Much of the hype about our economy surrounds the fact that the housing market is increasing, somewhat. And, to a degree, this is true. A little history ……
When the housing market crashed there was much wailing and gnashing of the teeth. But, it was entirely predictable, was predicted, as well as the aftermath.
When the recession hit, people couldn’t afford to make their house payments. The homes were entirely overvalued. The banks were reluctant to foreclose because they wouldn’t be able to realize the loan value. The federal government intervened with many new rules, essentially to both protect the banks with massive bailouts and whatnot, and to a smaller extent to protect the borrowers who couldn’t pay off their loans. Still, that wasn’t enough. I had hopes that they’d just let the market drop and in that manner, many of the working poor could afford to buy homes for the first time, because of the very low prices which would have occurred if they’d just let it go. But, that didn’t happen.
What did happen is that the fed reserve bank also intervened. They started to print money. And, what did they do with that money? They bought all the crap notes the banks were holding. So, now there’s money available without banks having to write off huge losses. The purchasing price of the homes were still too high, but, now there was all of this extra capital out there. And, it went to wealthy people and entities. And, that’s who are buying the homes. And, they’re renting them out. But, not a prices for the little people, who would have greatly benefitted by cheap homes. Now home prices are on the way back up, and thus, so are rent prices.
A record lot in fact: the median asking rent for US vacant housing units just hit an all time high of $735 per month.
Contrast the above graph with this one below………
The net affect of these disastrous policies is to have a two class system in the US. The “haves” and the “have-nots”. There is no upward mobility.
I haven’t figured out if Zero is intentionally doing this or if his advisors realize he’s simply too stupid to understand this is having the opposite affect of what he supposedly advocates.
I would be remiss to write a post like this without tipping a hat to Jimmy McMillan.