laws as socialism, while praising the free market ideal of supply and demand in the housing market for setting rental prices. The problem they choose to ignore, or are possibly even ignorant of, is that the free market ideal has been a dead letter for a long time in America, if it ever actually existed outside of economics text books in the first place. What we have now is a crony capitalist system run by corporate and financial oligarchs who bend government regulations in their favor. They write the rules to benefit themselves. They ran the housing market into the ground, and then scooped up everything at bargain prices and started charging sky high rents. If renters balked at the high prices, it didn’t matter, because they had no other options. Meanwhile, the building industry limped along, maintaining the housing shortage that keeps rents high. Supply and demand economics of, by, and for the fat cats.
The crudity and vindictiveness of Supreme Leader’s response to criticisms of his lackadaisical leadership in disaster recovery efforts for Puerto Rico after Hurricane Maria has been startling even for him, a crude and vindictive man. Certainly racism and sexism play a part, as they do in much of his behavior, but in this case there is the disquieting sense there is something more at work, and as is often the case, it helps to follow the money.
The Buccaneer Was a Picturesque Fellow, a 1905 painting by Howard Pyle (1853-1911) used as an illustration in Howard Pyle’s Book of Pirates: Fiction, Fact & Fancy Concerning the Buccaneers & Marooners of the Spanish Main.
Supreme Leader dropped the clue himself when he referred to Puerto Rico’s high debt load, adding that the Puerto Ricans must nonetheless continue to repay their debts despite their currently dire situation. What an odd thing to mention in discussion of relief efforts for a population struggling for survival! Did he mean those words to be taken to heart by the Puerto Ricans, who now have more pressing worries? No, not as much as he meant his words to reassure the holders of Puerto Rico’s over 70 billion dollars’ worth of promissory notes on Wall Street.
At the 18th hole of the AT&T National Pro-Am Tournament in 2006, Supreme Leader (not his title then) leans on his golf club. The pirates have exchanged their muskets for golf clubs. Photo by Steve Jurvetson.
Puerto Rico has no representatives in Congress and no votes in the Electoral College. It is a territory, and while its people are citizens of the United States, they have no say in federal matters relating to their island. On June 11, 2017, Puerto Ricans voted overwhelmingly in favor of statehood, but the decision to make Puerto Rico a state still resides with Congress. Most Puerto Ricans identify as Democrats, and since both house of Congress currently are controlled by Republicans, it is unlikely Puerto Rico will see a change in its political status anytime soon. The island’s people are effectively second-class citizens; to become first-class citizens, they must either make their island one of the United States, or entirely independent.
Mainland political interests are against Puerto Rico statehood, and there are also economic interests against it, such as large corporations and Wall Street banks that seek to continue plundering the island, an activity made easier by Puerto Rico existing politically between the devil and the deep blue sea. Who cares if the Puerto Ricans are suffering in the aftermath of Hurricanes Irma and Maria, which have piled on to an economic recession which started for them over ten years ago and has continued to worsen? Certainly not sociopaths like Supreme Leader and his economic advisors Gary Cohn and Treasury Secretary Steven Mnuchin, both formerly of Wall Street.
The damage caused by Supreme Leader, Steven Mnuchin, Gary Cohn, and other members of our ruling class is far more deplorable than what Monty Python depicted in this TV sketch, but still it helps to ridicule them.
It’s not as if Puerto Rico has 38 electoral votes like Texas, where Hurricane Harvey landed, or 29 like Florida, where Hurricane Irma continued its devastation after leaving the Caribbean islands, or even 3 votes like the District of Columbia, with its population otherwise shut out of federal representation but for those 3 measly electoral college votes. Puerto Ricans have zero votes. Not one vote in the electoral college, in the House of Representatives, or in the Senate. No one speaks for them. Thanks to its colonial relationship to the United States, however, there is money to be pillaged from its poor and working class people, and what’s left of its dwindling middle class. That’s why Supreme Leader acted the way he did, and tweeted what he tweeted, because he was looking out for himself and his cronies, and that’s his real constituency. Why would he care one way or the other about the Puerto Ricans?