The Housing Bubble Myth: A Construct of the Left?

Everywhere you look today, it seems like people are talking about a "housing bubble". The MSM has been hyping this story for several years now, and while the market is definitely slowing down, there is no real evidence that the "bubble" is about to burst. Carl Steidtmann, chief economist at Deloitte Research wrote an interesting piece in July of this year that goes into great detail on why there is no housing bubble to burst. The following month Neil Barsky, managing partner of Alson Capital Partners, LLC., wrote another myth-busting piece in the Wall Street Journal (here via Nations Building News Online) that illustrates why past and current housing markets differ, and why the "bubble" won't burst anytime soon. In fact, he warns of a shortage of housing.

Despite these strong and convincing arguments, there are many who are convinced that the housing market is way over inflated, and is due for a major 'correction' soon. Their reasons for such a belief are many, but I can't help but notice that many seem to also hold generally liberal political views. I have no doubt that there are many conservatives who agree that a housing bubble is real and about to burst, but my suspicions are that that group is quite a small subset of the housing bubble crowd. I would go further and argue that these conservative 'bubblers' are probably the analytical type who's view is that the easy access to mortgage loans seemingly without regard for credit worthiness has 'artificially' brought too many buyers into the market, pushing up home prices to unsustainable levels. No doubt there is some truth to that viewpoint, but I believe that segment of the housing market is a significant minority.

The bigger question, and the real focus of this post is the apparent political component to this important debate.

Their position goes essentially like this: First, the GOP, led by GWB and Alan Greenspan made access to credit very easy by lowering short term interest rates, and more importantly, by pumping lots of liquidity into the economy, which made borrowing and buying more available to people who would not have had access to mortgages in the past due to credit and/or income issues. Second, after these people bought into the market with low or no-interest loans, assuming that the market would continue to appreciate, the GOP-controlled Congress changed bankruptcy laws to make personal bankruptcy more difficult, and consequently foreclosure easier. Couple this with the false perception of a poor economy and rising unemployment rates, and you have the beginnings of a "bubble".

Then, as rates began to rise (note the evil Alan Greenspan again) from their historical lows, many of the people with adjustable loans found that they could not make the payments, and also, now that credit began to tighten, could not refinance their loans, could not declare bankruptcy, and were foreclosed. This allowed evil, rich Republicans to buy these foreclosed properties at a giant discount, then sell them later for quick profit. Our friends at the Daily Kos illustrate this point clearly.

Unfortunately, the facts just don't bear this scenario out. Yes, bankruptcy laws have changed, and yes, rates are rising slightly, but are still very low. More importantly, the economy is very solid. Add in the opinions of the experts (above and below) along with the fact that regional economic conditions are far more indicative of healthy or not-so-healthy housing market, and it becomes clear that the only thing bursting is the MYTH of a housing bubble.

Regarding regional situations, I live in one of the hottest real estate markets in the country: San Diego County California, and know it well from a buyer's perspective. I bought my first house here in 1996 at the bottom of the last housing bubble crash. In the years prior, the economy in San Diego was heavily influenced by military spending. There was (and still is) a large Navy and Marine presence, and the large industrial economy was mostly defense-related. In the very large scale-back of defense spending and base closings following the fall of the Soviet Union and the end of the Cold War, San Diego, as were many other markets, was hit very hard, and the recession of the early 1990's put the housing market here on its heels. Foreclosures were everywhere, as defense workers moved elsewhere to find jobs, they had bigger mortgages than their homes were worth, and many just walked away from them.

It was sad, and I couldn't bring myself to profit from their misfortune. I ended up buying a new, 2,400 square foot home for $169,000 that had stood unoccupied for more than a year. It was so bad then that the original builder of the tract had even gone bankrupt. There is no doubt that there was a housing bubble here then, and equally no doubt in my mind that no bubble exists now. I still own that house today, and it is worth about $680,000 based on a search today.

But to get back to the people who believe in the "bubble", it is that envy drives much of their enthusiasm for a housing 'bubble'. As Dr. John Ray writes, envy and and a strong need for "equality" is the driving force behind much of the leftist agenda. Many people are angry that so many have gotten rich (on paper anyway) from the recent strong appreciation in housing prices. They believe that it is unfair that many are left out of the housing market since prices have risen faster than incomes. They seem to actually relish the idea of a 'bubble', and are even hoping for a crash to 'show those rich people' that they are not so rich after all. It is really the classic liberal cause; If somebody is getting rich, then somebody is getting poor as a result. Too bad these people don't understand the concept of wealth creation.

Their anger toward anyone who disagrees with their view is becoming as vicious as the anger directed at those of us who remain unconvinced of anthropomorphic global warming. Consider this respected financial columnist from a San Diego area paper who recently wrote that a housing 'bubble' doesn't exist here in San Diego. Be sure to read the comments from readers and see if you don't agree that it is unwise to rile these people up. In fact, Mr. Chamberlin, who, by the way I have read and followed for years and highly respect, wrote a follow-up piece wherein he described the vitriol sent his way over the original column. Be sure not to miss the comments to that column as well.

