No more free lunch! Understanding the National Association of Realtors — all the way down to your bones…

Michael DiMella wrote the remarks quoted below in a comment, but I’ve extracted them and my responses to him into a separate post.

The meta issue is this: Is the NAR a criminal conspiracy against consumers, and, whether or not it is, is there nothing else good about it?

Michael DiMella: > you seem to have a thorough unwillingness to learn what NAR actually is and does.

That’s astoundingly false. I have written more about the NAR’s criminality than anyone, ever. You may not want to focus on that, but criminality is NAR’s sole reason for being. Everything else it might do is window dressing devised to fool the public — and gullible patsies within the NAR.

> That doesn’t make you a bad guy, but I, for one, would appreciate a modicum of respect.

Good grief. I will offer you and the NAR the oath of respect Fiorello LaGuardia paid to a similar criminal mob when he was inaugurated as Mayor of New York: “E finita la cuccagna!” (“No more free lunch!”)

> To [eliminate mortgage interest deductibility without comprehensively revising the tax code] would be careless and have a major negative impact on a majority of Americans.

False. The deductibility of mortgage interest is a handout to the rich. I’m opposed to all taxation, but it is absurd to argue that the wealthiest Americans cannot afford to bear their own economic weight. In any case, as is discussed below, using tax policy to favor one group over another, thus artificially to churn the markets, is vicious and wrong no matter who is hurt or helped.

The next argument would be that, in a condition of pressure-group warfare, to lay down arms is suicidal. That’s as may be, but, in order to make this argument, you must first argue that there can be circumstances in which you feel yourself justified in expropriating other people’s property — stealing, that is — for your own benefit. Are you an advocate of theft? Did I hear you say something about wanting respect?

> I would say NAR’s support of the MID is well intentioned to protect consumers

The sole purpose of the mostly mythical idea of mortgage interest deductibility is to churn the real estate markets, to cause people to buy and sell more real estate more often than they would in the absence of a specious tax benefit almost nobody gets. The only beneficiaries of mortgage interest deductibility are the real estate brokers and salespeople (and other industry hangers-on), who get to collect unwarranted commissions ensuing from this artificially churned-up real estate market.

> but many economists agree the only way we prevented this recession from getting much worse was spending and more spending

Also an obvious lie. This recession was caused by the NAR and its churning of the real estate markets, this more than any other causative factor.

> It’s nothing but a policy disagreement you may have, not a criminal act by NAR.

Theft is always wrong, no matter how you dress it up, and no matter how many witch doctors you hire to sanctify it. Theft from innocent children is particularly vile.

> if you ever get to be a very large organization

I have zero interest in any sort of organization. Honest men have no need to run in gangs. The NAR formed itself as a criminal gang precisely because its motives were and are dishonest. As you yourself are an honest man, I will expect to see you move in my direction over time. If you remain aligned with the NAR, you will very likely become a more adept apologist for theft. Your business either way.

Quoted below is an extract from a post I wrote about mortgage interest deductibility earlier this year:

The idea of mortgage interest deductibility is the key argument in the almost-always bogus rent vs. buy debate. Putative deductibility provides supposed cash benefits right now — and it promotes the investment value of your home.

Sit still for a moment. Take a few deep breaths. Forget everything about our current political and economic context and then tell me in twenty-five words or fewer why relatively fungible non-commercial real estate should ever be thought of as an investment. Do you think of your clothing as an investment? Do you anticipate a big cash payday for your knocked-around production-line mini-van?

We’ve been stupid for a long, long time, but not without cause. The NAR has told us for decades that we get a mortgage interest deduction, even though almost nobody does. They told us it was worth serious dough, even though it wasn’t. And they told us it turned our homes into investments, even though treating our homes as investments has resulted in massive over-building, massive over-lending, massive defaults, massive foreclosures and a massive clusterfrolic in the residential real estate business.

Who is at fault? Who claims credit for the idea of mortgage interest deductibility? The National Association of Realtors.

Two paragraphs ago you were thinking about reality and not just the news, so let’s try to make a habit of it. Suppose the car dealers in your state passed a law that put an excise tax on every vehicle — owned, financed or leased. But they also passed a law that let the drivers of financed vehicles deduct their interest payments from their excise tax bill. If you bought your car on credit, you might stand up and shout, “It’s a great day to be a Rotarian Socialist!” But if you lease or own your car — or if you own a fleet of trucks — you might not be so happy.

A tax system like that is obviously unjust — and its underlying motivation should be equally obvious: To get more people to buy more cars more often than they otherwise would.

This is also the motivation behind the putative deductibility of mortgage interest. People who own their own homes free and clear are being robbed, as are people who rent, but not even the mortgagee is the true beneficiary. The law is written for the benefit of Realtors — and lenders — who can talk you into buying more house than you otherwise would, trading houses more often than you otherwise would, all with the promise of a tax deduction that you almost certainly will not get, and which won’t amount to anything even if you do.

