Home Prices Still Too High: Nationally 24% Pay More Than Half Their Income On Housing

Case Shiller Home Price Index @multpl.com

Joel Kotkin reflects on the still expensive housing market here:

Ownership levels continue to drop, most notably for minorities, particularly African Americans. Last year, according to the Harvard study, the number of renters in the U.S. rose by a million, accompanied by a net loss of 161,000 homeowners.

This is bad news not only for middle-income Americans but even more so for the poor and renters. The number of renters now paying upward of 50% of their income for housing has risen by 2.5 million since the recession and 6.7 million over the decade. Roughly one in four renters, notes Harvard, are now in this perilous situation. The number of poor renters is growing, but the supply of new affordable housing has dropped over the past year. ...

According to the Center for Housing Policy and National Housing Conference, 39% of working households in the Los Angeles metropolitan area spend more than half their income on housing, 35% in the San Francisco metro area and 31% in the New York area. All of these figures are much higher than the national rate of 24%, which itself is far from tolerable.

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Kotkin nowhere mentions that currently expensive housing is explicit Federal Reserve policy. ZIRP and QE are specifically designed to reduce long term interest rates to make home mortgages affordable. Instead those policies have re-inflated housing prices to their historical highs before the bubble and reversed the downward trajectory of price resetting those prices were on.

In June 2013 dollars, the Case Shiller Home Price Index reached its low point after the bubble at 126.30 for the quarter ended March 31, 2012. That level hadn't been seen since June 1998. But from the long term perspective prices should have reset to 120 on the index or lower as they have in the past. This expectation holds even more considering the excesses of the bubble which needed to be wiped out, but haven't been.

The Fed has done nothing but interfere with the free market in housing, creating the bubble in the first place and preventing its deflation now. To fix the problem, the Fed needs at a minimum to focus solely on price stability by maintaining a strong dollar. Markets will take care of themselves after that.

By 2008, IRS' 40ish Shulman No Longer Considered Himself Much Of A Midwesterner

Mlive.com had the story in 2008, here, capturing the Ohioan's distance from the heartland after years spent at Williams, Harvard and Georgetown, and in New York City:

Shulman, who grew up in Ohio, said Kalamazoo has a "neat downtown. Kalamazoo is a great town," he said. "I like the Midwest. I like down-to-earth people."

Barry Ritholtz Is Against The World Religion Of Gold

Barry Ritholtz here recently had some fun with the goldbugs, whom he ridicules as devotees of a "religious cult".

The piece is regrettably inflammatory. Doesn't he know he's writing off the whole world as a bunch of religious kooks in this temper tantrum? That's pretty much what ideologues do when reality won't cooperate with their theories, but surely he must know that sovereigns and central banks the world over continue to build their hoardes of gold year upon year, now approaching 32,000 tonnes and 20% of all the stuff ever pulled out of the ground. That's quite the foundation for the edifice of the worldwide church of gold.

In fact, many of the central banks in particular have been on a tear recently, acquiring the stuff in quantities not seen in 30 years. Evidently they are to a man possessed by the Oracle of Au (pronounced "Ow"). But try as they may to acquire new gold reserves, no one of them yet even comes close to the chief priest bowing and scraping before the barbarous relic, namely the USA, the number one holder of gold in reserve to the tune of 8,134 tonnes (not to be confused with tons). 

That even the USA with all its fiat money still considers this gold to be the most sublime of all currencies can be seen in its own gold issues. Gold Eagles, in one ounce sizes down to tenth ounce, are denominated from $50 down to $5. It says so right on the coins. (I understand if you don't believe me because you haven't seen one. They are expensive these days.) I myself haven't seen one of these things in my change at Walmart recently, or anywhere else, but theoretically you could. In various places around the country they are in fact found in Salvation Army kettles from time to time, usually around the time of a holiday formerly known as "Christmas".

