Miscellaneous Forum
Patrick Killelea has no background in real estate at all. You should not believe anything he says until you understand the math yourself. Here’s the math:
3% annual cost of renting is less than the 9% annual cost of owning the same thing
If you understand that, then you probably understand the rest of this site as well. If your job depends on not understanding that, then you won’t understand it.
Patrick is a mediocre perl hacker, and is the author of the O’Reilly book Web Performance Tuning.
He likes to graph things with gnuplot, like performance measurements and financial data. The site itself is just hand coded HTML (it takes Patrick 2 or 3 hours a day to read and select those news links!) and modified Wordpress (PHP/MySQL).
Patrick a liberal who wants socialism. I say that just to piss off all the people who love labels too much, but there is some truth to it. Liberalism is a wonderful thing! Everyone should be a liberal. You know what “liber” means in Latin? FREE
Liberals say that everyone should be free to live life how they want to, as long as they don’t hurt anyone else. The people dictating the conservative agenda just use your fear and shame to get you to help the very rich evade taxes. They create fear and shame to control you: fear that government will take your money in taxes and tell you what to do, fear that immigrants below you will take your job and make you take one you’re ashamed of, the shame of working for people who disrespect you. They tell you that your salvation is in playing along with their entire agenda.
But there is only one part of their agenda they really care about: lower taxes on the very rich, people who get more than $1,000,000 in unearned income per year. Everything else is just to get you to vote for lower taxes on the very rich.
The very rich pay only 15% on the millions they skim off of others without working (dividends and capital gains) while you are forced to pay 28% on the little money you actually earned through hard work. It should be exactly the other way around, with lower taxes on work, and higher taxes on unearned income. Ultimately, there should be no income tax at all, only a tax on land values.
To keep you from having free time to complain, in case you ever figure out that you are being used only to help the very rich evade taxes, they encourage you to get deeply into debt. Once deep in debt, you have to slave away for the rich. When you are in debt, you are NOT FREE. Your slavery, my friend, is part of the conservative agenda (along with letting the very rich live tax-free), though most of the conservative foot-soldiers do not realize how or why they are being used.
While you’re distracted pledging allegiance to God and country with your hand over your heart, their hand is picking your pocket!
As for my socialism, this is all there is to it:
- Universal police and fire protection paid for by taxes! (Wait, we already have that.)
- Universal primary education paid for by taxes! (Actually, we already have that too.)
- Universal health care paid for by taxes! (MISSING. Universal health care is your only hope for independence from your boss and for secure retirement, and they don’t want you to have it.)
We have many other socialist policies which I say we should eliminate:
- Huge blind transfers of tax money to badly run banks.
- Taxpayer guarantees that force you to pay your neighbor’s unaffordable mortgage.
- A mortgage interest deduction that encourages financial suicide by debt.
- Federal Reserve price-fixing of interest rates.
Here’s a video of Patrick speaking at Google.
Patrick is always happy to get suggestions on how to improve this site.
He’s often available to help with website performance problems in the SF Bay Area. Patrick can be reached at p@patrick.net
151 comments on “About Patrick”
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Joined: 18 May 2009
Posts: 0
Comments: 1
Pat, I dont understand how you are calculating rent of 3% yearly of total home value? In a hard hit area like Jacksonville, houses that are worth 80-90 K in real today dollars are renting for 950 all day which would be closer to 12 percent. At 3-4% for renting it should be 300-400 per month right? And buying that property should be only about 500 a month right?
Joined: 3 Apr 2005
Posts: 429
Comments: 1230
Menlo Park, CA
Hi William,
that 3% is true around me (SF Bay Area) but I can believe it’s 12% in Jacksonville.
Sounds like a good investment opportunity in Jacksonville.
Joined: 16 Jun 2007
Posts: 0
Comments: 285
Patrick, a couple of points: Libertarians represent freedom better than socialists, who believe in giving up freedom and rights to politicians and bureaucrats. In fact, libertarians are the classical “liberals” (meaning FREE) - I don’t know why socialists in America usurped that name.
Secondly, are you sure only conservatives use *FEAR* to control everyone? Don’t socialists do that with issues like global warming? So, whether a “fear” is real or just a controlling mechanism seems to depend only on the point of view on a particular topic.
Thanks for the site, Patrick.
