It’s Time To Move Beyond The Wrecking Ball
Readers suggested a topic on jobs. “I’d like some discussion on people that have lost their jobs that were making a lot of money (in banks as VPs, or corporations) suddenly realize that they are not in demand. My own view is that these people were all fluff and were employed due to the sham economy up to 2007. My feeling is that businesses purged these highly paid persons (more old than young) when they realized that these persons skills were only ‘talking’ and not doing. When the economy was going gangbusters, these people were hiding behind the productivity of their colleagues. Now that the tide has gone out…”
A reply, “They get promoted in good times to manager and then bad times come, and see ya later.”
And this, “I’ve known more than a few well-paid older folks who haven’t grasped the idea that computer literacy is no longer an option. It’s a necessity. Especially if you want to have a job.”
Another said, “Doesn’t that imply that if they’d done the right things to update their skills, they could get another job at the same or better salary? What if the truth is that there’s nothing they could have done, and they only made that much money due to a temporary market condition? It’s not like the graduating class is stealing those VP jobs from the guy who didn’t keep up his skills.”
One had this, “If anything, IMO they updated their skills too much. Lots of those VP’s started out as ME EE CE engineers, or similar STEM positions. The higher up they rose, the farther away from their original STEM jobs they got. They would have a better chance if they tried to go back to their STEM quals. However, actual STEM pays a lot less than management of STEM.”
The Gazette.net in Maryland. “Employment growth is expected to increase at a sluggish rate of 1 percent during the next three years, according to statistics in a report released by the Board of Revenue Estimates today. ‘There are three essential components to an economy that is powered primarily by consumer spending — jobs, housing and consumer confidence, and all three ‘legs of the stool’ need to be moving in the right direction for a sustained recovery,’ Comptroller Peter Franchot, who heads the board, said in a statement.”
US News & World Report. “‘It has become an urban legend that we’re not recovering because housing prices are low,’ says Peter Morici, an economics professor at the Robert H. Smith School of Business at the University of Maryland in College Park. ‘During the boom, we amassed a huge trade deficit. That creates a hole in demand. That’s what’s holding back the recovery this time.’”
The Motley Fool. “While testifying before Congress earlier this year, Federal Reserve Chairman Ben Bernanke was asked if there was precedent for the economy recovering from a recession while the housing market stayed weak. He looked puzzled, thought about it for a moment, and replied: ‘It’s normal for housing and construction to be an important part of the recovery.’ No, in other words.”
“The key to getting the economy back on track is deleveraging — paying off debt accumulated during the bubble years. For households, the vast majority of that debt is in the form of mortgages. In that sense, housing not only caused the recession, but it’s by far the biggest impediment to recovery.”
“But it goes beyond paying off debt. In a report released last week, the Fed asked a simple question: How many of the 8.7 million jobs lost during the recession were tied to the housing market? Its answer: about 40%. And that probably understates it. The reality is many housing-related jobs never should have existed in the first place. When thinking about housing-related job losses and the potential recovery, you have to make a distinction between jobs tied to the housing market and jobs tied to the housing bubble. Many fall into the latter group. According to economist Mark Zandi, 23% of all new jobs created from 2003-2006 were housing-related. Many won’t come back — nor should they.”
The Arizona Republic. “Conventional wisdom is that the Phoenix-area economy stinks and it won’t get better until the housing industry recovers. I think that’s a misdiagnosis of the current condition of the economy and its intermediate prospects. Employment in the Phoenix area peaked toward the end of 2007. Since then, the area has suffered severe job losses. Prior to the housing bubble, the Phoenix area consistently ranked at or near the top in job creation.”
“I’ve consumed much ink and digits over the years arguing that Phoenix doesn’t have an economy dependent on real estate, to no noticeable effect. Such an economy cannot exist. Real estate does not create its own demand. If it did, there wouldn’t be so many empty houses in the Valley. All economic relationships are interdependent, but for the most part, real estate is a dependent variable. It depends on some other factors driving the demand for its products.”
