The American Spectator

Another Perspective

A Modest Proposal for Solving Both the Economic and Energy Crises

By William Tucker on 11.17.08 @ 6:08AM

Americans face an unprecedented economic crisis centered in the housing sector. At the same time we face an energy crisis that matches dwindling oil supplies with global warming. These problems are unprecedented. The old ways of doing things don't apply anymore.

Not since the days our Pilgrim Fathers first set foot upon the land have we ever faced a problem of surplus housing. The early settlers were happy to live in log cabins. As people moved West onto the treeless plains of the Mississippi Valley, they lived in sod houses. Nineteenth-century cities were filled with rickety slums and housing reformers such as Jacob Riis chronicled immigrant families living eight-to-ten in a room in decaying tenements.

Even after public housing reforms began relieving the situation in the 1930s, the housing shortage persisted. Urban renewal leveled whole inner cities without providing much in return. Public authorities erected high-rise housing projects but they quickly turned into vertical slums. Government authorities turned to section-8 vouchers to allow the poor to scatter into suburban neighborhoods but studies soon found this brought with it mini-crime waves.

Unwilling to rely on the vagaries of the free market, the federal government did everything it could to promote housing construction. Home mortgage tax deductions, real estate investment trusts, accelerated depreciation and property tax deductions on income tax all pumped up supply and demand. The Community Reinvestment Act of 1977 enhanced the effort. Mortgages were extended to people once considered uncreditworthy buyers. Community groups like ACORN forced the banks to comply. Fannie Mae and Freddie Mac started buying up these subprime mortgages. Finally, in the first decade of the 21st century, government finally created a surplus of housing. Prices collapsed and speculators defaulted, setting off a financial crisis that has reverberated throughout the globe.

The situation still will not bottom out soon. As long as surplus housing remains on the market, home prices will not rebound. We could find ourselves facing a prolonged, worldwide recession.

SO WHAT CAN WE DO? As with so many other things, we tend to remain focused on dollars and cents while failing to see the situation in a holistic manner. We do not take account of the seamless links between economics and the natural environment. It is time to think outside the box. It is time to think green.

Biofuels have been an ingenious solution that has alleviated our dependence on foreign oil and mitigated global warming while reducing agricultural surpluses. When first introduced by environmentalist in the 1970s, biofuels did not seem to make much sense. The energy gain from turning crops into ethanol is marginal and the process was uneconomical as well. Fortunately the federal government stepped in with lavish subsidies and as a result the biofuels industry has prospered. Almost 30 percent of the corn crop is now going into gas tanks -- American fuel for American cars. On a global scale, tropical forests are being decimated to provide Americans and Europeans with palm oil for biodiesel. Busybodies at the UN say this practice has driven up the price of food among undernourished people around the world, but that is hardly to be believed.

Across America, the success of corn ethanol has set off a rampage for turning every kind of agricultural and household waste into biofuels. Chicken manure, crop wastes, turkey droppings, used tires -- anything and everything is being thrown on the pyre. Only a few weeks ago a Wisconsin utility announced it would substitute wood chips for coal in a new electrical generation plant as its way of "going green." The wood chips will reduce global warming because wood doesn't…well no, I guess wood actually puts more carbon dioxide into the atmosphere than coal. But wood chips will lessen our dependence on foreign…no, I guess that's not right either. We have enough coal in this country to last us another two centuries. Well look, I forget exactly why they're substituting wood chips for coal but anyway, it's clean, green, and good for the environment.

So here's my proposal. Let's start turning surplus houses into biofuel! Studies have shown that in houses where the owner has defaulted, 95 percent of all the material can easily be converted to clean, green biofuels. It's clean because wood products don't contain all that nasty stuff that's in coal. (Just pick up a piece of coal and see how easily it comes off on your hand.) It's green because houses are made of wood and wood is organic, coming directly from the natural environment. And it's good for the environment because burning up surplus homes will return thousands of acres to their natural state, replacing suburban sprawl with natural wilderness.

The Homes-to-Biofuels Movement provides us with the opportunity to solve at one stroke two of our most pressing economic problems -- the mortgage meltdown and energy independence. It will require no new authorization of federal funds and will not discriminate against anyone by race, class or sexual orientation. Rats and other animals that have taken up residence in abandoned structures can be transferred to new homes so that no member of the animal kingdom will suffer as well.

I suggest you call Washington to express your support right away. Nancy Pelosi and the Democratic Congress will be happy to undertake this effort when the new Administration takes office in January. After all, they're eager to burn down the rest of the economy as well.

Letter to the Editor

topics:
Subprime Crisis