{"id":814,"date":"2025-12-08T08:30:28","date_gmt":"2025-12-08T08:30:28","guid":{"rendered":"https:\/\/brucecampaign.org\/?p=814"},"modified":"2026-01-17T18:45:09","modified_gmt":"2026-01-17T18:45:09","slug":"when-bubbles-burst-china-lets-speculators-fall-the-us-catches-them","status":"publish","type":"post","link":"https:\/\/brucecampaign.org\/?p=814","title":{"rendered":"When Bubbles Burst: China Lets Speculators Fall. The US Catches Them."},"content":{"rendered":"\n<p><em>By <a href=\"https:\/\/brucecampaign.org\/?p=38\" title=\"\">Bruce D. Wilkinson Jr.<\/a><\/em><\/p>\n\n\n\n<p>In the United States, we\u2019re told we face a housing shortage. But walk through any city and you\u2019ll see something else: <strong>vacant condos owned by shell companies, boarded-up rentals held off the market for speculation, and entire neighborhoods priced beyond reach<\/strong>. The problem isn\u2019t supply\u2014it\u2019s <strong>ownership, purpose, and power<\/strong>.<\/p>\n\n\n\n<p>Meanwhile, in China\u2014a society often misrepresented in Western media\u2014the challenge is nearly the opposite: a <strong>glut of unsold housing<\/strong>, built so rapidly that demand hasn\u2019t caught up. Yet their response reveals a fundamental difference in priorities: <strong>when China\u2019s housing bubble burst, the state protected people, not profits<\/strong>.<\/p>\n\n\n\n<p>In 2016, President Xi Jinping declared: <strong><a href=\"http:\/\/www.xinhuanet.com\/english\/2016-12\/15\/c_135903075.htm\" target=\"_blank\" rel=\"noreferrer noopener\">\u201cHouses are for living in, not for speculation.\u201d<\/a><\/strong> This wasn\u2019t just a slogan\u2014it became state policy. When China\u2019s second-largest developer, <a href=\"https:\/\/www.reuters.com\/markets\/commodities\/explainer-chinas-evergrande-debt-crisis-2023-09-26\/\" target=\"_blank\" rel=\"noreferrer noopener\">Evergrande Group, collapsed under $300 billion in debt<\/a>, the government <strong>did not bail it out<\/strong>. Instead, it let the company fail, fined its founder Hui Ka Yan, and banned him for life from capital markets. Once Asia\u2019s richest man\u2014worth $45 billion\u2014Hui is now a mere multimillionaire. The losses were borne by those who profited from the bubble, not by workers, taxpayers, or the state.<\/p>\n\n\n\n<p>Only after speculative prices crashed did China act to stabilize housing\u2014<strong>not for investors, but for people<\/strong>. In 2024, the government committed <a href=\"https:\/\/www.scmp.com\/economy\/china-economy\/article\/3251233\/china-central-bank-42-billion-yuan-plan-property-market\" target=\"_blank\" rel=\"noreferrer noopener\">$42 billion to buy unsold inventory at depressed prices<\/a> and convert it into affordable housing. Combined with subsidies for young buyers, this approach <strong>de-financializes housing<\/strong> and treats it as a social good.<\/p>\n\n\n\n<p>Compare this to the United States.<\/p>\n\n\n\n<p>Here, \u201csolutions\u201d to the housing crisis often <strong>protect asset values, not residents<\/strong>. Take the recently floated idea of a <strong>50-year mortgage<\/strong>, championed by Donald Trump and quietly explored by the Federal Housing Finance Agency. On paper, it lowers monthly payments. In reality, it\u2019s a <strong>debt trap<\/strong>: a $500,000 home at 6% interest would cost over <strong>$1.5 million<\/strong> across five decades\u2014with most early payments going entirely to interest. Worse, by making homes <em>appear<\/em> more affordable, such loans <strong>push prices even higher<\/strong>, benefiting sellers and banks while locking buyers into lifelong financial servitude. This isn\u2019t relief\u2014it\u2019s <strong>financial engineering to preserve the bubble<\/strong>.