For the first interview in our “ask the industry insiders” series, we turn to Dan Klusman, Director of Communications for the Master Builders Association of King and Snohomish Counties, the group behind the website Right Time to Buy.
Rather than pick and choose what portions of the interview to share, I’m just going to include the full thing, in order to give Dan a completely fair shake. So without further ado, Dan Klusman answers our questions about the Seattle area real estate market.
1) Median home prices have been falling in the Seattle area since late summer 2007, and are down 10-20% from their peak values (source: NWMLS). Given the drop so far, how much further do you expect prices to fall?
Let me start by putting my cards on the table. Some of your data-specific questions are better answered by other experts who are drenched in data every day.
1a) If you believe that home prices are at or near the bottom, what specific evidence can you cite to support this view?
I predict we are at or near bottom for drop in home prices. We may bump along the bottom until mid-2009. I don’t have a specific data source for my predictions. I’m basing my opinion on a number of factors including the fact that several city-specific areas have remained strong during this downturn; values of remodeled, resale homes have been strong throughout 2007; and some types of homes (such as those that are Built Green or otherwise environmentally certified) have continued to sell faster and hold their value. We haven’t seen precipitous price or value declines across the board in all types of housing in all areas.
Some may think I’m being optimistic but I’d put out that I’ve been right more times than those who’ve predicted that our Puget Sound market would follow Detroit and Southern California’s off the cliff.
However, the single biggest threat to the housing market is the limited supply of credit and home loans. A thaw in the mortgage market would help, whereas additional, significant blows to the economy or reducing mortgage availability further would make things worse.
1b) If you believe that home prices will drop further, what makes it a smart decision for potential home buyers to buy a highly leveraged asset in a declining market?
We’re experiencing a short term decline in what is a healthy market over the long term. Now is a good time to buy if you have a steady job, good credit, have money for the down payment and can make the mortgage. Plenty of choice in inventory available. Sellers and builders may be willing to deal. Also, FHA loans have become a great opportunity for first time buyers. The current FHA loan limit is about to go down from $567,500 to $506,000 in our area and the required down payment is about to go up from 3% to 10%. [Editor's note: while the FHA limit and the conforming loan limit through Fannie and Freddie are both being lowered to $506,000, the FHA minimum down payment is only increasing to 3.5% (thanks for the clarification, Rhonda).] For many people that makes it a good time to buy. May not be the right time for everyone but we’re not saying it is.
2) Housing and population data from the Census Bureau shows that from 2000 through 2007, construction of new housing units in King, Snohomish, and Pierce County exceeded household growth by 60% (see this post for further details and citations). During this same time, incomes increased less than 30%, but home prices increased over 85%.
How do you explain this rapid increase in Seattle-area home prices that has been so disconnected from the fundamentals that traditionally drive the housing market?
An excellent question and one that I think has several answers. I’m going to be brief in my response but I know people who can talk your ear off about this stuff. In general, we believe there is a lack of affordable housing in our region and that homes prices have increased substantially over the last decade for a variety of reasons. Looking at the big picture, central Puget Sound is a growing region with a strong and diverse job base. As residents look for housing, they run up against multiple roadblocks limiting the supply of housing near employment centers, including:
GMA. The Growth Management Act has been a double edged sword in this area. While it has prevented the overbuilding that now plagues some areas like Arizona, where partially-built inexpensive spec homes now lie abandoned, there is no doubt it has artificially increased home prices over the years.
Increased regulations. An ever-increasing number of local regulations (including impact fees) have driven up the price of homes. Research by UW Economics Professor Theo Eicher pegged the price of regulations at $200,000 for a Seattle-area single family home.
Lack of density. Local jurisdictions across the board have resisted attempts and, at times, outright ignored their responsibility to meet housing targets under GMA. Low supply + strong demand = higher prices. Increased density (whether it’s small lot sizes or allowing more multi-family development) will bring more affordable housing choices.
Traffic concurrency. While it sounds good, traffic concurrency requirements can create leapfrog developments, moving congestion from one community to the next.