“If you are a place growing faster than other places, you will have an oversize real-estate sector compared with other places. But that doesn’t mean that real estate is driving the economic activity. Conventional wisdom has it backwards: A robust Phoenix economy doesn’t depend on recovery in the housing industry. Instead, recovery in the housing industry depends on an otherwise robust Phoenix economy.”
The Sun Gazette in Virginia. “Could a lack of housing options for those across the economic spectrum be the factor that pops Arlington’s economic balloon? ‘I’m scared. Really. It’s going to be frightening.’ That’s how Laura Van Syckle, director of recruitment at Virginia Hospital Center, reacted to the suggestion that the county’s current housing crunch is likely to get worse before, or if, it gets better.”
“As land in the county continues to escalate in price, longtime property owners and developers are cashing in by building top-of-the-line housing, and charging prices to match. It’s now not uncommon for upmarket apartments to rent for $3 per square foot per month, said Mark Silverwood, president of the development firm Silverwood Cos. By one calculation, it would take an annual household income of $103,500 a year to afford to live in a market-rate two-bedroom apartment in Arlington.”
The Washington Post. “Nancy Welsh is the founder of the Raleigh, N.C.-based nonprofit Builders of Hope, which works to change the face of affordable housing by rehabilitating abandoned houses slated for demolition: It’s no secret that the United States is in the midst of a housing crisis. Foreclosure notices were filed against a record-setting 2.9 million properties last year and 1.2 million in the first half of this year. Yet the price of many foreclosed homes remains unaffordable for a majority of Americans.”
“Policymakers are desperately searching for a solution to the housing crisis. They fantasize about tearing down 3 million homes – roughly 60,000 homes per state – all in an effort to jump-start the housing market and the economy. What they fail to realize is the opportunity these homes offer for creating the affordable housing that Americans so desperately need.”
“This affordable housing void has resulted in many of the working class being priced out of the cities where they work, unless they choose to live in at-risk communities and dilapidated buildings.”
“Others have been forced to move in with family members or friends to save money during these economically challenging times. There is also a growing trend among young people of waiting to leave the nest, which can further burden their potentially struggling parents. In 2010, 1.6 million more young adults ages 20 to 29 were living with their parents compared with 2005.”
“We have millions of people in need of permanent housing and millions of units of vacant housing available. Instead of demolishing these homes, the inventory should be reused to rebuild the stagnant housing market, as well as address the immediate need for affordable housing and job creation.”
“By recycling homes and revitalizing blighted neighborhoods, we can put the surplus of vacant and foreclosed houses to work creating a more sustainable future for our country. It’s time to move beyond the wrecking ball and start getting Americans back into homes.”
“But it goes beyond paying off debt. In a report released last week, the Fed asked a simple question: How many of the 8.7 million jobs lost during the recession were tied to the housing market? Its answer: about 40%. And that probably understates it.”
To get the full count, you need to look at job loss in other industries that were tied to housing; does the 40% include this?
I’m curious what jobs will be good ones to have to make it through this financial crisis.
I remember reading “Hard Times”, Studs Terkel’s collection of Great Depression oral history interviews, around 2006 when I could see the writing on the wall regarding the economy. I was interested in the interviews with people who did well in that era, while everybody else was suffering. What were good jobs to have during the depression?
I remember the guy who invented Muzak was one success story - his business was booming while others were going bankrupt. That was a business based on new technology, so you could probably argue that there is a new equivalent out there somewhere.
Another one was a woman who had just started a job as a librarian when the depression began. She held onto her job throughout, and did okay, although she had to deal with shooing out a lot of homeless men who came into the library to sleep. (That makes it sound like things haven’t changed that much in the library world since then!) I remember a few years ago thinking librarian would probably still be a safe gig to hold onto. But actually between e-book readers and the internet I’d say being a librarian isn’t as safe a bet to get through this depression. Also, the idea that gov/pub employees are the enemy isn’t going to help keep those institutions around.
