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PulteGroup, D.R. Horton expect profitable turn. One thing that has kind of surprised me is that so many builders have hung on so far.
D.R. Horton is putting up some townhouses in Warrenton from the low 300's. Building seems to have resumed in other parts of the exurbs, too, but quietly. Northern Virginia's overall housing inventory is unchanged from last year.
Still, this area's economy does partially hinge on the ability of the federal government to keep spending, as discussed in a conversation in the Bits Bucket here yesterday. As we await our fate, the unflappable CR assures us that "paying the bills" will go on as usual.
Friday, July 29, 2011
Northern Virginia Bits Bucket 7/29/2011
Posted by Harriet at 2:57 AM
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18 comments:
Harriet-
I hope CR is correct, but I am becoming less confident. I find it very worrisome that Boehner can't even pass his own plan in the house. If the speaker can't pass his own plan when he has a a strong 55%/45% majority I worry that the house may be unwilling to pass anything.
I still assume Obama will either say the 14th amendment makes the debt ceiling unconstitutional or Boehner will convince a ~50 Republicans to vote for the Reed plan (which is a Republican plan even though it comes from a Democrat). Although the longer this charade goes on the more I realize that most of the newly elected congressmen don't know the first thing about economics and have the maturity of bunch of children. I really do find it amazing that Democrats and Republicans can't come to a compromise and would rather let our economy fall off a cliff than agree to something that is not optimal in their eyes.
Housebuyer: “I really do find it amazing that Democrats and Republicans can't come to a compromise”
HB, when I hear statements like this, I get frustrated, if not infuriated. All of the news coverage on this issue has been similar, e.g., “. . . those uncompromising politicians.” There is a false equivalence between the parties. Let’s be clear: one party, and one party alone, is to blame here. Republicans are threatening a national default to get cuts they want and eliminate taxes they do not want. That is what is going-on here. Certain of their members actually want a default. Certain of their presidential candidates have stated that they would not vote to increase the debt ceiling, *under any circumstance.*
Democrats control the White House. Democrats [barely] control the Senate. Despite this, they were willing to agree to a package that favored Republicans by a 3 to 1 margin, i.e., $3 dollars of spending cuts for $1 in every new dollar in revenues. So, THERE IS COMPROMISE by Democrats. Democrats, in an effort to avoid default, were willing to make huge sacrifices. Republicans, on the other hand, Tea-Partiers in particular, refuse to increase revenues at all, even on hedge-fund managers, jet-owners and oil companies. Republicans have pledged their allegiance to a man (grover norquist), rather than the country.
The Republican Party is an unmitigated disaster. They would rather rule in Hell than share power on Earth. It’s time for Republicans to compromise.
Mike-
I strongly disagree with you that there is a sense of equivalence in the news. Everything I hear is saying the tea party people and the Republicans as a whole are being very reckless. I put the vast majority of the blame on the Republicans, although I do think that the Dems deserve a little of the blame e.g. their unwillingness to even consider a short term solution.
What news sources do you listen to out of curiosity that is painting the picture as even. Even Larry Kudlow a very strong republican on CNBC has been telling republicans for weeks that Reid's plan is a Republican plan and the Republican's should take it.
Personally I would like to see more revenue in the packages, but I would much rather have a bad package than nothing at all. I am pretty confident the republicans will lose power in the next election and the cuts vs. revenue can always be revisited in the future, but the economic consequences of not passing something would be very severe.
HB, I think you're making Mike's case for him (in addition to the good case he made). The fact that "strong Republicans" think the deal was extremely favorable to their side and should have been accepted provides more support for the argument that Dems. have gone much further than the Repubs. in being willing to compromise.
There are sites on the web that provide evidence, with links, of how the false equivalence has been repeatedly presented. One could also argue that if the tea partiers were being portrayed consistently as you claim, it would both take away their power and show up clearly in the opinion polls that people blame them rather than Dems.
A short term "solution" is no solution, because the very same underlying issues will come up over and over, causing the same market turmoil (and other negative consequences). That's why Obama and others have had to say no to it thus far, though they may capitulate at the last moment to avert what they believe will be disaster. That's not an indication of unwillingness to compromise, but rather recognizing that it simply kicks the can.
I agree with everything else you said up to the last sentence in your first post.
Since my comments may be getting off topic from NoVA housing issues, I will shut up at this point.
Ace & Mike-
I guess I would be willing to revise the comment to say the Republicans. I personally blame them, but was just trying to put out a non-partisan statement. Seeing that my intentions failed I guess I may as well just say I agree with both of you on who is to blame and leave it at that.