There is a reason for what appears on a Gold Eagle: The US government has decreed that gold is money, and that the price of gold cannot fall. It has fixed the price at $42.22 per troy ounce since 1973, and it hasn't fallen since. The one ounce $50 Gold Eagle thus closely approximates this valuation, as it should if America wants to maintain its credibility as the leader of the free world and the spokesman for truth, justice and the, well, American way. The excess, in case you were wondering, is simply a small bonus in exchange for providing the world with both its security and its reserve currency, both of which are quite costly to the inhabitants of the land of the free.

Over our long history, the price of gold has indeed risen despite the best efforts of "manipulators" to stop it from doing so. For a long time the price of gold had been ruthlessly kept down at $20.67, from the War Between the States to FDR, but suddenly became $35 when the greatest Democrat ever saved us from the bad old ways. Not to be outdone, however, the great Republican Richard Nixon managed to make gold higher still, at $42.22, where it has stood ever since.

See, the price of gold hasn't ever fallen in America, it's only risen, just like Jesus. It's God's will. It is our manifest destiny.

That said, more people these days do need to come to accept the reality of this defacto gold standard to which our benevolent government all too secretly adheres. Younger generations of mockers actually have arisen among us who need to repent of their intemperate outbursts against gold and believe in the Gold Gospel once again. Instead of denying the reality of this kingdom of gold, which is really present here and now in the sacramental dollar, they need to wake up and consider the future possibilities of our great civilization and its gold religion.

Perhaps then there would be more public support for all these central bankers who print funny money to drive gold prices higher, especially for our own Ben Bernanke at the Federal Reserve who far excells all others at this. What he really needs most right now is more public encouragement to use that funny money like our competitors do in the world. Like them, we need to start augmenting our gold reserves once again using funny dollars to buy gold just as they are doing using, say, funny yuans. After all, this is actually a divinely sanctioned practice, what the Bible calls making use of "unrighteous mammon". You can look it up, it's right in there. Ben really needs to get on this right away. It should be a matter of his monetary policy to drive up the price of gold by hoarding it. Who knows, maybe we can even get our tonnage back up where it used to be after WWII, around 20,000 tonnes, and just think, all it will cost us is some paper and ink.

Meanwhile gold continues to work for us in season and out of season, in good times and in bad. Our reserves have seen us through thick and thin, whether it's been the boom times under Reagan/Bush/Clinton or the misery index years of Jimmy Carter or the new depression years of Barack Obama. Our gold is still there, just like the flag. It hasn't rusted, shrunk in the rain, or even tarnished. Good as gold as they say. Things might be even better if we had more of it, but you've got to be thankful for your blessings, thankful for what you do have.

The truth is, even in the very worst of circumstances imaginable gold has performed miracles for people. A few well-placed gold coins not that long ago meant the difference between some of our fellow countrymen coming here or going to the gas chambers. Ask them and their progeny if escaping an apocalypse wasn't "just fine", even if they were penniless afterward.

No, the only suckers when it comes to gold have been those who let theirs go when misguided government came looking for it. Some of those babies confiscated in 1933 now fetch $300,000. The rest appreciated in value in their melted down form in the government's vault, but only 6600%. You could go to Harvard today with just 120 of those ounces. In the present banks and governments across the globe are finding the collateral gold provides rather more reliable than US Treasuries in a pinch, which is why they keep acquiring it. Evidently we haven't yet understood the message that this sends. 

It's true in a sense that gold is a rejection of government control, but only in the sense of its opposite, self-control, which is what in America is the unique basis of our form of government. It was an idea bequeathed to us by Protestantism, and also by Plato, both of which are unhappily out of favor. But seeking to control your own destiny, which is what many foreigners are doing by acquiring gold, is actually the sincerest form of flattery of what the United States used to stand for. Free from the control of a reserve currency, there's no telling what others in the world may accomplish without us. But under a universal currency, there's no telling what we could still accomplish together. 

Housing Prices Need Not Increase, Just Remain Stable, For Economic Recovery

So says Harvard's Edward Glaeser for Bloomberg.com here:

The 1990s offer us one upbeat message. Housing prices stayed static for six long years after 1991, and in real terms, housing prices were no higher in 1998 than they were in 1991. Yet real GDP grew an impressive 28 percent between 1991 and 1998. It’s a myth that the housing market must recover before the larger economy can surge.

