What’s the smell of crisis?
What’s the smell of capitalist crisis? It’s the smell of new carpet, freshly laid linoleum, and fiber-board cabinetry being released into the wind as homes that are so new they haven’t even been lived in yet are ripped apart by demolition tractors. The absurdity of new homes being ripped to the ground immediately after having been built is staggering, and functions as an almost adequate parable about the global economic crisis that was set off by the U.S. banking system. Like the bailout money that’s been directed almost entirely to the finance and banking sector of the economy (and which has been used to prop up those sectors of the economy that keep the wealthy wealthy, while tending to bypass everyone else), the tractor that’s busy ripping the houses apart is working in the interest of the banks and not in the the interest of the growing population that’s in desperate need of housing, work, healthcare, and even food. With Hoovervilles and tent cities springing up all across the United States it’s a deep irony that houses are being demolished rather than converted to temporary shelter. According to the U.S. Census Bureau, the vacancy rate for U.S. homes hovered at around 2.8 percent for 2008 (with a drop to 2.7 percent in the first quarter of 2009), the highest rate of home vacancy since at least 1960. In fact, at no point between 1960 and the end of 2005 was the vacancy rate for housing higher than 1.9 percent. The high rate of housing vacancy between 2005 and 2008 can be attributed to the massive growth in housing construction to meet the needs of the housing boom. The fact that the vacancy rates have remained high can clearly be traced to both the fact that few people are currently buying, and the the incredibly high level of home foreclosure following the start of the current crisis. What does a 2.8 percent home vacancy rate translate to in real numbers? Around 2.28 million properties.
In the United States about 3.5 million people experience some form of homelessness in any given year (Wikipedia), and the number of chronically homeless people stood at about 123,833 in 2007 (a Bush administration statistic, as reported by the NY Times). Obviously this number has increased significantly since the economic crash of 2008 began. It takes not the slightest bit of logic to realize that there is more than enough housing to go around in the United States, and that it would take a relatively small amount of money to rent/convert/lease these houses as emergency shelters — a program that would put money directly in the hands of homeowners who can’t make their mortgage payments, while simultaneously keeping newly homeless families, the victims of the subprime lending scheme, from having to live on the street.
The absurd logics that have been at work in the United States over the past twenty years or so have continually reminded me of the stories about Soviet inefficiency that used to circulate in the popular media during the height of the Cold War. One of my favorites was the story (I have no idea whether or not it was true) that all of the apartment buildings in Moscow spent their winters with their windows wide open because the heat was mandated to run continually, no matter what the temperature inside the apartment might be, in order to keep Soviet oil workers employed. I also remember all of the stories about empty stores, the long lines for basic services, and of course the labyrinthine bureaucracy that stymied any attempts to get even the most basic things accomplished. And then I think about the crisis in California’s health care system (not to mention the national system in general) and I think of my cousin’s stories about having to wait in line from 7:00 a.m. in the emergency room at the hospital because, without insurance, this was the only way to receive medical care. Sometimes my cousin would have to wait for hours and hours and still wouldn’t be able to be seen by a doctor because there were just so many people in a far more serious state who had priority — people who were bleeding from open wounds, or pale and having trouble breathing. I have absolutely no nostalgia for the former Soviet system, but I sometimes wonder to what extent there might be a Cold War hangover that’s infected us that takes the form of not being able to see how dysfunctional things have gotten in our own country because somehow the myth is still circulating that those kinds of things are the kinds of things that are the provenance of other countries, but never the U.S.A.
Here are a few disturbing stats from the latest Harper’s Index:
Estimated total amount that world financial institutions will write off by 2010, according to the IMF: $4,100,000,000,000
Portion of those bad loans and securities that originated in the United States: 2/3
There’s something very Orwellian about the way in which the houses in Victorville have been demolished as a result of the mortage and banking crisis at the exact moment that more and more people need emergency housing because of the mortage and banking crisis. Perhaps it’s time for Victorville to be renamed Victory-ville as the Ben Tre logic of “‘it became necessary to destroy the town to save it” begins to surface once more.
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Tags: absurdity, bailout money, banking, bureaucracy, capitalism, capitalist crisis, Cold War, demolition, financial crisis, Harper's Index, health care, health care system, homelessness, Hoovervilles, housing, human needs, mortgages, Orwell, Orwellian logic, propaganda, Soviet Union, subprime lending, Victorville