Reductions in land supply. Local regulations have also removed buildable lands from the market (i.e. critical areas ordinances that increase the size of no-build buffers in urban areas, stormwater rules requiring larger detention vaults, etc)A no-net loss of buildable lands policy that requires increased density within the urban growth boundary any time buildable lands or housing supply is reduced would allow capacity to expand and help prevent sudden increases in price.
Attractive region/quality of life. Never underestimate the fact that our region has attracted people for all kinds of reasons. I moved here in 1990. I met my wife, had two kids, owned two dogs, and have owned two homes. The second one more expensive than the first. Does that make me part of the problem? Some would say yes, but I don’t think so.
3) What do you predict will happen (on average) with local home prices in 2009?
3a) Specifically, what data do you base this prediction on?
See my answer to question 1a.
3b) Same questions, for 2010-2015.
I would expect an improved overall economy and housing market, but other experts have a clearer crystal ball that far out.
4) Given the loss/sale of WaMu and Safeco, Boeing’s troubles with strikes and customer financing of new plane purchases, Starbucks’ massive drop in profits, and Microsoft’s “re-evaluation” of its hiring plans, how do you think the Seattle-area economy will fare in a prolonged recession, compared to the rest of the nation?
I’m confident in our long term economic health partly because of your question. You mentioned five companies in five industries that are all regrouping in the face of hard times. I grew up in the Midwest and clearly remember how hard the auto industry (and economy in general) was hit in the late 1970s and early 1980s. We’re fortunate that we don’t live in a one company/one industry region. I think we will fare better than many areas of the country in part because of our diverse economy, access to a thriving port, and a region that grows businesses from entrepreneurs rather than relying on businesses relocating to the Puget Sound area. You have to have some perspective with all of this. The Seattle-area market is nowhere close to the experience of Southern California, Florida, Nevada, or Detroit. If you think we are in the same situation in terms of building starts, price drops, employment or economic outlook you are very wrong.
5) In retrospect, what do you think could or should have done differently that would have helped avoid the current rate of real estate value depreciation?
Initially the slowdown in the market in 2006 and 2007 was fueled by consumer perception and not necessarily market reality. I wish we had been faster and more proactive to educate consumers about the market.
5a) Put differently, what are the top 3 lessons we need to learn from recent real estate events?
- Fortune favors the bold but devours the reckless. Those that are able to accurately asses their own financial resources and tolerance for risk will fair better than those that foolishly buy more than they can afford.
- Real estate, despite short term fluctuations, can be an excellent investment.
- That said, a house is a home and not an ATM. You should buy a home because it has a great floorplan, is near good schools, because it has the perfect spot for a Christmas Tree, or any of the other reasons that reflect your lifestyle, hopes, and dreams.
6) What changes do you see happening in the real estate industry as a result of this?
I think the next group of professionals involved in the residential real estate to be hurt by this market are remodelers. The new housing market and the remodeling market statistically are positively and not inversely related. Common sense would say when one is up the other is down but historically it hasn’t played out like that. The remodel market’s peaks and valleys are about 1-2 years behind the new home market.
Most people who remodel in our region finance the project themselves through one of several ways: home equity line of credit (or other loan), proceeds from the sale of an asset (such as stock), or spending saved cash. The first two on my list are drying up and stocks drop and credit is harder to get.
I’m sure there will be (and there should be) systemic changes to the lending industry as a result of this downturn. I’m sure I could give you my opinion but it would be just that. Others will have a better eye for this than I do.
The one thing that I don’t expect to change is the role of the housing and real estate industry as a primary driver of the economy.
7) Is there anything else you would like to say about the Seattle-area housing market to the readers of Seattle Bubble?
Yes, I have read some of the posts on SeattleBubble and other websites about the real estate market. I have agreed and disagreed with many of the posts and positions of their authors. The only thing I am offended by is the notion that somehow our association (or the other industry professionals that you’ve sent questions to) are “the other side.”
I have talked to local business owners who feel as though they have personally failed their employees, customers, and community because their company won’t survive this economic downturn; their out-of-work employees who feel scared and alone; and homeowners who feel helpless as forces beyond their control.
Our association has been a champion for affordable housing. We do not advocate that families buy more house than they can afford. We are not any more or less excited about the current market than you are. And for 99 years we have provided a basic human need: shelter. We are all in this soup together.
