Home is Where the Hearth Is

putting the FIRE economy back in the hearth of community where it belongs

A home is the greatest expense of a family or individual, yet bankers own them with the click of a keystroke. Whether high or low, it will cost as much as the market can bear. In this episode, I compare the astronomical prices of California to my hometown of Cumberland, MD, where a car might cost more. Although the problems are opposite, the solution could be the same. I introduce these solutions in three of my op-eds, published in Santa Cruz or Cumberland newspapers, reproduced below.

I look at Michael Hudson and how the ‘petropocalypse’ is affecting real estate and 'institutional investors' from an interview on his new book “The Destiny of Civilization: Finance Capitalism, Industrial Capitalism, or Socialism.” Petrodollars are being jettisoned from central banks around the world, since Russia has broken their exclusive hold on oil, and petrodactyls are hovering over the US and swooping down on any asset with a drop of real blood. My op-eds give some stats for CA.

Ellen Brown, author of Web of Debt and founder of The Public Banking Institute, has a proposal to self-fund local sovereignty as global food systems crash, by granting low-interest loans and reinvesting mortgage interest. My system, which is based on Ellen’s public banking model, goes two steps further and pushes the credit to repay the mortgages into the community in advance in the form of subsidies for locally produced food, wellcare, education and home improvements.

This keeps the money circulating in the community for productive labor equal to the level of debt. In the other step, I make one community caret have twice the value of dollars both coming and going, through a 2:1 exchange rate of dollars to carets and a 50% sales tax for non-local (dollarized) goods, services and payments. By pricing all real estate and rents in carets, this would give local buyers a 2:1 advantage over hedge funds and local landlords, producers, and service providers a 2:1 advantage over non-local capital.

Although I don’t mention this in the video, the comments on Ellen’s article are a ‘malestrom’ (sic) of ego, derision, scorn, self-promotion and dismissal of HER ideas. Only one other commenter is a woman. I did a community class called Glocal Economics on Ellen’s Web of Debt at my universecity.us site. She is the foremost thinker in the US on the foremost problem facing us. If you look at the discussion questions in my class, you’ll see that this is an advanced course of study.

If there was any doubt in my mind that economics is dominated by a male paradigm of competition, seeing the blowhards vying for the most withering put-downs of one of the greatest economic thinkers settled it.

In stark contrast is the Italian healthcare cooperative IppocrateOrg, presented by Robert Malone. Their solidarity brought tears to my eyes. Here are some quotes:

Our efforts to envision an alternative medical community started from insights prompted by observing the dysfunctional response of corporate and state-sanctioned medicine. We are committed to the belief that it is the right of the person to assume personal responsibility for maintaining his or her own health, and that all have the right to access medical care according to their best interest (not someone else’s interest). It is clear to us that we do not live in a society where the sanctity of human beings are at the center point of the project, but we know that something has to change in our world because the current social, economic and corporatist model is putting the right for health in danger across the entire world.

And we just can’t let that happen.

Going forward from this point, our goal is to care for the health of each other, our community, and our land. The quality of our lives is deeply connected to the amount of care we take for every place where we live. This is the reason why IppocrateOrg is reaching out to the whole world. Every place in the world deserves the opportunity to give and receive help.  A necessary collaboration to take personal responsibility for building a better future.

Can you read that without crying with longing? My viewer Annilori, who posts here as Pavanna, wrote “Dr. Robert Malone details his research into something I knew you’d find insanely interesting (though you probably have already read it.) I’m referring to his July 7th piece, that includes a link to an Italian group of physicians & medical researchers who have begun to manifest glorious alternatives to the hell-scape humanity’s been experiencing for far too long. The link is to their website is: www.origini.life.” Well said.

If we’re going to get out of this hellscape and put the FIRE economy of Finance, Insurance and Real Estate back in the hearth of community where it can empower our future, we need an economic coalition like IppocrateOrg that’s trading ideas based on measurable criteria and supporting one another, not tearing each other down. Both in setting the objectives for a family-centered economy and setting the method to be warmth and love, I believe this needs to be led by women.

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Here is my first op-ed referred to in the video, published in the Santa Cruz Sentinel responding to a local architect and former member of city council:

Santa Cruz Hates Homeowners

Santa Cruz hates homeowners. Only the very rich or the very poor—preferably homeless—have a right to live in Santa Cruz. Hedge funds are welcome, shelling out 30-50% over asking price, scooping up single family homes like a whale guzzles plankton. The mystery is why we call them family homes when families are the least able to afford them.

If a person has managed to hold onto their family home through disasters, divorces, economic downturns, pandemics, they are “lucky” or “privileged.” Your roof needs replacing? Aren’t you the fortunate one to have a roof! Your yard is full of gophers? What, you have a yard! That could be used for an ADU to house students and I’m sure it would fit a tent for some homeless.

