Herman Cain: Liberals Want to Destroy America

[Reverend Rick]

Every house will sell when and if it's priced right for the market. Period.

And...... every unemployed person will get back to work when they actually figure out that their not as valuable as they think they are.

Texas has got back to work, but the wages could be better.

The United States does not have the power to even correct the problems we are facing unless they want to become an isolationist country.

Otherwise, the world market will dictate what something is worth.

If we continue the path we are walking, we all will become broke and our new Chinese task masters will purchase everything right out from under us.

 

[Revoltingest]

The United States does not have the power to even correct the problems we are facing unless they want to become an isolationist country.

I prefer a different flavor of defeatism. I say we can correct (or at least mitigate) our problems by moving away from a society on the dole to one which fosters a vibrant work & business climate. Of course, this is not our path anymore.

 

[Falvlun]

I prefer a different flavor of defeatism. I say we can correct (or at least mitigate) our problems by moving away from a society on the dole to one which fosters a vibrant work & business climate. Of course, this is not our path anymore.

Of course that's what we'd prefer, and that's what Rev was getting at. In order to have that, we need manufacturing jobs... not just service, financial, and retail sector ones. We need to make things. We need jobs which don't require a university degree (or shouldn't require one), but still pay a living wage.

We can't get that when our workforce is competing against those in other countries which do not pay their workers a living wage or in which the cost of living is so much lower.

 

[Revoltingest]

Of course that's what we'd prefer, and that's what Rev was getting at. In order to have that, we need manufacturing jobs... not just service, financial, and retail sector ones. We need to make things. We need jobs which don't require a university degree (or shouldn't require one), but still pay a living wage.
We can't get that when our workforce is competing against those in other countries which do not pay their workers a living wage or in which the cost of living is so much lower.

I think Rev (the other "Rev") is more protectionist than I am about it.
(I don't really disagree with him, btw.)

 

[Stevicus]

Oh, I can explain that easily - the sellers are either upside down on the note and can't afford to write a check at closing, or simply are asking too much for the local market, or both. It's really very simple. Supply and demand.

Every house will sell when and if it's priced right for the market. Period. I mean, unless of course there's some sort of weird disaster which makes the area inhabitable.

I think this confirms my point. If the price of housing was determined solely by market forces, then these houses would be selling, not sitting empty. This indicates that housing is overpriced for the market. Judging solely by the rate of inflation, the house I referred to earlier should only be worth $149,000, not $349,000, so something is obviously seriously skewed here. (Note that in 2005, the value of that house peaked at $660k when it should have only been worth $134,000 in that year, going by the rate of inflation.)

I have an idea that might solve the problem, by proposing an unused property tax. Any developed property which sits empty and unused will be taxed at a rate which will double each month until the property is sold. That will serve as a disincentive to anyone who wants to sit on an empty property indefinitely, and it would give a wake-up call to sellers who demand too high a price. If there's a chance they could start losing serious money by a tax rate which doubles each month, they will have a strong incentive to sell their properties quickly, thus driving the prices even further down.

This would make housing much more affordable to working class people, and it would also free up huge amounts of disposable income for consumers to spend on other areas of the economy, since they wouldn't pay through the nose just to have a place to live. Workers could even take less money and be more competitive on the world market, if only they didn't have to spend so much of their income on basic shelter.

That's simply not true.

I sold a house for $30,000 profit. What did I do with that money? I spent much of it - in the local economy.

Also, when I bought the house, many people made money off that transaction. When I renovated it, many more people made money. When I sold it, MORE people made money.

And most of them spent most of that money - locally.

Building is only one of thousands of ways to pump money into an economy.

Government printing extra money is also a way of pumping money into an economy. It comes down to the same thing, if nothing new has been created and added to the economy (other than printed money).

 

[Reverend Rick]

I think back when Japanese motorcycles where kicking Harley Davidson's butt. We had protectionism back in the 1980's for several years and that gave Harley a chance to retool and report to congress that they could lift the restrictions a few years later.

Look at Solandra, (sp?) We can't make solar panels cheaper than China, so the factory went bankrupt. Why can't we put a tariff on Chinese solar panels to level the playing field?