Not quite.

The average Case Shiller Home Price Index for 1991 was 125.55, and was 125.10 for 1998, but the chart for the period was flat to slightly declining, until the provisions of the Taxpayer Relief Act of 1997 helped begin the housing bubble. Prices reached a nadir for the period in 1996 at 117.64, a decline of over 5 percent from 1991.

Europe Is Failing Because It's Already Taken So-Called Balanced Approach

Namely, very minor adjustments to spending combined with tax increases.

Veronique de Rugy has the details here, for The Los Angeles Times:

"In a 2009 paper, Harvard economists Alberto Alesina and Silvia Ardagna looked at 107 examples in developed countries over 30 years and found that successful austerity packages — defined by a reduction in debt to GDP greater than 4.5% after three years — resulted from making spending cuts without tax increases. They also found that this form of austerity accompanied by the 'right policies' (easy monetary policy, liberalization of goods and labor markets, and other structural reforms) is more likely associated with economic expansions rather than with recessions. This makes intuitive sense: Austerity based on spending cuts signals that a country is serious about getting its fiscal house in order in a way that taxing and spending certainly does not.

"On the other hand, they found that the so-called balanced approach — typically a mix of spending cuts and tax increases — is a recipe for failure. It fails to stabilize the debt, and it is more likely to cause recessionary economic contractions. And when it comes to plans such as Hollande's that would explicitly increase spending and taxes, they find little chance of either economic expansion or debt reduction."

Anita Dunn's Inspiration: A Monster Whose Excellence Was Killing Millions

Dunn, now 54, served Obama in 2009

"The third lesson and tip actually comes from two of my favorite political philosophers: Mao Zedong and Mother Teresa — not often coupled with each other, but the two people I turn to most to basically deliver a simple point which is: you're going to make choices; you're going to challenge; you're going to say why not; you're going to figure out how to do things that have never been done before. But here's the deal: These are your choices, they are no one else's. In 1947, when Mao Zedong was being challenged within his own party on his plan to basically take China over. Chiang Kai-shek and the Nationalist Chinese held the cities, they had the army, they had the air force, they had everything on their side. And people said, 'How can you win? How can you do this? How can you do this, against all of the odds against you?' And Mao Zedong said, you know, 'You fight your war, and I'll fight mine.' And think about that for a second. You don't have to accept the definition of how to do things and you don't have to follow other peoples choices and paths. Ok? It is about your choices and your path. You fight your own war, you lay out your own path, you figure out what's right for you. You don't let external definition define how good you are internally, you fight your war, you let them fight theirs. Everybody has their own path".

Red Guard member Wang Jiyu, 60, confessed killer

“The children now don’t know what happened. We are choosing to forget. We should not let them forget and everyone should know what happened to this country. Some people still miss and praise those years – let them go to hell.” (quoted here, Sept. 27, 2011)

"'I think the most terrible thing, when I recall that period, the most terrible thing that struck me was our indifference,' said Gong, today a 38-year-old graduate student at Harvard researching her own history. ...

"[D]ramatic new figures for the number of people who died as a result of Mao Tse-tung's policies are surfacing, along with horrifying proof of cannibalism during the Cultural Revolution.

"It is now believed that as many as 60 million to 80 million people may have died because of Mao's policies--making him responsible for more deaths than Adolf Hitler and Josef Stalin combined.

"Gong said killer is not a strong enough word to describe Mao. 'He was a monster,' she said." (Beth Duff-Brown in The LA Times here, November 20, 1994)

The ignorance of some is willful. 

The New York Times Discusses Bi-Partisan Culpability For The Imperial Presidency

Here:

Mr. Obama's new approach puts him in the company of his recent predecessors. Mr. Bush, for example, failed to persuade Congress to pass a bill allowing religiously affiliated groups to receive taxpayer grants -- and then issued an executive order making the change.

