Seven Red

Seven Red will admit to being amused by the class politics of the McCain “Seven Houses” gaffe (who doesn’t despise the word “gaffe” at this point?). It’s really a classic of poor timing, given the spiraling foreclosure crisis that has real estate agents in some communities advising people that they shouldn’t even list their homes if they’re not willing to take the foreclosure value. The New York Times article yesterday on the housing crisis in Merced, California really points up the nonsense that was the Bush economic plan: it’s the Ownership Society in smithereens.  As we now know (and as some of us always knew), the Ownership Society was largely illusory, a nominal “ownership” based on unconscionable loans to “owners” who often declared merely their intent to own, and were thereby given the phantom status of owners despite failing every reasonable test of capacity. You can’t have stagnant wages, ballooning house prices, and sustainable, realizable growth. Any seven year old could tell you this. As the joke goes, somebody get us a goddamn seven year old.

The Ownership Society could be read as the latest attempt to paper over the real effects of class in neoliberal economies, with the ideological apparatus stretching from the bully pulpit of the incoherent Bush press conferences, through the Congress and regulatory agencies, the decision-making rooms of the banks, lenders, and mortgage brokers, and even to the culture industry itself, suddenly and fervently enamored with “remodeling,” “switching,” and “house flipping” entertainment. The cultural transition from This Old House to Flip this House marks the odd if predictable displacement of the “house” from the enclosed and institutional space of the family (itself, of course, imbued with all kinds of nostalgic craft-consciousness) to the open and connected space of the investment vehicle. Bob Villa was, after all, a worker. The man picked up a nail gun from time to time. Jeff Lewis of Flipping Out, on the other hand, is the quintessential entrepreneur, not only directing the lazy and shiftless physical laborers, who would have no vision without him, but lording it over them with a playful wink. Needless to say, we’re meant to shake our heads at his petty and “obsessive compulsive” tyrannies, while remaining hooked into the notion that nothing could happen without him. The relative position of the main characters tells us everything. This Old House was about the house (what we used to call, perhaps, its use-value); Flipping Out is about its value on the market.  The fundamental incoherence of the real estate boom is located in the quick movement between these poles, where most people live the house as a (concrete) use value, but a whole apparatus revved up, asking us to imagine it as pure (abstract) exchange value. It is, of course, like any other commodity, both at once. But where the question of its value was once an intermittent consideration that hovered at the edge of its status as a disciplinary space for family life, it has become continuous, such that rapid cycling between the house as lived space and the house as abstract investment value is constant and pervasive.

McCain’s hilarious Seven Houses routine must be understood in this context. It is not merely that McCain is rich, though he surely is. Nor is it that it puts the lie to the laughable charges of elitism lobbed at anyone who dares contest the manifest failure of Friedmanism to deliver the self-regulation it promises. When you go jetting from condo to compound in your $500 shoes, comparing the relative price of iceberg lettuce and arugula seems a trite sort of argument indeed. That the houses were purchased with the so-called “working class” Budweiser dollars rather than snooty Belgian lambics is only a delicious irony. The elitism charge, in any case, never functioned as merely economic; or rather, it always leveraged homophobia for the purpose of refocusing class resentment – a move not unrelated to the “masculinities” and complex character of Bob Villa and Jeff Lewis on the teevee, one would think. The GOP conceptual flip always involves putting Bob Villa in the position of Jeff Lewis, while retaining the Bob Villa qualities in him. What happens to the qualities of the Jeff Lewis character in such an arrangement is perfectly obvious: they are banished to the margins, good for ridicule and negative comparison.  While it’s easy enough to read the Seven Houses business (or is it Ten? check with my staff…) as pure disconnect with such identity politics, it seems to me more problematic in that it necessarily emphasizes the house as an investment value rather than lived space. And it is precisely this mystification, this swing towards one pole of the house-as-commodity,  that is collapsing in so many places around the country. The pathetic GOP defenses that “some” of the houses are, in fact, investment vehicles (yeah, no shit), or that the alchemical transformation of houses into investment vehicles defines the “American dream” as such only exacerbate the problem. Is there anything more ridiculous than portraying the “house” element of the American dream as a fungible commodity rather than an element defined by its material qualities?

An article in today’s Los Angeles Times points up the policy consequences of this transformation. Apparently, the FBI was able to discern at least the fraud possibilities of this swing towards pure exchange value as early as 2004. I’m a little suspicious of the tendency to criminalize what happened in the mortgage industry; it seems like more of the same “few bad apples” treatment we saw with respect to torture. The out of control lending was not an aberration attributable to criminal actors, but a fundamental element of the legitimized market. That said, the fate of the FBI focus on mortgage fraud is itself revealing, even if we discount the increasingly desperate attempt to paint the catastrophe as resulting from illicit activity rather than the normalization of incoherent practices.

But sources familiar with the FBI budget process, who were not authorized to speak publicly about the growing fraud problem, say that he and other FBI criminal investigators sought additional assistance to take on the mortgage scoundrels.

They ended up with fewer resources, rather than more.

In 2007, the number of agents pursuing mortgage fraud shrank to around 100. By comparison, the FBI had about 1,000 agents deployed on banking fraud during the S&L bust of the 1980s and ’90s, said Anthony Adamski, who oversaw financial crime investigations for the FBI at the time.

So, what happened to the available agents?

That has reflected, in part, the ramp-up in national security and terrorism investigations after the Sept. 11 attacks. But the administration has also put more support behind efforts against illegal immigration and child pornography.

In a way, the mortgage debacle could not have come onto the FBI radar screen at a worse time. Just as Swecker was making his doomsday forecast, the FBI, under pressure from Congress and the White House, was creating a crime-fighting brain drain, transferring hundreds of agents from its criminal investigations unit into its anti-terrorism program. About 2,500 agents doing criminal work — 20% or so of the entire force — were affected.

Even if we elevate the importance of fraud as an element of the mortgage crisis, it becomes clear that the policy priorities of the administration were and had to be focused elsewhere. Almost necessarily, as a matter of its fundamental belief system. Even if there was fraud, the market itself would out it and correct for it; the more dangerous threat for government to deal with always comes from outside the political/market body (that each of the stated priorities is biopolitical should be clear enough). That said,  I don’t really see us going back, even if lending and securities regulations are restored, or if more agents are hot on the trail of mortgage fraudsters. The proverbial cat that is out of the bag is precisely the conceptualization of the house as such, and no increased regulation can reclaim the way its material qualities function in the broader discursive space. We’re all actual or potential entrepreneurs now. If the Ownership Society is in smithereens, it is a temporary, if endlessly repeatable, detour. If it is illusory, that need not impede its operations. As a research project, it might be worthwhile to trace the discourse of “property values” in its various developments and permutations. No doubt this discourse has served all manner of social functions over its lifetime (not least as a stoppage to intergration), but I suspect you’d be able to identify qualitative changes in the way the concept works, especially as it relates to the institution of the family.   Booga Face has some interesting thoughts on this, and it seems like a fruitful and timely avenue of study.

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