The only time SC doesn’t hate homeowners is tax time, when homeowners are their favorite target. Since owners are a minority soon to become endangered, renters rule at the ballot box. SC serves UCSC without reciprocity—we house, water, and feed them, and pay to park our own cars so they can’t take our spots. UCSC takes their tuition and gives the city neighbors who party until 6 am (spring break!) But who can blame them, with a lifetime of indentured servitude ahead where they’ll own nothing and grin and bear it?

Marc Primack’s solution is that parents bribe kids into community colleges with converted garages where they can pretend they don’t know them. Afterwards, they can rent it and live with other people’s kids. As an architect, inviting a swarm of inspectors into your home may sound cost-effective but for ordinary mortals, that’s the seventh circle of hell. And with the next rent moratorium, you’ve just adopted. Congratulations!

According to Marc, this would result in fewer students for us but more profit for UCSC Regents with out-of-state, grad and foreign tuitions. Our kids can “practice being adults” and work at the Boardwalk while the parents of Asian students put down a year’s rent in cash. Then they can compete with them for rentals in another college town and jobs thereafter “if they do decide to go on to university…”. Or they can just bus their tables.

Meanwhile, Marc’s repealing Prop 13 so that, in my case, property taxes would be 50% higher than my mortgage was. Lucky me! I thought working 30 years was enough to have housing security but everyone who wants to live in SC (or profit from cramming more people into SC) needs to be accommodated. If I manage to die before deteriorating in a nursing facility, my daughters might hang onto the house but stay-at-home moms are a bygone era.

The Empty Home Tax is another way of mowing down homeowners by dangling the carrot of affordable rentals before a hungry horde. It doesn’t have to be this way! Instead of cannibalizing each other, we could be proliferating home ownership, small local landlords and small local businesses. We could be funding local government with mortgages through public banks, not more taxes. Education could serve the community that hosts it, and renting could be a transition before taking responsibility for the place and the people with whom you choose to spend your life. Santa Cruz isn’t a commodity, it’s community.

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Second Op-Ed from video in Santa Cruz Sentinel:

If Wishes Were Houses, Beggars Would Reside

In response to various editorials, this continues my theme in “Santa Cruz Hates Homeowners” to show that their ‘solutions’ will only result in greater debt and our division into laptop-of-luxury workers renting from hedge fund landlords and those afraid to be kicked out of subsidized housing if they make any money. Is this what we want?

Here’s the data in a nutshell: median sale price in CA $900K requiring $180K annual income. San Jose median price $1.7M at 5.78% interest requiring $9000/mo. Santa Cruz/Aptos median price $1.4-1.55M with bids 19% over asking price. CA real estate purchased by hedge funds so far = $77B. CA second lowest national ownership (of mortgages, not even houses) at 56%. 180,000 new houses a year needed to meet the demand, even though birth rates are falling. In LA, “67% of all rental units and 74% of buildable vacant lots are owned by investment vehicles, not by human landlords.”

What is an investment vehicle? It’s the money that bankers took from your parents and grandparents for mortgages they conjured out of thin air. Now that they can no longer raise housing prices by dropping the interest rate, their goal is to drop the pretense and own the houses outright. Money is no object.

The current shakedown is raising interest rates after variable mortgages jacked up the price. Since we bid against each other based on our maximum debt, a variable rate NEVER helps homeowners, only the banks. The same goes for variable loans to cities and the interest-swap derivatives that bankrupted Detroit—I’d be surprised if SC doesn’t have this timebomb too.

Repealing Prop 13’s ‘unjust legacy’ so homes reflect their speculative value would make the median property tax $15,000/ year. The Empty Home Tax would charge $6000 to anyone who left, say, to care for elderly parents or who’s been hanging on until they can retire. Will the surrendered houses sold go to hardworking SC families? Not on your life. Another windfall for the investors robber barons.

Fred Keeley wants 40% of CA’s $97B surplus to build low-income housing. Mark Primack wants all new housing to be future duplexes, so mortgages can rise to four incomes rather than two. The two-part article on housing affordability says Santa Cruz is obligated to build 3400 ‘housing units’ this decade and the state will provide $1B in down-payment loans and 20% for second mortgages to raise our indebtedness further. Will this help us compete with hedge funds or bid up against each other?

Meanwhile, we’re housing 18,000 students with thousands more planned, many of whom will want to stay. Keith McHenry says the city should be “prepared to welcome hundreds of additional people who will become homeless and seeking a safe place to live.” He states the unhoused are unhappy with their accommodations, so the salaries of city staff should be allocated since $73M is a fraction of what’s flowing to City Hall’s “celluloid avatar poverty pimps.”

Here is the ONLY real solution: take the power to conjure money from thin air away from bankers and return it as the exclusive right of government. Have LOCAL government issue mortgages in a LOCAL currency that has a high exchange rate from dollars, driving out speculative investors. Price rents in the LOCAL currency and tax their extraction into dollars, driving out non-local landlords. Use the mortgage profits to give LOCAL Social Security and retirement savings a high return. Start fixed mortgages at 3% interest but raise them over time so the price of houses go down.