Is there a housing bubble? No, the facts don't support it. Will housing prices rise or fall? They are softening somewhat here in San Diego, and time-to-market is lengthening, but I do not believe a crash in prices is coming since the data I have seen does not support such a conclusion. But there certainly seems to be many who are hoping for such a crash, and, not surprisingly, many of these people have a political agenda aligned with the Left.



Tags
Housing Bubble
Real Estate Bubble

More on the NSA Electronic Evesdropping Program

As the NY Times continues to facilitate the illegal leaking of classified information, thus degrading the ability of the United States government to protect Americans from foreign terrorisim, the blogosphere is repleat with legal experts who can speak elequently on the legality of the program, and are clearly a much better source for information than the hideously biased MSM.

Some excellent sources:

Powerline
Baseball Crank (practicing attorney)
Volokh Conspiracy (via Baseball Crank)
Cass Sunstein (via Baseball Crank)



Tags
NSA
Surveillance
FISA

The President's Secret Surveillance Program

The New York Times broke the story on December 16th, 2005. In the aftermath of 9-11, the president authorized a secret eavesdropping program on international phone calls and emails originating within the United States. The order did not require court-issued warrants, and that has the Left even more frothing for George Bush's head—if you can believe it—than ever before.

First of all, the leaking of the existence of the program in the first place is illegal, and second it certainly helps the terrorists that the program was intended to catch. Moreover, it may even mean that some future terrorist act, possibly worse than 9-11, cannot not be stopped as the terrorists will switch to new forms and paths of communication, now that they know they are being surveilled.

The legality of the program is obviously under intense scrutiny, as the both the Blogosphere and the MSM investigate and analyze. There are legal experts in the Blogosphere who are far more qualified than I to write on this important subject, and I will reference below their excellent posts that you should read in detail and follow all the links. First, though, I want to quote from the president's recent statement prior to a press conference last week:

"And after September the 11th, the United States Congress also granted me additional authority to use military force against Al Qaida.

After September the 11th, one question my administration had to answer was, using the authorities I have, how do we effectively detect enemies hiding in our midst and prevent them from striking us again?

We know that a two-minute phone conversation between somebody linked to Al Qaida here and an operative overseas could lead directly to the loss of thousands of lives. To save American lives, we must be able to act fast and to detect these conversations so we can prevent new attacks.

So, consistent with U.S. law and the Constitution, I authorize the interception of international communications of people with known links to Al Qaida and related terrorist organizations.

This program is carefully reviewed approximately every 45 days to ensure it is being used properly. Leaders in the United States Congress have been briefed more than a dozen times on this program. [emphasis added.]

And it has been effective in disrupting the enemy while safeguarding our civil liberties. This program has targeted those with known links to Al Qaida.

I've reauthorized this program more than 30 times since September the 11th attacks, and I intend to do so for so long as the nation faces the continuing threat of an enemy that wants to kill our American citizens."

Powerline is the best source on this subject:

Powerline, Powerline, Powerline, Powerline


Tags
NSA
Secret Surveillance
Bush Spying

A Silent American Revolution

Is there a revolution underway in America? Have parts of the bureacracy of the US government been in silent revolt against the duly elected executive?

Consider these events and decide for yourself:

1. Plamegate. Did elements within the CIA who disagreed with the administration's Iraq policies deliberately select Joe Wilson, the husband of CIA officer Valerie Plame, in an effort to discredit the administration with his highly critical post-Niger "yellowcake" uranium report? Wilson was not required by the CIA to sign a confidentiality agreement prior to making the trip to Niger, nor was he required to even give a written report upon his return. Was that omission, usually a requirement under such circumstances, a deliberate effort to allow Wilson to write his infamous op-ed piece? By appearances, it looks like his trip was simply an effort by at a minimum a rogue CIA operation, and possibly something even larger. Too bad most of what Wilson had to say in his report turned out to be lies and untruths. In fact, there WAS over 500 tons of yellow cake uranium found in Iraq, and it's likely source was Niger.
   
2. CIA. Plamegate was merely a battle in an on-going war between the CIA and the Whitehouse. Following the resignation of former director George Tenet, Porter Goss was named to head the agency, with clear marching orders to reform the organization post-9-11, and to attempt to purge the organization of politically partisan operatives who sought to undermine administration policy.
3. The State Department. Former Speaker Newt Gingrich, in a speech in 2003 as well as in subsequent articles has written of a systemic, institutionalized resistance by certain parts of the State Department, specifically career officers, to the authority of the president. He suggests that this has been going on for at least several decades now. Here is an excerpt from a recent Gingrich article in ForeignPolicy.com (reproduced with permission by American Diplomacy):

"Some critics, including Deputy Secretary of State Richard Armitage and former Republican Rep. Jack Kemp of New York, have taken me to task for my remarks at the American Enterprise Institute on April 22, 2003, where I argued that the State Department was engaging in a “deliberate and systematic effort” to undermine Bush’s foreign policy. Yet that charge has proved true historically, and additional examples have emerged even since the speech.