I wonder if public libraries will last out the next decade. Maybe working at a historical archive would be better - even if new books go all digital, there’s still plenty of old documents that will never be digitized. Safe, but not exactly a growth industry.
Two things to keep in mind when selecting a career, IMO:
1. Is is something that will forever be in constant demand, and
2. Is it something that cannot be outsourced.
If I were a young man I would go after landing a job in a power plant. People/industry will always be in need of power, both produced and distributed, and it is a job that cannot be outsourced.
One thing that is most important in this economy (or even a good one) is to be good in what you are doing, if not the best.
Why not be within the top 1% to 10% in your field? It could be a good secretary, a good machinist, a good engineer, a buyer, coordinator etc.
The ones that are below average in their field / career are the ones that find it difficult to hold on to their job. Those that lost their job for this reason - that they are below average - cannot find one.
+10 on this.
Being outstanding at what you do is a safe bet under any circumstance.
A skilled secretary can print her own money faster than the Federal Reserve. If you’ve never encountered one, you are in a world of surprise when you actually meet one.
Unfortunately, they are few and far between, and never come on the market either. Their employers understand what they are worth.
“Being outstanding at what you do is a safe bet under any circumstance.”
My HS tennis coach captured this perfectly (and frequently) with one of his favorite cliches:
Why not be within the top 1% to 10% in your field?
I agree fully that everyone should strive to achieve this, but obviously by definition 90% to 99% will fail to do so.
Outsourcing will happen! Because most engineering and services jobs can be done by other people who are trained. Not all scientific people are inventors.
The only jobs that will not be outsourced are police, firefighting, govt jobs, education (professors, teachers, aides), defense.
Eventually cities/ municipalities will outsource/ offshore the record keeping, searching & secretarial work.
Paralegals are already outsourced, only criminal law & company law (to avoid taxes, find loopholes) are slow to outsource. But in time this will happen.
“1. Is is something that will forever be in constant demand, and
2. Is it something that cannot be outsourced.”
What percent of occupations fall in the intersection of 1. and 2.?
My guess: Less than 10%.
Select well.
Also, select a job that an old person can do because Father Time will eventually turn you into one.
“If I were a young man I would go after landing a job in a power plant. People/industry will always be in need of power, both produced and distributed, and it is a job that cannot be outsourced.”
Trivially insourced, as seen by the illegal alien who wired up my airconditioner compressor. If residential electricians are being replaced with illegals, industrial maint electricians and linemen are not far behind. Cafeteria and cleaning crew have already been insourced.
The other problem is pick your sub-industry wisely. Going into, say, natgas turbine maintenance is not a winner if you live in the UK (which is rapidly winding down natgas production).
Food industry - marketing and distribution. Cannot do without them.
Accounting - depending on government action…but you can bet it will want its take…so accounting is a gimme.
Food industry is also insourced. Meatpacking industry used to be a stable union job. Now it’s all illegals. Ditto for much of the grunt work on farms. Harvesting was insourced to migrants for decades. Restaurants? Ha. The waitresses are pretty but they make less than minimum wage. Now look in the kitchens, anywhere from high-end to Wendy’s. Se habla Español.
If it’s unskilled, then an immigrant can do it. If it’s skilled, then you probably use a computer, which means that someone in India can do it.
I was going to say “medical” but that’s fallen to the non-Americans too. Digitized records and slides are begging for passage to India. Orderlies are not paid much. Nurses as a field will saturate as unemployed smart people go back to school. And the day is not far off when you have to fly to Singapore or Thailand for that ACL surgery or root canal, because the insurance won’t pay for an American doctor.
Your best bet is to join the military long enough to get a security clearance — and hope that Ron Paul isn’t elected President.
FYI: Ron Paul drew more military support than any of the Establishment GOP (neo-con) or Democrat candidates in 2008.
Clarify: join the military long enough to get a security clearance, then go to work for some defense firm where they can’t outsource your clearanced job.
Then hope Ron Paul doesn’t cut defense spending.