We aren’t more secure with more debt for less house and we don’t need ‘woke guilt’ to say we owe the banks AND everyone else so they can have the same at our expense.

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Third Op-Ed from video, published in the Cumberland Times-News:

Bloom or Bust—Cumberland and California

I was born in Cumberland but have lived the last 40+ in Santa Cruz CA. Over the last half-dozen I’ve come often and stayed long as my dad declined and left my mom on her own for the first time in 90+ years. I’ve developed an adult relationship with my hometown and discovered it’s grown with me. My time-lapse experience is that it’s bloomed before my eyes with the farmer’s market, micro-breweries, boutique retail, fair trade imports, artisan crafts, farm-to-table, and GOOD ESPRESSO—my measure of civilization.

During these years, I renovated the 100-yr-old house where I grew up, including nasty surprises under false ceilings and happy surprises under carpeting. Forget psychoanalysis to deal with your childhood, there are real closets to unpack! I painted walls in ochre, red, aqua, cobalt blue to live up to the extraordinary local art and photography. Without the clutter of living here, I could set off the stunning pieces as a livable gallery.

Now that I have no family reason to come back, I find myself reluctant to leave the new friends and timeless treasures: summer thunderstorms, snow days, good corn and tomatoes. So I’m planning an AirBnB to keep one foot on each coast and have an excuse to return. My daughters, their fiances and friends have also come to love Cumberland, as I lure them to a place where you can build a dream and make things happen.

Which brings me to my topic. I’ve written a book called How to Dismantle an Empire that explains the system changes to take back local economies. Although the formula is the same, each community is different. No two towns illustrate this better than Santa Cruz and Cumberland.

Santa Cruz has the highest cost of housing compared to income in the country. Homeowners are subject to fees, taxes, and repair costs by those paying astronomical rents. In a recent editorial, I show the resentment against homeowners from renters, students and the homeless, who have 285 tents next to the courthouse. Meanwhile, the mortgaged class are one interest-rate adjustment away from losing everything.

In Cumberland, the cost of housing is too low. I didn’t want my childhood home bought by a slumlord who’d collect Section 8 rent while the pipes leaked and the ceiling sagged. But that would have been the more prudent move. With space and property plentiful, it’s ripe for enterprising fixer-uppers and entrepreneurs. But there’s not enough money in circulation to support real estate values and small businesses. Santa Cruz money moves too fast, pouring like water through a sieve, but Cumberland money moves like cold molasses.

My book is about system change, not what’s possible now, but that potential is coming fast. More people today understand banks have stolen the power of governments to create the money by conjuring mortgages from thin air. This gives them ownership of all property. With the rise of cryptocurrencies, we know that money is a fiction, but of what? Money organizes labor in the interest of whoever issues it. So everyone with a roof over their head is working for the bankers. What would happen if we took that power back?

Instead of Cumberland living on property taxes, it could stimulate local goods and services by advancing subsidies to the community for locally produced food, home improvements, ‘wellcare’, and education. This would be income for food producers, handypersons, caregivers, and anyone with something to teach. The time to act isn’t now. But it’s a good time for pragmatic dreaming—both in California and Cumberland.

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To start your pragmatic dreaming, here is Build a New Model:

Buckminster Fuller said that to change things, you can’t fight the existing reality. You have to build a new model that makes the old model obsolete. This episode outlines ten universal principles of a new model, including the purpose of government, how to measure its success or failure, what community wealth really is, how to protect and proliferate it, the intergenerational transfer of wealth, and paying your debt to society backwards and forwards. I begin by talking about the spiritual and metaphysical obstacles that keep us from imagining a new model and how to remove them in your own psyche. Based on my book, How to Dismantle an Empire, I end with the three powers that communities require in order to control their own labor: debt, tax & cash.

and to examine the ‘malestrom’ this is What Emerges from the Emergency?:

Responding to Russell's interview of Luke Kemp on Emergency Powers, I suggest that 100 generations of a system serving the ejaculations of men could be ending. I examine the four sources of power and their absence of the feminine representing home and family. I take a closer look at two examples Luke gives from history--Greek democracy and the Weimar Republic. The purpose of government is defined with a report card on the bipartisan pandemic administration. Russell is spanked for using patriarchal language but forgiven for doing it in the heat of his flirting bromance. And I end with a recommendation to "stay with the stuckness."

and this is Patriarchal Pyramid of Matriarchal Matrix? celebrating Vandana Shiva:

Responding to Russell Brand's interview called On Fearlessness and Fighting Power, I nominate Vandana as Spirit Mother Earth Goddess and suggest Ganesh as her consort. I predict that we're at the end of 100 generations of patriarchy and should enter the matrix--the womb or place of origin--to imagine what comes next. I look at fear as the opposite of love, and the social distancing that says fear IS love. I cite another fearless Indian woman, Arundhati Roy, on the fighting power of the Maoists or Naxalites. I propose India's 1.3B people as 4000 self-governing commonwealths and end with a dream of Red King Kong and the Winged Green Dragon in which they have tea and solve climate change.