Social Capital

Guest Post by The Zman

My dentist is located on a side street in a professional building. It’s one of those generic commercial buildings you see in business parks all over America. It’s not a big building, just two floors and half a dozen suites or so. It’s an odd stretch of road as there is a public library and a school on the street, along with my dentist, but the rest is a residential neighborhood of nice single family homes, most of which were built in the middle of the last century. It’s a nice little neighborhood where everyone knows one another.

On one side of the dentist was an old house that had fallen into disrepair, but after a series of mysterious happenings, the building was condemned and knocked down. The last time I was at the dentist, the old house was just a pile of debris and a front end loader was putting it into a dumpster. My assumption was that whoever took possession of the property had decided to start over and build a new house. After all, even though the lot was near the professional building, it was a nice little neighborhood on a quiet street.

This trip to the dentist saw a beehive of activity on the lot. The lot is on a steep hill, so the houses along the street are on terraced plots, with one side of the yard being a steep incline to the terrace up the hill from them. Every driveway has a four wheel drive vehicle, as it would be impossible to get up the street in the snow otherwise. By the looks of the foundation and some of the excavating, it looked like the plan was to build another office building on the lot. It had that cheap, slapped together look you see in office parks.

I asked the hygienist about the construction and she told me that the plan was to build three townhouses on the lot. Keep in mind that there are no townhouses in this area and the lot is the size of a postage stamp. Once the thing is done, each townhouse will have a strip of grass about twelve feet wide and ten feet long to call a lawn. It’s going to be a monstrosity that is completely out of place in the neighborhood. According to my dentist, no one had a clue as what was happening until construction had started.

This an example of the modern economy. The builders are not adding value to the land or to the neighborhood. You can say the value of the land they bought has been increased by their activity and that would be a true statement, but their activity is the process of stealing the social capital of the neighbors, in order to increase their property value. All the houses within eyesight of this mess will now lose value, as people looking to move into a nice neighborhood like this one, don’t want to be near townhouses or renters.

That’s apparently the other thing. According to my dentist, the word is the houses may not be sale, but instead they may be rentals. The scheme is to tap into a low-cost housing program to put blacks from the city into these townhouses via the miracle of Section 8 housing vouchers. Not only will the neighbors have their home values decline because of the aesthetics, they will now have to contend with three houses full of rampaging blacks from the city. I noticed several “for sale” signs on the street already.

Of course, it will not just be the immediate neighbors who pay for this. The school will get much worse, if it is Section 8 renters going into the houses. The local stores will go into decline, as crime will become an issue. This killed off a mall on the west side of town. It started as a very nice, upscale place that mostly served the Jews, who live west of Baltimore city. Then it was overrun by blacks and all of the businesses closed. The last time I there with a friend, the place looked like the end times. Total bedlam.

Again, this is the nature of the American economy. Sure, there are still people coming up with ideas to solve old problems, but most of what is called economic activity is just organized theft. Some clever guy figures out how to monetize the social capital of a part of society and then proceeds to sell it off. Amazon is an obvious example of this. There will be no little league teams sponsored by Amazon. There were always little league teams sponsored by the local store owners. That’s all gone because Amazon cannibalized it.

The internet economy is pretty much just the monetization of existing ideas, along with the artificial creation of bottlenecks. Apple and Google control the mobile space, so they now operate as toll takers. Neither company does anything interesting, in terms of technology or innovation. They just rob helpless travelers on the internet. PayPal is another example of a firm that adds zero value, but gets to operate as a gate keeper. None of this would be possible without the massive tax payer subsidies to build and maintain the internet.

Cost-shifting is obviously true in real estate. I’ve joked for years that the builders name developments after whatever it is they bulldozed to build the houses. It is a strange, unintentional mockery of culture. They knock down the authentic, to build a synthetic town, so a bunch of strangers can move through it. The argument is that there is a demand for new houses, so the old must give way to the new. No one ever bothers to ask why there is a demand for new houses or wonder from where these people are fleeing.

That’s just the thing. America is just a continental sized pump and dump right now. Millions of illiterate peasants are moving in, turning modest neighborhoods into squalor, so those people flee to somewhere else. Of course, the affordable housing for them is plopped next to nice organic neighborhoods, so those people flee to an upscale planned community a little further out from the city. On and on it goes, all financed by credit and perpetrated by people who hate us. The result is a land of strangers with no social capital.