Ohio Bans Plywood for Foreclosures
Crony capitalist strikes it rich
By Mark Luedtke
Publication date 021417
The Dayton Daily News recently published an article detailing how crony socialism enables rulers to strike it rich at the expense of everybody else. The article reads like an advertisement for Community Blight Solutions’ SecureView products.
“Clear boarding products are shatter- and tamper-proof, preventing vandalism, trespassing, squatting and other crimes in vacant properties, said [the founder and chairman of Community Blight Solutions Robert] Klein, who advocated for House Bill 463. Clear boards allow police and property owners to see inside buildings to make sure no intruders or other trouble is inside,” gushes the DDN. “Most notably, clear boards tend to be indistinguishable from windows and glass doors, meaning they don’t publicize that a property is empty as plywood does, Klein said.”
The DDN wants you to believe SecureView products are a panacea for blight, as if blight is caused by plywood, not a broken economy. Critics of the plan say… I don’t know what they say. As usual the DDN presents no counter to its propaganda.
But there’s a catch. “Clear boarding products are more expensive than plywood. A 48-by-96-inch SecureView window cover runs about $115 per sheet. A SecureView security door costs about $395.”
That’s over ten times the cost of plywood. It’s nearly 40 times the cost of a plywood sheet for a door. Klein and his partners struck the mother lode.
Of course he lobbied for this ban on plywood. We tend to speak of lobbying as if it was a legitimate, although often abused, activity. It isn’t legitimate. Lobbying is the purchase of government’s illegitimate power of coercion. Politicians sell that power to the highest bidder constrained by their ability to get re-elected. This is how politicians get rich fast and their rich cronies become super-rich faster.
Ohio is the first state to pass such a law. Klein must have successfully purchased a lot of votes.
But the DDN wants us to believe politicians care about taxpayers. “The law won’t affect Springfield or other municipalities that board up abandoned structures, Springfield Planning, Zoning and Code Administrator Stephen Thompson said. He believes the new requirements might improve blight in neighborhoods,” it wrote. “‘I would hope so but it’s hard to tell what the real impact of something like this will be,’ Thompson said.”
The law only applies to mortgage lenders. There’s not many of them so their votes aren’t important. They can be preyed upon to fund a plan advertised to fight blight.
But Thompson really knows what the impact of this law will be. While some mortgage lenders will pay the exorbitant additional cost to board up houses, making Klein super-rich, many will forego boarding up properties at all. More foreclosed houses will be used as crack houses and by squatters. Blight will increase. The additional costs will put marginal mortgage lenders out of business, hurting the economy, and they’ll be taken over by bigger companies, funneling more wealth into the hands of the few.
We’ll eventually read about these supposedly unintended consequences. They aren’t unintended. These consequences benefit rulers. They give them excuses to further interfere in the economy, making themselves and their cronies richer again.
The DDN inadvertently notes another way taxpayers are harmed by this legislation. “Fannie Mae, one of two massive U.S. government-backed agencies to buy and guarantee mortgages, was an early adopter of clear board alternatives,” it reported. “The housing finance giant started using polycarbonate coverings in 2013 to maintain its post-foreclosure properties in a handful of states, including Ohio. By the end of 2014, Fannie Mae had implemented clear boarding across all of its markets.”
Fannie Mae was created by Congress and is backed by taxpayers. Taxpayers bailed out Fannie Mae and Freddie Mac in 2008. Taxpayers will have to bail them and their clear board products out again soon.
But rulers declare the cost is worth it. Jake Williamson, vice president of Fannie Mae’s distressed assessment fulfillment division, told the DDN, “We feel the product is a bit safer and more secure than plywood.’”
A bit safer sounds worth paying ten times or 40 times more.
This article exposes the anatomy of legalized crony corruption that goes on every day in government halls in plain sight. Rulers think of taxpayers as an unlimited supply of wealth. They milk us like cows for every pet project that makes them and their cronies richer and us poorer, and like cows, we let it happen. Then we’re outraged when the negative consequences become obvious.
Originally published in the Dayton City Paper.