No House to House Resuscitation

Now that the end of the world has passed without incident, we can look for other record-breaking catastrophic statistical misery. Like this from a Website that carries an ominous name: “Home prices are inching closer to cycle lows and indicators of housing distress are rampant throughout the country. Home prices during the troubling five years of 1928 through 1933 saw a decline of 25.9 percent nationwide and this was during the Great Depression. The latest Case-Shiller data shows that home prices in the 20 City and 10 City composite measures are down by 32 percent from their 2006 peak.” Doctorhousingbubble.com. With most American used to carrying their net worth in their homes, the collapse of the domestic housing market is nothing short of a depression.

To make matters more “delightful,” many in real estate just don’t see a recovery at all. Certainly, for homes in outlying areas catering to marginal home-buyers, the prospects are less than bleak. Even if folks could afford these properties, with rising fuel costs, who wants to add hundreds of dollars a week in commuting costs in this most uncertain job market. Federal subsidies are the only thing propping up the lower end of the housing market, and the lack of lending money at the higher end had slammed that segment into oblivion.

And while I seem to be harping on these themes consistently in my blog, forget unemployment and look at the pay scales and job requirements of those who do have jobs – America is seriously under-employed. Working harder and making less. That we are crushing our educational systems under some misguided sense that we should spend money on wars which bring no value back to the United States and represent military and tactical failures at almost every measurable level but that school and university education is expendable is outrageous. Exactly how are the next generations of under-educated Americans going to earn enough money to buy that vast inventory of unsold homes? Or live?

Current Americans are living on the investments of prior generations. We are investing nothing in ourselves these days. We are cutting back on infrastructure construction and repair – hey, we don’t really want the productivity increase of fast road and rail transportation. We don’t need to seed research projects with federal dollars to create new technologies and new jobs in the future. Why should we? Aren’t the Chinese doing that for us? And who really cares if we educate the next generation of engineers, mathematicians, economists, and teachers. Again, look at the rising math scores and educational achievements in China, Korea and India; they’re totally ready to step in and take our place. We are pretty much taking ourselves out of the competitive race for future value-added jobs.

It’s not that I think the reasons for the new Tea Party fiscal conservatism are wrong. I get it. The federal government has let us down with wasteful missteps in the recent past. Point well taken. And irresponsible deficits need serious federal and state budget trimming or the longer-term buying power of our dollar will erode even more rapidly than it has already. But bottom line, if you believe in America, then invest in America… spending by the fed has a lot of pure expense (like the military budget) and a lot less in the way of investment (longer-term, value-generating expenditures that produce a multiple return over money invested: infrastructure, education and research).

We need to reverse that trend. The “every man for himself without government” mantra that unpins the Tea Party solution to the current crisis is where I strongly differ with that conservative movement. And if they succeed in cutting those governmental investments back to create a more balanced budget, leaving rampant military expenditures to rise unchecked, they will have succeeded in creating several “lost generations” of Americans completely unprepared to compete and make a real living in a global marketplace.

I’m Peter Dekom, and I strongly believe that if you really have faith in the United States of America, then you have to put your money where your mouth is – invest in her!