Joined: 3 Apr 2005
Posts: 429
Comments: 1230
Menlo Park, CA
Personally, I’m more of a libertarian, but I cringe at labels in general, though I seem to have no problem applying them to others
I call myself a socialist just to mess with people.
I don’t think a basic level of socialism in security, education, and healthcare means giving up any significant freedom. In fact, it could be argued you are more free without deep worries about those things.
Hey, our entire military is funded by tax money, so it’s socialist! Right?
Fear in general is indeed an effective control technique, and I agree that the global warming lobby is trying hard to use it. Rational warnings are one thing, but it is spin when you try to manipulate fear for gain. As in pushing your tax burden onto working people.
Joined: 31 Dec 2007
Posts: 0
Comments: 2
Well said, Patrick! I like that freedom bit. I think you’ve got something with that land tax too! Unfortunately the “Royal Libertarians” won’t be with you on that one! They seems to be all in favour of land rorting and speculation, except the few with Georgist inklings. Great site, too, mate!
Cheers,
Bryan Kavanagh
Joined: 4 May 2009
Posts: 205
Comments: 204
….Hey, our entire military is funded by tax money, so it’s socialist! Right?…..
I’m no socialist. I’m a warrior! And an HP Nonstop Consultant.
http://www.jvolstad.com/pictures.htm
Jim Volstad
Millbrae
Joined: 14 Sep 2008
Posts: 0
Comments: 117
“The very rich pay only 15% on the millions they get without working (dividends and capital gains) while you are forced to pay 28% on the little money you actually earned through hard work. ”
It was that same rich that pumped some 100Billion into tech companies in the aftermath of the 1989-94 recession that gave Patrick a career and a job in Silicon Valley.
Does anyone think if it wasnt for Wall Street, would California be the 8th largest world economy or still planting lettuce near the Mariani’s farms in Cupertino.
As Steve Jobs told John Sckully then President of Pepsi, “Do you want to make sugar water or change the world”. And this had been going on for the past 40-50 years due to private capital.
Joined: 3 Apr 2005
Posts: 429
Comments: 1230
Menlo Park, CA
Hey, I’m not opposed to capitalism. I love it.
I just think the current tax system is exactly opposite of fair, with the poorer people paying a greater percentage of their income in taxes.
But there should not be any income tax, really. Only a single tax on land values (not on improvements).
With a single tax on land values, and no tax at all on income, dividends, capital gains, or sales, I think capitalism could really flourish, and be very fair.
Joined: 3 Apr 2005
Posts: 429
Comments: 1230
Menlo Park, CA
Amazing quote I ran across just last night in a biography of Benjamin Disraeli:
Wow, that was in 1845 or so. So the strategy of using “values” to get the poor to vote for their continued exploitation was in use even then.
Joined: 3 Apr 2005
Posts: 429
Comments: 1230
Menlo Park, CA
Here’s the newslink subscription page:
http://patrick.net/housing/subscribe.php
Joined: 8 Jun 2007
Posts: 24
Comments: 167
Egg Harbor City, NJ
Patrick looks a little young in his photo. I can’t beleive were taking real estate advice from a 12 year old. You should trust people like me who lick water out of a bowl and chases my tail.
Joined: 3 Apr 2005
Posts: 429
Comments: 1230
Menlo Park, CA
You flatter me! Only 9 years old actually. Must have started the blog when I was 4 or so.
Some dogs are smarter than some people.
Joined: 19 Mar 2009
Posts: 16
Comments: 98
Patrick, you’re a very smart man. Who says that hackers won’t rule the world? Ignore zetabeos, he’s using standard conservative talking point #123: “if you increase taxes on the rich, they’ll take their money and go home (stop investing in business).”
Nobody is going to stop investing in business because capital gains taxes go up. They were investing before capital gains taxes were decreased.
In any case, I would also dispute the fact that the tech stock bubble did anything but hurt our industry. I personally have been working in IT as a software developer since 1989, long before any Internet bubble. All the bubble did was convince millions of unqualified ITT tech grads that they too could make 6 digit incomes as a web designer (lol). It took about 5 years after the crash for all of those wannabe’s that weren’t interested in technology at all and weren’t qualified to leave the business. But while they were here, they drove all of our salaries down by flooding the market with their resumes, which weren’t worth the paper they were printed on.
