The View From 1776

Upswing In Home Sales Cannot Last

The Factor Driving Home Sales: Fear

Posted by .(JavaScript must be enabled to view this email address) on 08/25 at 06:04 PM
  1. Well, Thomas, that post has to be one of your less brilliant posts:

    "Housing sales are up because people are suddenly scared out of their wits by Obama!"

    Housing sales can't possibly be up because the economy is slowly turning around, in spite of everything the Republicans in congress are doing to kill it? Nah! Couldn't be that!
    Posted by .(JavaScript must be enabled to view this email address)  on  08/26  at  04:18 PM
  2. awesome post as usual
    Posted by royalessays co uk  on  08/27  at  09:57 AM
  3. J. Jay,

    It is your comments that are “less [than] brilliant”, not Thomas’s post. First of all, Tom only posted an article of interest on his website, and is not the author of the piece. That may or may not signal he endorses it, or some part of it. He may not agree with it at all, but thinks it, nonetheless, worth reading.

    Secondly, while Tom’s link to the article does, indeed, imply fear is a factor driving sales [direction not specified] just now, he nowhere said or implied “sales are up [solely] because people are suddenly scared out of their wits”. Just plain scared is quite sufficient without the hyperbole. The liberal press (as well as conservative media) has published scads of articles (as well as tons of real estate market analysis) over the last 3½ years confirming the housing-market was and remains ‘nervous’. Only last week articles in both the WSJ and Washington Post opined ‘people are not ready to jump back in’, a clear acknowledgement they are worried a) the market hasn’t sufficiently stabilized, b) isn’t trustworthy, or c) mistrust the assurances of unelected officials (and their media trolls) proclaiming it is okay to venture back into the water (just ignore that rip tide depositing bodies up and down the shore) desperate to improve reelection prospects for their preferred leaders by hook or by crook. Any way you slice it, it still represents a ‘fear-factor’. Indeed, hardly a week goes by that someone in the liberal media does not predict that, while we have not yet turned the corner, Obama has made the necessary course-correction and we are on our way to economic health. Yet, like a mirage endlessly receding, recovery stubbornly eludes the ‘One’.

    The fact housing sales are up a little completely misses the point of where they ought to be by now (but aren’t). Obama has been bragging he ‘saved or created’ X jobs. Meanwhile, 2X is the number of jobs lost (and ought to concern him as it does us), and 17-million work-capable Americans (1 out of 9, BLS U6 8/3/2012) are still looking or have given up looking. Obama is merely ‘cherry-picking’ the jobs data he counts (i.e., government and green-jobs) and conveniently ignoring the rest where they conflict with his ‘recovery is happening’ cant; and, in the process, telegraphing what he will and won’t count. Some in this category are jobs he positively detests, and has imposed policies intended to block job-recovery in those sectors (e.g., financial, fossil-energy, insurance, &c). Some of these are jobs which, if allowed to grow unobstructed, would have given him a very real and unmistakable recovery before now; but such is his ideological repugnance he can’t bring himself to countenance them even now when he desperately needs them for reelection. In the case of oil, coal and gas, his obstruction is further predicated on pushing jobs to ‘green’ alternatives with much less real job potential at the expense of fossil jobs (i.e., deliberate job destruction). Green jobs require massive subsidization in perpetuity far exceeding the value of any jobs created (which fossil jobs don’t), and should not, for that reason, be counted (paying yourself to do things the market doesn’t want is the antithesis of economic activity). That alone makes ‘Obama jobs recovery’ proclamations of “all of the above” coupled with “we are out of recession” a sham and a sleight-of-hand. The same is true of his ‘housing recovery’ pronouncements. Yes, there is some housing-market improvement, but not enough as matters; and all prior experience shows the market ought to have rebounded faster and more robustly than this. Thus, the only conclusion we can draw is the housing-market, like so much else Obama messes with is (at best) on artificial life support and (at worst) held back; and buyers and sellers (regardless their politics) are just not buying it.

    Pull away the props Obama uses to [temporarily] spur housing sales, but without fixing the underlying (government induced) problems, and the market will indeed relapse as this article describes the moment those props are removed. Obama is not the first to play this game just before an election to give himself a tactical advantage. Pfeister is merely opining what many before him have observed: that none of the problems identified at the start of the mortgage implosion have been fixed and, therefore, that lenders remain hesitant to lend by a government still enforcing bad lending policies, buyers hesitant to buy because fearful they will get caught in a mess that has not been fixed (as advertised), and sellers holding out for a price that allows them to (at minimum) recover their principal.

