Uncommon Sense

June 11, 2021

The Rent’s Too Damned High

Economic myths dominate our political belief systems. Cory Doctorow recently addressed a number of them (on renting and home ownership) here.

Very much worth reading!

Here’s a taste:

The American middle class didn’t emerge thanks to property ownership — property ownership came about as the result of wage gains due to strong (and hard-fought) labor rights, and as a result of public subsidy for private homebuilding (the GI Bill). Homeownership is a good way to covert gains from the a worker-friendly labor market into something durable and insulated — but it’s no substitute for workers’ rights.

It only took a generation for the dream of homeownership to become a nightmare. Trading labor rights for asset appreciation meant that guaranteed pensions became market-based 401(k)s, turning American workers into the suckers in the financial markets’ casino. As these older workers retire, they are forced to supplement their wholly inadequate pensions by liquidating, remortgaging or reverse-mortgaging the family home. Social Security helps, but not much — without a powerful organized labor movement to defend Social Security, the program has withered, offering a sub-starvation cushion.

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