Big change in the real estate market.

Like millions of other Americans, I’ve paid 6% realtor fees and wondered what I was getting for my money. Like the millions of people, I considered the options and realized that the realtors had me in a corner and I couldn’t do anything about it. Today, the main realtor association has now realized that they are in a corner. I see this change as an opportunity to write about something that is a huge part of America. The pennies that MAGA people get red in the face about are trivial compared to the big bucks extorted by the billionaires.

Economics has always fascinated me. It’s sociology combined with the real world of money. You can lie about your sex life and pretend that you don’t care about fashion, but there is a hard reality to economics. In Army training, I used to carry a book by John Kenneth Galbraith to read during smoke breaks. (See: Define the Word “Smart”.) “Antitrust” is right there on the front lines of the war between the billionaires and the rest of us.

The place to start is the word “antitrust”. What does it mean? Isn’t “trust” a good thing? Why should we be against trust? Like a lot of English words, it doesn’t mean what you might think. The billionaire class and the modern science of thought control has done a great job of burying this important concept so Americans will blame something or somebody else[1]. Something or somebody that doesn’t take away any wealth from the billionaire class.

Before 1890, a mega-corporation would “trust” a local company to hold property for the benefit of the parent.[2] Today, laws have changed. In other countries, laws that prevent corporations from abusing their economic power area called “anti-monopoly” laws or something similar. In the US, it’s useful to call them “antitrust” laws because the name confuses people. That makes it easier for them to spread misinformation.

They used to teach this stuff in high school, but I’m not sure they do anymore. According to etymonline.com, the use of the word “antitrust” is less than one tenth of what it was back at the peak around 1940. One of the best books about it, In a Few Hands: Monopoly Power in America, was written by Senator Estes Kefauver (A Democrat! From Tennessee! How the worm does turn.) over fifty years ago.

The US got serious about monopolies robbing the poor to give to the rich around 1890. Before then, the ability of a corporation to use economic power to drive rivals out of business had exploded. John D. Rockefeller’s Standard Oil controlled nearly 90% of oil refining in the United States. The American Sugar Refining Company controlled a 98% monopoly of the sugar refining industry. And in other economic sectors like steel, shipping, and communications, just one massive corporation was giving consumers, employees, and potential rivals just one choice for the necessities of life. The Sherman Antitrust Act and later breakthrough laws changed everything, but corporations have kept trying to get big enough to rule like kings. For example, in 2022, Sugar made a big leap toward re-monopolization.

But last Friday, we took back some territory. The National Association of Realtors settled lawsuits by paying a $418 million fine and agreeing to eliminate a bunch of other monopolistic practices, including the elimination of the traditional “6% of the real estate price”. Look for realtors to compete on the cost of their service instead of just scaring you by claiming that “you won’t sell your house unless you pay me 6%”.

It’s about damned time!

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[1] A real estate page I found contained this gem:

“Unlike the commission, the party responsible for paying the closing costs can be negotiated — and this is often where real estate agents really earn their pay. Because no rule guides who pays these costs, agents representing both the buyer and seller work hard to get the best deal for their client.”
Why would they work harder? Customers are boxed in and the agent doesn’t get any of it. And if getting rid of rules for closing costs is a good thing, why isn’t getting rid of rules about realtors a good thing too?

[2] The Supremes have held that corporations are really people in disguise (Citizens United v. Federal Election Commission) with religious rights, political rights, and everything. It’s just that, like vampires, they don’t die. This leads to the question, if the 14^th Amendment makes it illegal for one person to own another one, why can “people corporations” own other “people corporations”?