Housing by the Numbers

 If you look around Albuquerque nearly all the new housing under construction will look like the one on the right.

That house on the right and the two north of it built at the same time all sold for about $400,000 each.  

To buy or rent one of those three houses you need an income of about $98,000 a year.

The median household income in New Mexico is $50,000.

Getting Real about Homelessness

 One local Albuquerque news program reported this evening that there are currently about 2,800 people living on the city's streets.  The encampments are all over the city in parks, under highway overpasses, in empty lots and on sidewalks.

The City Council voted to authorize some safe campsites recently, and then turned around and decided to prohibit such refuges.  The mayor vetoed that change.  The Council voted again to over-ride the mayor, but one councilor changed her mind and the veto was upheld. So now there are two official sites with room for maybe a hundred tents.

Mayors, city councils, governors and state legislatures are not going to solve the homeless problem.  Experience has shown that improved conditions for the homeless in any given locale will ultimately attract more homeless. It is a National problem which will require a significant commitment at that level.

A lot of problems contribute to homelessness including addiction and mental illness, but the fundamental cause is simply explained -- it is the lack of affordable housing -- and that affects not only the down-and-out but also families who are working and still unable to afford exorbitant rents or house purchase loan payments. So the inescapable conclusion is that what is needed in the way of a solution is a massive effort to create affordable housing nation-wide.

The housing crisis in turn is really just a symptom of an economy featuring ever-increasing inequality in wealth and income over the last fifty years.  The extent of that inequality has been well known for a long time: the top one percent are now likely paying a smaller percentage of their income than the guy who delivers your Sunday newspaper.

Thomas Piketty, in Capital in the Twenty-First Century, concluded this about what must be done to make the economy work for the rest of us:

"The right solution is a progressive annual tax on capital.  This will make it possible to avoid an endless inegalitarian spiral while preserving competition and incentives for new instance of primitive accumulation.  For example, I earlier discussed the possibility of a capital tax schedule with rates of 0.1 or 0.5 percent on fortunes under 1 million euros, 1 percent on fortunes between 1 and 5 million euros, 2 percent between 5 and 10 million euros, and as high as 5 or 10 percent for fortunes of several hundred million or several billion euros.  This would contain the unlimited growth of global inequality of wealth, which is currently increasing at a rate that cannot be sustained in the long run and that ought to worry even the most fervent champions of the self-regulated market.  Historical experience shows, moreover, that such immense inequalities of wealth have little to do with the entrepreneurial spirit and are of no use in promoting growth..."

In fact, Biden has recently promoted the idea of establishing some reasonable tax rates for the country's top earners.  I would suggest that the income from that sort of tax on the billionaires might be devoted entirely for at least the first year or two to the objective of creating affordable housing.  Such a financial injection into the national economy would have an immediately obvious effect on homelessness as well as improving the prospects for working families for home ownership, while simultaneously providing a big boost to the home construction industry. It seems like a win-win which even some Republicans might get behind.

Fundmentals

"We now have more income and wealth inequality than at any time in the last hundred years. In the year 2022, three multibillionaires own more wealth than the bottom half of American society – 160 million Americans. Today, 45% of all new income goes to the top 1%, and CEOs of large corporations make a record-breaking 350 times what their workers earn."

 — Bernie Sanders, The Guardian - 2 Sep 2022

* * *

It is interesting how little direct acknowledgement of those facts about our economy get in the discourse leading up to the pending mid-term elections.  The attention of voters is directed instead to symptoms rather than fundamental causes. The inadequacies of health care, education and housing dominate the conversation because they present imminent threats.  The proposed responses are really little more than symbolic gestures.

What all of that points to is the peripheral importance of the electorate in the governing process.  

Prison and Sentencing Reform

Here are a couple questions I would like to see asked of all of the Presidential Candidates:

• What is the explanation for the trends depicted by the following two graphs?
• What is the relationship between the two graphs?

As presented in a previous post, the first graph shows the rapid growth in the share of income going to the top 10% since 1980.  The bottom graph portrays a remarkably similar slope over the same time period in the incarceration rate.

The bottom graph is taken from a very thorough wikipedia article on U.S. incarceration rates.  As the article points out, other nations have similar arrest rates, but prisoners in the U.S. serve much longer sentences for similar offenses, resulting in much greater numbers of people in custody.  Contributing factors cited in the article include the Three-Strikes laws passed by many states, a huge increase in people jailed for drug offenses, and the growth of the privatized prison industry which relies on a steady stream of new prisoners to stay in business.

Similar graphs can be drawn to show increases in health and educations costs, and probably for quite a few other  issues as well.