A long-time friend of the blog writes:

I am so sick of hearing about things that millennials will “never have.” I am not that much older and I don’t think things were all that much different when I was in college, renting or buying a house. Perhaps the difference is in mindset- I didn’t expect to afford rent on apartments with marble countertops and rooftop spas when I was earning minimum wage just out of college. I didn’t expect my house to be perfect, either. I just needed it to be structurally sound. Sweat equity was fine.

To the point in this post that the market isn’t working for millennials, I would say it is to a fault. Millennials are demanding perfection, to move in to brand new, high end amenities. They won’t settle for less. Most of the rest of us have pkaces to live, or want to move up, as generations have before us. That millennials are refusing to rent or buy affordable housing, which in turn is being torn down to build luxury and market rate units is the market working. The affordable housing was there for millennials who wanted to start out like the rest of us. But, because they won’t buy or rent it, there is no market for affordability. That they “won’t have houses” is really just their own choices. Kinda like “we can’t pay our college debt ever” when they choose to get multiple degrees from the most expensive colleges in non-marketable skills, like fine arts, literature, etc.

I don’t mind people getting “non-marketable” skills, provided they don’t whine about their prospects after graduation (or show me their draft notice they got before being taken against their will to study Womens’ Studies at Oberlin).

What I’ve noticed?  They seem to collect maladies and diagnoses the way they used to collect Pokemon.

Maybe some – how do you say… – realignment of priorities is in order?

Joe Doakes from Como Park emails:

“Hoarding.”  Americans are “hoarding” cash in their checking accounts, rather than invest in the stock market.

The analysts quoted in the story say the economy is wonderful, the recession is over, incomes are up so people should be spending like crazy but those darn backwards fearful idiots aren’t even putting money into savings accounts that pay .0000025% interest, they’re leaving it in checking.  Morons.

Or, it could be that ordinary Americans hear the phony economics reports but see the economy around them and choose to believe their eyes.  The economy is not wonderful.  The fact they’re claiming it is, provides evidence we cannot believe them.  A bigger nest egg is a wise precaution.

Next up, watch for Liberal politicians to suggest that banks should assess a “surplus savings surcharge” on hoarders’ bank accounts, then deposit the proceeds into the accounts of non-profit companies ostensibly working for low-income clients but actually donating to Democrats.

Joe Doakes

Today’s quips are tomorrow’s Elizabeth Warren bills.

Joe Doakes from Como Park emails:

Reading a book from 2004 called “Dark Age Ahead” by Jane Jacobs, who has written about culture and cities and societal change.

When it was written, everybody assumed the house price bubble would never burst.

When it was written, everybody assumed that if the house price bubble did burst, the market would quickly correct itself making housing more affordable.

Nobody saw the endless string of stimulus packages and interest rate cuts to bail out foreign banks hoping to keep home prices propped up for a decade.

A whole string of public policy recommendations turned out to be based on bad assumptions.  We see it now, of course.  But at the time . . . .

So: what bad assumptions are we using today as a basis for public policies which, in 15 years, will have people shaking their heads saying “What a bunch of idiots”?

Joe Doakes

Mitchketeers?  Go to it!

I find myself more and more these days trying to give historical context to current events, to clarify current events for the various millennials in my life.

Here’s a big one:  while the media is turning cartwheels about the “Obama Recovery” (happening an unprecedented eight years after the crash – worse than the Great Depression), the best quarter of GDP growth in this “recovery” is lower than the worst quarter of Reagan’s recovery, from 1983 through 1987.

But never mind – the media will keep the narrative of Obama the Economic Lightworker warm and dry.

But with Hillary Clinton in the picture, there’s another wrinkle.   John Hinderaker notes at Powerline (with some emphasis added):

n 1992, Bill Clinton announced that “It’s the economy, stupid.” That was pretty much the sole theme of his campaign. He ludicrously claimed that the country was then experiencing “the worst economy since the Great Depression,” a lie that the press, to its everlasting shame, not just allowed but often endorsed. So what was the level of GDP growth that Clinton relentlessly denigrated?

