The Housing Bubble

It’s Friday desk clearing time for this blogger. “Central Texas’ housing market posted another strong month in October. Greg Cooper, CEO of Austin-based Goldwasser Real Estate, said he recently used personal correspondence to help his clients win the bid for a house in Northwest Austin. Listed for $445,000, the house had received three other offers in just one day on the market. Cooper’s clients bid $15,000 over the asking price. And then there was the letter Cooper wrote for them to the seller. It said they had fallen in love with the ‘magnificently maintained’ home, and could envision their two daughters, ages 2 and 9 months, growing up there and playing in the backyard.”

“Cooper said the seller told him it struck a chord with her. ‘That’s the kind of thing you’re having to do to win in this marketplace — go above (asking) price and tug at heartstrings,’ he said. ‘The last time I had to use that letter was in 2007, at the peak, and we had more listings then. And we thought the market was hot back then.’”

“An improving economy, record-low interest rates and a shortage of homes for sale has prodded central Ohio home shoppers into action, in some cases leading to bidding wars and multiple offers. Milt Lustnauer, a veteran RE/MAX Premier Choice agent, yesterday advised an Upper Arlington home shopper to offer more than the asking price on a house that was listed for about $250,000. ‘The house came on the market yesterday and already has two offers,’ Lustnauer said. ‘My suggestion was to come in over list price.’”

“Home prices in the New York metropolitan area, including North Jersey, dropped 2.3 percent in September compared with a year earlier, according to Standard & Poor’s Case-Shiller home price index. Home prices in the region have dropped 23 percent since their peak in mid-2006. In Bergen County, the median price of a single-family home was $427,000 in September, down 5.1 percent from September 2011. In Passaic County, the average price was $274,401, down 18.5 percent from a year earlier, while the number of sales rose 15 percent.”

“‘Why are home prices [nationally] going up? The key reasons are low interest rates and declining inventories of new and lived-in homes. Others include investors buying distressed sales in bulk, job growth, and, perhaps, self-fulfilling expectations.’ said Patrick Newport, economist, IHS Global Insight.”

“The recent acquisition by Beijing’s Xinyuan Real Estate Co of a planned condominium site in New York City could be a watershed for Chinese-backed property development in the United States. ‘The location is very popular with US domestic purchasers, and New York is a top destination for purchasers from China,’ CEO Yong Zhang said in announcing the deal.”

“Zhang said the project in the trendy Williamsburg neighborhood on Brooklyn’s waterfront, ‘will offer a quality residential condominium development to more than 200 New York families, as well as allow us to capture a large demand from China for quality residential product in the United States’. ‘We target all kinds of buyers, but we expect 40 percent of sales to go to Chinese buyers and 60 percent to New York residents’ including those who might have been priced out of the costlier Manhattan market, said Omer Ozden, who advised the Chinese company on the deal.”

“Investors from China, Hong Kong and Singapore are snapping up real estate in many of Sydney’s most desirable locations - from the central business district to waterfront properties and areas surrounding schools and universities. Similarly, Asian investors are swooping on top-end residential property in Queensland and Victoria. Foreign developers have grabbed 30 per cent of the Australian apartment market to date. In Sydney, researchers say about 90 per cent of the 700 units in the giant Macquarie Central development near Macquarie University have been acquired by Asian buyers.”

“Mark Bouris, from Yellow Brick Road Wealth Management, said Asian buyers ‘aren’t going to buy all the stock.’ ‘Really, we’ve got to embrace whoever wants to buy real estate and that will encourage more vendors,’ he said.”

“Dozens of families spent last week sleeping in their cars or in tents outside Landcom offices at Elizabeth Hills and Edmondson Park in Sydney’s south west before the blocks went on sale yesterday morning. Lots are 367 to 558sq m in size and priced between $245,000 and $315,000. Landcom spokesman Robert Sullivan said close to half of the blocks were sold within three hours of going on sale.”

“‘People chose to camp out at Edmondson Park because they were prepared to sit there for a week to make sure they got the lot they wanted,’ Mr Sullivan said. ‘When one person decides to camp out, it creates a domino effect where others choose to do the same.’”

