Labor | The Magpie Gazette

Buy Low, Rent High

March 3, 2019 Editor

“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.

The Condition of Laboring Man at Pullman 1894

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.
— Ed.

Thievery 2008 Financial Crisis, Academia, America, Building Industry, Capital, Chicago Labor (newspaper), Conservative Pundits, Crony Capitalism, Earth, Fat Cats, Fight for $15, Financiers, Free Market, Gilded Age, Government, Housing Bubble, Housing Market, Housing Shortage, Income Inequality, Kate Brown, Labor, Labor Unions, Landlords, Lower Classes, Office for Emergency Management, Oligarchs, Oregon, Pullman Company, Pullman Strike, Rent Control Laws, Rents, Resources, Rich People, Socialism, Speculators, Stockton Williams, Tenants, Terwilliger Center for Housing, Urban Land Institute, Wages, Wall Street, World War II

Too Much of a Good Thing

August 22, 2017 Isidore Gnome

Sugar can be derived from numerous plants, including beets, corn, and the fruit of trees, but it has come into its own since the Middle Ages in Europe as the refined product of the sugarcane plant, a perennial grass. The plant originated in New Guinea, and from there traders introduced to Asia, where it eventually found its way to southern Europe by way of Arab merchants. As noted from its origin, the plant grows in tropical or sub tropical climates. Europeans quickly developed a taste for refined sugar, but since the plant would not grow well in Europe or northern Africa, they needed to find either another source or another place to grow, or forever be at the mercy of Arab merchants, who kept the price high.

When European explorers stumbled upon the New World in their search for a trade route to the Far East that bypassed Arab middlemen, they were interested in exploiting sugar resources as much as spices. The tropical and sub tropical bands of the New World – the Caribbean, much of eastern South America, Central America, and the far southeastern portion of North America – turned out to be well suited for raising sugarcane. The problem was finding a suitably cheap labor source for the backbreaking and dangerous labor involved in sugarcane cultivation as well as refinement. The Europeans, after exhausting the Native Americans as a labor source, turned to Africa as a source of slave labor.

There were other plantation crops that Europeans raised in the New World exploiting slave labor, such as tobacco (a plant native to the western hemisphere) and cotton, but sugar was the big money maker for them, the linchpin of Atlantic trade from the 1500s well into the 1800s. Sugar grown on plantations in the New World traveled, some in the form of rum, to northeastern ports of North America and then on to Europe, where it was traded for manufactured goods; some of the manufactured goods then were traded in Africa for slaves, who were loaded onto ships destined for plantations in the New World, their voyage across the Atlantic being known as the Middle Passage of this triangle of trade. Some didn’t survive the voyage, and of the ones who did, many suffered abominably under harsh conditions in the sugar growing regions and elsewhere.

Pancakes with syrup, or syrup with pancakes? Photo by jeffreyw.

Hundreds of years later, sugar is still exacting a toll from poor black people, as well as poor and working class people generally. The European quest for cheap sugar succeeded all too well. Now it’s found in far too many supermarket foods and beverages, where in the case of processed foods it masks the loss of wholesome flavors. Sugary beverages like soda and many fruit drinks are especially egregious sources of the endocrine disrupting carbohydrates present in refined sugar that can lead to obesity and type 2 diabetes. These processed foods are easy to prepare and are relatively cheap and, because of the sugar in them, to some people they taste good enough.

“Big Rock Candy Mountain”, first recorded by Harry McClintock in 1928, is about a hobo’s idea of paradise. McClintock claimed to have written the song in 1895, based on tales from his youth hoboing through the United States. McClintock’s 1928 recording was used by Ethan and Joel Coen at the beginning of their 2000 film, O Brother, Where Art Thou?.

People could cut back their consumption of processed foods, and certainly they could drop sugary sodas and fruit drinks out of their diet and not lose any essential nutrients. People can use will power and self control, even though there is evidence that sugar’s effects on their health are more insidious than industry mouthpieces would have everyone believe. People can do all those things. But they don’t. Why not?

What if crack cocaine were as cheap as sugar? How about cigarettes? Opioids? What levels of consumption would we encounter then among the general population, and among the poor and working classes specifically? All those substances stimulate pleasure centers in the human brain, just like a good hit of sugar does in a smaller way, and all are ultimately destructive in high enough doses. Is sugar as destructive as those other addictive substances? No, not in the short term, and it would be ridiculous to equate a cookie with a hit of cocaine. In the long run, however, over the course of ten, twenty, or thirty years, sugar consumption at modern American levels of a hundred pounds or more per person per year is proving destructive enough. Time to turn some of that exhausted soil in the tropics over from growing monocultures of sugarcane for export to growing fruits and vegetables the locals could consume for themselves. We could easily cut back from two or three lumps of sugar to just one.
― Izzy

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