Saturday, August 1, 2009

The Housing Bubble is Officially OVER...

This week we had the best economic news on TWO fronts in years – FIRST, existing home sales rose for the third straight month and SECOND, the stock market inched over 9,000 for the first time this year.

This news is vital because it signals that there’s no way to blame ANY of the policies going forward on the now “long past policies,” of the Bush administration. That’s now off the table.

WASHINGTON (AP) - July 23, 2009 -- A real estate group's report says sales of previously occupied homes rose 3.6 percent from May to June, the third consecutive monthly increase and a sign that a housing recovery is under way in much of the country.

The National Association of Realtors says home sales rose to a seasonally adjusted annual rate of 4.89 million last month, from a downwardly revised pace of 4.72 million in May.

It was the highest level of sales since October 2008 and beat economists' expectations.

Ironically enough the stimulus packages have done nothing to bring about the current “recovery”. With less than 5% of the stimulus monies being spent, it’s been China’s recovery that has helped bring a large sector of the American economy back.

So why’s this so important?

For one thing, it’s nothing less than the official end of the “Bush-Pelosi-Reid” economy. Even though we’ve had a “Democratic economy” since January of 2006 and a concomitant period of economic disaster along with it, up to now, most of the last two years were wrongly blamed on the lame duck Bush administration, but now we have the official start of the “Obama economy”.

Economists across the board expect dire consequences from our exploding national debt, rising unemployment and declining revenues – fewer people working and less profitable industries has meant lower tax revenues for city, state and the federal government.

This mini recovery breaks with the past and makes ALL the future consequences the result of the failures of Democratic Keynesian policies.

Economists across the board agree that we’re currently facing some very dire consequences as a result of the exploding National Debt and declining revenues due to higher unemployment and far less profitable American industries.

At the end of next year, the Bush tax cuts expire and both tax experts and economists predict that the top 10% of American income earners, who now pay about 80% of the income taxes, will simply defer more of their incomes as tax rates rise, thereby DECREASING tax revenues. They predict that because that’s what the highest income earning Americans ALWAYS DO when tax rates rise.

So, now, a full six months into this administration, we can now, and without ANY rational opposition, say that “We are NOW officially in the Pelosi-Reid-Obama economy”.

From here on in EVERY rise in the unemployment rate, EVERY spike in inflation, EVERY hike in interest rates and ALL the concomitant economic pain is unquestionably due to the Democratic agenda and their Keynesian policies.

THIS should be welcome news to ALL Conservatives and economic Libertarians.

We’ve already had “the recovery” without any “feel good”, now, everything going forward can and will be blamed on the Obama-Pelosi-Reid policies.


Dan O. said...

"...that there’s no way to blame ANY of the policies going forward on the now “long past policies,” of the Bush administration."

Oh, but they will.

JMK said...

That's true, BUT here is the "recovery" that puts that lie to that kind of misdirection, Dan.

Existing home sales have risen each of the last three months, with the largest leap last month! The Dow is over 9200 and this is probably as good as "the turnaround" will get.

From here on out, it's ALL on Obama-Pelosi-Reid.

Besides, Obama was elected to improve the economy of the Bush years - 4.6% unemployment, 2% inflation and a 3% prime lending rate as recently as mid-2008!

Bringing us back to that would be a C - the minimum expected....OK, a C+, given the hole the Pelosi-Reid Congress put us in along with Sen Dodd and Rep Frank AND G W Bush, who signed onto most, if not ALL the Keynesianism they pitched since January 2007.

If things stay the same as they were when he was elected, or even get worse from where they are now, as many economists predict they will, given the exploding National Debt, the Democrats own all of that.

I can't see the Debt coupled with a HUGE Deficit (adding to that debt every year) doing anyhting but putting a powerful inflationary pressure on the economy, raising BOTH the inflation rate AND the prime lending rate and in the process, making it harder for companies to expand, thus increasing unemployment.

I see tax hikes, very possibly MASSIVE tax hikes, with those who can...that's most in the top 10% of income earners...deferring more of their monies and REDUCING government revenues. o, I see STAGFLATION not far down this down the road. Definitely double digit unemployment into and through 2010, probably rising from 10% very soon, it's 9.6% now) and rising through the 2010 elections.

With that, eventually all that inflationary pressure HAS to be felt and when it is felt, it'll probably rise substantially and quickly.