I’d like to thank Dan for being willing to share his thoughts on this forum. While I definitely don’t agree with all aspects of his assessment, I do appreciate his openness and enthusiasm.
Here are my biggest issues with Dan’s responses. First, Dan’s answer to 1a) seemed to be a bit of misdirection, talking about “several city-specific areas” and specific types of homes that have supposedly held their value. That’s fine, but most areas have had falling prices, and the question was whether those price drops are finished or not.
Second, Dan’s answers to 2) seem to totally ignore the reality that building has exceeded household growth in the Puget Sound, in spite of whatever restrictive effects the GMA may have had.
Also, in his response to 4), Dan seems to be putting a lot of faith in the area’s diverse economy. That’s fine, but right now, as the national/international recession is just getting started, nearly every aspect of our local economy is experiencing stress. Even just this week, our major local retailers have also announced that they are under significant stress.
Finally, I really can’t let Dan’s response to 5) just slide. I’m sorry, but there is zero evidence to support the view that the initial market slowdown was merely due to poor “consumer perception and not necessarily market reality.” Better “education” is not going to magically give people the ability to purchase an overpriced home. Sorry.
On the other hand, I agree with Dan’s comment that the Seattle housing market will likely not get as bad as Southern California, Florida, Nevada, or Detroit. That being said, if home prices in those areas fall 70% and Seattle only falls 50%, that condition will be met.
I also would like to say that in the initial interview post when I mentioned “the other side,” the reason I put it in quotes is because that is not how I personally feel, but rather how I feel many folks in the real estate industry view Seattle Bubble. I agree with Dan that we’re all in this together. It is a benefit to everyone that we work to improve the quality and quantity of market information that is available to potential home buyers and sellers.
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Oh, by saying we’d be looking like Zimbabwe if McCain/Palin got elected, I just mean we’d be f**ked, not necessarily experience hyperinflation. I think it’s obvious that we’d be f**ked if we had a president who is lacking even a grade-school education (she may have graduated, but she did not learn).
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I don’t know what Obama will do; I voted for him only because he was the best viable choice. But I’m confident that putting the country on a massive austerity plan and jacking up taxes (esp. for the rich) is the right thing to do for future generations. We bought stuff, we should pay for it, even if we have to become poor in the process. Those who do not support raising taxes while we have a towering national debt and no national emergency except of our own making are traitors in my book.
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Eleua I actually read most of what you write because it seems well thought out but this: “When BarryX raises taxes going into a doozy of a recession, he then owns it. He will no longer be able to blame his predecessor” Makes me think you went off your meds. So Bush is in the white house for the last 8 years and the Repubs control congress for six of those eight and now the Pile of Crap you tie to Obama — give me a break.
Have you been asleep for the last 8 years?
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“Those who do not support raising taxes while we have a towering national debt and no national emergency except of our own making are traitors in my book.”
Let’s face it, in 95% of American’s minds, the national debt never has to be paid back. “How much we have to spend equals how much we can borrow. Besides, we’re geniuses because we’ve managed to push all that debt off on our grandchildren. Stop worrying, and start borrowing and spending your way to prosperity. If you don’t, then you’re not a true American, and you should leave the country.”
You know, what really burns me is after 12 years of trickle-down economics (balloon the debt by 4 times in order to create temporary economic stimulus), we finally start paying down the debt, and then the next guy gets in and realizes, “oh boy, because the previous guy was fiscally conservative, I get to spend more.”
We live in a crazy country where borrowing beyond your means is the solution to all life’s troubles. And when you think like that, the last thing you ever want to do is come out of denial and pay back the loans. What you want to do instead is borrow more money to give back as a tax break and then borrow even more money to pay for interest on the money you borrowed for the tax break.
It’s called short-term greed. It’s a virus, and most American’s minds have been infected. For those who want a true tax break, click your heels, go back in time, and shave 12 trillion off the national debt. There’s a free half trillion dollars per year tax break for you and a balanced budget without any necessary spending cutbacks. It’s not rocket science but it does take a little bit of willpower, which apparently is quite rare in this country.
