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.

40 IQers and a Fool

So, like, Las Vegas, the poster child for late capitalist heedlessness, is totally wrecked and doomed.  So, what are the local sellers and chasers doing down there?

Home prices in Las Vegas are down by 60 percent from 2006 in one of the steepest descents in modern times. There are 9,517 spanking new houses sitting empty. An additional 5,600 homes were repossessed by lenders in the first three months of this year and could soon be for sale.

The price declines in Las Vegas have been so brutal that most homeowners with a mortgage owe more than their home is worth. If they must sell, their only option is a so-called short sale done with the approval of the lender, which can be a lengthy and frustrating process for all concerned.

Yet builders here are putting up 1,100 homes, and they are frantically buying lots for even more.

Las Vegas is trying to recover by building what it does not need. It is an unlikely pattern being repeated in many of the areas where the housing crash was most severe.

Leave it to The New York Times to call this standard late-imperial effort to make a symptoms into a cure “unlikely.”

Of Boondoggles and the Memory Hole

Remember way back in 2008, when the federal government had to rescue the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation, both of which had ruined themselves by making too many mortgage loans during the inflation phase of the housing bubble?  Remember how, way back in 2008, there were campaign promises that the lax lending would be restricted, in order to prevent a recurrence of the implosion?

Guess what.  That’s right:

Seeking to stabilize the foundering housing market, President Obama is offering a plan to help as many as nine million families refinance their mortgages or avoid foreclosure, according to a summary released by the White House on Wednesday morning.

Included in the package is a move to ease some restrictions on Fannie Mae and Freddie Mac — which guarantee millions of home loans. Generally Fannie and Freddie cannot guarantee refinancing on mortgages valued at more than 80 percent of the home’s worth.

But the president’s plan would remove that restriction on mortgages the lending giants already own or guarantee.  [The New York Times, February 18, 2009]

Dmitry Orlov is right:  The USA’s ultra-decrepit overclass is completely out of real answers.  All it can do is throw new capitalist boondoggles on top of the craters left by the collapse of the old ones.

And, as they do this, they are displaying a truly Orwellian capacity for forgetting yesterday’s ancient history.

Meanwhile, the cravenness and market-totalitarian stupidity of the Obama Administration, which starts right where the buck supposedly stops, is yet more solid proof that, as the great Noam Chomsky says, we live in a one-party state.  There is the Business Party, which has two wings, called “Republicans” and “Democrats.”

Batten down the hatches, folks.  The worst is yet to come, and the flood will be very deep…