<\/p>\n\n\n\n<p>The same logic appears in local policy. In Seattle, governments are pledging hundreds of millions to buy properties <strong>at or near peak prices<\/strong>\u2014even as population growth slows, homes sit unsold, and prices begin to fall. This isn\u2019t affordability strategy; it\u2019s a <strong>stealth bailout<\/strong> for landlords and developers just before a potential crash.<\/p>\n\n\n\n<p>And a crash may be coming. After peaking in 2022, U.S. home prices are softening, inventory is rising, and sales are slowing\u2014classic signs of a market rolling over.<\/p>\n\n\n\n<p>Yet instead of doing what Keynes prescribed\u2014<strong>holding public resources in reserve to spend <em>during<\/em> a downturn<\/strong>\u2014the U.S. government is doing the opposite: it\u2019s deploying public money <em>now<\/em>, at the top of the cycle. Whether it\u2019s cities buying overpriced homes, floating 50-year debt instruments, or the federal government taking equity stakes in strategic firms like Intel and rare earth miners, the pattern is the same: <strong>using public funds to prop up private asset values just before they fall<\/strong>.<\/p>\n\n\n\n<p>This isn\u2019t prudent investment\u2014it\u2019s <strong>reverse Keynesianism<\/strong>: using the state to inflate bubbles rather than cushion their collapse.<\/p>\n\n\n\n<p>The political winds, however, are shifting. In November 2025, <strong>Katie Wilson<\/strong>, a democratic socialist and lifelong renter, unseated Seattle Mayor Bruce Harrell on a platform of <strong>universal childcare, renter protections, and publicly funded affordable housing<\/strong>. Her victory reflects deep frustration with a system that serves speculators, not residents.<\/p>\n\n\n\n<p>Yet even with the best intentions, her administration may face pressure to act <em>now<\/em>\u2014buying distressed office buildings or rental portfolios at inflated valuations. If public funds are spent before prices correct, the result could mirror past failures: <strong>stabilizing private wealth while leaving working people behind<\/strong>. True affordability won\u2019t come from buying at the peak\u2014or from stretching debt across two generations. It will come from <strong>refusing to treat housing as a financial asset at all<\/strong>.<\/p>\n\n\n\n<p>Meanwhile, giants like Berkshire Hathaway sit on <a href=\"https:\/\/www.reuters.com\/markets\/us\/berkshire-hathaway-cash-hoard-hits-record-347-billion-2024-11-02\/\" target=\"_blank\" rel=\"noreferrer noopener\">$300 billion in cash<\/a>, waiting to scoop up distressed assets after the fall\u2014just as they did in 2008. The pattern is clear: <strong>private capital profits from boom and bust, while the public bears the cost<\/strong>.<\/p>\n\n\n\n<p>This isn\u2019t accidental. It reflects who holds power. In the U.S., <a href=\"https:\/\/fred.stlouisfed.org\/series\/CP\/GDP\" target=\"_blank\" rel=\"noreferrer noopener\">corporate profit margins have soared\u2014from around 10% a decade ago to 15% today<\/a>. In China, most firms operate on margins of 1\u20136%, with profits actively constrained by the state. Why? Because China treats capital as a tool of national development, not an end in itself.<\/p>\n\n\n\n<p>The U.S., by contrast, has surrendered economic sovereignty to asset managers like <a href=\"https:\/\/www.theguardian.com\/business\/2020\/jan\/27\/blackrock-vanguard-state-street-big-three-own-88-of-s-and-p-500\" target=\"_blank\" rel=\"noreferrer noopener\">BlackRock, Vanguard, and State Street\u2014firms that collectively own ~24% of nearly every major corporation<\/a>. They don\u2019t need majority control to steer the economy; quiet coordination is enough. The government\u2019s 10% stake in a company isn\u2019t \u201cpublic ownership\u201d\u2014it\u2019s a seat at a table already dominated by finance.<\/p>\n\n\n\n<p>We\u2019re told this system is \u201cfree market.