President Bill Clinton increased White House involvement in agency rule making, using regulations and executive orders to show that he was getting things done despite opposition from a Republican Congress on matters like land conservation, gun control, tobacco advertising and treaties. (He was assisted by a White House lawyer, Elena Kagan, who later won tenure at Harvard based on scholarship analyzing such efforts and who is now on the Supreme Court.)

And both the Reagan and George Bush administrations increased their control over executive agencies to advance a deregulatory agenda, despite opposition from Democratic lawmakers, while also developing legal theories and tactics to increase executive power, like issuing signing statements more frequently.

The bipartisan history of executive aggrandizement in recent decades complicates Republican criticism.

Evidently Obama Learned Hostility Toward Marbury v. Madison (1803) at Harvard Law

From an editorial in The Wall Street Journal, pointing out there would be nothing unprecedented in the Supreme Court overturning ObamaCare:

In Marbury in 1803, Chief Justice John Marshall laid down the doctrine of judicial review. In the 209 years since, the Supreme Court has invalidated part or all of countless laws on grounds that they violated the Constitution. All of those laws were passed by a "democratically elected" legislature of some kind, either Congress or in one of the states. And no doubt many of them were passed by "strong" majorities.

Read the full opinion rebuking Obama's complaint about judicial activism here.

I don't buy the argument that Obama is ignorant of these fundamentals of the history of American law. I think he's hostile towards them, and wants them all swept away, along with the Constitution.

Obama Has Deliberately Obscured His Life-long Marxist Extremism

From Investor's Business Daily:

The videotape of Obama praising and hugging his America-bashing, Constitution-trashing law professor Derrick Bell isn't the only evidence that's been hidden from the public. A 1998 video of Obama praising the late Marxist agitator Saul "The Red" Alinsky alongside a panel of hard-core Chicago communists also exists. ...

[A] 2003 video of Obama speaking at a Chicago dinner held in honor of former PLO spokesman Rashid Khalidi. ... [T]he radical Khalidi — a close friend and neighbor of Obama, who held a 2000 political fundraiser in his home for him — has strongly defended the use of violence by Palestinians against Israel, while expressing clearly anti-American views. ...

[W]hy did Obama disguise the name of his radical Alinsky trainer Jerry Kellman in his memoir? And why did he also try to shield from readers the identity of his Alinsky mentor John McKnight, who wrote him a letter of recommendation to Harvard? ...

[W]hy did Obama leave out his weeks-long training at Alinsky's Industrial Areas Foundation in Los Angeles? This station of the cross for Alinsky acolytes is strangely missing from all 500 pages of his tediously detailed memoir. For that matter, the late Alinsky is not cited by name in either of the president's autobiographies, even though leftist activists confess this father of community organizing had a powerful influence on Obama.

Moreover, if communist Frank Marshall Davis wasn't a controversial factor in Obama's life, why did Obama also mask his identity in his first memoir? If listening, spellbound, at the feet of a known subversive isn't a red flag, why keep his real profile a secret?

Obama also couldn't find room in "Dreams From My Father" to mention the most striking thing about his father's politics. Obama Sr. was a pro-Soviet socialist, who as a government economist wrote a communist tract for Kenya in 1965. If this published paper wasn't a big deal, as Obama apologists have suggested, why is it conveniently missing from the 143-page section Obama devoted to boast about his father's career in Kenya? ...

[Obama] never mentioned Bell or the Harvard strike he led on his beloved professor's behalf in either autobiography. If he wasn't trying to fool people, why leave this seminal event out?

Even more radical — and influential — than Bell was Harvard law professor Robert Unger, who taught Obama a couple of courses, including one called "Reinventing Democracy." Like Bell, Unger called U.S. jurisprudence a sham system designed to protect the rich at the expense of the poor. But Unger also taught Obama how to dismantle it. He argued for seizing all private capital and redistributing it.

Obama kept up communications with Unger long after he graduated, but those contacts stopped in 2008. "I am a leftist, and by conviction as well as by temperament, a revolutionary," Unger explains. "Any association of mine with Barack Obama in the course of the campaign could do only harm."

Read the complete op-ed here.

