The Housing Bubble

You know, Jane, I never realized it but that’s exactly what the wagon wheel thing is about. Thanks for this cool little factoid!

Cool. Somehow it’s just not the same with mobile home tires…

You are missing the concept. “Cost to build” means what it would cost to build an “identical” home, at least in terms of the market’s subjective standard of value. So your home in the swamp is only a relevant example if there is an existing home in the swamp, or similarly craptastic home, available as an alternative.

“Not to be snide, but the only way to truly see what an asset will sell for is to sell it.”

….in a market where the distortions are removed. That’s not what we have.

Until inflated appraisals(uneducated guessing), cheap borrowed money and skim by the NAR crime syndicate is removed, the only way to determine what the asset is worth is to perform a take-off of a new one and then depreciate it for wear, tear and age.

No, not in a market where the distortions are removed. In whatever market you are in (distortions or not).

I hate to be the bearer of bad news, but unless you see something that I don’t see with TPTB, we will continue to have the influence of the Fed and US government policies on the housing market.

If you expect those to change, then you can stay out of the markets entirely and/or lobby your representatives for the change.

Otherwise, you have to live within the constructs that our benevolent overlords have bestowed upon us. In that context, the market price is the price reached by a willing buyer and seller.

You can wait around for these distortions to be removed, and thus change the market rules (and I did for 10 years renting), or you can get on with your life.

‘I hate to be the bearer of bad news’

Well, well, the old ‘I agree with you guys but if you can’t beat em, join em’ routine. Haven’t seen that for a while. Why not just take a position. Say ‘I’m not waiting for these distortions to be removed.’ (Actually it’s market manipulation, not distortions). Say ‘I’m going to get on with MY life.’ Then tell us what you bought, where, when and what you paid (borrowed). That way we can all be the judge of your wisdom.

And you forgot a couple things Mr. Jones.

1) Realtors Are Liars

2) Appraisers are Corrupt and Clueless

3) Rental Watch speaks of things he/she knows nothing of.

I bought in the mid-Peninsula south of SF in May 2011. I paid a price equal to about 2.5x my annual household income and borrowed 75% fixed for 30 years. I have enough liquid assets to pay off the loan in it’s entirety, but why bother if the bank is going to give you 4% money for 30 years?

The house is 20 years old, and was previously maintained by a single woman with means. She replaced the roof the year before I bought (with 50 year warranty), and completely renovated the kitchen less than 10 years ago to a level that someone who likes to cook enjoys (double gas ovens, etc.).

It meets the needs of my family for the foreseeable future (ie. until the kids are out of the house and college, 20+ years from now), and is on a quiet cul-de-sac within about 7 minutes of my office, 5 minute drive to very high quality elementary school, and a 10-minute walk to a similarly high quality middle school.

Sorry to not get more specific than that, but I do value some privacy. I will say that in hindsight, we got incredibly lucky, I’m glad I bought when I did given where I live and work.

Good logical reasons to buy…one question why didnt you get a 15 year at even a lower interest rate?

15 yr fixed 3.11%

Part of the family comp is in stock that is hard to liquidate quickly given inside information, and in the near term, I’m putting lots away each month in 529s for kids colleges.

For jumbo loans, the rate wasn’t that low for the 15-year, and for the marginal difference in interest rate from the 15 to the 30, I preferred to have the flexibility to have more cash flow to do other things with (primarily invest it).

With a long view of interest rates (and where they/inflation might go given the Fed stance), cheap leverage at 4 3/8% for 30 is better IMHO than cheap leverage at 3.25-3.5% for 15.

And you’re underwater already.

No wonder you’re here lying to the public. You have a stake in the direction of prices.

Stop your lying.

Interesting 529s vs having the house paid off before they finish HS, would be a better deal cash flow wise.

aNYCdj, it’s all about timing and leverage.

1. The money is nearly free;
2. I know I will want to pay for my kids educations; and
3. I don’t yet know if I want to do any estate planning for my kids (passing on $ to the next generation).

529s use up gift tax exclusions. If I want to ever think about estate planning in any clever way at a later date, doing the 529s then will effectively eliminate my ability to use the annual gift tax exclusions at that point for estate planning.

“Not to be snide, but the only way to truly see what an asset will sell for is to sell it.”

Your point seems to assume away the existence of comparable properties. But there are almost always comparable properties, at least in terms of other homes which the market values similarly to the one in question, which can be used to at least approximate what an asset will sell for. In fact, it is not even necessary to have exact comps; all you really need is one set of relatively inferior assets, presumably valued by the market below the asset in question, and another set of relatively superior assets, valued above the asset in question. The asset in question has a value bracketed below by inferior quality assets and above by superior quality assets.

The only exceptions would seem to be (1) when so little is selling that there are few recent comparables, even of the fuzzy variety I describe above, or (2) an asset is so utterly unique that even fuzzy comparables don’t exist.

“If you expect those to change, then you can stay out of the markets entirely and/or lobby your representatives for the change.”

I’m thinking maybe Romney will prove to be the housing market agent of hope and change we have eagerly awaited.

Or do I detect the onset of a rather severe case of cold feet on housing market reform?

‘Don’t try and stop the foreclosure process’
By Steve Benen
Tue Jun 5, 2012 10:11 AM EDT

Last fall, campaigning in Nevada, Mitt Romney took a curious line on housing policy, which Democrats were quick to seize on.

The Republican said at the time, “[D]on’t try and stop the foreclosure process. Let it run its course, and hit the bottom.” In states like Arizona, Florida, and Nevada, where so many families are underwater, Romney’s line on foreclosures is likely to be problematic.
…

CIBT, I generally agree with you on valuation. The more homogeneous the market, the tighter the range of values that you can estimate.

My comment is most true in the product types with which I’m most familiar…commercial properties, where there is much more variability with respect to tenant base, quality, rent levels, duration of leases, etc.

We once had a piece of residential land for sale, and we had one person give a very credible argument for why the land was worth $x (consistent with the comps, etc.). They were willing to buy it off-market (save the sales commission, quick close, etc.). Instead we put it on the market, and marketed it widely. We found a buyer who simply thought it was worth more. They paid 150% of $x.

Two credible group’s opinions of value were 50% apart. Other times, the difference is <5%.

CIBT-WRT Romney…I think there is quite little the President can do, regardless of their views. Right now, the biggest difference in which markets are clearing and which are not is state by state, according to their laws.

Yes, there is Fed intervention at the periphery when it comes to the foreclosure process, but I think that will prove minor in the grand scheme. You only have to look as far as FL vs. AZ to see that the two states are dealing with the foreclosures much differently.

Much bigger is the Fed’s involvement via the MID, and Fannie/Freddie/FHA subsidizing down payments and lower interest rates. I’m all in favor of abolishing all of this garbage, but I don’t think any politician has the guts to do it unless it is part of a long-term plan (decades long wind-down) in terms of mortgage support, and the conversion of the MID to some other subsidy (tax credit). Can’t kill too many sacred cows at once, or they’ll run you out of the village.

We have pecan and live oak trees around our rental house in Texas. I have grown to despise the pecans because 1) they don’t produce a lot of nuts 2) they’re extremely brittle and are continually dropping branches, including 15-20 foot limbs after storms. They’re a genuine hazard.

Both kinds of trees produce shade that is very welcome in our hot climate. Additionally, the live oaks are extremely strong, very attractive, drop no limbs and few small branches, and are perfect for hanging a porch swing or tire swing or hammock. Unfortunately, it takes decades to get a really good one going. The ones in our neighborhood are about 60 years old.

“real estate exam prep books”

Could there be any book more closely revealing eternal truths?

BTW, replacement cost is only relevant if the house has never been driven off the lot, so to speak. Used houses often sell for a small fraction of replacement cost, with the land thrown in for free.