\u201d But figures like Peter Thiel\u2014who openly champions private monopolies\u2014reveal its true nature: <strong>neo-feudalism dressed as innovation<\/strong>. It\u2019s an aristocracy of billionaires who believe their wealth is divinely or genetically ordained, absolving them of responsibility to society or the planet.<\/p>\n\n\n\n<p>China isn\u2019t perfect\u2014but it is <strong>grounded<\/strong>. Its leadership enforces discipline over capital, not the reverse. And in a world teetering on ecological and financial collapse, that discipline may be the last best hope for ordinary people.<\/p>\n\n\n\n<p>So when we discuss \u201caffordable housing\u201d in the U.S., we must ask: <strong>Who really benefits?<\/strong> If we buy overpriced homes now, we\u2019ll have no resources left to buy them cheaply after the crash. If we subsidize landlords or stretch mortgages to 50 years, we reinforce the very system that made housing unaffordable.<\/p>\n\n\n\n<p>Instead, let\u2019s learn from those who\u2019ve dared to say: <strong>Housing is not a commodity. It\u2019s a right.<\/strong> Or perhaps better said: <strong><a href=\"http:\/\/www.xinhuanet.com\/english\/2016-12\/15\/c_135903075.htm\" target=\"_blank\" rel=\"noreferrer noopener\">\u201cHouses are for living in, not for speculation.\u201d<\/a><\/strong> <\/p>\n\n\n\n<p>And let\u2019s build a movement that treats it that way\u2014above ground, in our own names, and without apology.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><em>Bruce D. Wilkinson Jr. is a lifelong activist, school bus driver, and resident of Washington State. He writes from a commitment to land, community, and truth.<\/em><\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p><em>For more on China\u2019s economic model, see the <a href=\"http:\/\/www.xinhuanet.com\/english\/2021-03\/13\/c_139808694.htm\" target=\"_blank\" rel=\"noreferrer noopener\">14th Five-Year Plan on \u201cCommon Prosperity.\u201d<\/a><\/em><\/p>\n<\/blockquote>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"810\" height=\"688\" src=\"https:\/\/brucecampaign.org\/wp-content\/uploads\/2024\/05\/P929-Another-World-IS-Possible.jpg\" alt=\"\" class=\"wp-image-731\" srcset=\"https:\/\/brucecampaign.org\/wp-content\/uploads\/2024\/05\/P929-Another-World-IS-Possible.jpg 810w, https:\/\/brucecampaign.org\/wp-content\/uploads\/2024\/05\/P929-Another-World-IS-Possible-300x255.jpg 300w, https:\/\/brucecampaign.org\/wp-content\/uploads\/2024\/05\/P929-Another-World-IS-Possible-768x652.jpg 768w\" sizes=\"auto, (max-width: 810px) 100vw, 810px\" \/><\/figure>\n","protected":false},"excerpt":{"rendered":"<div class=\"mh-excerpt\"><p>And a crash may be coming. After peaking in 2022, U.S. home prices are softening. Yet instead of preparing for a downturn\u2014as Keynes prescribed\u2014the U.S. government is doing the opposite: buying stakes in Intel, defense firms, and rare earth miners at market highs. This isn\u2019t public investment; it\u2019s reverse Keynesianism\u2014propping up overvalued assets before they collapse. <a class=\"mh-excerpt-more\" href=\"https:\/\/brucecampaign.org\/?p=814\" title=\"When Bubbles Burst: China Lets Speculators Fall. The US Catches Them.\">[&#8230;]<\/a><\/p>\n<\/div>","protected":false},"author":1,"featured_media":815,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"footnotes":""},"categories":[82,8,74],"tags":[140,4,83,137,19,138,139,94,86],"class_list":{"0":"post-814","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-china","8":"category-commentary","9":"category-olympia","10":"tag-blackrock","11":"tag-bruce-wilkinson","12":"tag-china","13":"tag-evergrande","14":"tag-housing","15":"tag-hui-ka-yan","16":"tag-seattle","17":"tag-us","18":"tag-xi-jinping"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.0 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>When Bubbles Burst: China Lets Speculators Fall. 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