I implore you to read every word of this article. It’s a quick read, and you might be tempted to think it’s not relevant to the real estate business. But if you’ll hang with me, I assure you you’ll see the very clear connection. This is really important information.
There’s been a lot of talk in the main-stream media and other allies of the Obama administration that a “New Normal” has been established, in which 9-10% unemployment and some other undesirable economic measures will be considered typical and acceptable. While this is clearly an attempt to shift responsibility for our foundering economy away from the Obama economic policies that polls show have been roundly rejected by the American public, it would still be unwise to ignore the risks and realities that will result for real estate professionals if these policies continue to be pushed forward through the remaining 2.5 years of Obama’s presidency.
So, here are the most recent pertinent facts, according to Realty Trac [1] and CNBC’s Realty Check [2]:
- There were 93,000 completed bank repossessions in July – up 9% from last month, and up 6% from a year ago. This is the 2nd worst monthly reading ever.
- Factoring in all of the repossessed properties held by the government lenders and private lenders, there are nearly 600,000 repossessed properties being held by lenders as of right now.
- The National Association of Realtors tells us that 564,000 properties were sold in June. This factors in ALL homes sold, not just foreclosures. Even so, that number is below the number of foreclosures currently “on the books” at our nation’s lenders (600,000)
- New claims for unemployment spiked yet again in the past week, with 484,000 more new claims for unemployment being filed – the highest since February
All of this is bad news, and the big problem that we have right now is that our President – who has more influence on the economy than any other individual person – is primarily concerned with shifting blame to anyone but himself for the damage that’s been done to the economy. The objective evidence is already in – nearly two years into this guy’s presidency, the economy is FAR WORSE than when he took office, and the common expectation at this time is that we’re headed for a double-dip recession… all in the middle of what Obama dubbed “the summer of recovery”.
Do you see any “recovery” going on around you? Unfortunately, there is VERY LITTLE in the way of real recovery anywhere. The only sector that has shown tremendous growth in the past 18 months is GOVERNMENT jobs, and a big backlash against that is boiling over, too. This backlash is highlighted by the recent report from USA Today that concludes: “At a time when workers’ pay and benefits have stagnated, federal employees’ average compensation has grown to more than double what private sector workers earn.” [3]
That’s right: If you’re not employed by the government, you’d probably be paid TWICE AS MUCH if you were. But there’s not a lick of evidence that government employees are more effective, more productive, better qualified or even more desirable than their privately employed counterparts. They’re simply paid twice as much – at your expense.
This foolishness extends beyond the federal government, too: The recent uproar over insanely high salaries in Los Angeles county (Management analysts being paid $100,00; Political operatives at $150,000; 2 separate mayoral chiefs of staff at $194,000; Robert Rizzon, Bell City Planner – over $800,000) has sparked some serious scrutiny over the rates of pay offered to local and state-level public employees.
Remember, folks: With all due respect to the millions of government employees out there, one must remember: The government produce nothing. With the ever so rare exception, all of the government’s funding – including funding for all of these exorbitant public salaries – comes from one place: Taxes. And those taxes come from your pocket. Where the rubber meets the road, all of the tax money comes from you, whether in the form of individual income taxes, inheritance taxes, gasoline taxes and even corporate taxes that are passed through to you in the price of the goods and services you purchase… so the net effect is that government is doing little more than taking money from your pocket to put it into the pocket of government employees, because the painful truth is that the government is incredibly inefficient in every financial capacity in which it serves.
How does this relate to the real estate business? I’ll tell you in the conclusion to this “Soft Tyranny” article, which will be released tomorrow. But I’ll give you a hint right now: It can all be summed up in one word: “Uncertainty”.
Thank you for reading the Bryan Ellis Real Estate Letter. I’d love to have your comments, questions and feedback – including from those of you who have nothing better to do than blame all of our current problems on past administrations. Let’s get over that childish blameshifting, shall we? Bush was no economic wunderkind and Clinton accelerated the Fannie Mae debacle to an unthinkable degree… but neither of those guys have any real power any more, do they? So keep your eye on the ball, and fire away!
[1] http://www.mainehomeconnection.com/blog/2010/08/13/foreclosures/
[2] http://www.cnbc.com/id/15840232/?video=1564947592&play=1
[3] http://www.usatoday.com/money/economy/income/2010-08-10-1Afedpay10_ST_N.htm
This commenter’s history entitles him to win awards for “Most Vitriolic” and “Most Intellectually Vapid”. Enjoy! –Bryan Ellis
Nice try at Faux News spin, but once again, you fail.