    Additional Readings:

    http://www.bls.gov/news.release/pdf/empsit.pdf
    http://www.shadowstats.com/alternate_data/unemployment-charts

    http://www.instituteforenergyresearch.org/2009/01/13/green-jobs-analysis/

    http://www.instituteforenergyresearch.org/wp-content/uploads/2009/03/morriss-green-jobs-myths.pdf

    http://reason.com/archives/2012/06/21/how-many-americans-are-really-out-of-wor
    http://www.nytimes.com/2012/08/23/business/housing-report-continues-signs-of-weak-revival.html?pagewanted=all – NYT article (despite its positive spin) uses terms like ‘weak’, ‘convalescing’, and ‘new normal’ to describe the present housing-market; terms it was using a year ago and two years ago. It also has a real-estate source saying “I think people are really scared right now”. Except for liberal spin, this article admits everything the Pfeister article asserts (and more) about the sorry state of the housing market.

    http://www.independent.co.uk/news/business/comment/stephen-foley-americans-betrayed-by-halfbaked-attempts-to-fix-housing-market-8079538.html – an unbiased (i.e., Independent) appraisal as viewed from across the pond.

    http://blogs.redding.com/dbenda/archives/2012/08/the-underwater.html – allegations market is being manipulated by government to enhance reelection prospects

    http://www.allvoices.com/contributed-news/12677872-obama-white-house-intends-to-cause-new-housing-bubble – claims Obama is preparing a reprise of the mortgage debacle after recounting how we got in that mess originally.
    Posted by .(JavaScript must be enabled to view this email address)  on  08/28  at  05:51 AM
  4. Bob,

    The US economy is like a huge ocean liner, which once in motion, takes a long time to answer the rudder. The president, whether liberal or conservative cannot wave a wand and instantly suddenly see results. The president is not a king who can command obedience. He can affect national policy only to the extent that the House and Senate will consider his initiatives and compromise with him and with each other to pass legislation.

    It took eight years for the economy do descend to the condition it was in at the end of the Bush administration (losing jobs at a rate of 800,000 per month) and it is not surprising that it took a long time to get the ship of state turned around.

    Turning the ship of state was made even more difficult by the uncooperative first mate McConnell and half of the crew who were intent from day one on getting a new captain, and who did everything in their power to keep the rudder from moving.

    The sole (publicly announced) objective of the Republicans was to bring down the president, even at the cost of four years of economic stagnation and pain and misery for the American people.

    Posted by .(JavaScript must be enabled to view this email address)  on  08/28  at  10:34 AM
  5. J. Jay,

    I am afraid you have gone Dark-Side delusional on us again, and blowing smoke. First of all, you are invoking the wrong analogy and have little experience of ocean sailing. The economy is more like the ocean than the ocean-liner. You ride an ocean, only a fool tries to steer it; and, although it is not entirely unresponsive to feedback, the feedback has to be so massive it is rarely worth the effort. Rather than controlling the ocean, its tides, currents, or the height of its waves, you steer for a current or wave that gives you some advantage in height or speed; and, when you fall off, you angle to get back on as quickly as possible so as to sustain that advantage. In Obama’s case, he has indeed provided a feedback signal large enough to have an effect. But, because he is clueless how an economy actually works and listens to economists of the contrary-to-logic sort, his signals are exactly backwards, and they retard rather than spur recovery.

    Secondly, no one here is excusing Bush for his piling on of debt. But, unlike you, we are not stuck in the blame-everything-on-Bush-game. Bush was wobbly, Obama is wobbly on steroids. Both Bush and Obama have pursued expansionist policies and stimuli, differing in the main as to objects and magnitude. The very things you complain of in Bush, therefore, you defend in Obama. You are using ‘sluggish response’ as an excuse (and a really lame one) for your feckless leader’s inability to command anything more than the docile compliance of fools before demagoguery of the crudest sort. And, like your feckless leader, you have an excuse for everything that does not go your way, whether it is an economy, co-equal branches of government, or your hysterical historical rewrites.

