On the dole

Here in our part of the country, we wonder how sustainable our local economy can be when new business ventures are being subsidized by (often poorly administered) state and federal government spending, unwise tax breaks, and the like. We lament that our cities and schools must be stabilized by taxpayers’ money. We look longingly at the promised lands of North Carolina and Arizona and Florida, with their never-ending expansion, their shiny new neighborhoods and amenities, their boundless construction projects and job-filled economies.

The excellent blog Calculated Risk reminds us that the “success” of many of those regions has also been heavily subsidized — just in a different way.

Let us, instead, ask ourselves what constitutes the “upper and middle classes.” If they “moved up beyond their means,” then . . . their means are what, exactly? If 100% or near 100% financing is required to keep these neighborhoods stable (loans over $400,000 for houses in the $400,000-$450,000 price range), then in what sense are they neighborhoods of the “upper and middle classes”? Does our current definition of “middle class” (not to mention “upper class”) include having insufficient cash assets to make even a token down payment on a home?

In this light, Central New York doesn’t seem quite so pathetic. A tumbledown house it may be, but it least it wasn’t built on sand.

4 Replies to “On the dole”

  1. You’re right! I’ve been harping on this for years. There seems to be no end to the media pundits’ claims that the “economy is booming” (and I am so sick of this mantra). How can the economy be “booming” when any “prosperity” sits atop a bubble of consumer debt and/or heavy government subsidation? It’s a false economy, like the prosperity of the Roaring 20’s.

  2. Mrs M, you’re not the first person to evoke the 1920s with what’s been going on in the markets and economy… the scary thing is that so much of the U.S. economy, and increasingly the world economy, is now heavily based on the buying and selling of debt. Especially mortgage debt. Much of it poorly regulated (even some of the regulations that arose after the Crash of ’29 have been rolled back).

    As for this way of running an economy vs. government subsidies and heavy taxation… I think everyone in upstate NY, no matter what their basic orientation on public monies, understands that we have to do much more to get off the government teat up here. However, at the very least, our government is still nominally accountable to the people. Yes, even here in Albany’s realm. When you look at what is going on in the financial world… there is NO accountability there any more. None. Millions of Americans living in other states have been absolutely thrown to the wolves. With the federal government’s tacit approval.

    I find myself always wavering across a line here. Much of the time, I am totally fed up with New York State and Albany. Other times, like now, I watch what is going on elsewhere and still feel a shred of relief that New York State and its institutions endure, despite our state government’s many, many, many problems and faults.

  3. Exactly. I think many NYers across the board, black/white, male/female, Lib/Con feel the same way.

    I’d like to see our country return to the gold standard. It might be rough for a while, but it would solve a lot of problems, and make us secure.

  4. Flash! Living beyond your means has potentially crippling results. In other news, scientists have determined that water is “wet”, sky is “blue”.

    FARKiness aside, there’s a lot more to the current mortgage “crisis” than hordes of wannabe yuppies losing thier McMansions to the bank. For every unfortunate soul that didn’t comprehend what “adjustable” actually meant there’s someone like me that can finally move into a reasonably priced home in a good market. Realistically, right now is one of the best times ever to buy a home if you have solid credit.

    Then again, outside of my mortgage I’ve never had more than $500 in credit debt. It boggles my mind that people actually run up thousands if not tens of thousands of dollars in unsecured liabilities.

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