Holman Jenkins’ modest proposal

by

Ed Lewis

In an article reminiscent of Jonathan Swift’s modest proposal that the problem of poverty in Ireland could be solved by eating the children of the poor, Holman Jenkins in today’s Australian (in a column syndicated from the Wall Street Journal) recommends that the US government buy up and bulldoze newly completed excess housing to solve the sub-prime housing loans crisis. Swift, of course, was famously being satirical, but Jenkins seems to be serious (sometimes it’s hard to tell when reading neoliberal economic journalists).

Jenkins points out that “it’s old-hat in the sticks” to use “taxpayer dollars to buy and demolish foreclosed, unoccupied or half-built houses in selected markets”.

“Only a small mental adjustment is required to begin aiming these bulldozers at ‘new’ homes too. Get over it.

“Knocking down surplus homes would be the most efficient and equitable way to spend taxpayer dollars.”

That’s one proposal, here’s another one: pull the US troops out of Iraq and use the $US341.4 million a day that’s required to keep them there to buy up the “excess” housing and let people live in the housing at low rents, or to buy the places through low-interest, no-deposit, or very low deposit, long-term government-guaranteed loans.

According to a study last year by the US National Alliance to End Homelessness, there were three-quarters of a million homeless people in the US in 2005. Apparently tracking matters such as homelessness and poverty isn’t a high priority in the Land of the Free and the Home of the Brave, because the alliance says its survey is the first in a decade.

No survey is necessary to know that things have got a lot worse since then, and a lot of people in the US have lost their homes in the past year or so. Financial analyst Moody’s estimates that the sub-prime crisis won’t peak until the middle of this year, and will still be near its peak well into next year.

Moody’s economist Nick Zandi estimates that another 1.2 million sub-prime borrowers will default before the crisis ends. Cutting through the sanitised financial language, that means another 1.2 million people, and in many cases families of more than one person, will lose their homes in the US in the next year or so.

The supposedly richest society in the world can’t house not only the 750,000 or so permanently homeless, but probably 3 million or so more who could barely afford to buy housing at the peak of one of the longest economic booms in history. Actually, the US could house all those people, the point is it won’t, as it prefers to spend the money elsewhere, particularly on the Iraqi and other military adventures.

State-subsidised housing is not a new idea. For many years, until the neoliberal mania took hold, most Australian states had housing commissions that built cheap but good-quality housing for rental or purchase by people who otherwise couldn’t afford it.

These housing commissions with their construction arms were eventually dismantled at the urging of private construction and land development interests, which insisted they could supply housing more efficiently. The result is that Sydney and some other Australian cities now have the most expensive housing in the world.

The faith of Holman Jenkins and others in “the market” to provide housing in the US, or anywhere else is very touching, but it’s neoliberalism that should be bulldozed.

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