“Used houses often sell for a small fraction of replacement cost, with the land thrown in for free.”

I think the argument is a version of what financial economists call a ‘no-arbitrage’ condition (already mentioned above): Why would someone buy a used home at a higher price than they could build an even better new one.

In your example, the no-arbitrage condition is not binding.

Isn’t it kind of difficult to arbitrage a house? They are somewhat immobile.

“Isn’t it kind of difficult to arbitrage a house?”

‘Arbitrage’ in this use of the term has to do with the buyer’s decision; the fact that a home is immobile is irrelevant.

For simple illustration, suppose there is a home on Wisteria Lane that is offered at $300,000, next to a vacant lot priced for sale at $100,000 on which I could build an identical home to the $300K home at a building cost of $150,000. The no-arbitrage rule would suggest the $300K home is overpriced by $50K.

“Why would someone buy a used home at a higher price than they could build an even better new one.”

Because there aren’t any empty lots in the neighborhood they want to live in. Is this a California thing? Or a deep suburban/rural thing? Or a “I’m all right with having to drive to do almost anything” thing?

Actually CIBT, any sophisticated owner of the lots will price the lots relative to the home values in the area and the cost to build…there would be no arbitrage opportunities, except in cases of distress/weak demand/lack of sophistication. Land is the plug number in the equation, the price that moves the fastest in the homebuilding world.

Using your example, the lots would trade for ~$120k apiece. $300k home value, $30k builder profit margin, $150k cost to build, residual land value of $120k.

If home prices go up by $10k, all else equal, land values rise by $9k. 3% move in home values=7.5% increase in land value. This is how one can make a leveraged bet on a housing recovery without borrowing any money.

Suppose Wisteria lane is in a partially complete subdivision, the original builder filed bankruptcy, and the vacant lots went back to the bank and were subsequently acquired by John Paulson for $10k apiece for all cash.

The going rate in a “normal” time might have been $120k for a similar lot, but now, all those lots are controlled by one investor at a low basis.

Let’s say home prices crashed to $180k apiece from $300,000 (and it still costs $150k to build the home). The residual land value is $12k ($180k-$18k profit-$150k to build). This is why Paulson was able to pay $10k in bulk.

Now, let’s say that prices have recovered all the way to $190k…lot values up to $21k apiece…a nice 2x on his investment–at these price points, a $10k increase in home values results in a nearly doubling of land values.

He can either:

1) Sell them to a builder now (if a builder is confident that there is sufficient demand for the number of lots he is buying) at $21k per lot. There is no arbitrage…John Paulson gets the profit.

or

2) If the math done up above #1 yields a lot value of less than the cost of finishing more land, John Paulson may choose to wait and sit on the dirt until home prices rise to justify the finishing of more lots. Then he will sell.

If the cost to finish new lots is >$21k, some holders of finished lots will choose to wait…restricting supply. If the cost is <$21k, these finished lots will begin to flow to builders.

Some of the owners of finished lots are builders, and they are building on them. Others are investors, and they will sit as long as they please until they decide their profit has been maximized (which is going to be about the point that it makes economic sense to finish more raw land).

I expect to be called a liar by at least one person on the board, but this is the land value math in play today, which is why the cost to finish lots is so critical to if/when new supply of finished lots enters the market, and what the trajectory of home values is around the time construction recommences in any particular market.

“I expect to be called a liar by at least one person on the board,…”

Thanks for the insightful post. I encourage you to generally ignore dumshit liars who expect to profit by pulling the wool over sheeple’s eyes.

“For some people the extra $100K is worth paying in order to move in right away and not have to deal with the hassle of building a house.”

That is (implicitly) part of the no-arbitrage condition.

“If you are building a single home, builder profit will be far more than in a subdivision development situation.”

Ya know…..you are really shoot from the hip my friend. To the point where you’re just making up your own reality for whatever reason.

I’ll clarify your untruth.

Mobilization and demobilization costs are 5% of the total a schedule of values on a project. That falls to 0% for a duplicate project adjacent to it, i.e housing development. My subcontractors prices falls by 5% at a very minimum. Multiply that saving times 100 units and you get the idea.

I can and do negotiate down my concrete price because I’m casting 5000CY. That’s not gonna happen on 100CY. Same is true for the rest of the materials.

I don’t know what your motive is but seeking the truth is not part of it.

In 2007, the State Fair in the Midwest exhitibted a pre-fab house (the whole house right on the Midway). If you supplied the lot and the slab foundation, the house itself ranged from ~$85K to $115K for a 3-4 bed, including finishes and appliances and rugs and drapes. Around $100/sq ft.

I thought that wasn’t a bad deal, even if the decor was a little too Lawrence Welk-ish.

HIC-

If you serve as your own GC, then you are spending your time (my “if you are involved” concept).

If you are hiring a builder, different market realities set in.

Production builders build to a profit margin of 8-10%. They build en masse.

Custom builders build with margins of 20-30%. They build one at a time.

I’m not talking about mobilization costs, I’m talking about builder profit.

My motive is to only share what I’ve seen in the market (ie. the pro forma that a builder looks at when they develop a single home, or an entire subdivision).

Nice duck and weave.

ALL costs impact profit. You’re not in the construction biz nor have you ever been. You don’t know what you’re talking about.

Builders/developers don’t start the process unless they can make a profit.

Builders/developers can’t get a construction loan if they can’t show an ability to sell the home(s) for more than the construction loan (and then a margin of safety).

Builders/developers can’t get an investor (like the company I work for) to invest the equity in their development if they can’t show a healthy enough profit margin (over and above all costs).

Really?

You mean to tell me I didn’t develop a bid estimate on my current $17 million project? Really? You’ve got some serious construction management knowledge going on.

We and our competitors borrow money to bid and win work? Really? Seriously? You plain don’t know anything about bidding work.

You really think we need “investors” to bid, win and build work? How do explain my current project? And the project before that? And the one before that?

You’re here misrepresenting the truth about ALL of it.

No. We’re talking past one another. I’m talking about development profit (and always have), and you are talking about construction profit (and I’m assuming always have).

When you bid your $17MM deal (construction cost, I’m assuming), the developer needs to add that number to any other costs they have to get to their all-in cost.

The developer then takes their all-in cost budget, as well as all other costs, and tries to get funding to be able to pay the project cost.

The market value better be higher than their all-in cost if they want to actually get the deal funded and built.

No… you are bull$hitting once again. I am the developer.

Fine.

In my world, we are presented with business plans daily for investment. Those business plans come from developers/operating partners (my vernacular). Those business plans include (among other things), an estimate of cost (bid or not at that point), and an estimate of value. Sometimes the developer IS the GC, sometimes not. Sometimes a construction manager is involved, sometimes not.

It doesn’t matter. What I care about is the difference between cost and value (as well as a myriad of other items). The difference between the two is the profit margin.

An acceptable profit margin differs by product type and situation.

Back to my original comment:

That acceptable profit margin for a subdivision of many homes ranges from a low of 8% to a fat margin of 12% and better.

That acceptable profit margin for a single spec home is generally higher 20-30%.

Less than that, and the project is harder for the developer to get funded.

And you don’t know what you’re talking about. Nor do you have a clue about margins on construction of anything, anywhere no matter how many times you repeat your lies.

Stop digging and come up for some air. The ground water is over head.

Curious…are you a homebuilder (as in you buy the land, develop the product/plans, hire the subcontractors, borrow the money from a bank, have equity investors, build the homes and sell them)?

“homebuilder”? “Borrower money from the bank”? Build “homes”??? lmao

Pay your Liars Tax and move on…. just move on.

So you are a “developer” of what?

Are you a real estate developer?

Move on Liar.