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Markor,
If you actually took the time to learn about what went wrong with Zimbabwe/Rhodesia, then you would realize how inappropriate your analogy is. You also don’t seem to understand anything about Gov. Palin, outside what you see in the MSM. She is a graduate of U of Idaho. Now, I’m sure you will ’tisk, tisk” that school, but she is also the governor in the US that has the highest approval rating. How are you doing? How did the Georgetown and Yalees do as presidents of the USA? The most successful president of our lifetime went to Eureka College.
I think I know what your objections are to Palin, but I will need to scratch a little more to confirm it. 90%+ of Lefties essentially object to SP on one issue, and it isn’t her college choice.
Do you have any idea what percentage of the income taxes are paid by the “rich?” Do you have any idea what percentage of the income taxes are paid by each decile of the population? If you did, you could not make your statement (#102) unless you were maniacally insane or unfathomably stupid. BarryX can’t raise taxes high enough to close the deficit, even if he ends the GWOT and cuts the DoD 75%. It is a mathematical certainty. Perhaps you can work with some -X^2 graphs and see how this works.
You essentially have closed the circle of Biden’s “paying taxes is patriotic” mindlessness with your “Those who do not support raising taxes while we have a towering national debt and no national emergency except of our own making are traitors in my book” nonsense. How are you going to react to your taxes going up until you lose your job?
WGUMCD,
BarryX has the ability to use the lapdog MSM to pin this financial disaster on GWB in perpetuity. However, once he raises taxes and the economy tanks harder, he will own the situation. It was also the Neo-Marxist Lefties in this country that started this entire mess. They are not alone, but the democratization of lending is at the core of this problem. They are the ones that bear the brunt of the burden of allowing FNM/FRE getting to the state they now find themselves.
Remember, as of January 20th, there won’t be any Republicans to kick around. The MSM will start to look to BarryX for their daily dose of blood. Expectations are stratospheric, and empty rhetoric may dazzle Seattle Lefties, but it won’t cut it as far as the rest of America is concerned.
“Trickle Down” is a pejorative given to Reagan’s plan by the MSM/Lefties. Go back and correct for ballooning social spending (and these stupid bailouts), and we more than covered our DoD expenditures with plenty of cash left over. It is Congressional pork that is the problem, not the legitimate Constitutional expenditures that are causing all the deficits.
BTW, if timing is sufficient to assign blame, then IIRC, everything was “fine” until Madame Speaker got the gavel. What fiscal leadership has she shown? She is the one that rammed these bailouts through the HoR. Harry Reid did so in the Senate.
Bush was a horrible POTUS, as were his two predecessors and I am confident his successor will also leave office with an approval rating lower than GWB’s. Americans don’t like statists, but they love the idea that their government can do everything for them. This explains why they keep voting in presidents and Congresses that they end up hating. Pelosi’s Congress would kill to have GWB’s approval rating.
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U of I is a decent school, but it hardly matters when she thinks Africa’s a country, and can’t name a serious magazine she reads (but says she reads them all). She’s a good-looking governor in a heavily Republican state whose citizens pay no state/local income taxes and get an annual check from oil. That is, she doesn’t need much intelligence to attain or run that particular office.
Doesn’t matter. All I need to know is that the rich are buying yachts when they haven’t yet paid a dime for the Iraq war and other budget-busting stuff they encouraged their representatives to buy. They need a massive tax increase to pay for the stuff they bought, plus the interest incurred.
It’s a mathematical certainty that Obama can’t do what Clinton did? In what universe?
The same. (I wouldn’t kill for money either.) Yes, tax rates can be raised to only a point, beyond which tax revenues decline. But that point has obviously not been reached yet, because the rich are still buying yachts. I’m confident the yacht makers and associated employees can find work elsewhere.
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jonness,
Your post #104 is right on the money.
If the US Govt keeps spending more money than it brings in (with taxes), and keeps on borrowing more than it can re-pay, then The Tim will have to start a new website called: “United States of America Bubble”
I don’t want to be around when that Bubble bursts (if it hasn’t started to already).