Only six days following my remarks, Bush made the following statement to a group of Iraqi Americans in Dearborn, Michigan: “I have confidence in the future of a free Iraq. The Iraqi people are fully capable of self-government.” He also told them that “You are living proof the Iraqi people love freedom and living proof the Iraqi people can flourish in democracy. People who live in Iraq deserve the same freedom that you and I enjoy here in America.”

Contrast that vision with a recent classified report by the State Department’s Bureau of Intelligence and Research titled “Iraq, the Middle East and Change: No Dominoes,” which was leaked in March 2003 to the Los Angeles Times. As reported by that newspaper, the document stated that “liberal democracy would be difficult to achieve [in Iraq] . . . Electoral democracy, were it to emerge, could well be subject to exploitation by anti-American elements.” And according to an anonymous intelligence source interviewed by the newspaper, the thrust of the report argued that “this idea that you’re going to transform the Middle East and fundamentally alter its trajectory is not credible.”

The Los Angeles Times has also reported that U.S. diplomats (insisting upon anonymity) “said they are profoundly worried about what they describe as the [Bush] administration’s arrogance or indifference to world public opinion, which they fear has wiped out, in less than two years, decades of effort to build goodwill toward the United States.” Meanwhile, as reported recently by National Review Online contributor Joel Mowbray, a Bush administration official believes the outgoing director of policy planning at the State Department, Richard Haass, has “made it his mission to loosen sanctions on Iran,” despite Bush’s designation of Iran as part of the “axis of evil.”

None of the people involved in these activities or 'leakers' were elected to serve the people. All are either career officers, hired to execute certain tasks as directed by their superiors. Their surperiors were either hired (if career officers), or appointed by the President if a political appointee. All serve at the pleasure of the President. The President is the chief executive of the United States. His job is to execute the laws enacted by Congress. The various departments under his command are there to serve him and his policies. Whether those working in these departments agree with the policies of the President is irrelavent. If their personal views interfere with their duties as agents of the United States, and their abilities to carry out the policies as directed by the President, then they should at a minimum be fired, and possibly charged with treason.



More views on this subject:

Powerline
More Powerline


Tags
CIA
Joe Wilson
Yellowcake
State Department

Able Danger and its Inconvenient Facts (as Ignored by the 9-11 Commission) **UPDATED**

[Scroll down for updated analysis*]

Andrew McCarthy has an excellent article today in the National Review Online on Able Danger, and how the 9-11 Commission utterly failed in its investigation. In fact, this article outlines what certainly appears to be a cover-up of the findings of Able Danger by the 9-11 commission.

Here is an especially pointed excerpt:

Consider for a moment the dimensions of this omission by reference to another current controversy. The Bush administration is being accused by Democrats of lying about intelligence to justify the invasion of Iraq. One of the key allegations involves the purported suppression of State Department dissent from the conclusion that Iraq was seeking to develop nuclear weapons.

But the objections lodged by State's intelligence shop were not suppressed. They are set forth in the 2002 National Intelligence Estimate, although relegated to the footnotes. Essentially, the administration is said by Democrats to have "lied" because, even though it did acknowledge the dissenting information, it purportedly minimized the dissent's significance.

The 9/11 Commission, by contrast, did not do even that with Able Danger. It didn't report the dissent at all. Not in the text, not in the footnotes, not anywhere. It tried, Pravda-like, to erase completely from historical memory any version of events but its own.

Think about that. The commission's mandate was to conduct a thorough investigation and tell us exactly what it found. Its job was not to produce a carefully marketed narrative so media-starved commissioners would have a best-selling launch-pad from which to score sugary interviews. This panel was not supposed to have a vested interest in a single, definitive, air-brushed version of events. It was supposed to give us the facts as it found them, including on disputed issues it could not resolve. Why on earth did it decide to kill Able Danger?

*Many questions remain remain unanswered in the Able Danger story, as Mr. McCarthy so elequently writes in his column. The main issue seems to be the potential coverup by the 9-11 Commission and its staff over the allegations made by the Able Danger operation. Many questioned the inclusion of Jamie Gorelick as a commissioner, given that she was the author of the infamous "wall" between domestic and international intelligence gathering and analysis operations.

A thorough investigation of the Able Danger project and its findings must be conducted commencing immediately, as well as a thorough investigation of the 9-11 commission and staff to determine if they acted properly, especially given the clear conflict of interest of at least one commissioner, and lat least part of the commission staff. The safety of our country and our children may be at stake.


Previous posts:

Able Danger and the 9-11 Commission
Able Danger: A Third Source Corroborates Initial Claims
Able Danger Getting Uglier by the Day
Able Danger: Were the 9/11 Hijackers Known to the US Government As Early As 1999? ***UPDATE***



Tags
Able Danger