According to the Bureau of Economic Analysis, the quarterly growth numbers for 1992, in chained 2009 dollars, were 4.8%, 4.5%, 3.9% and 4.1%. That’s right–the growth that Bill Clinton derided as the “worst economy since the Great Depression” was around four times what we are now seeing under Barack Obama. And Hillary Clinton promises to continue Obama’s anti-growth policies.

I remember the recession at the tail end of the Bush 41 administration – as the economy adjusted from a Cold War economy to civilian spending – very well; it slowed down my transition from radio to IT by a few harrowing months when I was welcoming a couple of new children into the world.  But it was a short recession with a sharp recovery (“Thanks, Ronald Reagan, for that “peace dividend!”) that led to 15 mostly-prosperous years…

…whose various windfalls are long in the past.

Joe Doakes from Como Park emails:

First Quarter GDP revised down to 0.8% and second quarter revised down to 1.2%.  The economy is flat.

 And that’s if you believe these revised numbers are accurate information instead of political propaganda for the election year.

 Joe Doakes

Like any of Obama’s policy declarations, job and GDP numbers have shelf lives.

Joe Doakes from Como Park emails:

Fannie Mae used to allow 97% loan-to-value meaning you only had to have 3% down to buy.  After the crash, they lowered that to 95% meaning borrowers needed to save up 5% to buy.  It turns out women and minorities are hardest hit by that change.  So Fannie Mae raised it again to 97%.

 

They point out that only 7% of all such 97% loans given between 1999 and 2012 went bad, about the same as all other loans.  What could go wrong?

Yes, and if you started with all loans since Moses, it’d be an even smaller percentage.  Look at the loans given in 2007, when prices were at the max and everyone knew the crash was coming but the feds were still signing up any warm body they could find.  28% of the low-money-down loans failed.  And by 2011, lending restrictions were so tight nobody could qualify for a house so none of those loans went bad, which makes the overall percentage look even better but means millions of people lost homes they should never been able to buy in the first place.

 

I can’t help but wonder if this is the start of another boom-bust cycle in housing.  Are we intentionally repeating the mistakes of the past because it would be politically incorrect not to?  Has fiscal sense gone completely out the window?

 

Joe Doakes

Or does crisis become the current regime?

“Progressives” the world over are pretty much all the same.  Kevin Williamson on the Greek crisis:

When Greece’s sham economy went ass over teakettle, it agreed to a bailout package, finalized in 2010. That deal is now widely blamed by the Left for exacerbating Greece’s economic crisis with excessive “austerity.” The problem with that line of argument is that there was no Greek austerity: Greece lied about its debts before the crisis, and it lied about its reforms after the bailout. It didn’t take the meat axe to its public sector: Greece went out and hired 70,000 new government employees instead. It stopped selling government assets, which it had agreed to do, and government’s share of GDP actually increased rather than declining.

Lying about finances to lull the gullible?  Sounds like the DFL to me.

Greece’s problem – and you’re seeing it here, too – is that “progressive” economists (and the governments who love them) have the wrong measure of economic health:

As one Greek supporter of Tsipras’s wheedling told the New York Times: “We’re all pensioners here.” Indeed, and that’s the problem. A society’s wealth may be measured by its consumption, but its wealth consists of its production. One cannot consume what has not been produced, and consumption can exceed production only as long as your credit lasts, and credit — n.b., congressional clown conclave — is never eternal. Greece has too few people working in productive business enterprises and too many receiving government checks, either as employees or as welfare recipients — a distinction that is increasingly difficult to make in Greece and elsewhere.

Keep that in mind, as America’s employment participation rate drops below its lowest levels in a generation or two, even as our population  – especially the population with a Greek-like love of getting something for nothing – grows.

….continues in the style to which we have become accustomed.

Most chilling?  The labor force participation rate remains not a whole lot better than it was at the nadir of the recession.