Rental,

You’re dealing with a dyed in the wool mindset here, (as you well know), so being reasonable isn’t going to get you anywhere. But I, for one, appreciate your informative posts. (Just as I appreciate the insistent haranguing of our dissociative identified project manager.)

+1 Darrell

I watched my father commute 45 minutes to an hour each way for 40 years. I swore I would never do it.

Where we live is very expensive, and relatively close to both my wife and my work, but I was able to fix my daughter her breakfast while my wife braided her hair for school. I’ll be able to duck out of work tomorrow to see her little preschool graduation, and then get back to work within 10-15 minutes.

If I had my father’s commute, those two things (and many more) would never happen.

Anyone care to price that into the value of having a home close to work?

That has always been a major factor for me….plus in an emergency who gets called first? the one that lives the closest…plus you can always pickup some OT this way…and it covers any additional rent costs…

I lived less than two miles from where I worked and made sure it was east of work so that the sun was at my back driving to work and the sun was at my back while driving home.Before kids I always rode my bike; downhill to work and uphill going home.

That is true everywhere. People drive to affordability in most markets.

The shorter the commute, the more reasonable it is

I have never worked more than 2 miles from my home (since living in SF) and before kids and carpooling, rode my bicycle to work.

This is a major quality of life issue for me, and I actually like driving. Or maybe I like driving because I don’t have to commute.

Like many others, I will pay extra for not commuting. Although with the price of gas and tolls (Golden Gate Bridge toll=$7.00 ouch!), commuting costs a pretty penny.

I will also pay more to live with a view of Twin Peaks. If we can find a place where I can watch the fog come in over the city, I will be happy til the day I die.

It’s not all about money. I am lucky enough to have found a place to live that “fits”. You can’t buy a sense of “home”.

When people suggest we move someplace cheaper, it makes me think whether those are the kind of people who would suggest marrying for money over marrying the love of your life. Some do, but there’s a price to pay that can’t be quantified.

“The shorter the commute, the more reasonable it is.”

Not necessarily, but in general you’re right. My old commute was 80 minutes by bike to work and 30 minutes by boat home, a more than reasonable commute since they were the best parts of my work day at that h3ll hole. Working in the financial sector proved to be quite a Faustian endeavor.

That explains a lot about why I am happy.

Even worse, goonster, notice how cars are responding to the commuter market by installing iPod speakers, better cup holders, headset phones, climate control, heiney-warmer seats, smoother ride, cruise control, etc. All they need is a bathroom and millions of commuting men can avoid their wives for weeks on end.

“All they need is a bathroom”

Look up Trucker Bomb on Urban Dictionary

My sister-in-law did multiple cashout refi’s to have a heck-a good time. When the easy money went away, she just walked from the debt.

If you trust that no matter how bad it gets, we’re not going to let people freeze or starve in the streets, then is it more foolish to have a good time now or is it better to just work, work, work?

I’m trying to take the middle ground. I’m putting aside 5% and plan to have the debts paid off long before retirement, but also refuse to stop living life for the sake of work and accumulating other peoples’ unrepayable debts.

Darrel,

I kind of feel sad for you. Have you ever built a bookshelf with your hands? It’s a very simple project. You can add as much or as little detail to it as you wish. The cost is minimal, maybe $10 in materials, and you can even get away with as little as $20 in basic hand tools. You will get enjoyment out of that bookshelf for many years to come. This is an asset. You took raw materials, invested your capital of money and human willpower to it, and created a useful object.

Once you do that, you will get hooked. You will want to continue to invest to make things and processes that make our world a better place. If you don’t do it directly at your job, you can do it indirectly through investing in companies, loans to entrepreneurs, buying bonds, or a thousand other ways using the money you earn. Sometimes you will invest your capital and lose it. Sometimes, you will see a wonderful product or service come from it. If you don’t realize what you are doing, or could be doing, that is when I feel sad for you.

Btw, my wife continues to enjoy the shoe rack that we built together. And I love my new desk, assembled in the US of A, in the garage of mathguy. No debt offsets those items other than the thermodynamic law of entropy that will come to claim those goods in a few hundred years; as dust.

Btw, my wife continues to enjoy the shoe rack that we built together. And I love my new desk, assembled in the US of A, in the garage of mathguy. No debt offsets those items other than the thermodynamic law of entropy that will come to claim those goods in a few hundred years; as dust.

Mathguy (and Mathgal), if you were my neighbors, I’d be over at your garage workshop. If, for nothing else, the opportunity to hold this board steady while you nail it into place. I love being involved in DIY projects.

Good thread!

Sort of off the topic but a young guy (20s) at work bought a brand new $40,000 Japanese import. Yeah high performance. Of course he’s a direct hire, not a contract engineer. The contract engineers drive P.O.S. cars http://www.youtube.com/watch?v=CI0hj5QXoA8

Anyhow we sense the direct hires hate us because we contractors cost little, yet we are paid more than the directs (overhead pay goes to other divisions when a direct hire gets paid). We have to make up for it by working smarter, being more honest, even (gasp) working extra hours for free (in normal times we get overtime pay). As a contractor, my job is always unstable and I take every week I can get. Yes I just got a direct deposit (I checked) for my weekly pay.

I’ve been the direct hire guy dealing with the contractors before. The good ones that are more productive than me are great and I don’t begrudge them the bigger paycheck (I know they have more expenses and usually more risk). Occasionally you get the BSers, though. It was worst in the late 90s. It seemed like almost every contractor had BSed management into paying them 3x what I was making and they weren’t bringing a whole lot to the table. Either they didn’t have the technical chops they said they did, or their people skills were so bad (yet they could still BS a manager!?!?!) it was nearly impossible to work with them. In that case I did have a bad attitude about them.

Carl,
The ones you describe certainly exist. They are what I consider fly-by-nights. They don’t get return gigs at the places they consult. There were times I worked 60 hour weeks and got paid every hour. My best year was a total rake of $223,000 in 2007. I am back consulting at the same company perhaps at $164,000 this year and no OT. But the key thing is I’m back. They hire few consultant back rather than new employees for a reason - we are reliable.

But finished lots are produced all the time.

Developers buy land at the going rate;

They put in the infrastructure at the going rate (in his example, costs of $30-$40k in the context of a city subdivision);

They only do so if they can earn some profit through that activity.

We’ve bumped heads on this stuff before, why is that concept objectionable to you?

You been misrepresenting the truth about all of this for quite some time. Knock it off.

You’re misrepresenting my words and my intent. Knock it off.

Raw land is raw land. A site package is a site package. Stop conflating the two.

I’m not conflating the two.

Building a home is a production line, the inputs being land, labor, energy, materials, and unfortunately government fees.

You start with raw land. The price is whatever you can buy it for.

Then you need to invest money into the raw land to make it a buildable site (or sites). This cost varies depending on where you are, and the conditions on the ground (flat, good soils, etc.).

If you are buying land in the country, away from government building standards, requirements, etc., your cost can be fairly low.

However, in the context of a city subdivision (grading, curbs, gutters, city water/sewer, other utilities, city building standards, etc.), it is not uncommon for the costs to go from raw land to a finished lot being $30k+.

Is there something untrue about that statement?

Yes there is. Raw land is raw land. Period. Site work is site work. You don’t know the difference and you’re here bull$hittting everyone.

You don’t have the foggiest notion of site work costs.

You’re a liar.

Raw land without site work is unfinished. Raw land after the sitework is complete is a finished lot (land plus improvements)–is this not common vernacular?

If you are correct, then it will be cheap to build all sorts of new homes in places like Phoenix, and the market will soon be flooded with new homes on an ever increasing trajectory, since there will be lots of earthmovers grading new lots very soon to meet the purported demand. Prices will flatten out quickly within 6 months, and not go up much more as supply swells.

