feudalism [(fyoohd-l-iz-uhm)]

A system of obligations that bound lords and their subjects in Europe during much of the Middle Ages. In theory, the king owned all or most of the land and gave it to his leading nobles in return for their loyalty and military service. The nobles in turn held land that peasants, including serfs, were allowed to farm in return for the peasants’ labor and a portion of their produce. Under feudalism, people were born with a permanent position in society. (See fief and vassal.)

Note: Today, the word feudal is sometimes used as a general term for a set of social relationships that seems unprogressive or out of step with modern society.

Where it was tempting to write another post juxtaposing my thoughts with phrases from the musical, Les Miserables, I have decided against this.  Nevertheless, it is nice to see that Obama isn’t stopping at Great Depression economic policies when it comes to unprogressive solutions to our economic crisis.

Apparently he is mulling a modern reinvention of the feudal system.  This passage is from Reuters:

U.S. government officials are weighing a plan that would let borrowers who have fallen behind on their mortgage payments avoid eviction by renting their homes instead, sources familiar with the administration’s thinking said on Tuesday.

Under one idea being discussed, delinquent homeowners would surrender ownership of their homes but would continue to live in the property for several years, the sources told Reuters.

Landlord in Chief

This is a perfect example of liberal-feel-good policy.  How can we argue against a seemingly benign government putting the taxpayer’s neck on the line one more time to bail out improvident homeowners and their silly bankers?  I believe that we can safely assume that the feudaral government would be a benevolent landlord.  I am also pretty confident that Neo-Feudalism will have no negative unintended consequences.  It is very unlikely to incentivize people to quit their mortgages.  It is also unlikely to incentivize banks to continue to make bad loans.  It is also unlikely to artificially lower rental rates, thus wiping out whatever real estate investor class still exists in America.  It is also unlikely to perpetuate the downward spiral in housing prices that most economists agree needs to be reversed.  It certainly wouldn’t promote a greater sense of entitlement among average Americans.  It wouldn’t violate the 10th Amendment and further restrict state’s rights by replacing a local source of state revenue, property taxes, with a federal source of revenue, housing rental proceeds, to be divvied out to the states.  This policy will probably also help reduce the unemployment rate as delinquent homeowners are forced to live in their homes for years and are unable to uproot and find work elsewhere.  After all why go look for a job if your unemployment check now comes with a rent stipend that you can use to continue living in the house that used to be yours.