Your attempt to shift blame on the Clinton admin by using a lame, tired Faux News/Repub party talking point is pretty disingenuous of you. Especially while you’re trying to shield your boy Bush from any blame by pretending his failed policies of deregulation are not what caused the market to crash.
Deregulation is the mantra of the right and it is in fact what caused and allowed greed to run amok on Wall St. and is a DIRECT cause of the mortgage market crashing.
Learn something about Credit Default Swaps, I know you Faux News viewers have no idea what those are.
Trying to blame this on the Community Reinvestment Act or attempts by Dems to get more people into homes is pretty despicable. Blaming the poor, par for the course for you Repubs, is pretty low, (even for you guys) when in fact it is the fault of the super-rich, who devised investments instruments which paid off if the market failed, and then proceeded to start rumors that the market was going to fail.
The failed policies of Repubs have put us into the situation we are in now, the worst depression since the great depression. Repubs seem to always ruin the economy every time they get their hands on the political apparatus. Then you blame the other team who is left to clean up after you. Which is why you will fail to get a majority in November.
Most Americans remember what you’ve done to our country.
Putting us trillions in debt to the Chinese to fund a nation-building effort in the desert.
Keeping rates artificially low which created a massive bubble and a lot of paper wealth that was gone in an instant when your failed policies caught up with you.
Yes, you can continue to whine about being out of power, (which is only part of what your Obama-hate is about) but that’s not about to sway the American people.
Every time I see you trying to pretend that your failed ideology is not to blame for the problems we face today, I think of that quote…
“The greatest trick the devil ever played was convincing the world that he doesn’t exist”
As usual my friend, you’ve nailed it. We have to take back our country.There is no arguing, just educate anyone and everyone. This is serious.
Former OMB Director David Stockman gets it….the rest of you definitely do NOT. Everyone tends to go partisan, e.g., GOP vs DEM when addressing our country’s economic situation. Matters not what one’s political persuasion may be, bad policy is just bad policy….pure and simple. Just so happens, as Mr. Stockman points out, that the overwhelming majority of bad policy emanates from GOP administrations over the past TWO decades. This in mind, the GOP “snake oil” you’re selling is just a fantasy. Have you forgotten the House and Senate GOP majorities..2001 – 2006, and a President who rubber-stamped spending bills like “drunken sailors.”??? (No disrespect to the USN & USCG). Not to mention the “regime change”, “Mission Accomplished” and “WMD” forays into the Middle East that were never budgeted but we continue to spend precious tax dollars to support. This has nothing to do with Democrats or Republicans. Those who either crafted, approved, and/or voted for bad policy and those who just “went along” to get re-elected, or whatever, share the blame equally. You would benefit from reading Mr. David Stockman’s article, just published a few days ago. He gives much, much greater clarity to our economic crisis than I am able to do. Meanwhile however, think about this; as long as we, Republicans and Democrats, continue to point fingers at one another we will further divide our Republic to our own detriment. We must be very objective as concerns bad policy; it (bad policy) is NOT dressed in the suit of an elephant nor a donkey!!!!! Let’s pull together rather than against.
And their ‘pat’ answer is to blame it on Bush! Even though the Liberal-Socialist-Communist Democrats have technically had control for the past 4 and a half years.
Soft tyranny is a very appropriate term. We are in the midst of a takeover from within and it is indeed tyranny. Obama isn’t doing anything because Obama doesn’t want to and is there to do anything but be a puppet of the Elite and the so called New World Order. Nothing will change until we recognize the real culprits behind this and realize that they are bent on controlling not only the U.S. but the entire world. Don’t blame the government.. the real evil is the NWO. They control the money through the world bank the Federal Reserve, and whomever controls the money controls policy and people. Naomi Wolf and Naomi Klein both hit the nail right on the head with their books.
how do you feel about citys hiring retired to come in and manage at 85,000 an up remember they are retiered wish i can retire come back and make that kind of money
Does not matter who did what when any more, the fact is this: our current administration is the one in charge, our current administration is the one capable of making things better or worse, as they are in charge of economic policy, our current administration is screwing the United States into the ground for the next several decades if not forever!!