I would think that any job that makes folks/businesses more efficient and recduces cost would be a good one.
In good times these types of products/technologies are valuable, but are even more in demand when times are tight.
Business Intelligence software, for example.
I think makers of pitchforks and torches are poised to do well, going forward.
Engineering
Accounting
Nursing
Anything in the Energy Sector
Mechanics
Military
Research/Development
Pharmaceuticals
Everything in your list but military and possibly mechanics either is moving to or already has moved to Chindia or is insourced with illegals / H1Bs.
Local MRI manufacturer is moving HQ to China. Bye bye Engineering, Accounting, and R+D.
The killer with Energy sector is its either “making stuff” in China, “phone support” in India, installed by unskilled illegal labor here, or theres like two PHDs in the US who did the R+D. Great if you’re one of the two guys, otherwise, eh.
Most average and below average people in the fields above are easily replaced by H1Bs. No question of that. In the end the salaries of these people will stagnate and even come down since a lot of these engineers, nurses etc. will be available.
The current level of engineering graduates, on average, is pathetic. The ones that are decent think that they are destined to be rocket engineers. In the end mediocre engineers will generate mediocre results - those that an employer can go easily without impact to the bottom line.
My feeling is that if companies have a chance (2012-2014 should be a good time, since there will not be a rebound in the economy) they will reduce the payroll quite a bit more by getting rid of the highly paid average engineers, managers etc.
“The current level of engineering graduates, on average, is pathetic.”
While the B Schools are packed to the gills. Ever wonder why? Maybe its because the kids know that a “STEM” career pays mediocre wages, is hard as nails and has no job security. The real money is being in management, and not as a “STEM” individual contributor.
“Maybe its because the kids know that a “STEM” career pays mediocre wages, is hard as nails and has no job security.”
+1 The engineering professors freely admit this sad situation.
I wonder if public libraries will last out the next decade.
FWIW, our local libraries are very popular and busy places, even with the eBook crowd (who can borrow free eBooks at the library).
But libraries aren’t just about books. A lot of people who don’t own computers or have internet access come to the library to use the computer lab.
And a lot of people still come to borrow books, CDs and DVDs. Our local library has been so busy that it’s being expanded.
Libraries also are gathering spaces for those who want a refuge from the noise of the world or (if they have kids) their households. People go there to study, to plan, to find opportunities and to connect with others engaged in similar pursuits.
The loss our society will incur if public libraries are shut down will be immense, though difficult to measure, as the benefits are somewhat intangible.
“refuge from the noise of the world or (if they have kids) their households”
Around here the kids are dropped off at the library, turning it into library-daycare. The librarians are not happy about it, the patrons are not happy about it, the cops are not happy about it, the competition day care workers are not happy about it… The parents love it, and guess who’s in charge? You can imagine the reaction in the papers if kids were banned from the library. I sometimes think the schools are govt daycare with a fixed formal schedule, and the libraries are govt daycare for the rest of the time.
My local library has remodeled itself into something like a media center; multiple meeting rooms and little office like areas. Books have dropped from 70% of space to around a third. Added a lot more computers. Microfilm and microfiche just won’t die; if someone would just digitize the hometown newspaper archive, that could put a dent in it. Also they got rid of most of the study desks, too attractive for the homeless. Its too loud in there to study anyway, with all the feral children running around.
If you abandon your kids at our local library the cops will collect them and turn them over to CPS.
Its too loud in there to study anyway, with all the feral children running around.
Agree, my local branch libraries are always full of screaming children. It’s also not too uncommon to encounter some obnoxious teens or adults engaged in loud cell phone conversations. The librarians do nothing about this.
“The loss our society will incur if public libraries are shut down will be immense, though difficult to measure, as the benefits are somewhat intangible.”
Unfortunately, bean counters don’t do “loss to society”; they’re only interested in bottom lines.
Yeah, libraries are popular and busy, but last time I checked, libraries don’t charge admission.