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Good post, jonness. I agree the mindset is like a virus. I remember when Clinton created a budget surplus and wanted to apply it to the national debt, how furious the Republicans in Congress were that the “excess” money would not be spent. I don’t believe they were that stupid, but I do believe they were furious because their constituency is stupid, or at least greedy.
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Eleua,
Maybe you just don’t remember the last eight years: “BarryX has the ability to use the lapdog MSM to pin this financial disaster on GWB in perpetuity.”
BUT BUSH WAS PRES AND REPUKES CONTROLLED CONGRESS FOR SIX OF THE EIGHT
Come on, who needs a “lapdog” don’t let the facts get in your way of your right wing blather — BUSH ended his time with a record disapproval rating get it record disapproval.
Oh that is right you can’t blame poor Georgie for anything he was only the president for the last eight years but that doesn’t matter does it.
It is funny no one ever wants to pay taxes but they sure want good roads, good schools, and to replace Saddam and rebuild IRAQ, etc….. Yes it is all free.
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Too many people believe what they’ve been told by the government schools and main stream media. Why doesn’t anyone question the basic economic precepts that have been adopted since the beginning of the 20th century? Do all of you actually believe that Keynes was right? That allowing the government to control all the money is the best option we have? Do you truly believe that we need the government to solve all our problems? That they can solve those problems by spending more money?
I think it would be best if you would use a big dose of healthy skepticism and begin to question the basic tenets of an all powerful central government and central banking system. Deficit spending and Keynesian economics is, at best, a flawed system and it’s being proven once again.
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I’m no Palin fan – but I think this particular bit has been exposed as fraud
http://www.huffingtonpost.com/2008/11/10/martin-eisenstadt-non-exi_n_142785.html?page=5
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David, spending skyrocketed, and the money coming in was from borrowing, via treasury bills and bonds,
If the US Govt keeps spending more money than it brings in (with taxes), and keeps on borrowing more than it can re-pay
I remember when Clinton created a budget surplus and wanted to apply it to the national debt,
You can’t have it any way you want to make an argument.
I know that we are told we spend more money and we need to pay more taxes. I just don’t see it.
Clinton did create a budget surplus and Reagan cut spending while increasing spending.
Help me out with that. How is all of the number magic possible? A good example is the 150,000 ground troops in Iraq. You tell me how many billions a week it costs for 150,000 troops to be in a Third World country. We didn’t even give them body armor.
No we spent money on Bell Helicopters, Humvees, and Colts. All American Corporations.
We have money for the auto industry, Wall Street, and Pharmaceutical research, but we don’t have Health Care, social services, or infrastructure improvements.
I don’t see the spending. Do you? Please explain to me why we should give our government more tax dollars? Will that change anything?
Talk about delusional.
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dj,
funny thing with Palin is most people could actually believe that she didn’t know africa was a continent, she went around talking how you could see Russia from Alaska and how that proximity gave her some kind of foreign relations experience so alot of people could figure out pretty quickly she is an idiot.
one can only hope she runs for Prez in 2012
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Well I see this thread has gone quite a bit off topic!
If Dan is still reading I would like to know his opinion on my situation and everyone elses input so I might see the different positions.
I have a masters in Education (music) but its harder to find full time teaching positions in this area as generally when cut backs are made music and the arts are not a priority (economy). I work for costco and make less than the median income. I have 20k saved towards a house and am 26 years old. With your predictions [Dan] you say our market will rebound and continue to rise how will someone like myself who is paying for education (in fields I am truley passionate about and am willing to be paid less and have less to be happy) be able to afford the average house in king county. How will future generations be able to afford housing if it continues to rise?
Just curious at how people think about home values 100-150 years from now and how society will pay for those houses if they all appreciate?
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I remember when Clinton created a budget surplus and wanted to apply it to the national debt, how furious the Republicans in Congress were that the “excess” money would not be spent. I don’t believe they were that stupid, but I do believe they were furious because their constituency is stupid, or at least greedy.
Not just that the surplus wouldn’t be spent–that the “investor class” couldn’t make money on the country’s debt. For a while during the Clinton years the Treasury didn’t issue 30 year bonds because the money wasn’ t needed. Rich people squealed like piggies because they wanted to get a return on those bonds (i.e., make money on everyone else’s collective debt).