“Richard Smith and his fiancee Merryn Courtney, both 24, had slept in their car since last Monday to ensure they were first in line for the best 550sq m block, selling for $315,000. When the doors to the sales office opened at 10am, all they had to do was sign on the dotted line. ‘It was the pick of the lot so we had no choice but to camp out to get it.’ Mr Smith told The Sunday Telegraph.”

“For four decades, the Chinese economy was envy of the world. Underwriting the impressive facade, however, is an incredibly risky strategy. Governments borrow money using land as collateral and repay the interest on their loans using funds they earn from selling or leasing the same land. All this means that the Chinese economy depends on a buoyant real estate market to keep grinding. If housing and land prices fall dramatically, a fiscal or banking crisis would likely soon follow. Meanwhile, local officials’ hunger for land has displaced millions of farmers, leading to 120,000 land-related protests each year.”

“According to a 2011 survey by Landesa, a Seattle-based nonprofit organization, local governments earn on average $740,000 per acre of land. That is 40 times the average amount they pay to displaced farmers. On the surface, banks’ balance sheets have remained healthy despite these debts, since banks tend to roll over or ‘ever green’ loans by issuing new loans to help borrowers ‘repay’ old ones. In addition, local governments have been able to make their interest payments using their land as collateral.”

“Even before it pops, China’s real estate bubble is causing social harm. Close to 300,000 peasants are removed from their villages every year to make room for the construction of airports, highways, and buildings. Since 1980, more than 60 million peasants have been moved. The displaced are not usually consulted before relocation. Governments frequently force them to leave by suspending the supply of utilities, such as electricity, to their homes. Increasingly, local governments are even hiring or colluding with gangsters to intimidate villagers who refuse to move. Tellingly, in some villages, these mobsters are known as the ’second government.’”

“Compensation to farmers who do move is often inadequate, because negotiations over the value of their land take place without them. The opacity allows authorities to line their own pockets with funds meant for farmers. It is no surprise, then, that in a recent Landesa survey of nearly 1,800 rural households across 17 provinces, about 20 percent of the displaced (which made up 43 percent of the survey’s sample) had not received any compensation.”

“Stockton, California, has the highest U.S. foreclosure rate. It also has a housing shortage. Government loan-modification programs have gained traction, and the Federal Reserve has kept bank interest rates near zero. Investors are purchasing thousands of foreclosed homes in bulk before they even hit the market, further limiting new supply.”

“Slowing the foreclosure process has allowed banks to avoid booking losses on non-performing loans, said Joshua Rosner, an analyst with Graham Fisher & Co. in New York.’The goal all along — from the banks, the servicers and the government — was sort of to slow walk the whole thing, bleed it through over time,’ Rosner said in a telephone interview.”

“A Miami-based company says it’s seeking investors interested in buying into Florida’s bloated foreclosure market. Title Capital Management is overseeing a $150 million fund in which investors buy, renovate and rent homes before reselling them in five to seven years. A separate $50 million fund allows investors to buy, fix up and ‘flip’ the properties.”

‘Since 2006, banks have repossessed 450,000 homes across Florida — and 200,000 of those have yet to be marketed for sale because lenders are hoping prices keep rising, said Jack McCabe, a housing analyst in Deerfield Beach. There are 350,000 Florida homes currently in the foreclosure process — and 550,000 more that have yet to enter the courts, McCabe said. All told, 1.1 million of the state’s 11.1 million homes are in or near foreclosure, he said.”

“But the strategy isn’t foolproof, said Mike Larson, an analyst for Weiss Research in Jupiter. ‘It does raise the antenna a little bit,’ Larson said. ‘If everybody’s doing it, what’s the risk? The risk is that they could overpay for homes again.’”

“For the first time in almost three years, Nevada is experiencing a spike in the number of foreclosure, causing concern too many houses will flood the market. The concern lies with the speculation that banks have figured out a way around Assembly Bill 284, making it more difficult for banks to foreclose. The bill took effect Oct. 2011 and effectively slowed the state’s foreclosure rate.”