If I am correct, then finished lots will dry up in Phoenix, housing starts will increase initially (as the finished lots are built upon), then decrease as there are no more finished lots to build upon until prices rise to a level that supports new lot development. Prices will go up for a while before the earthmovers start up again, and only flatten out once that supply comes on line.

Let’s see what happens.

Why do you think there is going to be a continuing increase in demand in Phoenix?

Remember demand does not equal desire. Demand equals desire plus either cash or the ability to borrow.

Generally, long-term demographic trends favor the Southwest. However, my main reason for expecting demand to stay strong for a while is:

1. Job creation due to construction coming back, linked with;
2. Market psychology improving.

However, more specifically, these markets have been operating in a never-neverland of economic dynamics, driven by market psychology in a leveraged asset environment.

In a normal market, prices fall, demand rises, prices equalize. Econ 101.

In this cycle however, once prices fell past a certain level (lots of people underwater), more distress was created, increasing supply, and lessening demand, as people were more and more nervous.

What we got was prices fall==>supply increases==>demand weakens. Econ negative 101.

My thought is that once psychology shifts, supply will decrease (fewer people walking away), demand picks up as people panic that they are going to “miss it”, and prices rise in a more traditional Econ 101 mode.

This is what seems to be happening.

This new dynamic will happen (causing a quick bounce up in prices) until it is economically feasible to build more homes to meet this “we’re going to miss it” induced demand, up to a point where the rent/buy decisions are more in line with history.

This is where I believe development costs are too high to start developing new lots right away, meaning supply will continue to dwindle, exacerbating the “we’re going to miss it” market psychology, causing price increase momentum to go higher before it falls.

If however, you believe that it is cheap to add more homes to the mix, we should see earthmovers right away to meet this recent increase in demand, which will keep prices from going too high, too fast.

I totally agree with you about ability to borrow…this will dampen the situation in either case. However, as much as people are saying that no one can get financing, there are loans being made, and people are buying homes.

The other place where I get nervous about my thought is with overall vacancy in the market and the immigration policy of Phoenix. There are a lot of empty housing units…they will need to get filled up before things tighten too much there.

Demand is strong huh?

Housing demand is at 15 year lows and FALLING.

You’ve demonstrated misrepresentations one too many times…. Why stop now?

What we got was prices fall==>supply increases==>demand weakens. Econ negative 101.

Doesn’t classic supply and demand kind of assume that everyone pays cash and there’s no such thing as “underwater”? Or default?

“This new dynamic will happen (causing a quick bounce up in prices) until it is economically feasible to build more homes to meet this “we’re going to miss it” induced demand, up to a point where the rent/buy decisions are more in line with history.”

Sorry to tell you that if you wanted to be in on the run up out here, you missed it. The money has already been made and only the FHA first time home suckers are buying right now. The economy is barely hanging on, restaurants are closing left and right, strip malls are half empty and wages are not rising. So, come out here and “invest” at your own risk.

I agree. The window has long closed on the land acquisition opportunity in Phoenix.

@Carl,

That is correct, which is why this case is only so because home acquisitions are so commonly done with debt. I noted :”driven by market psychology in a leveraged asset environment.”

If the assets were not leveraged, we would not have ended up in the “econ negative 101″ situation.

If the Chinese people were to have a revolution today I wonder if they would head back toward real communism or if they’d try something different?

They’ll lean closer to the European model, but they will always do things in their own unique way.

I’ll say it again; nonprofit promoters are entrepreneurs just like any other. The CEO’s get big salaries and bonuses for themselves and underpay their idealistic employees, while wearing little halos as they troll the local service clubs, congressional offices and media outlets to promote themselves. It’s quite the racket.

Perfectly stated, Montana. My poor mother learned a painful lesson. The nonprofit she worked 25 years for cut her paltry pay, as well as all the other underpaid workers, then the President got a fat raise and some community award nonsense. Meanwhile, the people they are allegedly helping got screwed.

i’m surprised…they usually give the overpriced contract to their brother-in-law.

i’m surprised…they usually give the overpriced contract to their brother-in-law.

Oh, brother. You really have me going now, michael.

Yesterday evening, I went to a networking mixer. Yeah, I know. Slap me for indulging in such an exercise in futility.

One of the people there said she was with the Tucson small business something-or-the-other commission. She mentioned the name of someone who works for the city who’s supposed to be our advocate.

Slim tossed a grenade: “Does this commission help people who aren’t well-connected insiders actually do business with the city?”

I followed up with a very pointed remark about my attempt to read this advocate. She never got back to me.

The small biz commission rep noted that nagging was important, so I gave her my business card. Perhaps that may have been the lucky charm. I dunno.

After I finished my fusillade toward the commission rep, the owner of a computer store and I got into an exchange over his efforts to do business with the city.

He put in a proposal for doing computer support for the mayor and city council. Spent a month and a half of careful and detailed work on that proposal.

Did he get the gig? What do you think? Of course he didn’t. Because he didn’t have the right amount of pull.

i’m surprised…they usually give the overpriced contract to their brother-in-law.

And if they can’t find a volunteer and have to pay good money, that’s exactly who will get it. As of last week they were still hoping to find a sucker who would do it for the exposure.

And if they can’t find a volunteer and have to pay good money, that’s exactly who will get it. As of last week they were still hoping to find a sucker who would do it for the exposure.

The lady who referred me to that board that was willing to pay for website redesign but not maintenance also hosts a radio show that I’ve been interning with.

Well, last week, after I told the board guy what I thought about volunteering for something as time-consuming as site maintenance, oh, brother. You’d think I just whacked a hornet’s nest with a stick. How dare I talk to my betters that way? She was really put out.

But what really shocked her was that I told her that I wanted nothing more to do with her radio show. I’d truly had enough of her backseat driving.

I mean, come on. I can go down to the station and do a radio show all by my little lonesome at 5 a.m. What in the hell do I need this lady breathing down my neck for? I know how to run the damn mixing board and the CD players, honey. Ditto for the mikes.

I didn’t say what I just said in the e-mail I sent to her last Friday evening. I was a tad more polite.

The response: Your training period is over. Would you please do the show yourself on the following dates?

Heck yeah. I sure will. Now that we’ll no longer be in the same broadcast studio, we’ll get along just fine.

And this is what I like about Slim. By completely different paths, we have reached the same point.

Realizing that the PTB/banksters/1%ers are the real “Idiocracy”. Take away their inheritances, God given looks, and good buddy deals, and throw them in with the Wretched Refuse on an equal footing, and they wouldn’t last five minutes.

And this is what I like about Slim. By completely different paths, we have reached the same point.

Realizing that the PTB/banksters/1%ers are the real “Idiocracy”. Take away their inheritances, God given looks, and good buddy deals, and throw them in with the Wretched Refuse on an equal footing, and they wouldn’t last five minutes.

Thanks for brightening the morning after yet another networking exercise in futility. I appreciate it, X-GSfixr.

And, while we’re on this topic, more of Tucson’s idiocracy in action:

Josh Brodesky: Jodi Bain, ousted from Rio Nuevo, built nothing good

Keep in mind that the original goal was the re-development of Downtown Tucson. Which still needs it. Badly.

Good going slim…Its the same fight i have with the NPR idiots

It NOT public radio its government cheese radio…and we should defund all “public” radio and give the licenses back to the public who will involve the public in its on air programming.

NPR we take from the 99 and give to the 1% should be their new slogan

While I’m not a fa of NPR, take it away and what are we left with? ClearChannel?

No back to community radio which is what the 88-92 band was supposed to be…but NPR type stations hogged up all the frequencies so no one else could have a voice….defacto government censorship the FM band.

Oh why don’t broadcasting schools and colleges have an fm station to train their students? Why cant i do a zydeco or talk show on air? The space WAS there but public radio said NO to the competition….socialist radio. commie radio radio for the 1% playing nothing but classical music at a college????

kill “public” radio and return it to the people.

