Monday, March 25, 2013

Michael Lind — How to Defeat Useless Rich Moochers

In two previous columns, I argued that left and right alike are confused by a failure to distinguish productive businesses that sell innovative goods and services from “rentier” interests — landlords, lenders, copyright holders and others — which use their natural or artificial monopoly power to extract excessive tolls, fees and other recurrent payments from the rest of society, including productive businesses. The fees or rents extracted by these interests constitute a kind of “private taxation” which — rather than public taxation — is the greatest threat facing America’s productive economy.
Today America’s powerful rentier interests, particularly those in the FIRE (finance, insurance and real estate) sector, are mobilizing campaign contributions and paid propaganda to promote what I called the Rentier Agenda: low taxes on those whose income is derived from capital gains; the privatization of public infrastructure and the deregulation of regulated private utilities, to generate windfall profits for investors in privatized or deregulated agencies; and a macroeconomic policy that serves the interests of creditors, at the expense of slow growth and mass unemployment, rather than productive businesses and workers. Similar observations have been made by many on the left and some mavericks on the right.
To counter the domination of America’s rentier oligarchs, we need an Anti-Rentier campaign that would unite unlikely groups: owners of productive businesses as well as workers, populist conservatives and liberal reformers. An Anti-Rentier movement would distinguish businesses that make profits by providing worthwhile goods or services in innovative ways from rentier interests that passively extract exorbitant tolls and fees from the economy without adding any value.
How to Defeat Useless Rich Moochers
Michael Lind | Salon
(h/t John Zelnicker via email)


marris said...

Anyone who saves can buy property... it's not rocket science. Most landlords have rented property, especially when they were young. They save up their income and bought something, usually from a guy who discounted his future rents by the market rate of interest. Seems like productive business to me.

Tom Hickey said...

The housing market is largely being driven by investors.  The noise that we are seeing is large money from both Wall Street and foreign money clogging up real estate across the US.  Foreign money is more concentrated in targeted niche markets while big money is dominating places like the Inland Empire, Arizona, Nevada, and Florida....

The obvious reason for this is that the volume of all cash buying form investors is off the charts.  We’re not talking about a handful of buyers but billions upon billions of dollars flowing into the housing market from sources outside of your traditional buyer.  Couple this with Fed and government regulations that now allow banks to rent homes out plus the fact that many of these investors are buying to hold for a few years and then sell, you end up simply removing inventory from an already depleted market....

When people say that incomes do not matter the bigger picture is missed.  It does matter because even with a solid down payment and solid incomes many people are being outbid by the hot money market....

Remember that 5,000,000 Americans have gone through the foreclosure process since 2007 and a few more million will do so in the next few years.  Given the volume of investor buying, the odds are strong that these homes will end up in the hands of big investors.  Just like the Census figures show, California gained 500,000+ renters since 2007 while losing over 200,000+ home owners.

Dr. Housing Bubble today