“‘It would not be a good thing, just for basic supply and demand, if we had a tsunami of new foreclosures,’ said Las Vegas attorney Tisha Black Chernine, who helped write the assembly bill. ‘I think that Nevada is going to have to prepare for more foreclosures,’ she said. ‘But that is not necessarily a bad thing. We have to get through this inventory, we have to get people back on their feet.’”

“Developers of Toronto’s Trump International Hotel & Tower have launched lawsuits against seven investors in an effort to force them to close on deals for condo-hotel suites some claim haven’t turned out to be the Hollywood gold buyers were expecting. The legal move by Talon International Inc. comes at the same time that a London, Ont. doctor is seeking $750,000 in damages for ‘misrepresentation,’ unless he can get back deposits on the hotel suite he bought in the ill-fated project back in 2009.”

“Dozens of purchasers of suites in the 65-storey luxury hotel are now trying to get deposits back and renege on final payments averaging over $500,000. Most were caught up in the get-rich-quick mentality of Toronto’s booming condo market and intended to flip the units or use them to generate retirement income. Other buyers, some too frightened of the legal ramifications to walk away from deals penned up to seven years ago, say they are finding themselves in a crippling Catch-22 — unable to sell the units or secure mortgages on balances due.”

“‘One mortgage company asked me, ‘How could I give you a mortgage on a property that is losing money every single day?’ said one devastated buyer, a blue-collar worker who borrowed the $175,000 down payment from his immigrant parents and owes $750,000.”

“Trump Organization lawyer Alan Garten said the story is far simpler than an argument about securities law. Whether the hotel is doing better or worse in terms of occupancy or room rates than was promised, he cannot say. ‘To me it is totally irrelevant, because it doesn’t give you an excuse to get out of your contract,’ Garten said. ‘It’s buyers remorse 101.’”

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The Sun Sentinel reports from Florida. “South Florida’s housing market keeps getting better, at least for sellers. Values are on an upswing this year as a lack of available properties give sellers more negotiating power. Most market observers insist that prices have hit bottom, though some analysts say the recent gains will start to level off once lenders list more foreclosed homes for sale. ‘I do not believe pricing will come back down,’ said Summer Greene, president of the Florida Realtors. ‘I think that time has passed.’”

“Douglas Rill, broker of Century 21 America’s Choice in West Palm Beach, said he recently listed a three-bedroom short sale with a pool for $89,900. He had 27 inquiries, 12 showings and six written offers in three days. ‘Does that sound like a slow market?’ Rill said. ‘The low-end is on fire, reminiscent of 2005.’”

“Gary Thomas, president of the National Association of Realtors, urged potential buyers to improve their credit scores so they can qualify for mortgages before rates increase. ‘Even with rising home prices, we’ll continue to see favorable housing affordability conditions over the coming year, but they won’t last forever,’ Thomas said.”

“Mike Larson, an analyst with Weiss Research in Jupiter wonders whether investors eventually will create a frenzy that leads to another bubble. ‘That certainly bears monitoring, but I think it’s something to keep an eye on rather than freak out about,’ he said.”

The Tampa Bay Times. “Although the $25 billion national mortgage settlement’s goal is to keep people in their homes, big banks are doing much better at ushering Florida homeowners out, as a new report shows short sales dwarfing other forms of relief as lenders’ atonement of choice. Short sales totaled $1 billion more in Florida than principal forgiveness for first and second mortgages, deficiency waivers and refinancing — combined. And many of those short sales would have happened anyway.”

“‘They’re getting credit for doing what they were already doing, and what the market was dictating,’ St. Petersburg foreclosure attorney Matt Weidner said. ‘They’re still throwing people out onto the street that could be making a mortgage payment.’”

“‘The banks are pushing everything towards the short sales,’ Keller Williams agent Steve Capen said. ‘There have been some principal reductions here and there, but it’s been at such a random level that you can’t even talk about it.’”

“‘There’s nothing more frustrating than a homeowner who has been working for years to get a (loan) modification and can’t, only for the bank to turn around and sell the house for cents on the dollar … to an investor who will rent it out to somebody,’ Weidner said.”