Good riddance I say. If you want to work in IT, you’ll find it’s a thankless job. You rarely get congratulated for an all night coding session to track down that one last bug. The only reason to work in IT is if you’re a masochist or you truly like technology.
Joined: 8 Jun 2007
Posts: 24
Comments: 167
Egg Harbor City, NJ
The biggest problem I see in IT in businesses is they see IT as an expense, not as a benefit. Since IT doesn’t earn any money for the business, often our budgets are short changed. I would like to see how much it would hit there bottom line if they went back to pen and paper.
In my last job at a casino in IT, a new owner took over the company and they asked me to come up with an IT budget for how many computer’s we needed for the year. Since a five year life cycle is pretty much standard, where you replace 1/5 of your equipment so by the 5th year the oldest machines are being replaced, I came up with 60 computers and 10 printers, which was too tight as it was, since the company had over 500 computers. Managements answer? Pick your worst 10. Needless to say I was out of there first chance I got. And this was well before the credit crunch/market crash, I can only imagine how bad things are now.
Joined: 19 Mar 2009
Posts: 16
Comments: 98
Absolutely true. IT is just another expense for most businesses, unlike sales who actually generate money. Never mind the fact that the sales guys never do any of the actual work involved in delivering any product, they just sit back and collect a commission check and take clients out to eat. Anyway, I found out it’s a good idea to get into an industry like health care that makes money hand over fist, and sells health care IT solutions. There is a lot of money flowing from government into health care IT right now.
It’s surprising to me that a casino would be so stingy with their IT. I’ve heard stories of the amazing amount of money some spend on security…
Joined: 23 May 2009
Posts: 2
Comments: 665
Patrick says
This is actually the norm in most parts of the country now. The bay area is just “special”.
My dad finally got back pay for his pension that had been held up for over 2 years a few weeks ago, which came out to around $45000. That’s over half of what it would cost him to buy the place he’s currently renting for $600 a month. The owner offered to sell it to him for $80k if he can make an all-cash offer.
Joined: 8 Jun 2007
Posts: 24
Comments: 167
Egg Harbor City, NJ
lyoungblood says
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Test comment from a different incarnation of Patrick.
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Another test comment by badraig, to see if Patrick gets an email notification that someone wrote on his wall.
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Yes, when someone writes on your wall, you get an email. Unless you choose not to in your profile. Good.
Joined: 25 Jul 2009
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Comments: 1
Hello Folks, I love this Site.. I own RealtorSucks.com and I am Trying to Get attention to ObsidianFinanceSucks.com Attorneys are sucking up millions in fees - they are bankruptcy trustees and it is a shocking mess..
Joined: 24 Aug 2007
Posts: 161
Comments: 2818
Well, Crystal. Self proclaimed Real Estate Whistleblower. Owner of Realtor Sucks.com. I clicked over to your site and was less than impressed, what with the ads for Reservatrol, Bank of America, an IRA site, Foreclosure trainings, multiple realwhores, a RE Broker school, Short Sale Magic (promises I’ll make $100k in 12 months or I’ll get my money back - I’m sure there’s a catch), lisore education, Dex online, Appraisal company, how to pass the RE exam, Seized home auctions, health insurance, ad nauseum.
Instead of trolling here to get attention for your new site, you may want to access a spell checker and learn basic grammar. IMHO, of course.
Joined: 28 Jul 2009
Posts: 0
Comments: 2
Interesting. I agree with most of your financial logic. Completely congruent with conservative fiscal policy. I’m a little disappointed with your stereotypical understanding of the conservative viewpoint, however; it’s a classic marxist approach, i.e., you view the world completely in economic terms. Justice, morals, ethics are all understood in economic terms.
I actually agree with you about the taxes for the very rich. That’s why I believe in the very CONSERVATIVE policies of Steve Forbes and his FLAT TAX. If you were to run the numbers, the flat tax is actually the ethical form of tax (and it would be on SALES, not income: I agree with you on that, as well).
Actually, I think you are a conservative FISCALLY, but a socialist, er, SOCIALLY.