It is time for people to take back our country from the politicians, all of them! It is time for government to cut spending period. It time to lower taxes, to tell the Chinese to go to hell, the Middle East to go to hell and others I am not thinking of at this time.
It does not take a rocket scientist or even an economist to understand too much spending by anyone, without any means of repaying or making the money, it is stupid and shortsighted! If people think by spending more money than can possibly be made, if people think, pensions can be funded at levels that take all of the incomes of 19 times as many people working and earning as they earned, then there is nothing to do!
The stupidity of the last 100 years of economic policy is at hand. The few times when we had responsible leaders, has not been one since Hoover, we have choosen to ignore, as their style of politics did not generate enough power for the politicians in power and took too much control from the idiocy and thugs of the Unions.
The current ruling class of politicians is only interested in control and power. They do not give one thin damn what happens to any of us once they leave their post or this earth.
The article is a good article as far as it goes but it is glossing over most of the information as dour as it sounds, it is still too cheerful.
Stockman is one step removed from and idiot and if one decided to listen to him, well then good luck to you, you are going to need it.
If we raise taxes in this country we are doomed, if we keep at the current or worse, the accelerated spending levels heading at us like a freight train, we are doomed even faster.
To all that think things are going to get better following the current path, get your heads out of your *ss and look around! If you have even a tiny bit of business sense then apply it to our current government model and ask yourself how long you will have the doors open, That is the simplest way to see if we are on a good path or a totally screwed path. If you cannot run a business using our current model of government, then we will not be able to run a country that way either.
I can write pages of facts and figures, history not widely taught, detailing exactly who and what has lead us to this point in America. There is plenty of blame to go around, all blame is stupidity, it is time to act in a responsible manner, a fiscally prudent lower spending manner and do it now! Today, not next year, next week, but today!!
Seriously underweight-on-many-facts article here. And the tone! My, my: almost sounds like a glenn beck man-baby crying whine session.
Govt produces nothing? Oh, so the police in your community have no value? How about fire? How about prosecutors? How about regulators that make sure your drinking water doesn’t have rampant benzene contamination from natural gas hydro-fracking or that your airline flight doesn’t fall out of the sky. How about the folks who build, repair, and maintain your freeways, bridges, and tunnels?
This is not only an ignorant point of view, it’s also highly offensive to thousands of talented, hard-working people.
And that govt employees make “twice the salary” as private sector? Hardly. How much are teachers paid again? You want to make a case on that, break down census figures, not a few cherry-picked examples.
And I am hardly a govt worker apologist. I certainly acknowledge there is govt employee incompetence, laziness, and excessive pay. I have plenty of venom for a number of agencies I have to deal with.
And it’s easy to say let’s not engage in “childish blame-shifting”, but the evidence is overwhelming. The Bush criminal gang drove this country into a mighty deep ditch. It’s gonna take a hell of an effort to get this mess straightened out, especially when Cheney’s buried bodies keep floating up (MMS/gulf oil spill cronyism).
Bryan: if you were president I doubt you could have handled things any better. It’s really easy to armchair quarterback & heckle from the peanut gallery. Based on this weakly researched/thought-out article, you don’t even seem to have a clue about many of the dynamics at play in this game.
It’s a complex, nuanced world. Some of these things are true some of the time. One cannot paint everything with the same brush.
But that’s one of the frustrating things about right-wingers: can’t keep 2 opposing thoughts in their brains at the same time. And their predominant philosophy: “GIMME IT! IT’S MINE! MINE! MINE! MINE!”
To my valued readers: I appreciate this person’s comments, to the extent they go past childish characterizations. To the comment about police, fire, etc – there’s big a difference between “producing something” and “having value”. Those things are certainly valuable, and it’s reasons like those that we pay taxes. Curiously, if one simply adds up what we pay in taxes versus the actual expense of vital services, you’ll see the fallacy of your own argument. And if you have questions about the accuracy of my facts, as you suggest, simply take a look at the citations. I don’t make the facts, I just convey them – apparently to your discomfort. — Bryan Ellis
Mr. Stockman makes some interesting points. His final point is that – the old approach of balanced budgets, sound money and financial discipline — is needed more than ever. Sounds like the Libertarian mantra to me. What Stockman ignores is that a 10% increase in federal income taxes, increases in state taxes, health benefits now being counted as income for those fortunate to get them, and countless other increases in fees, are about to break the backs of an awful lot of people, and most don’t see it coming. I know I’ll be doing a lot of belt tightening come January as well as lots of others when they get that first smaller paycheck. Translation, less spending by all those who pay taxes, slowing economy, and more unemployment, fewer tax revenues, more unemployment benefits, bigger deficits…
Few people, except maybe the truly naive, believe that budget deficits will decrease at all under the current administration. Not even if the Bush tax cuts are allowed to expire. The new found revenues, temporary at best, will be needed to “redistribute” (another name for payoff) to the now permanently unemployed to keep them pacified and voting the “right” way.