    No, it did not take eight years for the economy to slide into recession. That took less than a year, and was triggered by policies set in place in the late 1970s & mid-1990s but unleashed by a Democrat controlled Congress and Senate in 2007-2008 (read http://www.allvoices.com/contributed-news/12677872-obama-white-house-intends-to-cause-new-housing-bubble again!). You are confusing cause with effect. The causes of recession were building toward implosion long before the event itself, and much of that did, indeed, gain momentum on Bush’s watch. However, ‘on Bush’s watch’ is not coequal with ‘Bush’s fault’. For most of that eight years, the economy performed well enough (could have been better), and it was only in the final months Bush really blew it. Bush’s contribution to this mess, although not insignificant, is modest compared to Democrat contributions. The Bush economy was sufficiently robust from early 2002 through late 2007 to garner praise from mainstream economists (U-3 unemployment averaged 5.3%, low inflation, 52 months of steady jobs growth), to satisfy most voters, and gave Bush a moderately high economic poll ratings five out of those eight. Economic optimism ran higher under Bush than his policies actually warrant, but that was mainly from people doing okay through most of it (okay is pretty darn good in most folks’ estimation). The flaws running through the Bush economy are the same ones running through this economy, were set in motion well before he took office, and are, in any case, non-discretionary (i.e., Bush had no say in them).

    Bush haters hated him because he was a conservative and a Republican, because he reacted to terrorism by fighting back, because he mostly ignored climate-change hype-mongers, because he favored oil exploration (though not exclusively), and because he was insufficiently PC on a host of radical issues. About the only thing he was not highly criticized by the left for was excessive spending (most of that came from the right). When they (you) did criticize his economic policies, it was to complain of Bush favoring business (perfectly happy to see him wreck the economy for ideology’s sake). In the main, liberal-politicians don’t want the economy discussed openly because that only draws attention to the enormous drain caused by their social initiatives. The left only picked up this refrain soon after the recession was upon us, and only because it made a dandy cudgel for Democrats to blast Bush’s ‘mishandling’ of the economy (but only after that was so obvious even the average liberal voter could not miss it was coming) during a Presidential election, thereby stealing the Republican thunder on one their best campaign issues. Obama slyly played his part by pretending to the greater fiscal responsibility during the election, but with no intention of following up on such pretensions, and no danger his core constituents would ever hold him to account (just as you refuse to hold him to any account). If Bush can be faulted at all, then, it is for not doing enough to counter the debt-compounding and market-skewing policies of [mostly Democrat] Congressmen; who stuck us with a tab we can never repay.

    Other presidents have ‘gotten us out of’ recessions far faster and with much less expenditure than Obama has with his profligate policies. [I say ‘gotten us out of’ amusingly because it is really private-sector enterprise that floats this particular boat, not government; and it is only in the sense and to the degree earlier presidents relaxed or reduced market regulation (i.e., got out of our way) that it can be said they helped more than hurt us.] I include Presidents Kennedy and Clinton in this group, as well as Reagan and G.W. Bush. Kennedy openly embraced supply-side economics whereas Clinton merely bowed to the math and logic of an early failure to stimulate on his part (i.e., quickly saw the error of his Democrat ways). But at least, they did not persist in sticking to failed liberal economic models (Keynesian) when obviously flawed. Not so our Obama. He appears to be uniquely indifferent to the political- as well as economic-suicide he’s committing in a perverse conviction that: it is working, that it will work if only we do not lose faith in him, and that water can be made to flow from rocks if you just keep beating your head against them long enough. He is also the most ‘indifferent to the suffering of others’ president we’ve seen in a long time. All that seemingly matters to Obama is: that he is ultimately vindicated (and his critics silenced). Shouldn’t a president care more about his people’s success than his own brittle ego?

    Obama’s latest gambit is claiming his is the superior recovery because he’s had more months of stead gain than any president in the last sixty-five years. This despite the market is no higher today than the 2007 high mark, and dozens of economic indicators suggest an economy still struggling and nervous. I find this a curious claim to make given he defends many months of steady growth to reach the same objective as his predecessors (even allowing for some greater volatility) in just a few months. In effect, Obama is bragging he has delayed prosperity longer than any president since FDR! Isn’t the proper objective of any recovery to get back on track as soon as possible?

    Further reading:
    http://www.fas.org/sgp/crs/misc/R41393.pdf
    http://www.heritage.org/research/reports/2012/08/cbo-budget-update-historic-deficits-continue-recession-threatens-in-2013
    http://www.forbes.com/sites/peterferrara/2012/06/28/obamanomics-economics-for-dummies/
    http://www.tnr.com/blog/plank/106512/you-are-probably-worse-you-were-four-years-ago - assuming you still disbelieve the recovery is subpar, read this anti-conservative hit piece complaining things ain’t so great for Obama’s key constituency – the perennially poor. According to this article, Obama has done okay by the rich 1% he claims need wealth-pruning. Meanwhile, the poor cheering him on are very nearly as poor as when he declared his recovery a fait accompli. But, of course, it is all Bush’s fault (or Romney’s, or whoever happens to be the Republican front-runner).
    Posted by .(JavaScript must be enabled to view this email address)  on  08/29  at  10:02 PM
  6. J. Jay,

    In your post #1 you sarcastically misrepresent “Housing sales can't possibly be up because the economy is slowly turning around, in spite of everything the Republicans in congress are doing to kill it? Nah! Couldn't be that!

