A recent issue of Time Magazine carried an article by The Curious Capitalist / Justin Fox entitled 'Get Homes Off Welfare" .  I'm not sure if Fox really is a capitalist at heart, or if he's just curious about the concept. Either way he makes a semi-literate case against the housing industry in general and the governments support of same. He bemoans the fact that homeowners are 'at the receiving end of a truly staggering array of subsidies and tax breaks', hard to put a price tag on but 'clearly in the hundreds of billions of dollars a year.'

He claims that even with all this aid homeowners aren't doing so well and then trots out the old canards about real estate values falling by $4 trillion the past couple years and the millions of foreclosures and people 'booted from their homes'. Like that's somehow 'housings' fault. He bemoans the fact that 80% of mortgage loans this year are backed by the government and their minions Fannie, Freddie & Ginnie at lower interest rates than private market mortgages.  He lumps in the Federal Reserve for good measure blaming them for artificially lowering interest rates by buying up Freddie, Fannie & Ginnie securities.  All of this, according to Fox, puts taxpayers on the hook when things go disastrously wrong, as they so spectacularly have the past couple years.

He goes on to slam the $8,000 first-time homebuyer tax credit and then progresses to the mortgage interest deduction, property tax deductions and capital gains tax breaks , which he believes cost the government at least $100 Billion this year and every year.  With nary a nod to the economic benefit and the hundreds of billions in revenue & jobs provided by housing, building and ancillary industries, he goes on to complain that the bulk of tax benefits flow to the upper end of the income spectrum and to the coasts. 

Let me get this straight - Justin thinks homeowners aren't taxed enough and that too many breaks go to the wealthy and the coastal elitists. Hmmmm, I may have just figured out his position on capitalism after all. That's curious. 

Then he posits that subsidies have a side effect that 'push us to buy rather than rent'. These dastardly subsidies  not only push us to buy, but force us to buy more home than we can afford & drive prices up and that subsequently our homeownership becomes a 'ball and chain' if workers want to move where jobs are more plentiful. He says  that subsidizing housing resulting in appreciating home values is good for sellers but not renters or first time buyers. Maybe he should peddle that claptrap to the 350,000 first-time homebuyers  who have recently become homeowners thanks to this subsidy. 

In fairness, every point Justin raises is valid. But as with so many in the media today, he appears to be in touch with only 1/2 the picture, the half that supports his agenda. Or maybe he was just on deadline and didn't have time to do an objective article, or he just thought this would be clever or something. Who knows. 

He closes his article by stating the obvious - that rising prices are always good news for real estate agents, mortgage lenders and homebuilders.  (Jeez, Justin, what might you conclude about our fortunes during the past 3 years of plummeting prices?) 

This part I love. "These groups are powers in Washington. The National Association of Realtors gave more money than any other group to candidates in the last election ($4 million). Its 1.1 million members can do a lot of lobbying." Justin, you got that 100% correct right there. 

Finally he refers to Dwight Eisenhower's caution against the 'military-industrial complex' by issuing a call-out to the 'real-estate industrial complex'.  I love that. Sure maybe it's just little old Justin Fox, the Curious Capitalist, who has recognized that fact, but it's a start.

I don't know about you but when it comes to advocating on behalf of homeowners, or standing up for private property rights and supporting the industry that drives our economy, I'm damn proud to be part of the real-estate industrial complex. Except, Justin, for future reference, we call ourselves 'The Realtor Party'. Try to get it right if they give you any column inches in the future. Of course that's just my opinion... I could be wrong.