Our nation is caught in an ongoing economic collapse. I fear it is unstoppable. And the tsunami is gaining momentum from the masses of sliding and tumbling world economies.
This rolling wave of disaster was set in motion by U.S. government-backed bank shenanigans, unregulated stock market gambling and unmitigated advertising guile in a culture where money is God, capitalism is the national religion and corporate CEOs are exalted as high priests. Even as our country is washed away, these earth-shaking games continue unabated.
Since 2008, unrealistically-low Federal interest rates coupled with stumbling economies at home and abroad have force-fed yet another real estate bubble. Rapid debt expansion and wealthy rats with money to stash have re-inflated house price bubbles around the country and around the world.
Homes have again become gambling tokens for flippers using tax-payer backed loans. They’ve again become safe-deposit boxes to hide cash. They’ve again become bits inside Real Estate Investment Trusts to gamble retirement savings on. But homes have stopped being places for working people to buy and live in.
And now, the additional tsunami from the collapsing oil bubble is here. It’s spreading outward from epicenters in cities, regions and countries whose economies have been dependent on greed-inflated oil prices.
No single boat can remain afloat alone among the flotsam in this turbulent world economy. No amount of positive-thinking or “always-up” spin can take the place of affordable housing, domestic industry and jobs with living wages. Tooth whitening does not fix teeth.
Housing bubble gamblers have priced home ownership out of reach of even our nation’s most highly-educated and well-paid talent. And these folks are the people we’re counting on to power our nation’s economic recovery. But these highly educated are also the people most likely to be dragging a jumbo anchor of students debt with them. If the educated and talented can’t afford a 2 bedroom fixer shack for a small family, they cannot provide fuel for the rest of us.
I live beyond the borders of San Jose, a town in the center of high-tech innovation known as Silicon Valley. According to Glassdoor (an on-line job site), software engineer salaries in San Jose average $108,387 a year. I used a tax calculator and found that this leaves a monthly take home of around $6,000.
This sounds like a lot of money next to the masses of unemployed, slightly-employed and low-wage workers, especially next to those who live in areas where an ordinary family house can be purchased for under a hundred thousand dollars. But here where the jobs are, $6,000 a month is not enough to afford even the smallest of American dreams.
Tiny 2 bedroom fixer shacks within commuting distance to jobs in Silicon Valley are now priced upwards from a million bucks. With 3% down, the monthly cost is $6490, including mortgage payment, interest, taxes and insurance. If an engineer has accumulated $200,000 to bring to the table as a 20% down payment on a million dollar shack, this brings her monthly cost down to $4886… for thirty years.
As the 7 million Americans who’ve suffered through foreclosures over the last few years have learned, you’d better be dog-certain that you and your family can stick together and sustain this pace and level of income each and every month for the next thirty years.
Out here in the hinterlands we’re a three plus hour daily commute from most high-tech employment opportunities. An 800 sq ft two-bedroom tear-down just sold for “only” $700,000. To buy this shack, one of those educated and talented engineers with a well-paid high-tech job in Silicon Valley would have to spend hours each day on dangerous highways and work 2XL-sized hours. With no union protections, sixty hours a week (and up) have become the “normal” work week in high tech.
The best educated and most talented people our nation can produce (or import) must drive and work endless hours in order to live an impoverished, cramped and hurried life.
The tsunami has already washed us away.
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Thanks for reading.