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.
;)
;)