The decline of public libraries is one of the most damning indictments of modern American life. Too few readers, too many distracted, lobotomized Pod People immersed in their electronic entertainment cocoons. And naturally, libaries are the first places on the chopping block when municipalities have budget shortfalls.
In Simi Valley (Reagan Library area-So Ca)the local public library is being privatized. I haven’t looked into it yet, but I don’t like the sounds of it. Property Taxes should be enough to cover the nut.
The nicer one, Thousand Oaks Library, seems to be OK. Gotta love the huge fresh water fish tank in the children’s area. I could sit for an hour and just watch the fish. Relaxing. (local contractor donated it)
A couple of suggestions from this retiree.
1. What ever career you start out in will most likely NOT be the career you finish in.
2. Establish and maintain a large network of people who know what you’ve actually accomplished. That’s more important than them knowing what you (supposedly) can do. In my working career I only got one job where my network didn’t help.
3. When putting together a resume, actual accomplishments are at least 10X more important than a listing of your skills/abilities.
4. The famous Peter Principle states: Everyone is promoted to his/her level of incompetence. Meaning, people get one too many promotions.
In the old days you could fake it, like Dilbert’s pointy-haired boss. Not any more.
Libraries are down to 4 days per week around here (San Jose), with the downtown library being the only exception. Until last year, all branches were open 6 days per week.
“Policymakers are desperately searching for a solution to the housing crisis. They fantasize about tearing down 3 million homes – roughly 60,000 homes per state – all in an effort to jump-start the housing market and the economy. What they fail to realize is the opportunity these homes offer for creating the affordable housing that Americans so desperately need.”
You’d think Fannie Mae and Freddie would be all about restoring houses and providing CHEAP homes for people. After all, weren’t they supposed to be all about “affordable housing”? Instead of providing loans to rehab houses, Fannie is taking servicing rights to all the bad loans the Bank of America accrued and risking more losses to the American Taxpayer, since they are effectively in receivorship.
I would think every political hack whose always pandering to the “poor” and “disadvantaged” (code words) would be on the bandwagon for restoring houses. Where is the rising tide of affordable housing advocates?
Instead, all the talk centers around tearing down houses to force new construction to “stimulate” “growth”. It reminds me of the “cash for clunkers” program. Destroy perfectly serviceable vehicles to force new sales and provide a government “subsidy” to make it happen. Sure, it promoted new car sales, but all the USED cars that would provide an opportunity for “poor” and “disadvantaged” people to own a car LOST OUT. The USED car inventory was purposefully destroyed.
It is ALWAYS a bad idea to destroy perfectly usable commodities for the sake of creating new jobs. It’s like digging holes so someone else can fill them, or having hoodlums break windows in housing developments and saying you increased GDP by installing new glass.
By standard economic metrics of GDP, it is true. But you have not increased “wealth”. You simply diverted human energy to places it should not have needed to go. It is one of the many problems with GDP estimates. It counts increased government spending as growth.
“Instead, all the talk centers around tearing down houses to force new construction to “stimulate” “growth”. ”
How is that different from digging a ditch, then filling it up, except that a lot more resources are wasted in building, then tearing down houses?
If a plan to jump start the economy centers around building things we don’t need instead of things we do, we really are screwed. While not all of the surplus housing is in more optimal places or of more optimal types, does it make sense to tear it down and build yet more housing that may not be in the best location or of the best type either?
We have plenty of infrastructure that’s bordering on third world. Why not replace or upgrade that if we’re going to build something?
Because Greg, that’s smart and we have a dumbed down president..
Actually, the recent Presidents we’ve had represent the fullest expression of our national descent into IDIOCRACY. In the immortal words of H. L. Mencken:
“When a candidate for public office faces the voters he does not face men of sense; he faces a mob of men whose chief distinguishing mark is the fact that they are quite incapable of weighing ideas, or even of comprehending any save the most elemental — men whose whole thinking is done in terms of emotion, and whose dominant emotion is dread of what they cannot understand. So confronted, the candidate must either bark with the pack or be lost… All the odds are on the man who is, intrinsically, the most devious and mediocre — the man who can most adeptly disperse the notion that his mind is a virtual vacuum. The Presidency tends, year by year, to go to such men. As democracy is perfected, the office represents, more and more closely, the inner soul of the people. We move toward a lofty ideal. On some great and glorious day the plain folks of the land will reach their heart’s desire at last, and the White House will be adorned by a downright moron.