NO surprise to me that Republicans practice credit-card financing–their base requires it.
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2DJO #111,
Thanks. It is amazing what PDS does to people.
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Angie,
The 30Y was suspended because they wanted to force money into the short end of the curve to help foment the bubble.
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I worked for someone from the Neatherlands. He loved it here because only the truly wealthy could afford a 5 acre lot. This was out near Carnation. Do people there worry about affordability? He worked at Microsoft and could have done the same from his home country, but enjoyed being able to afford something here. I’m going off of what he said and what I have read, but is that normal in Europe? Eleua, Obama wants to roll back taxes to what they were in the 90′s under Clinton. Didn’t the economy boom then? You are a far right wing nut, aren’t you. I find it hard to believe that you and Softwareengineer, who both seem somewhat intelligent, can square what has happened over the last eight years with Bush as being good for the country.
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Eleau, if the government is running a surplus it should still borrow money?
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mikal,
You will search with futility to find a glowing endorsement of GWB by me. I have hated GWB since April 2001 and have thought him to be a disaster of a POTUS.
I am not suffering from the delusion that Obamessiah is going to be anything but a complete failure.
Obama is the most strident statist that has been elected since 1932. My opinions from that observation. Both Bushes were statists, as was The UNIBANGER. His tax policies didn’t do anything. It was the stock bubble that made him look like he was a fiscal genius. Look at what happened to the bond market in 93-94 when he tried to nationalize Hillary Care.
GWB has been a disaster, as was The UNIBANGER, and Bush 1.0.
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mikal #119,
I don’t understand the basis of your question. We have been borrowing money every year of my life and the debt has grown, provided you include entitlement payments and promises of those payments.
If you are asking about the suspension of the 30Y…
The bond market has two parts: borrowers and lenders, both of which need each other. The available funds that seek .gov debt will buy and drive up the price (yield down). If the 30Y is not available, that money will float down the curve and buy that debt, thus reducing the yield. This was critical as the Treasury started to finance .gov debt with short term funding, which saved money on the interest that would be paid. Since the 10Y bond is beyond what any POTUS can serve, they don’t care if it blows down the road, as it would blow on someone else’s watch, thus making you look like a genius in comparison.
The secondary effect is to lower the retail interest rate for average consumers and businesses, thus expanding stock markets, consumption, and all the other attendant bubble spin-offs.
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Eleua- your patience when faced with BDS and economic ignorance is inspiring. Personally, I have given up.
Your comments and analysis are, of course, spot on. But now is not a “teachable moment.” Only when the economy has entered it’s death throes, and the entirety of leftist/socialist/statist ideals proven an impossibility will will people seek to understand, not just propagandize.
When the student babbles on, the teacher can’t be heard.
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If a journalist asks you if you really did kick that toddler in the face, is your reaction going to be an angry “Who told you that!?” That was essentially Palin’s reaction when asked if she had really said that Africa’s a country. She didn’t deny it. I saw the video, so I will not believe subsequent expected GOP spin.
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I VOTED FOR NADER AND HATED BUSH TOO
But since I saw Obama put in a decent anti-overpopulation chief of staff that the minority of the Democratic Party hated [they even wouldn't even let him speak, he's too honest like me]….I wish I’d voted Obama. Maybe you wished you’d voted McCain now….lol
I see McCain as middle left and out of touch with the post election Zogby Poll results too: 2/3s of Obama supporters hate amnesty, but you far left call me a Bush supporter (he supported amnesty like you and McCain).
Americans are mostly like me….moderate [actually moderate right, but I'm not that far right].
I know, now call me a NEOCON hater for this blog….lol
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The economy is already in death throes, Obama’s not in office yet, but he’s already being blamed. Surely, having risen from the bottom of the rung all the way to the top on his own merits, he’ll now plunge this country (further) into oblivion. Because paying for the stuff we bought is always a horrible idea. It’s socialist, by golly!
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Funny that some people seem to think that Boeing will be ruined by a couple of weeks of strikes. And that the fact that Starbucks is rethinking it’s strategy is a disaster for Seattle. I agree with Klusman that Seattle has good economic foundations and is an attractive city to settle because of it’s surroundings etc.
