Mr. Moderate

I would assert that every sane person desires a higher quality of life. The question usually revolves around “just what is it that I need to do to achieve that higher quality of life I desire?”

Unfortunately, the system is biased in such a way as to ensure that everybody’s quality of life degenerates over time, except for the very few “elites” who gain great wealth at the expense of us all. This is just one aspect of a core economic system that is based upon free-market capitalism. For one example of what I’m talking about here, please read my essay on how easy credit for home purchasing led to huge inflationary pressures in the housing market. The net result of this process is that average people can no longer afford average homes unless they are sitting on a huge profit from earlier price appreciation. It seems particularly ironic to me that the government’s attempt to create incentives for home ownership led to the price appreciation which now prevents all but the wealthy from affording a good “quality of life” home to own.

Renting has not been much of a better option, because the huge run-up in housing prices has occurred mostly in the cost of land, and rental property needs land too. So, new rental developments face the same high land costs as do new housing developments. You used to be able to count on purchasing rural land for around $1,000 to $2,000 per acre. But earlier today I saw one 70 acre farm offered for $7 million, which is a cost of $100,000 per acre. For a farm, no less. It seems obviously that only a home developer could afford land priced that high, so another farm is headed out of production so that somebody can grow houses instead of crops. By the time you factor in roads, parks, drainage, and other “common area” facilities, the prospective developer will be lucky to get 100 quarter-acre lots out of that tract of land, meaning that the developer starts out with raw land that has already cost him $70,000 per lot. Before he can build, he needs to commit another $15,000 to $30,000 per lot to roads, sewers, water mains, fire hydrants, street lighting, mail kiosks, cable television, telephone wiring, and a plethora of other infrastructure needs. Before he is ready to pour his first slab and start building his model homes he has to have committed something around $100,000 per lot for a deal like this one.

The builder of rental property faces similar economics, and is generally under a great deal of pressure to create a property that will pay off its investors as rapidly as possible by justifying as high rents as possible. And the benchmark is, once again, the monthly costs paid by single family home owners for an equivalent number of bedrooms.

Now, I’m not running down single family homes by any means. But the plain fact is that the average person can’t come close to affording the average home, and condominiums are not much better. A condominium gets you a smaller home with outside maintenance and a group of neighborhood busybodies who will run you out of town if they don’t like the loud party your son threw for his friends last Saturday. While the raw price of a condominium is lower than the raw price of a single family home, the total cost of ownership is not much different because the huge monthly homeowner’s fees added to the mortgage costs will frequently exceed the cost of an equivalent single family home.

Finally, the cost of mortgages or rent, homeowner fees (if any), taxes (if any), cable television, electricity, natural gas (if any), telephones, and all of the other costs of owning or renting a home or apartment in the current economic conditions adds up to far too high of a percentage of the monthly income for the average family. So it is that we find when a family member loses a job or is taken ill, the family is frequently only a matter of weeks away from getting evicted and becoming homeless. Our average family is living on the edge, with insufficient personal savings and no safety net to rely upon.

So, what’s the solution? There aren’t any magic answers. To have more disposable income, and thus be able to afford a higher quality of life, you need to either raise your income level (hard) or lower your costs (also hard). Most of us feel trapped and pressed in the same way that Luke Skywalker and company felt in the Death Star’s trash compactor. If you stick with the economic model foisted upon you by capitalistic corporate America, you cannot and will not get out unless you can get lucky and “win the lottery” in some way, shape, or form (founding a company that goes public and becomes a Fortune 500 star, like Google, would be one example of how to “win the lottery”). It is the nature of a competitive capitalistic economy that only a few of us will ever manage to “win the lottery.” So, what are the rest of us to do?

My utopian dream continues with a series of pages outlining various ideas for a cooperative community of the future that allows us to have a better quality of life and to better prepare ourselves for the future. Please read these pages and consider what I have to say therein.