NPR gets precious little public money.

And your local station isn’t owned by NPR. It is an independent entity that had to buy its license from the city. Don’t you remember the fundraising? Public radio stations pay NPR for the rights to play NPR programming. And the WNYC shows that play from 10 to 2 on weekdays (Brian and Leonard) are created by WNYC.

You seem to be very, very uninformed about public radio and how it works.

Polly I hope soon they will fail…and have no choice but to give up their licenses..again its a gullible public who gives money to them…

Its the STATE governments that pays the costs the licenses are Owned by the state…so there is very little $$$ from the federal government .

Some independent broadcasters like sacred hart univ….bought the last 2 AM stations in Fairfield county from Cox radio this year for $500K because Cox radio just wanted to get rid of them…so what do you put on the radio stations in one of the richest counties in America…why NPR of course…FIRE the staff and run it remotely, and the 30 weekly show hosts on the station that were paying cox radio $200 per hour to do their shows all gone…..

Yes take from the 99 and give to the 1%….

No more HS football soccer games etc on Saturdays that ran for 60 years…nope must have “car talk” And the FCC just doesn’t care.

dj,

I’m hardly the 1% and I (and many people I deal with) rely on NPR for not only its news and analysis, but the color programming it runs from producers all over the world. Whether or not I agree with any given ideology, it’s still always well-produced and thoughtful radio.

The fact that they don’t play a lot of zydeco or allow you to host your definition of a “talk show” (Sorry, hon, but you’re no Warren Olney) reflects more on your delusions than on NPR’s audience.

The irony is, they’ll spend their youth trying to claw back taxes from the old people, only to become old people when they finally succede.

Maybe not your granny, but I know plenty who have died of ALL ages due to lack of money.

Personally.

“…There was only 1 private insurer with a higher rate of 3.62%…”.

Curious if this is on the first round of authorization or after the fifteenth appeal.

Try and post the link. That’s interesting.

http://www.ama-assn.org/resources/doc/psa/2011-nhirc-results.pdf

Ah, the American Medical Association?

Isn’t it the biggest culprit in our facked up medical costs? IIRC, the whole medical insurance thing was started so that the doctors and hospitals would have easier time to get paid.

Doctors and Hospitals are the number 1 - 10 causes of expensive health costs in America period!

No I don’t work for Health Insurance Industries and do not like them either.

Ah, the American Medical Association?

I once heard Andrew Weil speak at the University of Arizona’s main campus. He’s a UA med school prof — when he’s in town — but he doesn’t appear on the main campus very often.

Any-hoo, he said that the AMA is a very ineffective organization. Because whatever it opposes comes to pass.

Only 15-18% of the AMA are practicing physicians.

Invisible hand of free market is the Government. In US anyway.

Jim Crow? That’s just scratching the surface. In Romney’s second term he will restore the 3/5 compromise and the Fugitive Slave Act!

The funny thing is that Jim Crow laws, the Fugitive Slave Act and the filibuster of Civil Rights legislation for decades were all DEMOCRATIC PARTY ideas and DEMOCRAT PARTY mandates/laws…

You should let that sink in for a few days…

The funny thing is that Jim Crow laws, the Fugitive Slave Act and the filibuster of Civil Rights legislation for decades were all DEMOCRATIC PARTY ideas and DEMOCRAT PARTY mandates/laws…

The proper name for the party is Democratic Party. Mis-labeling that party as the Democrat Party just points out that you don’t know what you’re talking about.

“The proper name for the party is Democratic Party. Mis-labeling that party as the Democrat Party just points out that you don’t know what you’re talking about.”

I always chuckle when libs get offended by this. Calling Bush, Chimpy McHitler, accusing pretty much every Republican who has ever lived of being a Nazi…..that’s A-OK.

But calling The Democratic Party, Democrat Party….that is an outrage!!!!

‘let that sink in for a few days’

That brings up a point about the two party system. When I was just getting old enough to vote in Texas, the Democrats had had a one party hold on Texas politics since the 1880’s. But the Republicans at that time were the best of the two for civil liberties, gun rights, freedom of expression, national sovereignty, so I joined for a couple of years. Now they don’t stand for any of those things.

The Democrats are no better. But both groups will go nuts if you suggest the two party system isn’t working, or should be busted up. Interesting that they agree on that, huh? But as you point out, there is no real lasting position or even ideology of the two parties. Their grip on power boils down to this; there is something special about the number TWO. The number of parties can’t be three, or four or ten. It has to be two.

But with two, you don’t have anywhere to go if you disagree, do you? Cuz the ‘other side’ (cue Darth Vader music) is practically evil! Plus if you have three or four or more parties, they could form coalitions. And then the big boys would lose their ability to play the voters like a ping pong ball.

BTW, I’m a part of a lawsuit against the GOP for what they pulled at the state convention, where I was a delegate. The party leadership in Arizona are corrupt scum bags and I hope to play a role in bringing them down.

BTW, I’m a part of a lawsuit against the GOP for what they pulled at the state convention, where I was a delegate. The party leadership in Arizona are corrupt scum bags and I hope to play a role in bringing them down.

This former Arizona Democrat and long-time Independent hopes that you succeed. Go, Ben!

The funny thing is that Jim Crow laws, the Fugitive Slave Act and the filibuster of Civil Rights legislation for decades were all DEMOCRATIC PARTY ideas and DEMOCRAT PARTY mandates/laws…

You should let that sink in for a few days…

And guess where all those dixiecrats bailed during the civil rights era? That’s right…. the good old GOP. And they brought the platform and agenda with them.

Don’tcha just hate complete history?

Frankly I don’t give a crap because paid hacks like Tooby and all the nattering that goes with it is meant to keep us all divided. That’s a hard reality to face but I believe, personally, that is reality.

A “Two Party” system promotes the illusion that there is “competition”.

Hey, they were doing it for the exposure, too!

My wife got portraits of our kids done last year. All in it was about $650 including the prints. And that was one of the cheaper packages. Some were as high as $1500.

I’ve seen coupons for a session at the Walmart Photo Center for significantly less.

President Of Estonia Slams Paul Krugman: ‘Smug, Overbearing & Patronizing’

http://www.huffingtonpost.com/2012/06/06/estonia-krugman-toomas-hendrik-ilves_n_1575937.html?icid=webmail_plugin_news_en_us

You go, dude! The twitter comments are priceless.

“Before now, I had never really understood how the 1930s could happen. Now I do. All one needs are fragile economies, a rigid monetary regime, intense debate over what must be done, widespread belief that suffering is good, myopic politicians, an inability to co-operate and failure to stay ahead of events.”

He left out the preceding 30-year debt binge.

“He left out the preceding 30-year debt binge.”

Typical Keynesian omission of relevant facts.

Yes, but they could redefine what they owe on their internal debts, leaving more to pay the others. Of course they could also default.

Technically, TARP has not cost anything. We have gotten it all back…. Or, at least, that is what I hear.

You can topple governments with a few bananas if you are Samuel Zemurray - no need for trillions of dollars!

http://members.tripod.com/group_13dc/megan/Guate.html

Technically, TARP has not cost anything. We have gotten it all back…. Or, at least, that is what I hear.

I’d really like to see an accurate bailout tracker. Here’s what I found, and it’s nowhere close to being profitable or even break-even for the government:

1) July 24, 2011: http://www.nytimes.com/interactive/2009/02/04/business/20090205-bailout-totals-graphic.html

2) Unknown date: http://money.cnn.com/news/storysupplement/economy/bailouttracker/

If anyone’s got better sources, I’d like to see them.

There’s a lot of disinformation placed in the media. I’ve seen it done in the past.

Yeah, we hand out almost a trillion bucks to wall street etc, and they pay it all back. But we loan millions of dollars to solar companies and they lose every penny?