“Bankruptcy filings in the Tampa Bay area continue to drop from their 2010 peak, falling another 20 percent over the past 12 months to reach levels not seen in four years. But the plunge in new cases in the bay area has done little to alleviate a backlog that could be months if not years away from returning to normal levels. Moreover, strained courtrooms already operating with smaller staffs because of budget cuts may see the situation worsen if bankruptcy filings rise once more — which is exactly what many observers predict.”

“‘I think we’re going to be in for a huge storm,’ said St. Petersburg bankruptcy attorney Charles Moore. ‘I think we’re in a weird, artificially created low. … All of us are asking why (bankruptcy filings) are so low right now. The economy didn’t magically get better over the last two years.’”

“The temporary reprieve in new bankruptcies is rooted in the housing mess. Drawn-out efforts to modify mortgages along with the ‘robo-signing’ scandal over foreclosures that had to be re-filed because paperwork was faulty or forged have given many delinquent homeowners an extended reprieve from losing their homes. Terry Smith, a trustee for Chapter 13 reorganization cases for two of Tampa’s bankruptcy judges, sees more foreclosures being the inevitable driving force for more bankruptcies.”

“Delinquent homeowners — some of whom haven’t made a mortgage payment in years — will suddenly be forced to put money toward rent instead of other expenses. And bankruptcy, he said, may be their only alternative. Moore is already seeing it happen. ‘I had a client in here today who hasn’t made a mortgage payment in 31/2 years,’ he said. ‘They’re finally getting a foreclosure and coming to me’ to discuss bankruptcy options.

“Moore said there’s a common misconception that people who haven’t made a mortgage payment for years must have saved something to shield them from bankruptcy. ‘What bank account is that money in? It’s not there. People are living to what they have,’ he said.”

The Bradenton Herald. “Foreclosures shot up in Manatee and Sarasota in October. Home defaults in both counties have now posted double-digit increases for the past two months, after seesawing for much of the year. Officials peg the choppy numbers to the uncertainty surrounding the judicial foreclosure process in Florida, which has left attorneys still sorting out cases from the peak of the crisis three years ago.”

“A tough labor market also continues to feed new filings, with underwater homeowners who still can’t meet their monthly mortgage, said Joseph Lehn, a Sarasota foreclosure attorney. ‘The reprieve is over — foreclosures are on the rise, modifications are on the rise, short sales are on the rise,’ he said. ‘Banks are realizing they have to move these properties.’”

The Tampa Tribune. “Like thousands of people across the Tampa region, Cheryl Hunt will start preparing for her family’s Thanksgiving meal today. And they’ll give thanks for the meal, which wouldn’t have happened without the help of people they never met. The Hunt family is among the nearly 150,000 Hillsborough County households surviving on food stamps this Thanksgiving, according to the Department of Children & Families.”

“It’s a record number — and one that continues to rise month by month even as the unemployment rate falls. In October, the Department of Agriculture paid out nearly $38 million in food assistance in Hillsborough County alone, a 10.4 percent increase over the previous year. The Department of Children & Families says about a quarter of the Floridians receiving food stamps work.”

“‘It could be that even though people are going back to work, but maybe the incomes are not rising,’ said Patrick Mason, a labor economist at Florida State University. ‘They aren’t going back to jobs that are paying a lot.’”

“For the last three years, Cheryl and Johnnie Hunt have had little or no work. Johnnie used to run his own tile business, which went bust with the housing market. Cheryl worked for a title company. The family’s house is in foreclosure. They’re living on food stamps and scraping up whatever work they can get. They get help from friends and family, too. ‘I don’t know any other way to say it,’ Johnnie said. ‘It got bad.’”

“With the housing market showing signs of life, the Hunts hope next year will be better. ‘I don’t even care if I’m working steady — just more than now,’ Johnnie said as Cheryl loaded the family’s few bags of groceries into their minivan.”

The News Journal. “There’s nary a house in Flagler Estates. At least, not on the Flagler County side, which includes 2,771 acres of land that was subdivided and sold in 1970, mostly as lots of about an acre. More than 40 years later, nothing’s been built and the lots in Flagler County are likely to remain vacant into the foreseeable future.”

“Other stalled developments have occurred statewide, including in Volusia County. Dozens of these so-called ‘paper subdivisions’ were marketed throughout Florida as investments in the 1960s and ’70s. Buyers often purchased land sight unseen and now find themselves in some cases unable to find the property, much less build a house on it.”