    The economy isn’t slowly turning around. It ‘turned’ (i.e., bottomed out) way back when Democrats still ruled both houses of Congress (plus the Oval Office) with an iron fist. Republicans back then (2009) could do nothing to loosen the Democrat death-grip on the economy; so any failure to forge ahead robustly must be all Democrat. It was so imperceptible a change, though I suppose you can be forgiven having missed it. Even with Republicans controlling the House, almost every stimulus and economic recovery policy change was set during those first heady days of Democrat dominance. And mighty sweeping changes they were, too! Why changes like that ought to have moved mountains, parted seas, split-heirs, and ushered in the millennium. But all you got for it was a crummy ‘Hope & Change’ bumper-sticker. Poor J. Jay! He had such great hopes and all it cost him was his integrity.

    Little has changed since that time which any rational mind can point as having had a Republican origin and/or design, and which alters the economic situation one iota. But, let’s not make that keep Obama and his media-minions from swearing ‘it was the fault of them damn Rah-publicans!’ Damned if they [Republicans] do and liberally-damned if they don’t, so they may as well go ahead and do what is right than what pleases a bunch of freaked-out, dope-smoking, can’t-get-heads-out-of-Keynesian-butt-crack radicals.

    At most, having a Republican House has staunched some of the wealth-killing Democrats have inflicted, but have yet to fully arrest it. At best, then, Republicans can be said to be holding a line against further liberal temper-tantrums, and have eased some of the corporal-punishments of [assumed] corporate crimes. At worst, Republicans have abetted Democrat confiscatory measures and ‘pile-on’ regulations. Republicans overall have proved, thus far, ineffectual, and will remain so until real conservatives light enough fires under them or elect enough real conservatives (not necessarily Republican) to rein in both houses. At that point, they should be able to establish budget and other controls sufficient to quell the business-hostile environment Obama has created and incited. However, it is doubtful even that will be sufficient unless and until we also get a replacement president, as the current occupant of that office has repeatedly shown a tendency to exceed his authority. Possibly, he can be impeached should he continue this ‘law-unto-himself’ behavior under a Republican Senate and House, but I wouldn’t count on it. Republicans, too, had better improve their game or they will be next.

    I realize you are self-deluded it is Republican intransience (before the greater wisdom of The One) alone that is impeding this recovery, and that they do this solely to make Obama look bad and to rob him of his office; but that is because you are a true-believer in junk-economics just as you are a believer of junk-science, who believes governmental stimuli really do produce a 25% ROI on every investment. We have had plenty of stimuli, but only negative ROIs. Will you next claim Republicans have been holding voodoo cabals in the basement of Congress to jinx Obama’s stimuli? Republicans have bent over backwards trying to work with Obama only to be rebuffed and cheated every time. After awhile, the prudent negotiator realizes he is dealing with a radical whose idea of compromise is: ‘you give me what I demand, and I won’t beat up on you anymore (until I want something else, of course)’.

    Part of the problem is you admit no separation of powers constraining the various branches to their proper spheres (unless it is to constrain a Republican or a conservative, then you are all for it). Obama is even less inhibited than you in this respect, as evidenced by his lawless disregard for limits on his authority. He had no authority to suspend immigrations laws or to overrule states in their enforcement of what are federal laws, but he does it anyway. Similarly, he has no authority to expand welfare by ignoring recipient screening laws, but does it anyway. Moreover, he has defied Congress, upbraided both the other (coequal) branches of government, made illegal recess appointments, misused his Justice Department to intimidate political opponents, refused to enforce our laws, obstructed justice, corrupts the grant process for his own political advantage, overrode Congressional EPA mandates, the BP extortion scandal, voter disenfranchisement, abets extortion by unions, election-tampering in a foreign country, contract cancellations, firings without due-process, has shielded criminal friends from justice, FOIA violations, conflicts of interest, the alleged bribery attempt on a Congressman, and may be involved in the divulging of state secrets. Some of these are impeachable offenses in any president, and some just demonstrate an incredible disregard for the rule of law and of limitations intended to prevent despotism. You will, of course, point out other presidents have exceeded their limits or twisted our laws, but none have done it with such abandon and disregard for the rule of law as has Obama in order to consciously trash our system of checks and balances.
    Posted by .(JavaScript must be enabled to view this email address)  on  09/01  at  05:13 AM
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