ObamaCare Violates Centuries of Contract Law: The Mandate is Equal to Duress

It's so simple a child could tell you that, but to date no legal wizard from Harvard, Yale, Chicago, or Stanford has been able to put his finger on it quite so well as this wonderful stroke of genius distilled in a newspaper from the American heartland of genius, Virginia:

From Hugo Grotius in the 17th century through William Story in the 19th and up to the present, legal doctrine has held that contracts are not valid unless they are entered into by mutual assent. If one party signs a contract as the result of fraud or under duress, it cannot be valid. But if Congress compels people to buy insurance policies — not as a precondition of exercising a privilege such as driving, but as a consequence of having been born — then, the [I]nstitute [for Justice] argues, this would undermine centuries of contract law.

All those law degrees, wasted.

If they were smart they would ask for their money back.

Now why didn't The Heritage Foundation realize this back in 1989 and save us from all this trouble from HillaryCare through RomneyCare and ObamaCare?

After all this time America is still little more than a backwater in the intellectual history of the West. Progressivism. Bah! Humbug!

'Wasteful Spending Will Always Rise To The Level Of Revenues'

So says Arthur Laffer in support of Newt Gingrich in The Wall Street Journal, here:

Mr. Gingrich's flat tax proposals—along with his proposed balanced budget amendment—would put a quick stop to overspending and return America to fiscal soundness. No other candidate comes close to doing this.

Here is a corollary I learned from a Harvard-trained philosopher, PJWM:

'Work expands to fill the time allotted.'

Rush Limbaugh Seriously Asks Us To Believe Elliott Abrams Was Spoon-fed

Not once. Not twice. But three times.

Transcript:

[I]t seems like Elliott Abrams has been had.  It seems like Elliott Abrams had a piece at National Review really ripping into Newt, was spoon-fed some out-of-context stuff. ...

So Jeffrey Lord got together with some peopl[e], and found out that it appears that Mr. Abrams been spoon-fed some stuff that he didn't question because there is an institutional dislike for Newt amongst the conservative establishment and so on and so forth. ...

[T]here were the videos of some examples selectively edited. You know, things left out and starting point of the edited version, not really the starting point. So there you have it. But, however, folks, I'm just gonna have to assume here that Elliott Abrams was spoon-fed this stuff by the Romney people.

Elsewhere in his remarks Rush lets this whopper fly:

Elliott Abrams' reputation is beyond repute [sic]. He's gold. He's the coin of the realm, and that's what made people curious.

Assistant Secretaries of State for eight years under Ronald Reagan aren't spoon-fed anything, particularly Harvard grads with BA, MA and JD degrees who go on to plead guilty to two misdemeanors of withholding information from Congress.

You know, doofusses who, [w]hile serving for Reagan and in the State Department . . . were integral players in the Iran-Contra affair. Abrams held many roles within the affair, some official and unofficial. This included working with CIA operations that got the U.S. onboard with the illegal shipment of arms and supplies.

Gee, what could Elliott Abrams and Newt Gingrich have disagreed about in 1986 which would have caused Abrams today to attempt to re-write Newt Gingrich's relationship with Ronald Reagan in order to discredit Newt's run for president?

An "institutional dislike"?

Try a fundamental difference over the meaning and limits of conservatism.

With ObamaCare About to Pass, Elena Kagan Wrote to Harvard Plagiarist Laurence Tribe to Exult !!

She should recuse herself from hearing any case involving ObamaCare.

David Harsanyi weighs in here:

Nor, as we learned this week, is it reassuring to find out that while the House was debating passage of Obamacare, Kagan and well-known legal scholar Laurence Tribe, then in the Justice Department, did a little dialoguing regarding the health care vote, and according to documents obtained by Media Research Center, Kagan wrote: "I hear they have the votes, Larry!! Simply amazing."

Nothing says impartiality like double exclamation points!!

Cain Accuser Kraushaar Can't Remember Complaint Filed at Subsequent Job

As reported here:

Kraushaar said Tuesday she did not remember details about the complaint and did not remember asking for a payment, a promotion or a Harvard fellowship.

