Please allow me to share a little secret with the Harvard eggheads, ruling elite, and otherwise unfamiliar with the real world White House policy makers; the economy can’t recover until housing recovers, and neither can recover until the job market recovers.
This universal truth has been shared during the four and a half years of the Obama grand experiment to fundamentally transform America. Their notion is that bigger government, Keynesian spending, and the class warfare ‘fair share’ persecution of producers in the private sector to pay for it, would somehow generate a recovery. The warning signals were there because that’s what Obama said he would do in his campaigns.
Obama and his economic theoreticians placed their theory into action, because they obviously haven’t read the proper history books or any Milton Friedman. Their plan failed to no one’s surprise, excepting the eggheads who don’t live in reality. Although they do receive rather large real life checks for their destructive theories.
Exhibit number one Obamacare. Even NBC News the most active mainstream wing of the DNC admitted that there might be a correlation between the Obamacare mandates of fifty employees, and the thirty hour work week resulting in 77% of all jobs created this year being part time.
NBC must have missed Jimmy Hoffa’s letter to Obama, Reid, and Pelosi explaining Obamacare was destroying the forty hour work week that unions had spent decades fighting to establish. Who says Obamacare isn’t effective in at least one thing?
Who needs a forty hour work week? The middle class, the American worker, the economy, and especially the housing market. That is if you really want an economic recovery. The eggheads told us that Obamacare would help the economy because it would drive down the costs of health care which was the primary driver of the debt. World to eggheads, spending is the primary driver of the debt.
CNN Money reported this week that home ownership is becoming less affordable. Shazam! Rising interest rates, rising home prices mean fewer prospective buyers can afford to buy a home? A little clue for the CNN folks, mortgage applications have fallen ten of the past twelve weeks by 50% to April 2011 levels. Do you know what happened ten weeks ago CNN folk? Interest rates began to rise!
USA Today reports this week that the inventory of homes for sale has risen in many markets during this period of rising interest rates. The National Association of Realtors says there is a 5.2 month inventory of homes for sale. Allow me to clarify: of homes listed for sale.
The FHA reported earlier this year 789,000 mortgages were in default and either foreclosed or in foreclosure. There is a shadow inventory of untold numbers of foreclosed homes on bank books sitting vacant and withheld from the market. Wouldn’t want to dump too many homes on the market too fast and risk our Bernanke induced price bubble bursting now would we?
So here we are headed for the fall market and typically slow winter months for real estate sales and we have rising interest rates, rising inventories, not many full time jobs, plenty of part time jobs, and stagnate to declining incomes. Do you spot any potential trend for home sales?
Let us repeat for the eggheads cashing big checks for implementing flawed economic theories, and living large like their boss vacationing on Martha’s Vineyard, disposable income is important to consumer spending. Especially on big ticket items like homes.
That leads us to a warning delivered by Secretary of State John Kerry this week; if congress doesn’t act on climate change president Obama will.
I swear these eggheads sit around trying to develop the perfect plan to kill the middle class and whatever economic activity the private sector has been able to muster. We know Obama is part owned by the radical environmentalists, and we know the radicals manning the EPA have been chomping at the bit to release economically destructive rules on what you exhale.
You can say goodbye to more jobs, and worse; those that can keep their jobs will have less disposable income. That should help with consumer spending.
The warning signs were there in 2008 and the warnings just keep on coming from this administration. But seriously I’m glad they want to save us from global warming while I look for a jacket to wear to the Illinois State Fair. A record low 49 degrees yesterday and a high of 75. In August.
At least the administration knows its priorities. (That’s a warning).
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.