“Technically, TARP has not cost anything. We have gotten it all back…. Or, at least, that is what I hear.”

$190 bn and counting…and please don’t float the lame argument that there is no connection between GSE housing price support and repayment of TARP in full, as I’m not buying it.

Geithner Adviser Says Options for GSE Reform Need Further Study
By Clea Benson - Jun 1, 2012 11:16 AM PT
Bloombergi

All options for overhauling the U.S. system of housing finance pose challenges and need further study, an adviser to Treasury Secretary Timothy F. Geithner said today.

The Treasury Department has been working on a plan to restructure housing finance and wind down Fannie Mae (FNMA) and Freddie Mac (FMCC), the two taxpayer-owned mortgage finance companies, since releasing a white paper in 2011.

The options in the Obama administration’s report ranged from limited federal involvement to a system in which the government would serve as a catastrophic insurer on certain mortgages behind private investors.

“No matter how thoughtful any plan, the deeper you dig beneath its top-line description, try to understand all of its inter-related parts and ask second- and third-level questions, one quickly realizes the challenges and complexities,” Michael Stegman, counselor to Geithner on housing issues, said in a speech in Washington.

Any proposal from the administration will include government support for low-income homeowners and rental housing, Stegman said.

Government support for housing finance should be “transparent, explicit and limited,” Stegman said. “Private capital should be the primary source of mortgage funding and bear the burden of credit losses.”

Stegman didn’t specify when Treasury would release a housing finance plan. Previously, he and Geithner have said a plan could come this spring.

Fannie Mae and Freddie Mac have been operating under U.S. conservatorship since investments in risky loans pushed them to the brink of insolvency in 2008. The two companies have relied on almost $190 billion in taxpayer aid to stay afloat.

There isn’t much spring left.

“Geithner Adviser Says Options for GSE Reform Need Further Study”

These are extremely studious people. Every reform requires “further study.” Years of study. Unending study.

Extremely studious.

Consider who would be forced to recognize the loss if it were taken quickly, and who will be forced to recognize the loss if it is taken slowly (as in the way we are doing it).

Are you talking about loss of political capital, or real capital?

The comment was that the economy would boom if ALL current jobs were done by robots.

Yes, because imagine how motivated those workers will be who have to invent a new job or starve. And some of them will succeed and bring us even better goods and services! The others? Try not to look, it’ll all be over soon.

The comment was that the economy would boom if ALL current jobs were done by robots.

Northeastener is correct. jobs move up the value chain. if all current jobs were done by robots, new, higher paying jobs would be created. created by the wealth that was being built at almost zero cost.

Yes, because imagine how motivated those workers will be who have to invent a new job or starve. And some of them will succeed and bring us even better goods and services! The others? Try not to look, it’ll all be over soon.

thank you Carl.

But it takes fewer people to do those things, then to make the products.

Where is the definition of capitalism “maximum employment”. It is about the efficient deployment of capital to receive maximum return. Automation allows for higher productivity through more efficient production.

Why are we complaining when our capital-based economic system uses technology and creates obsolete laborers and fewer higher-value, higher pay jobs? It seems many don’t understand the system in which they exist nor what it takes to continue to thrive in that system…

Why are we complaining when our capital-based economic system uses technology and creates obsolete laborers and fewer higher-value, higher pay jobs?

Because at the same time we’re offshoring and using illegal aliens to do the jobs that should still be available to the “obsolete” laborers. Not everyone can invent a new job for themselves.

Because at the same time we’re offshoring and using illegal aliens to do the jobs that should still be available to the “obsolete” laborers.

the number of possible jobs isn’t limited by the number of people available. there could be conditions where the number of jobs available exceed the number of people to do them. the only thing that limits jobs, is the limit of wealth. and presently, with all the government interference, we are destroying wealth. losses in jobs and wages will naturally follow.

Not everyone can invent a new job for themselves.

Like I said the other day, these “new jobs” require a lot of brainpower, more than the average person possesses and the bar continues to rise. Just for starters, if you aren’t good at math (as in Calculus, DE’s and Linear Algebra) you can forget about a bunch of those new jobs. This is one of the reasons so many people jumped onto the housing bubble … they couldn’t cut it with the “new jobs”, which aren’t all that plentiful to begin with.

Why are we complaining when our capital-based economic system uses technology and creates obsolete laborers and fewer higher-value, higher pay jobs? It seems many don’t understand the system in which they exist nor what it takes to continue to thrive in that system…

1. I don’t want angry mobs of unemployed youth looking for a meal roaming my neighborhood.
2. I’d hate to see my friends and neighbors and family and customers loose everything.
3. I like the security of a strong middle class.The broader opportunities for my son. When unemployment is high and there are no opportunities nepotism and bribery flourish.
4. I like democracy. A strong middle class is less likely to vote for oh say guys like Hitler and Chavez. Concentrating wealth in the hands a few destroys democracy.

if all current jobs were done by robots, new, higher paying jobs would be created.

Now that we’ve replaced the menial jobs with illegals, robots, and Foxconns, surely the Job Creators will create some high-paying high value jobs for the rest of us to do. Or are they witholding all their creative genius until they get no-regs-and-no-taxes?

<Now that we’ve replaced the menial jobs with illegals, robots, and Foxconns, surely the Job Creators will create some high-paying high value jobs for the rest of us to do. Or are they witholding all their creative genius until they get no-regs-and-no-taxes?

we haven’t replaced most of the menial jobs yet. it will be the highly profitable jobs that get replaced first (when the technology is advanced enough). surgeons will quickly be replaced when robots become advanced enough. then surgeries will be common place, safer and much cheaper. it won’t happen overnight, but it will happen. (unless we are overtaken by the poverty of socialism).

What do you think is the most likely result if huge numbers of jobs that can be automated are eliminated and replaced by very few highly technical jobs designing and maintaining the robots?

Vast numbers of people in the bottom 70% of the intelligence bell curve create new jobs for themselves through their innovation and creativity (and without capital).

Vast numbers of people in the bottom 70% of the intelligence bell curve follow Measton’s guess and end up rioting and or prowling the streets looking for a meal or something to do.

The government starts a war to send the unneeded former workers or never got to be workers to.

Some other result.

My guess is we get some of 2 and 3 and very, very little of 1.

What do you think is the most likely result if huge numbers of jobs that can be automated are eliminated and replaced by very few highly technical jobs designing and maintaining the robots?

those jobs wouldn’t be replaced by ‘a few highly technical jobs’. they would be replaced by many different types of jobs.

the world could become so wealthy that people could hang out a shingle and do just about anything, and make lots of money. as the world becomes more wealthy, it also gets more frivolous with its wealth. that’s the reason we had things like ‘pet rocks’ in the eighties. we won’t be seeing that kind of thing again for a while.

my prediction is that if the world went to free market capitalism, many good things would happen. new types of products would constantly be created. wages would increase or at least the value of fiat currency would steadily rise. either way, our living conditions would continue to improve. either way we could afford to buy more and save more.

lastly, i believe that employers wouldn’t be able to find enough people to work. jobs would out number the people available to fill them. employers would have to compete to get imployees. of course that would mean better working conditions. some jobs simply could never be filed. people could retire much earlier on just the money they were able to save. because in free market capitalism, there would be no social security.

it’s easy to be generous when you’re wealthy. no one would starve or be homeless in that kind of society. the very few that actually needed help would get it freely. but never from government. always from the kindness of fellow citizens.

sorry, i meant to say ‘emloyees’ of course.

never mind.

The HELL??

I mean seriously, that’s all I have to say.

What do you think is the most likely result if huge numbers of jobs that can be automated are eliminated and replaced by very few highly technical jobs designing and maintaining the robots?