HB, sorry if I came across as jumping on you.
Well, I disagree with what you are saying. The President is the one that wants our country to default. This is a problem caused by Democrats and they are to blame. They are the ones that won't even bring up the bill that was ALREADY passed in the house for a vote.
THAT is the problem. Democrats have not compromised at all. As usual, Republicans compromise and will continue even to our nation's peril. I am glad for once that they are trying to stand their ground.
As to the conversation yesterday, even if gov is shrunk a bit will house prices in the area really decrease? If people that are buying now have money in general, they will continue to have their money to spend and just get better deals if prices fall.
Ace-
I did not think you were jumping on me I was just trying to clarify my position.
Wunderbar-
The bill they had has nothing a democrat would want, while the bill the democrats proposed was mostly what republicans wanted with only a few thinks democrats wanted. So I would hardly call it compromising to refuse to add a single thing the other person wants and refuse to negotiate with them if there is a single revenue increase.
Your comments also make it seem like Republicans have historically been the fiscally responsible ones. If you look historically this just hasn't been the case. Debt/GDP has grown much faster under republican presidents than democrats. Historically both parties liked to spend money, but only democrats wanted taxes.
Housebuyer -
Thanks so much for your civil and reasonable comments on this blog. I fundamentally disagree with you, but appreciate your focus on the issues, rather than the personalities.
I recommend to you Professor Epstein. He makes the point that government spending is the main issue. It really matters much less what the means of financing is, whether it be borrowing or taxing. I could not agree more. Plus, he is a very erudite scholar of constitutional law.
The bigger the government, the smaller the citizen.
http://ricochet.com/main-feed/Smaller-Government-Not-Lower-Taxes-is-the-First-Order-of-Business
Senator Obama in 2007:
"America has a debt problem and a failure of leadership. Americans deserve better. I therefore intend to oppose the effort to increase America's debt limit."
Mark-
Thanks.
As for Professor Epstein I agree with his comments about closing loopholes in taxes. As for smaller government I think that depends on the situation. I am a fairly strong believer of Keynes' work, so in in the good times the 90s and late 2003-2007 I think we should have had a small government and ran surpluses. So to that extent I think Obama was right in 2007 to say we should reduce spending. Now I think government should try to create useful jobs and spent a lot of money doing this. If they had spent $1+ trillion on massive infrastructure projects including energy I think we could have made self sustaining recovery, which would have more than paid for itself. Unfortunately the stimulus was too small and very poorly conceived (e.g. paying people for two years to be unemployed). These people continued to be worried about not having a job so the economy never got started.
Housebuyer -
A trillion dollars of payroll tax cuts would have been immediately effective, and would not have transferred power and control to the central government. Despite its many virtues, the federal government is also a vast economic mis-allocation machine. It breeds corruption, punishes virtue, and rewards vice.
The bigger the government, the smaller the citizen.
"HB said...I am a fairly strong believer of Keynes' work, so in in the good times the 90s and late 2003-2007 I think we should have had a small government and ran surpluses."
The only problem with Keynes theory is that we dont follow it. When we enter a recession, the govt does a good job of becoming the "spender of last resort" and taking some of the edge of the downturn.
The flip side of which is when the economy is growing, and the govt is flus with tax reciepts, it should put them aside to use during the next recession. However, history has shown we dont do that. Repubicans talk about "giving it back to the people" via tax cuts, and democrats talk about expanding this program or that, and then the next thing you know, *poof* that rainy day fund is gone.
Its a shame we are so good at spending money we dont have.
"sehrwunderbar said...
As to the conversation yesterday, even if gov is shrunk a bit will house prices in the area really decrease? If people that are buying now have money in general, they will continue to have their money to spend and just get better deals if prices fall.
7/29/11 3:55 PM"
I'd say yes. Go back a few posts to the Case Shiller thread, and look at the late 80s bust. At the time, we had won the cold war, and did a bunch of scaling back in the defense dept.
As such, the CS index which hit 93.02 in March 1990 fell to 87.97 in March 1992 (a drop of -5.4%).
Thats why im interested to see the size of the austerity package that comes out of congress before I update my price projections. Depending upon the size of the package, we could be looking at possibly a -5 to -10% drop in prices from current levels.
HB, not to beat a dead horse, but here's a perfect example (from today's news) of the false equivalency, "Washington is broken" article that is so common.
Wash.'s Awful Side
Folks
the way i see it the "Debt Ceiling"
charade is just a move by the wall street banks to hijack social security.
They want the Trust fund liquidated and turned over to the banks.
Oh, and when they are finished digesting that they will move in on the Federal Pensions.
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