– Baltimore Sun (26 July 1920)
“Because Greg, that’s smart and we have a dumbed down president..”
I call BS. The President has been trying desperately to appropriate money for infrastructure. But — OOps, the R’s said we have “spending problem” and filibustered absolutely everything.
Who’s the dumbed down ones? Check the signs at your local Tea Party rally. But you better hurry — I heard those things only last a couple hours.
An inordinate ammount of the money designated for “infrastructure” never actually gets spent on actual projects. That said, I wouldn’t call Obama dumb. His supporters? Dif’rent story.
I am not sure whether you agree or disagree with my proposals.
I suggested that instead of bulldozing houses we should be looking to rehab them and use them as a basis for more “affordable housing”.
I am not sure that you are not say the same thing.
Where we will probably disagree is that I don’t believe in “jumpstarting” the economy. I think this is government waste of the grandest sort. I believe in clawing back all the money that was stolen from us by bad Bankster business decisions and returning the money to the US Taxpayers.
In my world, Lloyd Blankfein and Jamie Dimon, along with Hank Paulsen, and the “honorable” Jon Corzine would all be destitute, their property ceased and auctioned off to pay for the losses they made on their bad decisions. The Sheriff would lock up all their properties and holdings, and every account would be settled.
WE can’t have ANY real economic growth until people believe that their investments and labor will be protected by a rule of law.
Lawlessness has taken over the US of a. I don’t anticipate a renewal in business growth until TRUST is put back. That won’t happen with the Obama administration. He’s all about working to steal whatever he can to give to the people he thinks should get it.
Why not a house give-a-way program to those who cannot afford them in exchange for NO deductions (meaning ZERO) on state and federal income taxes over 5-7 years? Limit this only to those who haven’t walked away from mortgages.
Put unused resources to work (existing houses), eliminate cost (tax refunds, processing, legal, bureaucracy) and create window of opportunity to cut taxes for rest of mortgage-paying/paid citizenry.
Let the banks, lawyers and government eat any costs since they created the mess in the first place.
There must be a metric out there somewhere to determine best-case scenario…
An interesting idea, because it would create an arbitrage class of poor people who pay no taxes anyway therefore need no deductions, who would simply flip the house to someone who could actually afford the expensive maintenance. The poor would get to spend all their flip money on bling which helps the consumer economy, the parasite class would get double commissions and fees for awhile because of the flip… Surprised this hasn’t been enacted already?
Another problem is if its uninhabitable, the press will skewer them just for the sake of skewering, and if they are inhabitable, that means the copper wiring, pipes, etc could be sold off at quite a handy profit, assuming the cost of the house was in fact zero, if your deductions are not worth much. Or in other words if the houses are not uninhabitable now, they would be soon.
Another final issue is if you eat a loss and file it as a capital loss, doesn’t that mean you don’t really need deductions anyway? I would need to research this further, it might not work, but it Might encourage people to flush bad investments to make a loss to make up for lack of deductions, and selling into a down market is going to make the PTB unhappy.
Silly. To keep housing affordable and the industry moving, you have to keep the product as unaffordable as possible so that as many people as possible can buy it.
Duh.