I like bare bones competition, but Americans have to deal with all these regulations that China does not. It's not a level playing field. I don't want polluting, unsafe, slave labor ran factories in America, I want us to make a superior product by people making a living wage.

 

[Magic Man]

Maybe you shouldn't have bought it. Maybe you should be renting. Or moving elsewhere. I don't know.

Why would I do any of those things? I think you're missing the point. The point is housing prices here are not cheap. We luckily can afford it, but it's not like we had the option to get a small starter home for cheap, unless we moved into a really crappy neighborhood or an extra 30-40 miles away from where we are.

I wouldn't spend $200,000 on a 1400 square foot house, that's for sure. But hey, that's just me.

Well, good for you. It seems you don't understand the concept of different areas having different costs. I would think that would have been something you learned while working in real estate. But you also seem to be missing the idea that that is just the market around here, so if you wanted to buy anywhere in a 60 mile radius, that's about what you'd pay, so it's not a bad deal relative to the market. It's not like we paid $200,000 for it at the height of the bubble and now it's worth $100,000.

Everyone's experience is biased - including yours.

The difference is I can look at my experience as simply my experience. I don't pretend that my experience is universal or representative of the whole group of people. I know that there are people who live beyond their means. I just don't think it's as widespread as you think it is.

However, I would say that my ownership of a real estate company with a staff of twenty (oh, and did I mention that I also managed a real estate company with 100 realtors on staff?) gjves me a bigger view than most people.

Yup, but even that, viewed through biased lenses, can mean little.

Actually, I have checked out Maryland. In fact, I've lived there twice in my adult life. Didn't buy a house there, though - too expensive. I chose to rent instead. I also didn't choose to settle there permanently, in spite of the many things I like about the area. What I specifically DON'T like, and therefore voluntarily choose to avoid like the plague, is the ridiculously high cost of living.

You must have been in a different area then. The cost of living here isn't that bad. It's higher than many places, I'm sure, but it's nowhere close to a Manhattan or L.A.

But my point was that different areas have different markets. A starter home in your area may be very cheap, but in many other areas, it's not.

Well, I don't know where you live in Maryland, but I can tell you one thing - I lived there twenty years ago and I couldn't have bought a 1400 square foot house THEN for $150,000 in the 'burbs.

Then you must have been in Montgomery County or something. 20 years ago, my house would have been worth something like $100,000. In most of Maryland 20 years ago, you could have bought a home like mine for under $150,000.

But hey, I can STILL buy one like you're describing for that price in East Texas!

Yeah, but the problem is then you have to live in Texas.

 

[Magic Man]

If students would stop taking out student loans (which are ALWAYS optional) then perhaps universities would get real and lower their tuition.

Supply and demand.

Good plan. "Hey, nobody go to college, don't get a good education, and hope tuition falls." I can't wait to implement this. Actually, while we're at it, why don't we stop buying houses or renting places to live. We can hope that'll bring those prices down, too.

 

[Magic Man]

You should've researched this a little.
Prices here have been falling for a decade.
(I happen to buy appraisals regularly, so I have some painful expertise in this market.)
As we can see in this link, housing prices for the past 40 years fluctuate in their inflation-adjusted value, sometime gaining & sometimes losing value.
The net gain over time is quite low (less than 1% per year.)
Real Estate Charts: Graphs of inflation-adjusted, historical housing prices.

Then I guess you live in a weird area. Yes, going by this year's numbers, the net gain per year was less than 1%. However, if you looked at it 2 years ago, or 5 years ago, it would have been different. When we get the economy back on track, 3 years from now it might look even different. But that's still adjusted for inflation. So the price of a house has gone up by 30% after inflation in the past 40 years.

Compare that to the median income. In 1970, the median household income was $50,700 in today's dollars. The current median household income is $49,500. So, while the median income hasn't even kept up with inflation, housing prices have outpaced inflation by quite a bit.

 

[Revoltingest]

....housing prices have outpaced inflation by quite a bit.

That statement conflicts with what I see & with my linked source.
Evidence for your claim?

 

[Alceste]

If students would stop taking out student loans (which are ALWAYS optional) then perhaps universities would get real and lower their tuition.

Supply and demand.

