Thank you for the very vigorous response to part #1 of the “Soft Tyranny” article series.  If you missed it, check it out here before reading this conclusion to the 2-part series.

As bad as the economic policies of the current administration are for the real estate industry and the business community as a whole, those policies themselves are made far worse for one primary reason:  Profound uncertainty.

Where does uncertainty come from?  Consider these points:

  • In the past, if a big company did something wrong that caused it to suffer financially, it would have to declare bankruptcy, pay off creditors, and maybe even go out of business.  That’s no longer true – the $1Trillion+ Obama “bailout”/slush fund changed that forever and the financial reform bill that just passed a few weeks ago extends the government’s ability to perform bailouts/takeovers at its own discretion.  (This same bill also makes it legal for the government to directly monitor your credit/debit card transactions without a warrant or any other permission.)
  • In the past, a person could reasonably expect to have a chance to review and advocate for or against new legislation before the legislation passes.  That’s no longer true – the Pelosi-lead Democrat Congress and Reid-led Democrat Senate has now repeatedly refused to publicize new legislation before its voted on, meaning that they refuse to allow you to express an opinion – or even be fully aware – of what is in new legislation before it passes.  This is preposterous and will continue if the Democrat party remains in the majority in either or both houses of Congress after November.
  • There’s massive anecdotal evidence that small employers are refusing to hire new employees, despite financial ability and their need to do so.  Why?  Massive uncertainty about two things:  Taxes and medical insurance changes.  As more information about the government’s health insurance takeover legislation arise (massive expansion of the IRS, expansion of reporting requirements for small businesses, significant tax increases, and much more) small business owners are opting to be conservative about hiring because they just don’t know the next thing this administration and congress will do to hamper their business development efforts.  And remember – nearly all of these “small business owners” are people who have fewer than 5 employees… many work for themselves with no employees at all… they are your neighbors.
  • There are very large businesses with literally billions of dollars sitting on the sideline.  They want to begin hiring, but won’t do so at this time, because Obama’s financial policies are simply too unpredictable and irrational.
  • There’s massive and increasing unemployment, and all of the evidence at this time is that at BEST the hundreds of billions spent on the stimulus program did NOT help unemployment, and it seems quite correct that the stimulus programs have actually seriously DAMAGED the employment situation.

Add into the mix the absolutely staggering decline of the real estate market – with no real evidence of improvement in the near future – what you see is that we have a horrible economic environment.

Who is responsible for all of this?  Is it George Bush, as the whiny liberals like to say?  Or is it Barack Obama, who is the only person who can really do anything about it right now?

The truth is, the person who deserves the blame – and hopefully the credit for economic recovery (whenever it happens) – is YOU.  And me.  And every single person among the thousands upon thousands of people who will read this article today.

Why?

It’s simple – it’s our votes who have put every President in the Oval Office.  It’s our votes that have elected every single Congressperson (except for the rare appointment).  It’s our votes that have filled the state houses and governor’s offices in every single state in America.

This isn’t even about political ideology.  In good times, we have the option to vote based on which “party” we’re most comfortable with.  But it’s much more than that – it’s about shifting this country away from a brand of creeping socialism that has never worked in any other country in the history of the world.

And it’s about your INVESTMENTS, too.  Frankly, nothing will EVER change if you as a business person don’t get out there and put your money to work.  This isn’t a lecture, it’s a simple notice:  While the economic policies espoused by the current administration are the equivalent of economic illiteracy and seem to be designed to HAMPER the recovery rather than support it, the fact is that we have only three choices:  (1) continue to hold onto cash, credit, skill or other assets and do absolutely nothing because of your [reasonable] fear of uncertainty; (2) jump blindly back into a market full of uncertainty and helmed by a team whose economic experience is a demonstrable failure; or (3) do everything possible to push back the damage done, change our leadership, and make our country an economically viable and respectable land once again.

I choose option #3.

How do you do this?  Look back to one of the things that is said to have gotten Obama elected:  The promise of “change”.  With the benefit of hindsight, we can now see that the notion of change is not inherently good or bad.  Obama’s brand of change has been horrible and incredibly Jimmy Carter-esque.  That’s not what we need – but we do need some change, and fast.

November is coming up quickly.  If you’re not registered to vote, go register right away.  And in the mean time, take an objective and serious look at your options.  Remember:  There is NO SUCH THING as a perfect candidate.  Never has been, never will be.  But with the economy in the dumps, and all of us having a financial future that’s at least in part tied to the performance of the economy, this election is not one in which you can afford to vote for anyone simply because of their party affiliations or minor personal failings.  For example, I’m very conservative politically.  I nearly always vote for Republicans.  But there are non-Republican candidates that definitely get my attention and interest this time around.  Admittedly, none of them are Democrats, since that’s the party that enacted the devastating Stimulus bill and the health care takeover legislation, but I’m even willing to consider a Democrat that makes sense.  We had a Democrat in the U.S. Senate here in Georgia for many years – Zell Miller – and I was proud to support him.  Like so few politicians, the guy seemed to just “get it” – and the voters loved him… and he got elected in the “Republican” state of Georgia even though he was a Democrat.

That’s what I want.  Candidates who can get on board for simple, clear solutions to our economic woes.  Truth is, I think what we need is very conceptually simple:  (1) Cut wages for government employees across the board by 50%; (2) PERMANENTLY cut capital gains taxes deeply to spur economic activity; (3) Change the law to offer a tax CREDIT rather than a tax DEDUCTION for any charitable contribution that benefits those who are below the poverty line and are actively seeking to remedy their situation; (4) Repeal the health care takeover bill; (5) Defund the remainder of the stimulus bill; (6) Change the Constitution to require a supermajority in both houses before any tax can be created or increased.

Not all of these things would be easy to accomplish – but the implementation of any one or two of them would have a massively positive and immediate impact on our economy.  And each one of them COULD be done.

Think of how CONFIDENT you could be as a real estate investor and small business owner if you knew that you no longer had to worry about the effect of the health care takeover; or if you knew that no tax could be created or raised without a supermajority in both houses; or if you could get a huge tax CREDIT for the charitable contributions to help the poor that you’re probably ALREADY MAKING?  More importantly, think of how CONFIDENT you’d be to see the employment situation improving with each passing month… How confident would you be if some sense of optimism and real hope returned to the general populace in the United States?

I’m an optimist.  I believe it can happen.

But what is NOT the answer for us is for the government to take over more of the economy.  It’s foolishness, and the Obama brand of rapidly creeping socialism is a honey-covered road straight into a deep economic pit that our industry – and our country – may never recover from… unless we all demand CHANGE THAT WORKS.

Thanks for reading the Bryan Ellis Real Estate Letter.  Your comments and questions are welcomed below.