It was a rhetorical question. My point in asking is if we think we know the end result of capitalism (high concentration of wealth, no middle class, high unemployment, etc), why aren’t we embracing another economic system*? Is it because there is no other system that efficiently allocates resources as well as capitalism? Communism certainly failed in that regard.

Bottom line, either embrace the system in which we exist and attempt to thrive in it, or change the system. But if you do change it, would the change be any better? Given my post below regarding what I feel the natural state is, I think no…

**It’s a trap… the end result of every “economic system” is failure**

Perhaps we could go the Julius Caesar route.

The rich bought slaves to do the work, leaving the masses without jobs. Cesar imposed huge taxes on the rich, used the tax money to purchase the goods of the slaves, then just handed out the goods to the poor whose jobs had been outsourced to slaves.

The rich, not liking the system, killed Cesar, and they were run out of town by the angry mob who ensured that Cesar’s nephew came to power and continued the system of taking from the rich to give to the now jobless masses.

Instead of invoking the misquote of Marie Antoinette, we could say, “The Liberatores didn’t get it either”.

You must not know too many wealthy people, if you think the wealthy will spread the wealth.

To them, money isn’t something to spend. It’s a way to keep score.

You get more “points” by screwing your employees and customers as much as you can get away with.

You get more points by arbitrary judgements on what people are “worth”.

A dollar gained by your “opponent” (be it government or your employees) is viewed the same as points “lost”.

The rich bought slaves to do the work, leaving the masses without jobs. Cesar imposed huge taxes on the rich, used the tax money to purchase the goods of the slaves, then just handed out the goods to the poor whose jobs had been outsourced to slaves.

Perhaps it will work out better to keep things simple and just enslave the masses. Although there’s that pesky democracy thing to get around…

+1 X-GS fixer.

Do you honestly think some football player “needs” 18 million dollars insteadof 14 million dollars? No, he just wants to SAY he makes 18 million dollars. Ditto for every other CEO, board member, movie star, and so forth.

And with numbers that high, they lose all sense of scale. To them, that extra $4M a year is a bragging point. To a typical HBB-er, that’s a $50K job for 800 households.

tj, you are either very naive or else you are unhinged. Actually thought your post was satire the first time I read it. But in light of some of your other thoughts, I’m going to have to agree with GS. You obviously don’t know a whole lot of rich people.

The ultimate denouement of free market capitalism is monopoly. I can think of nothing that stifles innovation and competition more than one entity holding all the cards.

He is saying that wages in the USA will fall to that of the third world, and there is nothing we can do about it. Entropy… everything obtaining the same energy level.

There is alot more than wages that companies consider when choosing where and how to build a product.

If it was just wages - Haiti would be booming. For the last 50 years you could hire someone there at about $1/day. Yet companies avoid the place like the plague.

Countries that have:
Rule of law
Private Property
Infrastructure
Educated Work Force
Work ethic of the work force
Low crime
Low corruption
Low taxes
etc.

In short - personal liberty and economic opportunity.

America used to have it all. Now after many decades of the nanny state growing and growing, we are losing it.

I don’t think that word means what you think it means.

Inconceivable!

At it’s simplest, entropy is an expression of disorder or randomness. It also helps explain why there can be no “balance” or fairness in economic terms between two systems. Protectionism is simply isolating system. Trade is systems interacting. Per wikipedia: total entropy of any system will not decrease other than by increasing the entropy of some other system.

My comment was in regards to the statement “too many sociopaths in charge leads to war and collapse of the nation.” To lay blame on “sociopaths” is to not recognize the truth, that this is the natural state of existence.

America used to have it all. Now after many decades of the nanny state growing and growing, we are losing it.

After 30 years of the tax burden being shifted onto the middle class, which has experienced flat or declining wages, America is losing a lot of other things.

“America used to have it all. Now after many decades of the nanny state growing and growing, we are losing it.”

Nanny state? Where is my free healthcare and free college for my kids? Where is my guaranteed job? Where is my government provided house?

Nanny state? Oh please.

If it was just wages - Haiti would be booming. For the last 50 years you could hire someone there at about $1/day. Yet companies avoid the place like the plague.

Not really. My brother used to work for Hanes, and they used to outsource a lot of textile work to Haiti, until the Chinese undercut them.

“To lay blame on “sociopaths” is to not recognize the truth, that this is the natural state of existence.”

No actually it isn’t. Order can and does, indeed, spontaneously arise from chaos and can be maintained for extremely long period of time or transformed into other ordered states.

Happens every day.

“nanny state “

There is a loaded term.

There is a loaded term.

For some reason, it reminds me of a loaded diaper. Which the nanny had better change right now before Albert James Fauntleroy The Third has a major hissy fit.

AZ, you would absolutely be my favorite neighbor -

It seems every nation on the planet is engaged in a trade war for the benefit of their population at the expense of the “not their people”

See my comment above regarding competition and entropy.

As far as the US goes, we have been losing the competition among nations and economies since the 70’s. The only question left to ask is this because of ignorance and incompetence of our elected leaders or because the 1% have sold the other 99% of the US out (or some combination of the two)?

“because the 1% have sold the other 99% of the US out”

Packaged and sold to you as the “invisible hand of the free market” at work…

we have been losing the competition among nations and economies since the 70’s. The only question left to ask is this because of ignorance and incompetence of our elected leaders

protectionism, higher taxes and more burdensome regulations have made our economy weaker. all things that ignorant and incompetent politicians vote for.

“The only question left to ask is this because of ignorance and incompetence of our elected leaders or because the 1% have sold the other 99% of the US out (or some combination of the two)?”

Precludes the 3rd option that I believe is the answer. The 1% control the elections through campaign contributions, so ensure the politicians that win are the ones that are on their side.

The 1% are the government.

The 1% own the government? Not really, but the majority of voters are more concerned with their pet perversions and personalities than issues of corruption and bribery.

The 1% own EVERYTHING in this country.

We ARE a plutocracy.

Everytime you see someone write “the 1%”, just substitute “the boooogeyman”. About same level of discourse.

“Only someone that has ruled out any possible protectionist trade policy would assume such a thing is inevitable.”

If the US was forced to survive on only what can be produced in the US, the standard of living would decline. The only question would it be more or less of a decline than continuing down the current path.

If the US was forced to survive on only what can be produced in the US, the standard of living would decline.

absolutely true.

It might decline on average, but it wouldn’t decline for everyone. If only there were a happy medium where beneficial trade could occur, but only in balance.

It might decline on average, but it wouldn’t decline for everyone.

it’s critical to understand that the standard of living would decline for everyone in the world, not just the united states!

“the 1% … same level of discourse”

Seriously. At least when the Tea Party had their rally not a speck of garbage was left on the National Mall, no fights broke out, nobody overdosed on drugs, nobody got raped.

Those Occupiers need to occupy a shower and go get a job!

It might decline on average, but it wouldn’t decline for everyone.

it’s critical to understand that the standard of living would decline for everyone in the world, not just the united states!

I’m talking about different groups within the USA. If we were forced to live on what could be produced in the USA, some people’s standards of living would go up, even if the average were worse. And because mean != median, it’s possible that could actually be more than 50% of the people. But like I said, there’s a happy medium that would be even better.

But I’m curious if you think the way things are *right now* is better for the *majority* of people than if we did it all here?

The 1% bogyman?

How could I have forgotten it was the 99% who needed $16 TRILLION in bailouts.

Oh wait…. THEY DIDN”T.

If we were forced to live on what could be produced in the USA, some people’s standards of living would go up, even if the average were worse.

some people’s standard of living might look like it’s going up in relation to how fast others are going down. but i promise you that declining world wealth, from restricting trade, would affect everyone. maybe not dramatically, but there would be an effect.