We can debate all day long about whose fault it is. There’s plenty of blame to go around and at the end of the day nothing will have changed for the better. It’s very clear to me at least that this administration has every intention on dismantling the capitalist system we have today and ultimately implementing a socialist system. As for “soft tyranny”, we’re already there. Next up, the real thing if we’re not careful.
Great… here it is in print. “Let’s get over that childish blameshifting, shall we?” So from now on, we will no longer see Mr. Obama’s name in these articles? Thanks so much. I really needed a breather…….
I certainly can’t promise that. Obama is who we have to deal with right now, and the pressure has to kept high on whoever is in office to expand our economic possibilities rather than minimizing them as has this administration. — Bryan Ellis
You are describing the “Ruling Class”.. as has been the European model for some time now. Soft Tyranny is an apt description.
Well said Bryan,
The alarm and the alarming signs are all around us and we (those who have a lick of common sense) see and hear the “Left Stream Media” or Obama’s palace guard tell us things are improving when most americans know it’s a mountain of B.S.! they just continue to hit the snoze button.
Obama and his Dem. majority along with his zars and activist judges are distroying this great nation at record pace, when will those who support him wake up? Do they (Obama and his followers) not realize we will all stand before God in the end when the big party is over.
The second wave is coming… and it’s a big one!
Bryan-
I see some of your readership are hardcore leftists who don’t know some relatively recent history. They either don’t remember Carter or choose to ignore his presidency. And to argue on behalf of the currrent administration is sheer arrogance. I can tell that politically you lean conservative, and I can tell you listen to Mark Levin, and probably a few other conservative talk show hosts. That is good, but more importantly, they and you are right; and I don’t just mean the politics of the right. Let your leftist readers lie and twist the facts and deceive themselves, or let themselves be deceived. The democrats and Obama have a definitive end goal in mind, and that is the destruction of America as founded. No matter what they say, stick to your guns, because those of us on the right vastly outnumber the elitist anti-American left, and we’re going to start to really kick the snot out of them on November 2nd. The time of reckoning has come. Thank you for being on the right side of history.
Thanks, Bryan, for hitting the nail on the head! This is certainly a scary time for all of us, no matter what our political persuasions. Politicians are ruining our country & if we don’t do something pretty quickly to take it back I am seriously afraid there won’t be anything to take back soon. I sure don’t have all the answers but anyone who looks at his own neighborhood, no matter where in the country you live, can see the sad state of affairs. Look forward to the 2nd half of your article.
Ever notice how the biggest whiners of foul play are always preaching a left wing/socialist agenda? Ever notice how name-calling is the best argument they can come up with? Ever notice how the leftist idea of a new idea is to blame someone and cry foul when something truthful is pointed out? Ever notice how the attacks of anyone with a centrist, libertarian or conservative viewpoint is attacked as not being able to understand facts or do not have facts? Ever notice how the left idea of history goes only as far back as a few years and they think that is all that is needed? Ever notice how Socialist and Marxist are the only one’s capable of help us misguided center of the road people? Even though the fine Marxist Dictators of the world have killed more people than anyone else in history! Fact boys and girls look it up! Ever notices how the slimmest of politicians claim they are the most transparent when they allow, no free voices in meetings, records to be kept at their meetings, no photographs of the meeting, events, the list goes on? Ever notice how the same politicians insist on being able to closely keep secret what they are doing, where they were born, who they are meeting with and when, how much they earn, yet do not want us to have secret ballets, because we are not capable enough to take care of ourselves? Them keeping secrets is good, us having a secret is bad! Ever notice any of these things?
Probably not!
