Part 1 of this 5-part series discussed how America listened to the chaos whisperer. Result: Economic Crises I and II -- the 1980s S&L collapse and the 2007-8 world recession.
Part 2 examined how house flipping generates inflation and corruption. The Surf Nazi School of Economics is the ideological representative of the chaos whisperer in both practice and -- to the extent there is one -- theory.
Part 3 looks into a heretofore unaddressed topic ...
We are inundated in songs, novels, TV shows and movies about drug trafficking. For that matter, even prima facie boring topics such as meatpacking (The Jungle), railroads (The Octopus), Wall Street ("Wall Street") and large farms (The Grapes of Wrath) have been dramatized.
To date, the entertainment industry has studiously stirred clear of house flipping. As for the mass media, a total disregard is to be expected, given the tycoons who own them and the role house flipping plays in their Fourth Reich ruling America today (see this blog, The Big Movida: The Third American Revolution, Chapter 13).
But there is another reason for the resounding silence. The house flipper´s inner essence: he surfs obsessively, unconsciously; he is driven rather than a driver. Indeed, he is more a function than a person. House flippers can be real estate offices, insurance companies, stock broker firms, S&Ls, banks, you name it. Such an unfixed, blurred persona is hard to place in the prevailing dramaturgy of our times: professional wrestling.
Let´s break the American media taboo. Let´s turn the spotlight on a house trafficking profiteer who materialized in my town.
* * *
Am I talking too much?
-- George Bailey --
His outstretched hand was almost as big as his Texas cheerleader smile.
Strange thing about Bob. His name is a Palindrome, i.e., a word that is spelled the same way backwards and forwards. Lon Nol, Cambodian leader 1970-75, is another Palindrome. Corrupt, incompetent, he ushered in Pol Pot.
Bob worked out in the same gym I did. Somebody told him I was the chief aide to the Majority Floor Leader in the House of Representatives. After a few days in that position, you learn that anybody who is there on a social call is not there on a social call.
I took in Bob`s ever-present grey wind breaker; every orifice was closed and then some. After the standard 20 seconds of de rigueur small talk, I cut to the chase:
"What can I do you out of?" The question/remark was intended to suit the circumstances: absurd/obvious.
Bob told me he lived in X, a wealthy suburb of my town. Wealthy is a euphemism; movie stars were buying houses there. And houses were the issue.
State law required counties to reevaluate property every 10 years. The re-evaluation of 1980 had just been published. The wonderful news for Bob: due to house flipping, values in Suburb X had doubled not just once but three times since 1970.
The terrible news: property taxes had gone up accordingly.
Bob came to see me as the representative of the Suburb X home owners association. He wanted to change state law so that they would not have to pay the new and improved taxes.
I know what you are thinking, Dear Reader. But Bob´s interest was not self-interest -- oh no, perish the thought.
We have all heard the expression crocodile tears. I must admit I never actually saw any until Bob launched into a prepackaged diatribe about the "poor" ethnic minority group in Suburb X who would be "devastated" by the higher taxes. "Unfair" -- property that had been in their families for centuries would have to be sold. "Unfair" -- their property would be put on the chopping block quickly, hence at bargain basement prices. "Unfair" -- families ruined. "Unfair" -- it was not the minority group´s fault that movie stars were moving in. In fact -- "unfair" -- the minority group had made repairs/improvements but nothing out of the ordinary to cause the ruinous and ridiculous rise in property values. "Unfair" -- an entire subculture wiped out. "Unfair" -- how could we it stand there and let such a thing happen?
"Unfair" -- Bob was an amateur, but a professional amateur. I knew more about him than I let on. A retired Pentagon employee, he had made his money the hard way: he married it. His wife was one of the biggest realtors in the state. Mary´s hand was in the till for 3% of her listings which abounded in Suburb X.
Thanks to his wife, Bob was a newly minted oligarch. He accepted his role with the all-consuming zeal of a recent convert. A key aspect of that role is to be an erstwhile practitioner of the oligarchy´s favorite game: Heads we win; tails you lose. In this case, all the advantages without a single disadvantage of skyrocketing property values.
Backwards and forwards, coming and going: such is the bubbling core of surf Nazi economics -- the immediate manifestation of the chaos whisperer.
I told Bob to see his state representative and talk it over, that there was nothing the House Majority Floor Leader would say or do until an actual bill was dropped in the hopper.
Bob briskly thanked me. Gone were the crocodile tears, the Texas cheerleader smile. He shot out the door as if he didn´t have a second to lose. And, in truth, he didn´t: conquest can´t wait.*
I went next door and met with Bob´s representative who was also the Democratic Party Whip. No need to explain what a Whip does. He is a member of the House leadership, right behind the Majority Floor Leader.
He and I agreed that the minority group would be unfairly hurt by the new, mind-wobbling tax rates. Property rich but cash poor, they would be deftly and swiftly despoiled of their holdings. Bob´s wife would be the All American, George Bailey-inspired facilitator of that entirely legal robbery.
Following our discussion, the Whip wanted to sponsor corrective legislation. I sent a note to a bill draftsman:
Property held over X period of time (many years) which increased in value greater than X percentage (very high) in a decade would pay taxes at the old rate plus a small X percentage increase until the property was sold, at which time the unpaid higher taxes would be collected.
The Xs all had numbers, but they were not final. They would be debated and replaced by the legislative process.
* * *
My initial problem with the Palindrome Bobs and Megabucks Maries of this world is simple: they don´t know what they are doing.
So, what are they doing?
Coming soon: "The Chaos Whisperer. Part 4: The Political Economy of House Flipping."
*Bob`s hasty departure is explained not only by his not so hidden agenda but also by the walled, gated and guarded community where he lived. "The law of power never has the patience to await complete control of the world. It must fix the boundaries, without delay, of the territory where it holds sway, even if it means surrounding it with barbed wire and observation towers." Albert Camus, The Rebel, p. 24.