Keynesian policies used to be all about building infrastructure, bridges to nowhere, and the like. Put people to work, replace private investment, prop up aggregate demand and all of that. Remnants of FDR’s New Deal are still standing, not to mention projects constructed by the Roman Empire. But Detroit’s new mayor Dave Bing is shooting and scoring with a plan to “right-size” the Motor City. Not by building new homes but by knocking down old ones, even in well-to-do neighborhoods.
The Wall Street Journal says there’s federal funding for Mayor Bing to knock down 3,000 houses by September.
The Hall of Famer Bing scored 18,327 points in his NBA career and is looking to bulldoze over half that many homes just during his first term. One of the first houses to go is the old Romney place that sold for $645,000 just eight years ago.
With millions of vacant homes and commercial building sitting empty around the country, this is an idea that could catch on. Don’t laugh, after all the government killed cattle and poured milk on the ground in compliance with the Agricultural Act of 1933 to support prices even as people where starving. Most farmers at the time couldn’t afford not to take the government money.
Is it too far-fetched to think that Washington, in yet another way to bail out the banks, would pay financial institutions to knock down repossessed homes and buildings? This would cure the glut, clean up public nuisances and blight (like the Romney place), with the added benefit of helping out homebuilders. Plus, good high-paying jobs knocking down buildings would be created: a right-sizing of employment if you will. This is a win-win-win-and then some policy.
Bing may be leading the fast break on this one. There could be a bubble in demolition company stocks coming. Is Halliburton in that business?