As published in The Californian newspaper and online at www.nctimes.com Sunday, August 17, 2008.
Building no answer to housing crisis
Whatever happened to Ronald Reagan's call for "rugged individualism?" Apparently, it went the way of all those business acquisitions, mergers and corporate consolidation. These days, individuals are in rugged survival mode in a nation where profiteers periodically plunder the middle class.
At least one TV commercial reminds us, "We are a nation of consumers." Well, what else can we be when millions of jobs have been outsourced to emerging nations? Those country's economies are emerging because they produce products, thereby providing jobs for their citizens.
Meanwhile, the same old scams are perpetrated upon the American public for the sake of corporate profits. The marketplace responded to the 1970s energy crisis by building smaller, fuel-efficient vehicles, but amnesia set in and automakers returned to a bigger-is-better mentality. Thirty years later, when fuel prices started rising again, commercials urged people to cash in on their home equity to fill voids in the family budget.
The savings and loan scandal of the 1980s was replicated as the sub-prime mortgage fiasco of this decade. When corporations go bankrupt, they get government bailouts and then are adopted by other companies. When families fall victim to predatory lending, they lose everything. Their homes go vacant, and I suppose they move in with relatives.
Last Tuesday, an article on page A-3 of The Californian was titled, "Most companies in U.S. avoid federal income taxes." Ironically, these limited liability and "S" corporations skip paying taxes on trillions of dollars in sales by taking advantage of "individual tax codes." I guess that's called "rugged corporate individualism"? The article didn't even mention the corporations that move offshore to escape U.S. taxes.
Incredibly, these companies that avoid their own government obligations have no problem greasing the wheels of politicians to get corporate welfare. An Aug. 9 Community Forum by Bob Yoder, president of the Building Industry Association of Riverside County, suggested that "now is the time for local government, the homebuilding industry, area business groups and community leaders to band together" to reverse the collapse of the housing market and related industries.
Mr. Yoder advocates "policy solutions that bolster the region's economy and its most important industry, new construction." This means streamlining the entitlement (I thought that word only applied to welfare) process and decreasing impact fees that pay for infrastructure.
One definition of insanity is doing the same thing over and over while expecting a different result. Housing slump? Let's build more! Oil dependency? Let's drill our way out of it! Struggling economy? Shop 'til you drop!
Building in a region that is oversupplied with housing will slow recovery of the existing resale market and won't help existing homeowners regain lost equity. Investing in alternative fuel technologies will create new industries of jobs. Jobs stimulate the economy.
American ingenuity is the way to pull our economy up by its bootstraps.
Investing in rugged human individualism is a better alternative to restructuring the old schemes of corporatism. The plutocracy takes every opportunity to invoke Reagan's name while forgetting his heart for the individual. Paul Jacobs is a regular columnist for The Californian. E-mail him at TemeculaPaul@aol.com.