“Lynne Bohannon and Jeff Hartdorn, who live in New Smyrna Beach, own at least 28 lots in Flagler Estates. ‘It’s simplistic to dismiss the purchasers of swampland as stupid,’ Jeff Hartdorn wrote in an email. ‘There was an incredibly well-choreographed industry to prevent victims from obtaining accurate information.’”

“Lots in the Flagler portion of Flagler Estates that initially sold in the 1970s for between $5,000 and $12,000, according to a sales brochure Bohannon has kept all these years, are today valued by the Flagler County Property Appraiser at $300 to $600. Still, some property owners remain hopeful that their land will regain its value one day — maybe just not in their lifetime. Jack Snider, who lives in Pleasant Prairie, Wis., is one of them. He paid $11,000 for 1.36 acres in 1984. Today it’s appraised at $300.”

“‘It’s been up and down,’ Snider said by phone. ‘Before the housing bubble burst, some lots were selling for $30,000. I’ll probably pass it along to my daughter, who may keep it for her children.’”

“‘I own land in Texas and other land in Florida, and it’s the most likely to eventually become viable,’ Snider said. ‘I was sucked in by the sellers.’”

“Snider remains hopeful his investment eventually will pay off. ‘It’s land,’ he said. ‘It’s always going to go up.’”

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Readers suggested a topic on renting. “The other day I saw another warning notice of rent non-payment on the door of an apartment in my building. If that person doesn’t pay up, they’re out in 30 days. Or less, since I’m guessing they missed the current month’s rent. But we never hear about the plight of the renter. If a homedebtor gets behind in their payments or goes into foreclosure, it is years before they’re forced to move. If a renter misses a payment, he’s evicted in 30 days. But you know what? Both are humans. Both may have families.”

“What exactly is it about the homedebtor going non-current in their payments or facing foreclosure that evokes such sympathetic howls of grief and agony from the media, the Fed and the government, whereas nary a peep is heard about renters being evicted in 30 days if they miss a payment? Why is that?”

A reply, “It’s really simple. An apartment can easily be rented out again after an eviction, whereas a foreclosure usually represents a massive financial loss to the creditor (the banksters). So they lobby for programs to help keep FB’s in their houses, with the bailout money ending up in the bankster’s pockets. It has nothing to do with whoever is living in the property.”

And finally, “I think people see renters as inherently more footloose and mobile, not attached to any one place. A move for them is seen as no big deal. People see ‘homeowners’ as people who have ‘put down roots’, are raising a fam, the whole American Dream thing. It’s not always accurate, but that’s the perception.”

My West Texas. “In some areas of the United States there is still a long way to go to reach a healthy state in the residential real estate market (and prior peaks may not be surpassed for decades, if ever). When the housing downturn began, homeownership had reached almost 70 percent nationwide. The total market value of all U.S. homes more than doubled between 1999 and the peak in 2006/2007, with prices for individual homes up an average of about 50 percent. The jump in value was uneven, with the east and west coasts generally rising more than the center of the nation. For some metropolitan areas, prices more than doubled.”

“There is some empirical evidence (such as a study by economists at the Boston branch of the Federal Reserve Bank) that only those who suffered from the housing crisis directly or through someone close to them are likely to change their behavior based on it. For people who have merely seen the news stories and statistics, the decision of homeownership is far less likely to be affected. Age is also a factor, with younger people less confident that buying a house is a good idea than older individuals who may be more apt to see the recent pattern as an aberration in an otherwise known trend.”

“A survey supported by a major real estate firm (Coldwell Banker) concluded that Americans now have more respect for homeownership, and pointed out that a home is far more than a financial decision, but an emotion-laden aspect of happiness that isn’t easily measured by dollars.”

“Over the past several years, the housing market saga has been played out in the media with stories of displaced families, foreclosures, and bankruptcies. Against this backdrop of bad news, the natural question has arisen regarding whether homeownership is still ‘the American Dream.’ The answer is as much psychological as it is economic.”