Wouldn't it be simpler for government to regulate tuition hikes? How are you going to organize a movement of young people who effectively boycott post-secondary education in an effort to influence tuition?

 

[Magic Man]

That statement conflicts with what I see & with my linked source.
Evidence for your claim?

The evidence is your source. The one line is gives is adjusted for inflation. You said it yourself. Adjusted for inflation (meaning all in current dollars), the median price of a house has gone from $140,000 in 1970 to $175,000 today. That means, after you factor in inflation, it's still gone up another $35,000.

 

[Magic Man]

Wouldn't it be simpler for government to regulate tuition hikes? How are you going to organize a movement of young people who effectively boycott post-secondary education in an effort to influence tuition?

Well, you have to start by convincing them that not getting a college degree, and therefore taking worse jobs and making less money, will be worth it when their kids [hopefully] pay less in tuition.

 

[strikeviperMKII]

Who taught you economics? Inability to pay debt has drastic consequences on international purchasing power of the dollar. Seriously, where do you come up with this stuff?

The point pressed was that there was too much debt, not an inability to pay it. Inability to pay on debt (defaulting) is bad, as I said. The amount of debt doesn't matter, as long as you pay on it. That is my point.

As many that realize that College doesn't guarantee success? As many that went in without a backup plan? As many that had false hopes and expectations?
Lots of people who put their faith blindly in the University system indeed.

Indeed. There is not much education on how to choose an education.

Ummm, no more loans being given out which are a drain on the economy?

And what about the students that already have loans?

Grants for what exactly?

Any number of things. Scholarships, internships, you name it, there's probably a federal grant for it.

The 80's were an economic boom despite massive government spending which tripled the debt. So was the 2000-2006 period. And the 90s which had a Republican congress that tangled with Clinton.

Exactly. You seem to be making my point for me here. Massive spending does not equal a bad economy, which destroys your reasoning that a cut in spending will lead to a better economy.

So once again, what's to be done instead?

Are you falling back on the argument that because nothing else is better, what you say is the best solution?

 

[Shermana]

The point pressed was that there was too much debt, not an inability to pay it. Inability to pay on debt (defaulting) is bad, as I said. The amount of debt doesn't matter, as long as you pay on it. That is my point.

If you're not able to pay the debt itself and only the interest, you will end up paying more and more and more interest until it eats up a huge chunk of the budget and requiring taxes to cover it.

Indeed. There is not much education on how to choose an education.

Okay we agree here. The problem is that there aren't enough people going to Trade schools, and trade-schooled labor is in dire SHORTAGE. That's right, while Liberal Arts and Business and other "majors" from standard Universities are waiting for better days, many companies are begging for skilled labor. Trade schools should be far more respected (and used) than "universities".

And what about the students that already have loans?

What about anyone else who took loans and can't pay? Let them default and shut the corrupted, crooked University system down and make the government pay for supporting it. The collective lesson will be worth it.

Any number of things. Scholarships, internships, you name it, there's probably a federal grant for it.

Ok, so no more scholarships and internships, sounds good to me.

Exactly. You seem to be making my point for me here. Massive spending does not equal a bad economy, which destroys your reasoning that a cut in spending will lead to a better economy.

Huh? How did I make your point for you. I have no idea how your response here is cogent. The 80's economic boom was the result of lowered taxes (like the Bush era) and trickle down that you say "never works". The debt that increased at the time wasn't crippling as it is today, and the economy would have been far better if it didn't get there. There was also a major crash in the 80's just like in 2007-2009. Do you know recent history?

Are you falling back on the argument that because nothing else is better, what you say is the best solution?

Okay, so you have no other solution. Got it.

Perhaps you'd like to actually say what you think is the solution instead of dodging the question each time?

 

[Copernicus]

Huh? How did I make your point for you. I have no idea how your response here is cogent. The 80's economic boom was the result of lowered taxes (like the Bush era) and trickle down that you say "never works". The debt that increased at the time wasn't crippling as it is today, and the economy would have been far better if it didn't get there. There was also a major crash in the 80's just like in 2007-2009. Do you know recent history?