But I’m curious if you think the way things are *right now* is better for the *majority* of people than if we did it all here?

right now, we should be trading with everyone that will trade with us. trading amplifies or enhances statistical wealth. not one single world leader understands this simple truth. if they did, there would never, ever be another trade war. all tariffs would come to an abrupt end.

Each time you here someone bleat “1%”, think boogeyman and recognize end of functional discourse. So it goes

right now, we should be trading with everyone that will trade with us.

With the exception of places like Cuba I thought we already were? And paying them in IOUs instead of goods produced here. Does that meet your definition of “trading”?

It has occurred to me that creative and people oriented careers may become the best paying jobs.

It has occurred to me that creative and people oriented careers may become the best paying jobs.

i don’t think that anyone can know the answer to that question. maybe we’ll start making things that science fiction hasn’t even imagined yet.

If you don’t know answer, then you can’t postulate it as the solution.

I’ve lived through the “better jobs will replace the old ones.” It was total bullcrap.

i don’t think that anyone can know the answer to that question. maybe we’ll start making things that science fiction hasn’t even imagined yet.

There’s no doubt that will happen. But it’s worth noting had few jobs the “creative” places actually create. It’s no like in the old days when GM or IBM had hundreds of thousands of good paying positions.

Contrast that with places like Google, which only employs 30,000 people, and they’re a heavyweight. And to get a job there you need to be both VERY creative and smart. The few people I know who work there have advanced degrees.

Contrast that with places like Google, which only employs 30,000 people, and they’re a heavyweight. And to get a job there you need to be both VERY creative and smart. The few people I know who work there have advanced degrees.

And I’m here to tell you that being smart and creative while self-employed isn’t the road to riches. Especially when you have those types who want you to volunteer to do very time-consuming work that others have paid you for.

Eff ‘em.

If all jobs were done by robots TJ believes better jobs would come.

Well we’ve already seen that this is false.
Robots are just a cheaper form of labor.
Technology has already replaced a large # of jobs and moving jobs to china is not much different than robots.
Initially technology created jobs filled the gap, but now engineering jobs are being outsourced too. Then the gov created a credit bubble to fill the gap. Now that bubble has burst and unemployment/underemployment is sky high. Benefits are crashing, the cost of living is rising.

If all manufacturing can be done with robots, and even thinking jobs can be done by robots. I heard on the radio this am about a company that makes a computer to grade essays. IBM has computers that can beat the best at chess, and act as a doctor. Cannon had an article last month saying they plan on going to 100% automation to make cameras. Netflix and Amazon etc have replaced 100’s of thousands with 10s of thousands and I would imagine this # is shrinking.

Tell us TJ where are the new jobs coming from

so many replies and so little time. ok, this one has similar qualities to the others, so i’ll answer here.

If all jobs were done by robots TJ believes better jobs would come.

correct

Well we’ve already seen that this is false.

i don’t think so.

Robots are just a cheaper form of labor.

that humans no longer would have to do.

Technology has already replaced a large # of jobs and moving jobs to china is not much different than robots.

not much different than robots? then what are the similarities?

Initially technology created jobs filled the gap, but now engineering jobs are being outsourced too.

technology doesn’t create jobs, it eliminates them.

Then the gov created a credit bubble to fill the gap.

the government never knows what it’s doing.

Now that bubble has burst and unemployment/underemployment is sky high. Benefits are crashing, the cost of living is rising.

all of these things are because of government intervention in the economy.

If all manufacturing can be done with robots, and even thinking jobs can be done by robots.

if??.. what’s the question?

I heard on the radio this am about a company that makes a computer to grade essays.

freeing more time for the teacher to teach.

IBM has computers that can beat the best at chess, and act as a doctor.

so they can entertain you while they cure you. and you think there’s a downside to this?

Cannon had an article last month saying they plan on going to 100% automation to make cameras.

great! now we can get cheaper cameras made with better precision than possible with humans. and the guys that made the cameras can move on more productive jobs. it’s a win, win.

Netflix and Amazon etc have replaced 100’s of thousands with 10s of thousands and I would imagine this # is shrinking.

if you’re talking about employees, (i got the spelling right this time), then it’s great news again. it means that netflix and amazon have become more efficient. now labor that was used inefficiently, can move on to even more production.

Tell us TJ where are the new jobs coming from

the come from where they always have came from.. the building of wealth through production.

When I was growing up, my county had a VoTech High School. You had to apply and the “problem” kids weren’t welcome and didn’t make the standards. And they had to get through all their academic requirements as well as the classes in their “major.” If you could decide in the 8th grade what you wanted to do with your life and it didn’t require college, you could try to get into VoTech.

Your county is/was the exception, not the rule.

Other than “Home Eco”, there is NO vocational training around here. High school is geared to either college prep, or teaching the rest of the wretched refuse just enough to pass the NCLB testing.

Agreed, neither makes an appealing argument. So it boils down to who sucks less, and even that is a tricky choice.

Yup, because different people have different priorities and we don’t get to choose other people’s priorities for them.

This might help you decide:

http://www.reuters.com/article/2010/09/28/us-usa-democrats-offshore-idUSTRE68R40I20100928

Yeah - what obama needs - even MORE time in government.

He should have spent 10 years running his own small business while trying to make payroll and adhering to every crazy regulation and tax that comes out of Chicago and DC.

Well maybe so, but you can buy homes in Sacramento itself starting at $180k, so the sticks and bricks must cost about $90k for 2000 sq ft if the ‘permit’ is $90k.

http://www.newhomesource.com/communitydetail/builder-11305/community-55685

You are all correct to some degree. I was oversimplifying the “$90,000 Fee” to the city. That actually includes water, sewer, traffic mitigation, school impact AND building permit fees.

The city (in Placer county) does not really get the whole $90,000. In fact, they get very little of it.

However, they do charge $150 per lineal inch for every oak tree you cut down, so if you have 10 oak trees inside your building area, and they average 12″ in diameter, you get to pay $18,000 in Oak Tree Mitigation Fees.

So that equals $27/SF before you buy the lot or go vertical with a 2×4…..

This is why reproduction cost is important to appraised value. It isn’t getting any cheaper…..

I’ve heard sticks/bricks being as little as high $30s psf ($38 I think was the lowest number I heard), so perhaps less than $90k to build a 2,000 footer.

If I understand the general location of Jingle, it’s a nicer area, not one where you can buy for $180k. I’m guessing where he is the newer homes there are substantially higher cost (larger, nicer, etc.), and thus higher permitting fees.

For the lowland areas (not in the foothills), I’m guessing permitting fees are much less ($40k?).

Correct, RW. In Sacramento, permit fees are totalling less than $40,000. In outlying areas they very, but Rancho Cordova was $70,000 and dropped to $50,000 to stimulate building.

Name of carrier, por favor.

Cricket. The phone is the ZTE Score x500. No contract. Ever. Android OS. Including tax in my state, $55 month.

You might also check Virgin, Trac Fone, Boost.

Bush was president. His Secretary of the Treasury and his Chairman of the Fed were the ones begging for it. His Secretary of the Treasury implemented it.

Why vote for something when it will pass without you, and then you get to blame the other party for something that you would have voted for had it not been guaranteed to pass without you?

I do not own it. If did not vote for any of the Democrats that voted for it, nor did I vote for the president that signed and implemented it. I called my senators, wrote my senators, and emailed my senators begging them not to vote for it.

how many starving kids could be fed and how many teachers could be hired

And how many starving children of GM employees — and employees of other parts companies — were fed by the auto bailout? That GM bailout was JOBs, you you frozen sundae slice.

The bank bailouts were, what? Filling in a hole in a computer.

“And ALL of it was to save the UAW”

And thousands of small businesses in Ohio, Indiana, and Michigan that depend on GM and its employees.

I’ve enjoyed Bradbury’s remarkable insight of consequence. Thanks for the follow-up!