The Chicago Tribune. “Among the many aftereffects of the popped housing bubble is the perception that a generation of young adults has been spooked into doubting that they’ll ever own a home — or even aspire to own one. Not true, says a new survey from a major real estate company, which contends that 18- to 35-year-olds do indeed like the idea of owning homes, and they’ve learned a thing or two from watching their parents struggle with the housing market.”

“Sherry Chris, CEO of the Better Homes & Gardens real estate brand talked about what her company gleaned about 20- and 30-somethings (in edited form): Q: Why did your company recently survey a broad group of young adults, generally known as Generation X and Generation Y? A: When you look at nationwide demographics, about a third of the population is baby boomers — that’s my generation. We’ve driven the economy for 30 years, and we’re starting to slow down our buying of real estate.”

“Another third of the population is echo boomers, which are a combination of Generations X and Y, and they’ll drive the economy for the next 30 years. It was important to find out what’s on their minds, because there’s been a lot of chatter about how they’re going to remain renters and don’t have a clue about home ownership. It was important for us to get this firsthand.”

“Q: So, are they gun-shy about real estate? What did they tell you? A: What we found was the opposite of all the chatter and noise. This group of young adults is very much in tune with owning real estate…Nearly all of them said they were willing to adjust their lifestyles to save for a home. Sixty-two percent said they’d eat out less. Forty percent said they’d work a second job. And 23 percent said they’d move back home with their parents to save money.”

“Q: Of course, confidence in the job market is no small indicator these days, which I think might slow their entry into the buying market, even if they want to buy. Then there’s the evidence of huge amounts of student debt they’re likely to be carrying. What did they say about student debt? A: We didn’t get into that.”

“Q: What would you have done if young adults had said, ‘No, thanks, I think I’ll remain a renter’? A: Well, as an industry and certainly as a brand, we’d have to step up our campaign to show young buyers the importance of real estate as a long-term investment and lifestyle.”

The Victorville Daily Press. “The Victor Valley has been one of the epicenters of the housing market’s boom and bust during the past decade. The median home price in the area dropped from $323,000 in July 2006 to $103,000 in July 2009, according to Caroll Yule of Shear Realty. Investors flooded into the market after the housing bubble burst as they looked for opportunities to make money off cheap foreclosed homes.”

“Some of these investors refurbished the purchased homes and resold them quickly with a markup, in a practice known as flipping. But as inventory of foreclosed homes depleted and prices began rising recently, many investors are holding onto their properties and renting them out. ‘Investors are creating an environment where the rental market is going to be flooded,’ said Tony Smith, a real estate agent at Century 21 Fairway in Apple Valley. ‘It’s the next wave we are seeing.’”

“Cash buyers accounted for nearly 40 percent of all home sales in the Victor Valley during September, according to Larry Trombley of Century 21 Rose Realty. ‘This is basically cutting regular home buyers out of the market,’ said regional economist John Husing of the Inland Empire Economic Partnership. While some strongly oppose his view, Husing warned that the recent expansion of rental properties is ‘destructive’ to the Victor Valley communities for the following three reasons:”

“1) Rental properties are generally not wellmaintained and will bring down property values in their neighborhoods. 2) Calls for police service tend to increase in neighborhoods with a high volume of rental properties because they attract low-income earners. 3) Schools suffer from a high concentration of renters in one area because some of these families move their children around to find the cheapest property.”

“‘There’s a close relationship between the housing market and the crime rate,’ Husing said. ‘My instinct is it’s getting worse, not better. The share of underwater homes is extremely high.’”

“Ben Lamson, founding partner of Bluestar Properties which manages rental homes pointed out a cultural shift among Americans, who are often forced to move around to get a job. ‘I think you are seeing more demand for rentals as the society becomes more mobile,’ Lamson said. ‘We are seeing young people today wanting to live in different places and not tied to mortgages and loans.’”

“Tony Card lost his Big Bear home when the housing market collapsed and is now renting a house in Apple Valley. Card, a real estate agent, said people have different reasons for renting. ‘They have to live somewhere,’ Card said. ‘That doesn’t make them a second-class citizen.’”

