The Mortgage Rate increased today

Today the interest rates on mortgages increased by 14% to 6.28%. If you were to buy a house with a loan of $100,000 right now, you’d pay $6,280 in interest before you made any dent in your mortgage. Now, let’s use the median home value in the United States to give you a better idea of the problem. The median home value in this country is $428,000 currently, and based on this interest rate, if you took out a loan in that amount right now you’re paying $25,680 in interest alone. This isn’t like student loans, because you have collateral that you can lose if you fail to pay the bank back.

The average millennial’s salary is $47,034 a year. Not counting state or local taxes, only factoring in federal taxes, the average millennial would be left with $39,470. If the average millennial were to buy a house with the median value right now, they’d spend 65% of their annual income after just federal taxes on the interest rate. Considering that millennials are the demographic that should be settling down, getting married, and having children, this is suicidal for the country. We need more Americans. Generation Z will not fare any better, and neither will the generations to come afterwards. What we see today is the gradual destruction of American living standards. Our expectations and dreams will gradually be dialed back, as we get materially poorer and poorer. 

Every group in the United States right now has a declining, under-replacement birth rate. This isn’t our fault, but rather the result of capitalism extracting from us every penny it possibly can. It’s not expensive to be poor anymore, because by the standards of Americans generations ago, the large majority of us today are poor. In modern America, it’s simply expensive to be. With college tuitions rivaling and even exceeding the median incomes of adults in the peak of their careers, with student loans having 10% interest rates, it’s becoming harder and harder to make even that median wage. America is slowly becoming a third-world country, and as we lose more and more of our purchasing power, we lose more and what more of what it means to be American. This is not a land of the free, when you’re a permanent renter who can’t afford a quality education, who can’t take days off, who can’t say what you want without risking your job, and who has no access to affordable healthcare. 

There’s a common argument that America had a labor aristocracy sustained by exports in the latter half of the 20th century. The idea is that we can’t replicate or ever expect that lifestyle again, because it was purely situational. That’s not the case. Our share of gross domestic product today resulting from exports is the same as it was in the 1950’s, and the difference lies mainly in our unionization rate and social programs that we had back then. Tuition at state universities was far cheaper and our rate of union membership was so high that over 1 out of 3 workers was in a union. Moreover, the amount of small businesses in America meant that money circulated far more within  local communities. Now, less than 1 out of 10 people belong to a union, tuition has increased by 500% over the past few decades, and the vast majority of our economic activity is conducted by mega corporations. We can’t live like we used to, because America outsourced its native industries and concentrated wealth as it allowed for corporations to merge again and again. 

While the economy of the 1950’s was a paradise for workers, it wasn’t for the capitalist. These degradations in living standards in the decades since are a result of capitalists pushing back against socialist programs and unions. The structures that our ancestors fought to erect, to protect and enrich us all, have been destroyed in America. We live in the gilded age once more, in a destitute banana republic. The problem was that syndicalism rose to dominance because of concessions granted to unions by FDR during the Great Depression. While FDR won rights for laborers and unions alike, that was to alleviate discontent about capitalism during his presidency. After WW2 was over, the workers of America coasted off the good graces of yesteryear’s efforts, until those hard-won perks were gradually eroded back to nothing by corporations and government. The same push to give us concessions no longer existed, and thus began the gradual slide back to true capitalism, where the individual was completely on his own to do everything. As communication and information technology improved in the following decades, corporations found they could outsource and thus, all but ended unions in most industries in America. 

Outsourcing, as well as letting immigration run rampant after 1965, reduced the American worker back to his days as a man desperate for a job, desperate to feed his family. And today, those reductions have gone so far so as to make it impossible for us to have our own families or own our own homes. The very things that we associated with adulthood have been stripped from us, and in a way capitalism has infantilized the younger generations. We have to make do with lifestyles that we had when we were younger, because we don’t have the material means to reach those milestones that adults are meant to reach anymore. Capitalism didn’t take away just your house or your education, it also took away the maturity that came with becoming a self-sufficient, independent individual. 

The interest rate hike today means all of us without houses are much further away from ever owning one now. With the trend of financial institutions to buy homes in cash for far above market value now, the end of home ownership by the individual is on the horizon. It’s now more expensive for the individual, and renters are now assured for the financial institutions gobbling up all of America’s real estate. In the coming age where none of us have any private property left, at what point do we decide to abolish it? Eventually all the private property left will exist in the hands of a few mega corporations, that will relentlessly price us out of having a decent life more and more. What can we do about it? Organize. In time, we’ll win but we can never again rely on non-state solutions. Unions were a fine buffer against capitalism, but until we incorporate unions into the very structure of government, we will never be rid of the deprivations and eroding forces that capitalism brings with it.