And that is why the NAR must wail so balefully that the deduction of mortgage interest is sacred and must not be touched — because it’s a sleazy scam for churning the real estate markets, and, if anything changes, there’s a chance that someone might catch on to the con game.

I’m talking to everyone who is still reading, not just to Michael. I do not have any doubt that the NAR is a criminal organization, but if you do, I want you to help you see my side of this issue.

The National Association of Realtors was formed as a cartel. Its original objective was to get laws passed in state legislatures to make it unlawful for otherwise honest people to broker real estate transactions for compensation. These were the original real estate licensing laws, and they were all written by the NAR. The purpose of all occupational licensing laws is to increase the compensation paid to licensees at the expense of consumers. In other words, the NAR has been a criminal conspiracy against consumers since its inception.

There are two side issues here. First, in order to usurp advantages for its members, at the expense of the general public, the NAR had to blow its horn about the vitally important role occupational licensing plays in providing consumer protection. As we all know, and as some of us are willing to admit even in full daylight, exactly the opposite is the case: Licensing lends the color of competence and legality to all manner of boobs and crooks. In this respect, occupational licensing is surely worse than nothing, since consumers are gulled into the belief that the license actually means something, rather than serving as camouflage for a much larger crime.

Still worse, since the NAR outlawed unlicensed brokerage for compensation, it will soon have the embarrassing task of trying to outlaw unlicensed real estate brokers who choose to work for free. Who might those be? How about the ad-supported Realty.bots? They’re already introducing borrowers to lenders for free. How much longer before someone starts introducing buyers to sellers without collecting any compensation for the introduction? When this happens, the NAR’s drawers will be all the way down. It will be fun to watch its apologists then.

There’s more. As we have discussed here many times, the NAR’s main focus, by now, is influencing legislation at all levels of government to churn the real estate markets. Whatever the consumer’s interests might be, the NAR’s interest, always, is to induce more people to buy and sell more real estate — sooner rather than later. If it were the NAR’s function to promote the sale of after-market car stereos, it would lobby for leniency for petty criminals!

If you work in real estate, you may think it’s somehow a good thing for the NAR to churn up more and more transactions. But as is discussed above, every bit of this churning is effected by acts of theft, by stealing from one innocent person in order to confer unearned wealth upon another. The $8,000 tax credit is not a credit against the home-buyer’s taxes. It’s an unearned cash gift stolen from every taxpayer who doesn’t get one. Still worse, since the United States’ government is broke, the funds are being stolen from future taxpayers — your children and grandchildren.

To say, “I support the NAR,” you must first be prepared to say, “I am in favor of enslaving innocent children so that I can have some unearned treats today.”

You must be prepared to say, “I am in favor of forbidding otherwise innocent people from earning a living however they choose.”

You must be prepared to say, “I think pushing innocent people around at gunpoint is a good thing, provided it benefits me.”

To say, “I support the NAR,” you must be willing to say, “I am proud to be a thief, proud to enrich myself at the expense of my neighbors and my own children, proud to beggar an entire nation of once-free people — provided I get mine!”

If you’re willing to say things like that, you’re hardly alone. Socialism is a philosophy of brigands, and Rotarian Socialism is the philosophy of the NAR.

But if you are not a thief, why would you ever issue apologies for thievery? Why would you permit a criminal gang like the NAR to sully your good name?

I know that no one has ever explained these issues to you in this way before. But now that I have, you have to make a choice.

You can say, “Yeah, but,” and then proceed to make ever-more-ludicrous excuses for ever-more-vicious crimes.

Or you can hide behind you hand and pretend that there is no need to do anything so off-putting as taking a side — as the cannibal vampire dinosaurs in the NAR devour your neighbors — and then your children — and then you.

Or you can stand up on your hind legs and bellow, “Not in my name, damn you!”

I live very comfortably in a world of absolutes, so there is no strain for me in writing treatises like this one. But one of the penalties you pay for reading me, and for reading me all the way to the end, is that I rob you of your middle — of your mights and your maybes. You spend your days peering through of fog of vague generalities, and then you go and ruin it all by showing up here!

It doesn’t matter to me what you do now. I’ll supplant the NAR with your help or without it. But it very definitely matters to you what you do about this. I’ve robbed you of the ability to make excuses for the NAR’s fundamental evil. You’ll do what you do, going forward, and that’s your business. But you will never forget this essay, never forget that you know all the way down to your bones that the NAR is a criminal conspiracy against the consumer — against your neighbors, against your children, against you.

Here’s what I think I want to say, just for now: “No more free lunch!”