Where’s The Recovery? Discussing the Mess We’re in Today

February 28, 2010
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Growing weary

Anyone else growing weary of hearing about how this economic bog we’re in is all W’s fault? Yes, 43 was a fiscal knucklehead and absolutely contributed to the mess we’re in today but it’s your mess now, Obama. Regrettably the President’s focus is not on housing and the economy, it’s on healthcare.

When Bush 41 was defeated by Bill Clinton it was all about ‘the economy stupid.’ I can already see those signs coming out again as we near the mid term elections. Mr. Obama’s focus on a healthcare program which at the very least will cost business a per diem on every new worker hired highlights how little he understands or cares about the severity of our housing and economic downturn.

It’s about jobs, Mr. President…and right now housing and jobs are both showing little signs of recovering.

Realtor, Speaker, former Indianapolis radio personality. Least prettiest person ever on HGTV. Crashed in a helicopter and a Cessna 182. Seven lives left. Blessed by an amazing family!


  • Duke Long

    The REAL Housing Market. I hope someone is paying attention!

  • http://blog.mdsuburbanhomes.com Ken Montville

    I’m not ready to through Obama overboard yet. I can’t debate the rest of the video, though. It’s a mess and it’s going to get messier. The sad part is that both sellers and buyers are in some sort of denial. Sellers (at least the ones with some equity) seem to think they can sell their house like it’s 2005. Buyer’s, on the other hand, think they can get a mortgage at the drop of a hat or, more likely, are just giving up.

    Unless someone turns the credit spigots back on were really in for a rough ride.

    All I can say is I sure hope Wendy’s gave you a double bacon cheeseburger with fries for that nice product placement! :-)

  • http://thewestchesterview.com Ruthmarie Hicks

    In general the focus on health care is actually good in the long run. We can not have 1/6th of the economy tied up in health care and the costs of same are holding back employment. Benefit costs are impacting the decision to employ and that is also causing companies to throw older (more expensive) workers off a cliff. It is also one of the top reasons why people lose their homes and file for bankruptcy.

    The other focus needs to be jobs, jobs, JOBS!! But not just jobs – jobs that actually PAY. One of the issues that we have in this country is that very few fields are lucrative enough. Too many H1-B visas were issued, and too many other high-tech jobs have been outsourced. This has pushed salaries into an abyss. Ask any engineer or scientist or programmer. I was talking to one programmer and his earning capacity has fallen from about $150k to under $50k in a matter of a few short years. In NY that’s near the poverty level. The difficulty is that the only careers that will actually pay the bills are in business, finance, banking and MAYBE law and sales. Law is now undergoing a lot of outsourcing – that combined with glut of J.D.’s coming out of the pipeline eliminates yet another avenue for a decent income. I’m not one to spout protectionism – but for God’s sake, something has to be done about the implosion of salaries particularly in fields that require extensive education. The scope of jobs available that are actually lucrative are far too narrow for society to thrive.

  • http://unhub.com/susieblackmon Susie Blackmon

    Corporate America needs to stop the ridiculous pay to the CEO’s, etc. Their ‘pay’ has gone up drastically over the years while ‘employees/workers’ have pretty much not even experienced a noticeable spike on a graph over the same period.

  • http://blog.realtyinfusion.com Justin Boland

    Crunching numbers for an article recently, I was really struck by the fact it would have been cheaper to pay off up to $200,000 of the principal on every underwater mortgage in the United States back in February 2009. Based on my admittedly limited knowledge of macroeconomics, I cannot help but think this would have dealt with several major problems (the scope of the subprime debt bomb and the 2009 drop in consumer spending and confidence levels) and it would have clinched a 2nd term for Obama right out of the gate.

    Am I insane? Or just totally wrong?

    • http://agentgenius.com Benn Rosales

      on the net side, it would have accomplished the cash infusion the banks needed and uprighted the default leans leaving the banks to adjust payment schedules based on the new principal balance. Ultimately however, the resetting interest rates on arms and other exotic loans would still have probably tidal waved many homeowners. The other side of the argument was why would we give over leveraged investors $200k? I say it’s a bailout for Americans rather than Bank of America.

      In theory it all sounds great.

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  • http://www.granthammond.com Nashville Grant

    Perhaps that buyer shouldn’t be that grateful after all, if mortgage rates are 7 or 8% in a few years home prices will fall drastically. The relative affordability of homes will most likely rise as the market corrects, especially if it is a market guided correction and not a government enforced one. What scares me is the impending stagnation is sales and what that will mean for our economic recovery. I read a statistic that said the US Housing Market and related industries pour over 17% of our country’s GDF into the system…what if that were to just, go away? Wow.

    • http://blog.mdsuburbanhomes.com Ken Montville

      Nashville, I think you’re being too optimistic. 7% rates will probably be here by late 2010 or early 2011 at the latest. Your are correct in your assertion that home prices will fall but one of the by-products of that will be increased foreclosures and short sales which make the home affordable in price only. There will be repair costs and the enormous glut of inventory. People without jobs will have a hard time renting, homelessness will increase, crime will increase as people become more and more desperate.

      Or the banks will be forced to play ball and things will work out like they did in the early 80s with double digit interest rates.

      • http://www.granthammond.com Nashville Grant

        Ken, you paint such a rosey picture!

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  • http://dotloop.com Nick Sweeney, DotLoop Social Media

    While I don’t agree with everything you said, I do have to applaud the quality of your argument. If the only reason you can afford to buy a home is due to an extra $8000, then you can’t afford to buy a home. In some markets, $8000 barely covers a year of maintenance costs on a home.

    You’re right that the housing stimulus was like pouring sugar into a ten-year old (great line, by the way), but some forget that prior to this extra sugar, the ten year-old had just finished gorging on a whole jar of cookies. Housing prices were over-inflated for years, yet no one cautioned against it. The market itself was shaky long before any government stepped in.

    As for the foreclosures, the lenders took on the risk as much as the homeowners, so both are at fault. But since it may be a bit more work to renegotiate a lot of defaulted mortgages, lenders would rather just kick the people out. The banks lose (they have a house that is still not able to be sold for what is owed) and the homeowners lose (they end up living in their Hondas). So why not compromise?

    Last I checked, the taxpayers lent the banks money interest-free. It’s now time to lend some of that grace back. Until lenders realize that nobody benefits by kicking people out of their homes, recovery will never happen.

    Great post, Greg!

    • gardenknome

      why cant you afford the home after the stimulus? we bought ours, and the stimulus gave us the money for a 20% downpayment, so , no pmi! sure, there are maintenence costs, but if you dont live outside your means, like us, we are paying morgage for 500/month, less than our apartment!…..

      just work hard, pay your bills, and dont vote in anymore liberals, – and for a better analogy, try this, a stimulus is like putting a cheap bandaide on a wound, works great at first, but you know that it will fall off after an hour!

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