I agree with Ray and CAFA (above). Instead of focusing blame on the President and crying over a measly 10% unemployment why not focus on the main reasons for the employment problem in this country. The 10% are just the ones who are actually on the unemployment sign-up. I’m unemployed but am not on the ledger, as are millions of people, so I’m sure the number of unemployed is actually way higher. So, let’s get madder at Obama.
Besides the fact that millions of jobs have been sent abroad by businesses, often a smart move I guess, what about the tens of thousands of jobs that have been replaced by robots and other technical marvels? Those jobs are gone forever.
Obama isn’t trying to “…shift responsibility for our foundering economy away from the Obama economic policies….” He is trying to help us see the truth: We cannot go back to the way things were. Artificial Intelligence has totally turned society into a new direction. No economic manipulation can ever bring some jobs back.
Twenty five years ago when B.A.R.T (Bay Area Rapid Transit) started the plan was no operator sitting in the front because computers run the system. After a public uproar,still today, there is someone sitting there, getting paid to enjoy the ride. We hope he/she has a “Panic Button” to stop the train if there’s something happening the computer hasn’t “seen.”
It’s easy to bash the President, but the approach totally lacks creativity, and simply seems copy what other Republicans are saying. Obama has saved and created thousands of jobs with his policies.
Always great writing and a great forum, and thanks for tossing the thoughts at us. I took a time out from chasing the American Dream in writing this response. And thanks to the people that built the robots that in large part built this laptop.
I’ll hit “Post” now, with a strong sense of gratitude to Bryan.
Business is sent abroad for a number of reasons the largest one is actually two fold. The number of regulations a business has to meet in this country versus the other countries the business goes to and the tax structure inflicted on business in this country versus taxes inflicted in other countries.
If you do not think both of these items are not under the direct control of the current administration, I really suggest you take a class in how economics works!
If a business has to pay 30% in taxes on the profits versus 16% in taxes on the profits, the shareholders will always tell you to move the company or fire you in a hurry! For the math impaired on 1 billion dollars in profit, that comes to 140 million dollars different in profit. This is profit the government decides if a company can keep or not. How many of you would send your company overseas for 140 million dollars additional profit? How many of you would allow your companies CEO to stay in charge after giving away 140 million dollars in profit for no good reason?
For all of the whiney, nanny state, taxes should go even higher and spending needs no control out there, it is a damn good thing you do not run a company! Oh, wait a minute maybe that is why you do not run any kind of company or business!
It takes three steps and only a few months to get a manufacturing business sited, opened, and running in China. The same company takes 20 steps and probably over a year, more if anyone objects to get the same company started in the United States. The government is one hundred percent in charge of that!
As for the ridiculous government and union pensions the taxpayers are expect to fund forever, that is just criminal theft any way you look at it, if you do not think so then I expect you to volunteer all of your money to them! If you are unwilling to give all of your money to the pensions so they can have more income retired than when they were working, then shut up!
Okay, here’s my take on the whole series of posts.
Bryan – I understand and agree with a good deal of what you have said in the post although, as some others have already stated, this issue is rather complex and is easy to over simplify and politicize. It’s not really a matter of who’s right or wrong, it’s a matter of WHAT’S right or wrong.
Jay – Really? That’s your response? Really? Wow… I thought there would be insightful, thought provoking responses to a post like this, rather than a typical knee-jerk “Blame Fox News” piece of offal. (Oh, I’m sorry… did I just use a word you need to Google to find out its meaning?)
runway22 – You’re obviously an aviator, which means you have a good deal of time invested in studying. Good for you. Please spend more time studying economics. Start with anyone but Stockman. His data is clouded by his ideology, therefore it makes the data suspect at best. You’re right, bad policy is bad policy, no matter which party. But bad the same can be said for bad ideology and bad judgement.
Chris – DING! DING! DING! We have a winner! I like you already!
CAFA & asocialscientist – So, what flavor is the Koolaid?
Prieto,
When you speak of Faux News and the Repub party, they are one in the same. Faux is a mouthpiece for the Repub party.
They spit out pre-chewed info for people who don’t know where to get good information, or don’t want to get accurate info, whatever the case may be.
You’re obviously one who likes to believe in an alternate set of facts tailor made for those who don’t like reality.
It’s sad, really.
Chris,
As usual, the only reply your post merits is “What else dId Glenn Beck say on his show today?”