Readers suggested a topic on comparisons. “Do Americans have more or less to be grateful for than they did in 1980? That’s the time the old post-New Deal liberal order, unions and industry were starting to collapse, precipitating the era we have been in since, or had been through 2007 or so. It’s also the time that those born from 1930 to 1955 or so took over our institutions from the Greatest Generation, and those born afterward entered the labor and housing markets.”

“There were real gains in information technology, and the information and entertainment people had access to. And, though it was expensive, health care. But much of the rest of the apparent gains in the standard of living over the past few decades have been funded by debts, public and private. And now that has collapsed, the standard of living is falling.”

“In the early 1990s recession, when people were down, I put together a spreadsheet with a variety of economic, social and environmental indicators comparing the so-called ‘good old days’ with the ‘recent bad years’ to show things were, in fact, better. I’m pretty sure that for most people, especially young people, I could make the opposite case today.”

One said, “Fancier toys do not make a for a better life. 20 years ago I wasn’t constantly keeping my ear to the ground, hoping to dodge the next wave of layoffs. I would gladly trade my flat panel TV and high speed internet for some peace of mind.”

And finally, “I think we have a great deal to be grateful for, such as modern new inventions and greater prosperity. With all the news talk about how this decade compares with that, it’s often not even comparable. My first computing experience began in High School with a Wang card-reader that barely did arithmetic. Shortly thereafter, a hand calculator emerged, priced about $450 that could do multiplication and division and even had a percent key. Wow.”

“By 1980, my College had a computer that worked with punch cards. By 1985, it was fully integrated with computer data consoles and a few programming languages. Apples, Amiga, Commodore and IBM laptops had all entered the market. I started out with a 16k laptop that was an amazing 4 times the previous model for data storage, with a floppy disc, rather than cassette tape storage. We also had the first COLOR ‘RGB’ consoles. I started out with amber and green screens. You can see where this is going.”

“I used to stay up nights drinking beer with computer geeks and downloading data on a 1200 baud modem. Soon we got a 2400 bps modem and WOW, we doubled out data stream. It was like magic.
We didn’t have the Web, web-sites, internet access (only university inter-library access and bbs services). We didn’t have cell phones. My first dial-up systems used a rotary telephone. Most kids don’t even know what that is.”

“My college car was a 1972 Datsun pickup. It was built poorly, but mechanically unstoppable. Cable TV? You must be joking. We started out with 5 network channels in the 1960s. That was it. World satellite communications? Didn’t exist. VCR’s had begun to be developed. Then we got DVD’s around the 1990’s or so. My 8-track and cassette players have been replaced by CD’s. Online music?? MP3 players?? What’s that?”

“Shopping ‘malls’ were new creations. We had local stores and strip centers for 1/2 my adult life. Look around your house. I still have VINYL records and still play them. I like to put the stylus down on the track I want to hear. But lots of the stuff you have didn’t exist in 1980.”

“Online library? Forget about it. You need to look something up? A trip to the local library and a dig through the Card Catalog (no computer files). 3×5 cards. Index cards. Rotary Business lines with phone books delivered for every phone. The advances of medicine and available care could fill a book. I never had an MRI before 1999. I could go on for the rest of the day. A lot has changed and in many ways our lives are much easier and more efficient. I think my standard of living is mostly improved. I am communicating with you in ways that were not possible in 1980 or even 1990. But all this has come at a cost. We spent way too much to achieve a greater, bigger and richer society. I say that collectively, as I personally did not.”

“There have been vast improvements to people’s lives, but societies live by way of comparison. We all live better than most Regal Elites of past generations to whom ’salt’ was a luxury, ice was shipped around the world for cold (before refrigeration), Books were rare, and ‘climate controlled’ buildings were simply a dream.”

“The simple truth is that whatever ‘new thing’ some people are able to possess, others will feel left out and ‘oppressed’ because they don’t have one, too. And somehow, it’s not fair and the government should ‘do something’ about it. We live in a world of scarcity, not abundance. Human efforts have created more abundance, but the desire to ‘fairly distribute’ it will remain a source of conflict so long as humans are working to debate and resolve the issues. Unfortunately ‘credit’ allows people to live more abundant lives and create the illusion that they are more ‘wealthy’ than they really are. This includes societies as well as individuals.”

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