How many times do we hear the economy is in recovery? How many times do we hear the housing market has bottomed and is in recovery? How many times do we believe this to be true?
Owning a home has in the past been referred to as the American Dream. A place of your own that grew in value over time. We were taught over time our home would become a nest egg. The biggest investment of the middle class.
But a system that worked beautifully for generations changed overnight with the housing collapse. Trillions of dollars of home equity vanished overnight.
There is a historic lesson in the housing collapse, central planning by government caused this disaster. The market left free of their meddling and we wouldn’t have had a meltdown.
Here we are today and the NAR is aptly running ads sharing that the dream of homeownership is in jeopardy. They are correct however don’t go far enough in my opinion. They should be sharing why. This would enhance the credibility of the industry that failed to sound the alarm bells during the housing bubble.
Instead we hear any glimmer of good news as signs of recovery when there has been no recovery which is obvious to people living on main street. Truth is record low interest rates are the reason housing has a heartbeat.
The dream of home ownership is in jeopardy due to continued central planners interfering with the private sector. Specifically the big government agenda of the Obama administration preventing business from expanding and creating jobs.
The housing market will not have a sustainable recovery until the labor market recovers. All but impossible due to the Obama agenda. The big three obstacles to growth are taxes, leviathan laws (Obamacare, Dodd Frank), and energy costs. Unlike the congress and president who haven’t passed a budget in excess of 1200 days, businesses do budget.
Obama the immovable ideologue standing firm on these three critical issues makes it impossible for businesses to grow. Hence no jobs through growth helping the housing market.
Then there’s the Federal Reserve repeating past mistakes by holding interest rates too low too long, tripling the money supply, monetizing debt all devaluing the dollar. Remember these days of two and three percent home loans, because in the near future they will only be a memory.
When rates increase without job growth, housing will tumble again.
Wall Street continues to call for QE3 from the Fed. QE1 and QE2 didn’t establish sustainable growth and neither will QE3. The Fed is out of bullets.
There is no recovery of significance that can put millions back to work because the Fed is impotent, while the Obama administration believes they are omnipotent.
Yes we have a credibility issue in real estate today due to the damaged faith in the home as a good investment, however that pales to the credibility issues of Obama.
Obama tells you his plans have worked when they have failed. That the economy is in recovery when we are stagnate. The auto industry is roaring back when it is faltering. That the Romney plan is a return to the failed policies of the past, tax cuts for the rich, that caused the meltdown when it was failed central planning. That the Romney plan will increase taxes on the middle class so he can give tax breaks to his rich buddies to incite class envy.
Distinguished Professor Emeritus in Economics Richard Judd of UIS analyzed the Brookings study that Obama is basing his claim taxes will go up on the middle class. The Professor summed up the Brookings report in one word; dishonest.
Why? Brookings assumes the elimination of deductions that aren’t stated in the Romney plan. But best of all says the professor, cuts in spending are translated into a tax increase. So if a food stamp recipient has their food stamps reduced that is counted as a tax increase on the non taxpayer by Brookings. Judd says not even the Keynesian economists believe such a radical economic theory.
Obama claims have no credibility, yet cheering crowds fall prey to the deception. Then the media reports the claims as truth. Therein lay the danger. A man with no credibility could get elected again through deception and corrupt reporting.
The fate of the housing market, the economy, and the future of America is at stake. Businesses large and small fear Obama, and are frozen in uncertainty. Should Obama win reelection those fears would grow exponentially knowing Obama would have free reign to move his leftist agenda unencumbered by another election.
The choice is clear. Obama and big government central planning as the solution to our economic malaise, or Romney and the individual free of central planners pursuing their dreams in a free market economy.
There is only one credible choice. Which will America choose?
The opinions expressed here are solely those of Fritz Pfister or identified sources, and not necessarily those of RE/MAX Professionals of Springfield or RE/MAX International