“But Lakewood’s demolition derby is about something bigger than nuisance properties: it’s an attempt to save the town’s economy as a whole. Like the rest of the country, Lakewood is still struggling to recover from the shock of the 2008 collapse. With a 6% drop in tax revenue, a $3 million drop in state funds and an 8.3% unemployment rate, the town needs to find a new way out. Razing houses, officials say, will increase competition for the remaining homes, driving up real estate values. That, in turn, will make it easier for homeowners to refinance to cheaper loans, freeing up spending and boosting consumer confidence. “It’s a matter of supply and demand,” says Dennis Roberts of the Cuyahoga Land Reutilization Corp., a quasi-government-controlled nonprofit, or land bank, that is overseeing the destruction of more than 645 homes in and around Cleveland.”
http://www.time.com/time/magazine/article/0,9171,2090368,00.html
Despicable. The governments real goal is unaffordable housing, and debt slaves.
I still can’t understand why cities don’t want and DESIRE AFFORDABLE and DECENT housing for their citizens…
Have they spent every dime of their anticipated ever increasing property tax revenue on insane union contracts already?
The main purpose of government is to support the government and it’s “employees” and beneficiaries. It’s them against us. That’s how government works.
They are not interested in affordable housing except as a campaign slogan to get re-elected. They are, however, very interested in revenue, to continue to spend for the things they think the government should support.
This is all about revenue. Abandoned houses don’t generate tax money. And worse, when all the “values” declined, then revenues went down.
The government wants everyone to live in a million dollar house so they can derive million dollar tax revenues. That’s all.
They also know the “citizens” will feel much more wealthy if the prices of all the “owned” and occupied real estate go up.
People in government have one goal: increase the size and power of government (that’s 2 goals) to provide greater benefits and pensions to people in government.
You and I are simply supposed to PAY for their benefits. That’s our job.
Time Magazine was stoking the housing bubble all the way to the top, and they were among the last to admit that a bubble existed. Little wonder that The Economist Magazine has better circulation.
Time was the first MSM to link online and mention this blog. In 2005.
“Time was the first MSM to link online and mention this blog.”
That’s awesome since the MSM rarely links to a blog.
The Economist identified the housing bubble early on, and I can still remember a friend in San Jose, CA being worried in 2003. By November 2005 prices stopped rising in San Luis Obispo, CA. because the lending dried up, but oddly enough the bubble continued to inflate well into 2007 up in the Seattle-Tacoma area.
The Economist identified the housing bubble early on
Yep, they were already sounding the alarm in early 2005, and probably earlier as well.
http://www.economist.com/node/3715895
To buy or not to buy? That is the question
Today it is often much cheaper to rent than to buy a house
Mar 3rd 2005 | from the print edition
“IT IS always better to buy a house; paying rent is like pouring money down the drain.” For years, such advice has encouraged people to borrow heavily to get on the property ladder as soon as possible. But is it still sound advice? House prices are currently at record levels in relation to rents in many parts of the world and it now often makes more financial sense—especially for first-time buyers—to rent instead.
…
The divergence between rents and house prices is, of course, evidence of a housing bubble. Someday prices will fall relative to rents and wages. After they do, it will make sense to buy a home. Until they do, the smart money is on renting.
“Others have been forced to move in with family members or friends to save money during these economically challenging times.”
The hairdresser who gave me a holiday season haircut last night is one of these people. She, her husband and their three kids all live at Grandma’s home, which is 1700 sq ft size, in National City. I commiserated with her a bit, but also pointed out that she and her family are lucky for not having bought a place in 2006, when they were in the market, just before the housing bubble popped.
““I’d like some discussion on people that have lost their jobs that were making a lot of money (in banks as VPs”
Check the failed bank list at:
http://www.fdic.gov/bank/individual/failed/banklist.html
Those facilities simply no longer need executive management.
The govt only provides the number of failed corporations. A guy named George Ure at urbansurvival use to count the number of failed branches, which in a post-megamerger world is more important. Supposedly more branches have closed already than during the first great depression, even accounting for population.
To some extent its also an educational problem. To get my CS degree I had to write a compiler. How many people will ever do that for a salary? Not many. A microscopic percentage of the graduates churned out. There are just too many qualified candidates at all levels, including at the top. When businesses complain that there is a shortage in high tech industries or STEM fields, they don’t mean there are no qualified candidates, we certainly have waaaay tooo many available for work. What there is a shortage of, is qualified candidates thrilled to work for minimum wage or maybe as a free intern, especially salaried with no overtime and mandatory 80 hour work weeks.