Reagan faced a recession when he came into office and tried to carry through on his own rhetoric. His administration quickly learned that that was no way to cure a recession, so he signed the Tax Equity and Fiscal Responsibility Act, which raised $47 billion per year for the next four years. It represented the largest tax hike in four decades. He borrowed and spent like a drunken sailor. The man funded the huge "star wars" boondoggle. In other words, he was a "weaponized Keynesian", as Krugman likes to put it. But, unlike Clinton, he left office with a record deficit. Bush left his two terms with a record that even Reagan couldn't come close to.

 

[strikeviperMKII]

If you're not able to pay the debt itself and only the interest, you will end up paying more and more and more interest until it eats up a huge chunk of the budget and requiring taxes to cover it.

Yes.

Okay we agree here. The problem is that there aren't enough people going to Trade schools, and trade-schooled labor is in dire SHORTAGE. That's right, while Liberal Arts and Business and other "majors" from standard Universities are waiting for better days, many companies are begging for skilled labor. Trade schools should be far more respected (and used) than "universities".

So you can have a company without management?
Granted, trade schools do provide an undervalued service, but shutting the universities out is not going to fix the problem.

What about anyone else who took loans and can't pay? Let them default and shut the corrupted, crooked University system down and make the government pay for supporting it. The collective lesson will be worth it.

Yikes. Not everyone in the University system is crooked. Being one of them, and paying my own way without any loans, I feel that shutting people out to learn a lesson isn't the way to go. Especially since that plan ruins my engineering degree.

Ok, so no more scholarships and internships, sounds good to me.

There goes the skilled labor you were asking for. At least skilled in managing, financing and making business work on a more global level.

Huh? How did I make your point for you. I have no idea how your response here is cogent. The 80's economic boom was the result of lowered taxes (like the Bush era) and trickle down that you say "never works". The debt that increased at the time wasn't crippling as it is today, and the economy would have been far better if it didn't get there. There was also a major crash in the 80's just like in 2007-2009. Do you know recent history?

The 80's was where people made money by moving money around. Buying companies, selling companies, merging companies. Financialization. Not trickle down economics. The crash happened because that system started failing, I believe. It's not a healthy economy when people are making money just moving money around. Which is exactly what happened in the most recent crash. Trickle down economics actually helped the problem in these cases, I think. Less taxes means more money for companies to spend and with a new way to spend it, they took to it in droves.

Okay, so you have no other solution. Got it.

Perhaps you'd like to actually say what you think is the solution instead of dodging the question each time?

I never said I was presenting a solution, merely pointing out that a solution shouldn't be just another radical shift to the right or left.

 

[Revoltingest]

The 80's was where people made money by moving money around. Buying companies, selling companies, merging companies. Financialization. Not trickle down economics. The crash happened because that system started failing, I believe. It's not a healthy economy when people are making money just moving money around. Which is exactly what happened in the most recent crash. Trickle down economics actually helped the problem in these cases, I think. Less taxes means more money for companies to spend and with a new way to spend it, they took to it in droves.

Huh? Where did you live out the 80s? We had a strong industrial base then. I had more work than I could shake a stick at doing engineering consulting & design.
I also did OK in real estate development in those less restrictive times. Now, most of the companies I worked for are outsourced, bankrupted or out of business
because it just doesn't make sense to make so many products here. (Northrop is still around & doing well though.)

 

[Kathryn]

Government printing extra money is also a way of pumping money into an economy. It comes down to the same thing, if nothing new has been created and added to the economy (other than printed money).

What does this have to do with what I posted about spending my profits on the local economy?

When I spent money at Lowe Home Improvement Center (for example), don't you think that my money supported creativity and added to the local economy?

 

[strikeviperMKII]

Huh? Where did you live out the 80s? We had a strong industrial base then. I had more work than I could shake a stick at doing engineering consulting & design.
I also did OK in real estate development in those less restrictive times. Now, most of the companies I worked for are outsourced, bankrupted or out of business
because it just doesn't make sense to make so many products here. (Northrop is still around & doing well though.)

I admit I am a little thin on thin on the subject. I would think that a booming economy would inspire a great deal industry, but once the financial boom faded, so did most of that industry. Not saying that it wasn't a factor, but I don't think it was the largest one during the 80s.