Luxury Capitalism

As investment outlets outside the financial casinos get harder and harder to find, and as almost all new wealth continues to pile up in the coffers of the hilariously/Orwellianly self-proclaimed “job creators,” the reality is that corporate capitalism is getting increasingly dependent on selling increasingly ornate luxury goods to the elite and the merely comfortable.

Consider the latest news that the size of new houses being built has returned to its pre-crash trend of steady, record-breaking increases. Why is that? Is it some feature, as many “consumer culture” analysts would surely have it, of national character, of collective greed and psychosis? “Americans love bigness!”

Not so much. “To get an answer, just take a look at WHO is buying new homes,” says the NAHB itself. Here’s the click-to-expand graph:

ficohousing

Hence, another always stratified and divisive core capitalist product has generally gotten much more stratified and divisive.

7 Replies to “Luxury Capitalism”

  1. As someone buying a house right now, I’ve been thinking a lot about this topic lately, and the experience of the process is surreal.

    I am definitely a part of the “merely comfortable” class (two professional incomes, no kids, old cars with no car payments, mountains of student loan debt); but after reviewing my family’s finances, I concluded that there is no way we could afford a mortgage higher than our current rent ($950).

    Since I also consider the idea of a 30 yr. mortgage inherently crazy, the mathematics works out to a house that costs LESS than 100k, on a 15 year mortgage.

    Anyway. The point is that my credit is congruent with the chart above – “excellent” – 760, which entitles me to “only” put 5% down. down payment plus closing costs add up to $8,000 –> cash I need to plop just to walk into the door of an old, fixer-upper house.

    The luxury housing market aside, think of how out of reach even this type of house is for the people that are “supposed” to live in sub-100k houses – i.e. the lower middle class, the working class. Most of these families will NEVER see $8000 in disposable cash in their lives, even as they pay rents compatible with the corresponding mortgage.

    The person I’m buying the house from is has been working for the state all her life – which is how I know that her annual salary is $35,000 (public info). Yet she could not afford to keep this cheap-ass old house, which is how I’m getting it, in a shortsale.

    In other words, the overlords will have to come up with new luxury stuff to sell to their buddies pronto, because even people like me are certainly not in the mood to buy superfluous toys. We’ve got plumbing leaks to fix, courtesy of the dispossessed…

  2. Great reporting from the front lines of the class struggle – precisely rendered.
    1. What’s crazy about a 30 year mortgage? We took 25 to pay ours off – but we could only afford our cheap house because we had sold a very, very cheap house to willing buyers who kind of got the raw deal later when prices in the Rust Belt dropped.
    2. Every other point you make is dead-on. Welcome to the world of home ownership – Just watch out for hidden costs, like house insurance, repairs, more repairs, squeezing other bills to keep the mortage payments from decimating finances.
    3. Smart about the no kids part – for that reason alone, you should make your 15 year finish line without a hitch.

  3. Also, it is amazing how many of the houses in my area are owned by ‘investors’, rather than occupants.

    Martin, yes – the reason why I arrived at such an “unreasonably low” (though I’d debate if this is so) price limit is precisely taking into the monthly payment account all attendant costs (home & mortgage insurance, taxes). I do not take into account renovation/improvement costs – these might be partially recoup-able, but they are mainly consumer expenditures (it is indeed impressive how the HGTV marketing machine was able to re-brand them as “investments”). “Get a new pooper! It’s an investment!”.

    (As for 30 year mortgages, simply the thought of being on the hook for so long stresses me out…)

  4. The working class’ countermove against elites is to stop having children–elite pleasures depend on a steady stream of free proletariat kiddies to threaten with starvation in exchange for work. Dropping birthrates could produce a worker/parasite ratio closer to the time after the Black Plague, when peasants got a bit more bargaining power.

    Ergo if the point of this all was short-term financial gamesmanship then drastically reduced birth rates is a positive development in the great class struggle.

    If you don’t believe in some form of cosmic spirituality, then you want those birth rates to drop. Barring mass suicide, it’s the only way to force the lazy elites to reconsider wealth distribution, and make a lifetime of productive labor look a lot more pleasant.

    What if I told you that all elites will eventually get what they want? A very long capitalist paradise where they can compete against the best of the best: other elites who decided to be there to compete in the misery game, rather than all the milk-watered wusses who wanted to be communal? If you decide to change your mind at the last minute, it might be too late to dedicate a few decades’ suffering to some expensive, fiscally-ruinous offspring.

    <3

  5. I like this theory, unfortunately if true, there is no way it can happen fast enough to make a difference:

    http://www.statista.com/statistics/241530/birth-rate-by-family-income-in-the-us/

    Besides, in any epoch, *the poorer you are, the more children you have*. Whatever the reasons, it is also true today.

    It is probably the stupid middle class (people like me) that gets the double whammy: not rich enough to cultivate well even a limited offspring, not poor enough to just say fuck it and procreate big time.

  6. E.g., the great humility, selflessness, and sacrifice is by the stupid poor, who economically demean themselves by procreating in order that the species might not go extinct. The rich procreate, but not to their own detriment. The middle class, as it were, is the group that defines itself by either not procreating, or by limiting family size for economic reasons: not just to save mommy and daddy a few bucks, but also to allow more “investment” in time and dollars in the child’s education, with the hope that she or he ascends to the upper class.

    So much of the nexus of modern evil begins with the middle class. The decision to try to become elite, even while bemoaning the plight of the poor, eventually pays off, creating the very thing so-demeaned…while the stupid sans-culottes keep pumping out large families of janitors, nurse aides, and construction workers.

  7. The aspiration to be a part of the elite betrays a massive failure of education in the family, precisely the thing the middle and upper class like to bash the poor for lacking. The only meaningful aspiration a parent can have for their kids is for them to be good and wise. Everything else is paranoia that will stop at nothing in the pursuit of security. Understandable as it may be, it is futile, though it certainly leads to horrors: the bourgoise will always, always, always ally with the rich and the tyrants.

    While I certainly am blind to some of class based personal deficiencies (and the ones I am not blind to would be too uncomfortable to surrender), at least I don’t feel constantly psychologically at war with everybody, like many of my friends.

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