And this goes back to my point if you dont live with your parents or deal drugs how do you survive?
What there is a shortage of, is qualified candidates thrilled to work for minimum wage or maybe as a free intern
Oh, you can live pretty well on min wage, I certainly did when I was in my early 20s. Good music, hot women, good friends, fun times, all that stuff seems so cheap when you’re a young healthy kid, and so expensive when you’re not. Anyway, a seemingly inevitable permanent downgrade from STEM level back to min wage is no big problemo, been there, done that, but its hard for the retiring baby boomers to sell the old house for $750K if the pool of available buyers only makes min wage and lowering it at all means grannie only gets to eat cat food while retired. Well, during the bubble, it was easy, for awhile, just NINJA it. Now that doesn’t work so well. Whoops.
Was that a good summary of the American economy for the past couple decades?
“Oh, you can live pretty well on min wage”
Good luck finding a FT minimum wage job. When I was a college student they existed. Today they are all PT jobs where you have NO idea of how many hours you will get in a particular week.
To understand the incomprehensible mandate by the government to keep housing healthy and affordable while doing all they can to keep it as unaffordable as possible, simply look at where Congress invests its own money:
“When politicians own stock, they are investing not just in that business or even that industry, but also in the broader economic sector. In the same way that CRP classifies campaign contributions into more than 100 industries, and then those industries into 13 sectors, the Center does so here for the stocks, bonds and other investments reported in lawmakers’ portfolios. ”
http://www.opensecrets.org/pfds/overview.php?type=S&year=2010
These policies of trying to buoy housing immediately become crystal clear, similar to the optometrist dropping the correct lenses in during a vision test.
“They fantasize about tearing down 3 million homes – roughly 60,000 homes per state – all in an effort to jump-start the housing market and the economy.”
What kind of sicko fantasizes about destroying (aka wasting) vast swaths of real estate wealth? Do they think building houses is free in terms of resource and labor expenditures?
Guess what: It’s not free.
“What they fail to realize is the opportunity these homes offer for creating the affordable housing that Americans so desperately need.”
I’m sure glad that MSM writers have figured it out, as I have brought up this rather obvious point on the HBB until I nearly turned blue in the face.
““They fantasize about tearing down 3 million homes – roughly 60,000 homes per state – all in an effort to jump-start the housing market and the economy.””
Broken window economics at its worst.
Teaching our kids about debt danger
Published: Sunday, Nov. 27, 2011 4:00 p.m. MST
By Linda & Richard Eyre, For the Deseret News
What do you think is the biggest danger your kids face as they grow up in this world and move toward their own life outside your home?
We could make a pretty good case for debt.
A lot of kids today have no idea how much their college tuition is because the bill goes to their parents and they never see it. Or they get a student loan that they won’t have to start paying back until they are “out in the world making lots of money.”
And they don’t know how much their cars cost because they are focused only on how much the monthly payment is. And they think they can keep charging this little thing and that little thing on their credit card because it’s easy not to worry about it until the bill comes, and even then, the minimum payment is not very much.
The spend-now, pay-later mentality of today’s society is killing lots of adults, but it’s hard even to imagine the effect it will have on kids who grow up with it and get as dependent on it as they are on oxygen.
…
“it’s hard even to imagine the effect it will have on kids who grow up with it and get as dependent on it as they are on oxygen.”
Which, of course, is exactly what “they” want—a population entirely dependent upon debt to get through their life.
You can take that to the bank.
Maybe the politicians are afraid to say this but with over 300 million in this country and a world hungry to enjoy a better life the US has to accept that many will not be in a position to own a home or new car and set their minds to that in the future.
The FEDRAL GOV’T owes the citizens nothing more than what the consitition dictates basically that you rise on your own, you fall on your own…. TO BIG TO FAIL IS NEVER GOING TO HAPPEN AGAIN?