Vampires of the Gilded Age

Financial gurus advise never spending more than a quarter of your income on housing, so as to have plenty of cash left over for food, heat, transportation and other niceties. But if you live in certain parts of the country (D.C., New York, San Francisco) that little bromide has always been a joke. Not for nothing does NYC actually have a political party called "The Rent is Too Damned High."

Since the financial meltdown and collapse of the housing market and record foreclosures, we have become a nation of renters. And Wall Street has become a cabal of landlords, buying up all those distressed properties they had a big hand in distressing, and then leasing them out to the same middle class refugees who once owned them. There's a new housing bubble. But instead of giving out subprime liar loans to unqualified buyers and thus inflating home prices, the banks and the wealthy investor class are snatching up housing inventory with scads of easy money provided through the Fed's quantitative easing welfare program/continued bailout of Wall Street.

And so where does that leave the poor, who were always renters? Pretty much in high-rent hell. Even vermin-infested slum properties are desirable these days, prime fodder for a new breed of urban renewalists and gentrification entrepreneurs and landlord investors. And when your landlord is Wall Street and you're late with the rent, they cut you no slack. They're evicting tenants as fast as they're sucking up their last dime as security deposits.

From the New York Times:

“We are in the midst of the worst rental affordability crisis that this country has known,” Shaun Donovan, the secretary of housing and urban development, said at a conference here (New York) on Monday.

And the less income a household has, the harder the sting. “These are the people with the fewest financial resources,” said Sheila Crowley, the president of the National Low Income Housing Coalition, a research and advocacy group based in Washington. “These are the people in danger of becoming homeless.”

The problem is national, and particularly acute among the working poor. The number of renters with very low incomes — less than 30 percent of the local median income, or about $19,000 nationally — surged by 3 million to 11.8 million between 2001 and 2011, according to a report released Monday by the Joint Center for Housing Studies at Harvard. But the number of affordable rentals available to those households held steady at about 7 million. And by 2011, about 2.6 million of those rentals were occupied by higher-income households.

As a result, the share of renters paying more than 30 percent of their income for housing jumped to 50 percent in 2010 from 38 percent in 2000. For renters with incomes of less than $15,000 a year, 83 percent pay more than 30 percent of their income in rent.

During the soon-to-blessedly-end Bloomberg era, the division of the city into the haves and have-nots proceeded at breakneck speed. An example is the Hudson Yards Project, in which low income people were kicked out of their apartments through eminent domain in order to make room for green spaces and nice views for the rich.

The Times may be running a Pulitzer-worthy series of stories on extreme poverty and homelessness, but record wealth inequality is in no way impeding their business-as-usual shilling of lifestyles of the rich and famous. The editorial board just warned public workers and newly-elected Bill De Blasio that they'll have to face reality and stifle their expectations of a more egalitarian Big Apple. The Gray Lady suggests municipal workers contribute more to their own medical costs, but says nary a word about taxing the rich. In the midst of their holiday noblesse-obliging, the vampire elites are still pushing austerity on the masses while sucking up more for themselves.

 Sardonicky contributor Nan Socolow (who used to work in New York real estate) sent along this piece about River House, yet another residential tower for billionaires. The article fondly reminisces about the gilded age of the robber barons, and how it is making a comeback at long last. Property is getting so tight that even rich people are getting squeezed --- a historic luxury bar for wealthy boozehounds in the district is being closed to make room for one more plutocratic apartment. Nan writes in her scathing published comment:

The venerable New York real estate firm, Brown, Harris, Stevens (est. 1873) is offering the River House "residence" for sale at 130 Million Dollars. This egregiously grotesque price for an apartment - no matter the 'mod cons" and 82' swimming pool, right next to the East River (FDR) Drive - beggars comprehension!

This property needs a real go-getter pistol of a broker - someone like Leona Mindy Roberts before she became Mrs."just wild about Harry" Helmsley, and crowned herself Queen of the Helmsley Palace (Napoleon Bonaparte crowned himself Emperor of France). It will be interesting to see who has $130,000,000 walking around money to pay for this offering with its ineradicahble clangour of traffic noise and pall of air pollution. How good it is to see that hubris, chutzpah, and gall are alive and well in Manhattan's real estate market!

For the average billionaire, I suspect that $130 million is spare change, well in keeping with the gurus' advice to spend no more than a quarter of one's income on housing. If you're a Walton or a Koch, it's tantamount to throwing a nickel into a Salvation Army bell-ringers cup for Christmas. Not that these types would ever part with one plug nickel to ease the pain of the lesser people.

On that theme, be sure to read (or better yet, avoid)  scribe-to-the-plutocrats David Brooks's latest effort, a review of economist-to-the-plutocrats Tyler Cowen's latest book. Nobody can agitate for sadism in a more sensible-sounding philosophical manner than Our Mr. Brooks. His last two paragraphs are a veritable ode to Ebenezer Scrooge before his nightmare conversion:

Economizers. The bottom 85 percent is likely to be made up of people with less marketable workplace skills. Some of these people may struggle financially but not socially or intellectually. That is, they may not make much running a food truck, but they can lead rich lives, using the free bounty of the Internet. They could use a class of advisers on how to preserve rich lives on a small income.

Weavers. Many of the people who struggle economically will lack the self-motivation to build rich inner lives for themselves. Many are already dropping out of the labor force in record numbers and drifting into disorganized, disaffected lifestyles. Public and private institutions are going to hire more people to fight this social disintegration. There will be jobs for people who combat the dangerous inegalitarian tendencies of this new world.

My response: (he admits he never reads the comments because of his sensitive feelings)

So now David Brooks is shilling for the Koch Brothers.

Tyler Cowen, author of the book that he's salivating over, runs the libertarian think tank known as the Mercatus Center. Founded and funded by the Koch Family to the tune of almost $30 million, it's been called "Ground Zero for deregulation policy in Washington."

The Kochs' sole aim is extraction -- despoiling the planet as they relentlessly steal from every man, woman and child living on it. They're among just 250 individuals who have more money than the total annual living expenses of almost half the world -- three billion people. Or put another way, the richest 5% own about two-thirds of the $15 trillion gained since the recession.

So all this recent talk of wealth disparity and rising progressivism must be making them nervous. From the Kochs' vault to Cowen's brain to Brooks's Rx pad comes this cheery prescription:

It's a servant economy, stupid. And if you won't toil for the rich at subsistence wages, then you're a lazy low-life. And if you find yourself relegated to the margins through your own fault, there are plenty of your fellow citizens desperate enough to persuade you to get with the Brave New World program. Private for-profit prisons beckon those who can't embrace the joy of poverty and find fulfillment in licking the same boots that won't stop kicking them in the teeth.

It must be hard out there for a columnist needing new ways of preaching Social Darwinism week after stultifying week.