However, you seem to equate “conservatism” with Christianity. This is a mistake. A worldview inspired by Christianity actually applauds your views against forcing moms into the workplace in order to keep families from participating in civic events and voicing our concerns. Policies that place unreasonable taxation on families, the “marriage penalty tax,” etc … are all against a Christian-inspired view, IMHO. Ironically, these policies are all liberal–not conservative–social policies that force mothers into the workplace and keep them from participating in the political process. That is why I agree with the conservative tenent that “a government big enough to give you everything you want is also big enough to take away everything you own.” And history shows us that 100% of the time, that is what happens.
Some of your statements are perplexing. You call yourself a (”qualified”) liberal, yet you agree with conservative policy that the income tax, as well as Fannie Mae (a liberal F.D.Roosevelt–i.e., “Obama I”, invention), should be eliminated. Both are marxist policies created by American liberal administrations over 100 years ago. So I’m confused with your “liberalism.” At it’s core, it sounds like classic conservatism to me.
Where you are classically “liberal” is your social views: “Liberals say that everyone should be free to live life how they want to, as long as they don’t hurt anyone else. The people dictating the conservative agenda … manipulate your feelings about patriotism and religion … [T]hey create fear to control you … ”
Oh my. My thirteen year old son says the same things about me, so I will answer this childish notion (which characterizes most of the liberal opinion) on this level. My 13 year old, too, wants to do “whatever he wants as long as he hurts no one.” Since when he is making the rules as to what is right and wrong? Since when is some standard of “hurting” someone even a part of determining what is “good” or “bad?” And if it is a part of it, whose definition of “hurting someone” do we use? Take a rapist: do you not think his definition of what constitutes “hurting someone” differs even a little bit from yours and mine? To gloss over these critical principles of the conservative agenda is destructive. It makes sense to me once your denial, however, of a reality that transcends our own, is taken into account.
I find it comical that conservatives are smeared with this indictment of using “fear” when the current, most liberal administration in U.S. history has done nothing but use fear to get legislation passed that completely socializes our nation, will ultimately remove all privacy and private property, and imposes a “one world government” pre-cursor on Americans.
Anyway, I find, typically, your understanding of conservatism and Christianity to be somewhat immature, uninformed, and elitist (condescending). But that’s the world we live in. No offense taken–I completely understand your statements once, again, belief in a reality that transcends our own is removed–then sure, what you say makes perfect sense.
Joined: 28 Jul 2009
Posts: 0
Comments: 2
I am reading more of your comments.
Makes sense now. You are a libertarian, which, truly, except for santicy of life issues, is the closest ideology in a political sense that we have to Christianity, IMHO.
Now there’s the whole issue about whether you vote your conscience and ‘waste’ your vote on an unelectable party, or vote Republican because they are the closest morally, economically, and socially to one’s belief system.
Joined: 17 Aug 2009
Posts: 0
Comments: 1
Dear Patrick:
I enjoy reading the facts you distribute and wish there was a way that I could know for sure that what you say about the rich is true. Don’t the highest incomes pay around half the taxes? Where can we get the real truth about that statistic. It seems like its all up for grabs when it comes to that kind of government statistic. Some “facts” state one thing, other “facts” state the opposite. How can we get proof of the real facts?
Joined: 3 Apr 2005
Posts: 429
Comments: 1230
Menlo Park, CA
Hi John,
depends on how you look at it. Tax rates on the rich are actually much lower than the tax rates on you and me. They pay 15% tax on most of their income (cap gains and dividends) while you and I pay 28% or more.
Also, we actually work for our money. Capital gains and dividends are “passive” income. They just sit there and it rolls in, as a rule.
Joined: 22 Jul 2009
Posts: 0
Comments: 2
Thanks for the site Patrick. I agree with your approach for the most part, though the labels escape me and seem to bind up everyone else.
I had more hope than was warranted with Obama and still know he was the best choice of the two, but from the moment that the same old shills Larry Summers and T. Geithner lined up for the big econ jobs, it was clear we were heading for more of the same. The insane spending and borrowing of the last administration got our asses in a sling and the new administration is incapable of administering the tough medicine needed to cure what ills.