Smartest President Ever Says We Built The Intercontinental Railroad

Ah, that would be transcontinental.

Andrew Malcolm for The LA Times, here:

"We’re the country that built the Intercontinental Railroad," Barack Obama.

That's what the president of the United States flat-out said Thursday during what was supposed to be a photo op to sell his jobs plan next to an allegedly deteriorating highway bridge.

A railroad between continents? A railroad from, say, New York City all the way across the Atlantic to France? Now, THAT would be a bridge!

It's yet another humorous gaffe by the Harvard graduate, overlooked by most media for whatever reason. Like Obama saying Abraham-Come-Lately Lincoln was the founder of the Republican Party. Or Navy corpseman. Or the Austrian language. Fifty-seven states. The president of Canada. Etc.

"[Obama's] probably the smartest guy ever to become president."

(Michael Beschloss, Harvard MBA, presidential historian, interviewed on Don Imus in November 2008, transcript and appropriate commentary mockery here.)

No wonder Obama keeps his college transcripts sealed.

"How does a bad student go to Columbia and then to Harvard?"

Why is Michael Lewis a Kraut-hating Bigot?

Scott Locklin wants to know, here:

Michael Lewis attempts to get to the bottom of the German side of the financial crisis. This is an interesting and tremendously important subject. Why? Because Germans didn’t have a financial crisis. This, despite the fact that the German Landesbanks were the counterparties in a good fraction of the printing of shitty bonds (aka, Germans own a lot of the worthless bonds printed up by American banks). This despite the fact that the Germans own a bunch of shitty Greek government paper. This despite the fact that Germany was incinerated and invaded in WW-2, and half her territory and a third of her population incarcerated under communism until 1989. Yet, Germany is a prosperous and pleasant nation to live in; one of the best in the world. Germany manages to have lower unemployment than the US, despite all their unions and socialistic regulations for hiring and firing: laws which Harvard economist ding a lings will insist would be the ruination of the American economy. How did the Germans manage this?

Michael Lewis doesn’t know; he’s too busy making turd jokes. 

AP Reports Householders Converted to Renters Total 3 Million

With 3 million more expected by 2015:

Since the housing meltdown, nearly 3 million households have become renters. At least 3 million more are expected by 2015, according to census data analyzed by Harvard's Joint Center for Housing Studies and The Associated Press.

Read the rest of the story here, which says that the GSEs presently own 250,000 foreclosures.

Not Triple A

Thanks, Harvard.

Story here.

Median Amount Saved in Retirement Accounts is $2,000?

Which would imply that half the population has less than that saved, and half the population has more than that saved.

The oft-repeated datum is pretty darn old already. A decade! It is based on a survey of about 3,400 people taken way back in 2001 and reported on the Bureau of Labor Statistics website in an "updated" posting dating to 2005, here:

The median amount held in retirement accounts--$2,000--provides another indication of the wide variation in the amounts held by households.

More recent surveys of somewhat smaller samples of Americans paint an only slightly less apocalyptic picture of the resources Americans may or may not have tucked away:

Just over a third (34 percent) of Americans have no retirement savings, up from 30 percent in 2009, according to a new Harris Poll of 2,151 adults. ... Some 42 percent of individuals age 45 and older have less than $25,000 saved for retirement, EBRI found. Only 11 percent of all current workers say they have $250,000 or more saved for retirement.

At a 4 percent per year drawdown rate in retirement, people with $250K can draw down roughly only $10K per year for 25 years, and then it's pretty much gone.

Pretty hard to live on that without Social Security and Medicare, which themselves are going bust.

Americans are not ready for the future, but the maw of the future sure is ready for them.

Politico Reports Boston Globe Reporter Had Obama INS Files Since 2009

So The Boston Globe spiked the story?

Politico doesn't say. So inquisitive are they.

So inquisitive, in fact, that they don't notice that the details in the release contradict Obama's often repeated story about his earliest childhood.

Others have noticed.

Politico's story is simply participating in the administrations's diversion strategy, focusing on the fact that Obama Sr. was prodded out of the country by Harvard.