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“I worked for someone from the Neatherlands. He loved it here because only the truly wealthy could afford a 5 acre lot.”
Well duh, look at the size of the country and population density. I do think that housing in the US, even in Seattle is much more affordable than in Holland if you look what you get for a similar share of your income, but that probably has more to do with the fact that the US is a huge country than with political organization.
An interesting fact for all the socialism haters is that Holland had a slightly higher BNP per capita in 2007 compared to the US, and achieved that in spite of all the evils of long vacations (5-6 weeks on avg), universal health care, 36 hour working weeks, progressive taxes, etc. That’s not to say that I think things are better in the Netherlands (though I do miss my long vacations), but it puts right-wing FUD spreading in perspective as far as I am concerned.
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Ugh, I meant GDP (BNP is the Dutch acronym)
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I don’t think Boeing is a disaster, I just don’t think they are going to manufacture planes in Seattle much longer.
The writing is on the wall if you look at recent comments by management. Why should the continue to manufacture planes in the Seattle area at a premium when they can move the base of operations to the South and be much more competitive with EADS?
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And lose the infrastructure and worker base they have here just like that? The only things I’ve read is the south actively lobbying to get a piece of the pie, particularly of new business, so that they can build some long-term infrastructure over there.
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Scotsman,
You are correct. The truly teachable moment is coming down the pipe. When the bond market finally capitulates under the groan of all our social spending, that moment will be upon us.
Doctrinaire Lefties seek to suspend the laws of math to justify their tax hikes, yet all the shrieking over deficits seem to fall eerily silent when the Neo-marxists lick their chops at the prospects of national health care, and wild social spending.
It is the spending that is the problem. This is what caused the GOP to lose their majority. It’s tough to remain in the majority when you campaign as fiscal conservatives and operate like a drunken statist. When we hear of the GOP being the party of fiscal restraint, it’s tough not to laugh.
If they have an ounce of brains among them, they will use this time in the wilderness to hone a genuine message of spending cuts and tax parity, while the Neo-marxists drive the ship of state into the ditch.
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Eleu and Scotsmen, if you are teaching anyone it is the blind leading whomever. What arrogance. You both come off as incredibly unhappy. What will you wake up and complain about tomorrow?
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Obviously I’m way late in this, but please keep comments on the blog posts mostly on-topic. We have a place for off-topic political arguments: the “Everything Else” section of the forums.
Please direct future unrelated political arguments there. Besides, it’s been quiet and lonely there since the election, anyway.
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Darn, Tim, you sure know how to spoil the fun. You’re welcome to exercise your rights as moderator and transfer this comment to the forum but I have no interest in wading in to the site that far!
Eleua’s invocation of “neo-Marxists” is too well-timed…I can’t resist sneaking in this link to Bill Kristol’s column today where he accuses Bush and the congressional Republicans of “letting free markets degenerate into something close to Karl Marx’s vision of an atomizing, irresponsible and self-devouring capitalism.” That guy, he’s such a crazy liberal statist!!!
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Euro,
What base and infrastructure? They’ve already outsourced a tremendous amount of manufacturing overseas, corporate HQ is in Chicago, what’s left, a few hangers and some plants?
Small price to pay for the cheap labor the south provides.
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Funny!
Making claims of the government “borrowing” money is denying the budgetary process. If I work for the government with a budget I need to exceed that budget amount so I can get more money the next budgetary cycle.
In good times I would need to spend more so I will have more of a budget in the bad times.
In bad times my project might still have a budget, it may even go down, it may be terminated, but the dollars allocated to me are still coming in.
That there is your government spending.
The dollars come in every day from a variety of sources. People just love giving the government money so they can get it back in make work projects.
This is very much on topic in regards to the building of housing units.
In my opinion construction has been a government inspired welfare to work program. I hate to make the comparison but it is like the tech bubble of the 1990s without the college degrees.
By my twisted logic new construction is now selling off surplus properties.
Everybody has already wrung out the dollars and now the builders want to get rid of the remainders.