But no matter how much the government dips its toes in and screws up the housing markets, I believe the drop in home prices is gong to continue for several years still, especially as you go into the mid and high markets. I live in Los Angeles, so a practical mid would have to be around $450K and high over a million. I see those dropping another $25% before it’s said and done. I believe the lower end of the market may be at or is close to a bottom since it has become truly affordable. I bought a foreclouse in a “starter” market two months ago. Because I bought the place below market, I don’t think that the value is going to drop from where I bought it, because this part of the market has already been buffetted by waves of foreclosures and is very soft
Proportionately, I believe you will now see a rise in mid-level foreclosures, if that’s not already happening. When these broke yuppies realize there is no way out of the fix they’re in but to say goodbye to whatever equity they had or thought they had and capitulate, then that market will begin to bottom. This will take quite a bit of time and a sea change in psychology as folks leave the land of denial. If you have a good job and your loan is fixed, you can postpone the reality that your house is a black hole sucking up your money for a long time. Others lose a job and are so close to the edge they have to face the music sooner and get foreclosed on. Some of the smart ones realize they’ve been caught on the wrong side of this mess and do whatever they can do to get out and star over. Still, altogether, years of one by one, we give up.
Joined: 4 Oct 2009
Posts: 0
Comments: 1
Hi Patrick-
Great info resource! I have a sneaking suspicion that it is the goal of the government to inflate the living heck out of the dollar so that, magically, all the home owners will no longer be upside down on the homes. Of course, this solution just robs us all blind but ultimately, I don’t see any other government action long term.
Of course I have no idea when the hyper-inflation will happen. Just like 2004-05, it was plainly obvious that there was a huge disconnect between average income and average home and average family spending. It did eventually crash but there seemed to be a long time when the music stopped and lots of folks were still dancing.
So, now we see the gov’t subsidizing housing, new vehicle purchases, etc. so this tells me that the super-inflation will happen but we don’t know when of course. So, I am thinking that buying a home in the next year or so might be prudent since those with cash will be robbed but those with debt will be helped / subsidized if you have a fixed rate mortgage.
Also, long term interest rates have to rise- they must cover: inflation, profit on investment, and risk of default. Once again, at this time, I can’t imagine that interest rates come close to covering either inflation or risk, much less all three items listed!!!
So, I continue to fight with myself about buying another home now.
Joined: 21 Sep 2009
Posts: 8
Comments: 133
Patrick, Thanks for your post. I’ll try to help rid you of socialism.
The problem with socialism is that it rewards failure and punishes success, it destroys prosperity. Socialism restricts or destroys a free market and creates a huge, suffocating, governmental bureaucracy. Socialism diminishes the work ethic and makes dependents out of people. In a word SOCALSIM KILL PROSPERITY…if that’s what you want.
It’s been capitalism that has created the highest standard of living in the history of man. Yet those who are the loudest in proclaiming their desire to “help the poor” are the loudest in denouncing capitalism.
Karl Marx predicted that socialsim would be a transitional stage between capitalism and communism. [from Wikipedia] That’s kinda sobering, isn’t it???
Joined: 3 Apr 2005
Posts: 429
Comments: 1230
Menlo Park, CA
A test of the image upload system…
Joined: 5 Jul 2007
Posts: 0
Comments: 2842
Carlsbad, CA
johnnicinco says
Patrick omitted a couple of facts in answering. Self employed people pay self employment tax which is equal to your social security tax and the employer’s contribution. Technically that is part of your pay as well. In any case, a lower income person pays an additional 15% of their wages for Social Security and Medicare. The 12% for Social Secuirty caps out at about $100,000. Therefore the marginial income above $100,000 is not subject to Social Security and so basically is being taxed at 12% less although, higher rates apply as your income climbs to higher brackets.
The other injustice on working people is that passive income doesn’t have self employment tax at all. Capital gains (passive as well, no self employment tax) rates are lower than income taxes so income from passive activity is taxed very lightly. There is no self employment tax for rental income (most cases), interest income, dividends and S corp distributions. In addition you have lower rates for gains like sales of stock long-term, real estate (primary homes have no gains tax in most cases) or other gains such as gold.
Joined: 7 Dec 2007
Posts: 18
Comments: 283
Chicago, IL
We should ideally eliminate ALL income tax, or at least raise the taxable minimum to $35K per year AND set a maximum labor tax of 30% for the highest paid laborers. Every time a tax cut gets discussed in congress, they use a cost/benefit to our deficit utilitarian type of debate to make their decision. What ever happened to right/wrong, or constitutional limits of government? An income tax is a tax on labor, as is the social security/Medicare tax. Taxing labor lowers the resources each employee may use on himself while also raising costs of production greatly lowering the employees’ level of net consumption. People mistakenly hold this against the evil corporations, as the government demagogues use the business execs and shareholders as scapegoats. All the while the real culprit, the federal government, gets more resources which they may use to justify their own existence and buy votes.