The Republicans post-Gingrich have been part of the problem and the Moderate-wing of that Party still IS, but for better or worse, all they have to do is take a page from the Dem's playbook and "politicize a problem and focus the blame on the Party in power".

That'll always work.

Skunkfeathers said...

Yes, the Barry spinmeisters will continue to blame Bush for everything they can, right up to their '12 campaign. Credibility is not in their character. And long as voters don't expect credibility from them, it doesn't have to be.

So we voters better start demanding it.

JMK said...

No question SF, BUT the only "credibility" the Left had going into 2008 was based on the abject failure of the GOP which had bone-headedly abandoned its Reagan/Gingrich "Small government" roots in favor of joining their fellow (Democratic) politicians in feasting on D.C. pork.

Delay and Hastert disgraced the GOP and G W Bush joined in by spending "MORE on reckless social spending, even adjusted for inflation, than LBJ did."

Today's Keynesianism began with G W Bush (the first "stimulus checks", the first bailouts)'s only gone into hyper-drive since January!

The GOP merely has to return to its roots and DELIVER on its Gingrichian and Reaganite promises of SMALLER, cheaper, more localized government.

We're heading toward a major fiscal calamity. That crisis will rpovide a PERFECT OPPORTUNITY to slash and burn NOT ONLY the Obama-Bush-Pelosi-Reid add ons, but many, if not most of the Johnson-Nixon-Carter debacles as well.

Such a fiscal crisis provides a great opportunity to convince the people that they'll have to give up some of their cherished "free stuff, in exchange for greater prosperity overall.

A daring, Gingrichian Conservative COULD and WOULD be able to slash and burn "free healthcare," welfare as we know it", section-8 housing, food stamps, and a of other programs that only inculcate MORE dependancy and poverty.

The coming debacle will provide a GREAT opportunity for Supply Side supporters.

Those who claim, "Once these programs are in place, there's no stopping them" don't know what they're talking about....all it would take is a little political courage.

Bug said...

Interesting... I guess this explains why we have to short sell our house and possibly go into foreclosure. Wow... the housing market has been fixed... thank you so much Obama!

Lets look at what they are doing compared to what they did in the 20's... seems awfully familiar. I wonder where we will be in 2 years.

Seane-Anna said...

Hey JMK! I hear where you're coming from but I have to agree with Dan O and Skunky. The Obamabots will continue to blame Bush for anything that goes wrong during their god's reign, and with the MSM on their side they'll get away with it. Only if things get REALLY bad will Bush bashing cease to be a viable enterprise for Obama and his followers. Or maybe not. I just don't know what to expect anymore.

JMK said...

Hi Bug!

I'm not claiming the housing crisis is over, unfortunately even subprime lending is still going on unabated, this time by Ginnie Mae (Fannie's and Freddie's GSE cousin), BUT that's what both the Obama administration AND many economists are saying.

Existing home sales have improved over the last 3 months and have risen to their highest levels last month, since 2007. Even the unemployment numberss have improved slightly.

I WANT those official reports to announce the end of "the Bush economy" so we can get onto "the Obama economy."

This administration will take the blame for all the economic mayhem caused by the mountain of debt and the explosion of government taxing and spending that will only drive UP unemployment, inflation and interest rates in the months ahead.

The reports are in and they're official....the economy is now all theirs.

JMK said...

Taht's not the point Seane-Anna.

It doesn't matter what partisans say, it's what the fact say that counts.

The first six months of any administration are always impacted by the previous administration's policies. In a very REAL sense, the Obama administration has actually benefitted from some of the previous Bush policies, including tax cutss that continue to bring in higher revenue rates.

Tax hikes ALWAYS reduce revenues because the top 10% of income earners tend to have the most discretionary income, so when rates rise, they respond by deferring more of their pre-tax income in tax-deferred vehicles like IRAs, 401-Ks, 457s, etc. and that reduces revenues, since that group pays over 80% of all income taxes in America.

Whether they like it or not, from here on in the economy is officially "the Obama economy."

The good news for folks like you, Roady, Dan O, myself and others is that more of that vast middle, all those independents and self-proclaimed "moderates" are becoming more and more disaffected with the Obama administration. The healthcare uprisings and the Tea Parties prove that.

Today, I'm looking forward to 2010 more every day!

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