Again, for new construction, from the builders point of view, this may be the right time to buy.
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Point taken, Tim. But remember to leave a little wiggle room and let the conversation wander, as housing trends are to a large extent a function of the economic and political climate. It was political pressures and directives that started this bubble, and it’s political considerations that will decide how it deflates, and who will pay for the losses. If you want to grasp the entirety of the issue, politics has to be included in the discussion.
On a broader scale, and in the context of this specific post topic, we could look at Dan’s responses to your interview and how they are similar to the political posturing that’s going on. I’m sure Dan’s a nice person and a very effective spokesman for his industry. But he’s clearly not an economist, or even by his own admission a numbers guy. He’s a promoter for the building industry, and his perspective reflects that. Unfortunately, our current politicians are little more than promoters for the special interests that bought them. The idea of true statesmanship is dead, and leadership has been replaced by the raw quest for power. The importance of truth, understanding, accuracy, and comprehensiveness have been overwhelmed by the sound-bite of the moment. Dan’s comments are a case in point. I’d be more impressed if he sought to broaden his understanding of all the factors in the market, and shared some of the strategies and concerns of the builder’s group. As it is, i could have written his answers for him.
And mikal- I’m generally very happy, healthy, and successful. But unlike many here, I feel have a pretty comprehensive understanding of the current economic situation, and a very clear picture of the future. I can “do the math”, and it shows that while we may have some choices now, there will be fewer and fewer as we go forward. Soon enough, necessity and survival will overwhelm today’s wants and desires, placing significant limits on what life has to offer- for me, my children, and those I care about. And that makes me sad, because until recently it didn’t have to be that way. Like a chess game, bad choices up front limit your plays at the end, until one is boxed in. Good luck to all.
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“I think I know what your objections are to Palin, but I will need to scratch a little more to confirm it. 90%+ of Lefties essentially object to SP on one issue, and it isn’t her college choice.”
Her low IQ?
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Jonness,
Since you have a superior IQ to the governor of Alaska, can you demonstrate your towering intellectual prowess by reading and comprehending what “The Tim” posted in #133?
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Eleua, give me a break maybe you can look at how much you posted that was off topic and compare it to others how about a little honesty.
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Ideologue:
1 : an impractical idealist : theorist
2 : an often blindly partisan advocate or adherent of a particular ideology
There are half a dozen people in this thread that need to take a step back, read what Tim wrote in 133, and have a coke and a smile. No one in this thread is changing anyone’s mind.
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“Since you have a superior IQ to the governor of Alaska, can you demonstrate your towering intellectual prowess by reading and comprehending what “The Tim” posted in #133?”
Eleua:
It’s true my IQ is far superior to Palin’s. But here on SeattleBubble, my IQ is only about average. Thus, I don’t believe you will appreciate my interpretation of post #133, but I will do my best. I believe The Tim is saying your 15 off-topic politically-charged posts, which are based more upon your passion and emotion than your typical flair for logic, are not relevant to a conversation about Dan’s interview.
The Tim believes you are a very insightful person who brings a great deal of value to the economic-related discussions at this site. However, when the mud-slinging gets as bad as it has in this thread, particularly with the inclusion of stereo-types, labeling, and name calling, it’s probably a good idea to move this aspect of the discussion to a far corner of the site where fewer people care to venture. This will ensure the site will maintain a palatable reputation to viewers who don’t share your intense passion for political subject matter.
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Apparently it’s not the right time to buy in Vancouver either. Bloomberg just posted a story here.http://www.bloomberg.com/apps/news?pid=20601213&sid=aUaxzBW8q_OU&refer=home
To recap it, the slump has hit there too.
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jonness,
The difference that I am highlighting was that you kept on going after Tim asked you to stop.
If you want to chuck knuckles in the forum, I’m willing to give it a go. It’s OPEX week, and I’m stuck at the computer until 1pm on Friday, and I need some easy amusement.
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Eleua:
I appreciate the offer, but I don’t extract much joy from discussing politics. One or two posts per week on the matter pretty much fills up my appetite.
On another note, the recent DOW plunge appears to be a surprise to many, but I doubt too many people on this site are finding it to be an incredulous week. :)
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