“Economists announced the positive news that both food and healthcare prices are up strongly today showing a promising growth trend since the beginning of the year. The malaise in food prices is now seen as over, and positive growth is indicated for the next two quarters. The rise in healthcare prices is particularly robust, as buyers are rushing back from the sidelines to buy healthcare in a sign of general economic improvement.”
We’re kidding. And no, that’s not really a quote.
Rising food and healthcare prices are nothing short of disastrous for the economy, sapping money out of potentially productive investments and decimating consumer spending and investment.
So why do we not even blink when the media uses the same rosy language to discuss the equally destructive rise in housing prices?
Housing, as we all know, is not a productive asset. It’s not even a reliable store of value as it deteriorates quite rapidly without maintenance. As Americans throw a larger and larger chunk of their paychecks towards housing, they are depriving the actual productive economy of investment. And yet, if one were to open any mainstream publication, one would think that “housing inflation” was somehow a “good thing”.
What about renters?
And why do both the media and government forget about renters? The so-called “recovery” in housing is an unmitigated disaster for America’s renting class. The reason we don’t pat ourselves on the back when it comes to food-price inflation is that we’re all consumers. But in the case of housing, only one side of the public pays rent. Does anyone in government ever mention renters?
How many of us own homes anyway?
How often does the media use the term “Housing inflation”? We’ve never even seen the term used in any mainstream media publication.
Real-estate inflation is given positive sounding names like “Housing growth”, the “Real-estate recovery”, and it’s celebrated as if “we” are all real-estate owners. But how is it a “recovery” if you’re not a real-estate owner? Isn’t one man’s real-estate “recovery” another man’s crisis?
Why does the media champion one side of the economy and utterly ignore the other side which gets skewered by rising prices? Home ownership is now at levels not seen since 1995, according to the US census bureau.
But let’s be clear: It’s much worse than it looks. Why? Because if you’re a 23 year-old living at home in your parent’s basement, you’re considered a “homeowner”. If you’re part of a household which owns a home, the census doesn’t count you as an adult looking for a home.
How many adult children are living at home? Answer: Record numbers. Take Sacramento for example:
So even if we take the US Census numbers at face-value (which we do not) the number of Americans renting is at 35% But add to it the millions of Americans between 18-31 living at home, and the reality becomes clear: The class of real-estate “have nots” is vast. Comprising close to half of all Americans.
Both liberal and conservative mainstream media side with the real-estate “haves” and pretend almost uniformly that the “have nots” simply do not exist at all. Renters are a class utterly without representation.
And the current administration seems to think that “Americans” is synonymous with “Real estate owners”.
The forgotten renter-class.
And when the real-estate “Recovery” picks up, it’s the “have nots” that get crushed.
Fortunately for the renting class, their salaries are growing along with the “economy” at a 1:1 clip. Oh, wait. No they’re not. Real US wages are collapsing.
Not only is the notion of a real-estate recovery a lie, given the clear collapse in real US wages — but what is most offensive is the notion that housing inflation is considered a positive development given the vast size of America’s renting class.
What the media bias amounts to, is collusion with the banking industry who seeks to drive real-estate holdouts into the shackles of debt-serfdom. In another post, we’ll discuss the oft-used weasel-word, “affordability”, which is code for “better access to the shackles of debt serfdom”, and has nothing to with lower prices.
“Recoveries” are not built on the inflation of non-productive, cost-of-living expenses. We would never claim victory when healthcare costs rise, and yet we do when it comes to housing. It’s time to start calling this “recovery” in housing prices for what it is: Inflation. Plain and simple.