Joined: 21 Sep 2009
Posts: 19
Comments: 436
CBO - BINGO! You hit the nail on the head. Eliminate all income tax. Our country did very well and had virtually no inflation for approx our first 150 years…with NO income tax and sound money.
Good question… what happened to the co0nstitutuonal limits of gov’t ? Well, its pretty clear NOW that violating the law (the conaswtitution) has very real conseqwuences. Something politicians never seem to be concerned about.
Yea, lots of people like to denounce corporations and business’s. However those are the very entities which provide jobs, pay taxes and many (not all) produce things (unlike gov’t which produces nothing).
Correct again…gov’t always accuses the greerdy corpotation, greedy business and the greedy buiness man of being the guilty parties - so they can heap on more oppressive laws, rules, regulations, statutes and at times even more taxes. This is MAJOR reason companies and jobs go “off-shore”. Its a 100% reaction t0 gov’t over regulation. The term frequently used is “UNINTENED CONSEQUENCES,” again, something that politicians don’t seem to care about. Politicians care only about what there new law looks like to the general public - but are unconcerned about the results of their actions. Who is John Galt?
And correct again…the real culprit is the GOVERNMENT (a single body - two headed beast). Don’t get me wrong. I’m in favor of gov’t …you can’t run a country without it. It does assist in coordinating necessary services BUT gov’t has MUTATED. The SERVENT has become the MASTER, and America is suffering because of it.
And finally CBO -you are correct, the gov’t sucks up taxpayer money to justify their existence, and give handouts to dependents in order to buy votes. That reminds me of this very asstute saying. “If you rob Peter to pay Paul, Paul will ALWAYS VOTE FOR YOU.”
The solution to our problems is to return to LIMITED Government, follow the law of the land (the Constitution), and restore the countless freedoms we have lost by eliminating the laws which caused the loss of our freedoms in the first place.
Thought for the day: “if we have more laws than other countries - are we truely more free ?” Honest Abe.
Joined: 21 Sep 2009
Posts: 19
Comments: 436
P.S. I was going to hit spell check and can’t find it - darn I hate when that happens. Just read through all the mistakes - content is what matters.
‘BAD SPELLERS OF THE WORLD UNTIE!” Abe
Joined: 7 Dec 2007
Posts: 18
Comments: 283
Chicago, IL
There’s a good article written by a Pepperdine econ prof that discusses this idea.
“Greedy-Bastard Economics
by Gary Galles
If your landlord or apartment manager hasn’t gotten around to fixing your garbage disposal for weeks, how carefully do you think about why? If you are like many people, you simply blame your landlord or manager, rather than inquiring further.
This is an example of greedy-bastard economics: rather than tracing their understanding of something they dislike back to its ultimate source, people only trace it back until they get to someone they can demonize as a greedy bastard. That is, scapegoats become what Frederic Bastiat called “what is seen,” while the real cause remains “what is unseen.” Unfortunately, that real cause is frequently the coercive hand of government, moving control of resources to itself, and the blame for the resulting consequences to others.
In the case of rental housing, rent control rather than the “greedy-bastard” landlord may be the real cause. Rent control undermines landlords’ incentives to provide the services tenants want, because it denies landlords the ability to receive adequate compensation to make their efforts worthwhile. What landlords are blamed for is in fact one of many predictable, adverse consequences of rent control, including housing shortages, increased discrimination, increased uses of subterfuges to evade the controls (like tying willingness to rent to astronomical key deposits or the simultaneous rental of furniture, parking or other goods), reduced construction, and deterioration of the housing stock.
All these predictable effects follow without landlords being any greedier than anyone else (although rent control might attract greedier people, who are more willing to do what it takes to get around the regulations), which should properly placesthe blame at the feet of the government body that imposed the controls. But instead, government gets to control resources without paying for them, while “greedy-bastard” landlords who would otherwise look for ways to cooperate with renters get the blame.
Rent control is not the only example of the adverse effects of price controls. All price ceilings reduce the quantities traded, wiping out the wealth that would otherwise be created by mutually agreed-upon arrangements. They also increase discrimination (and evasion efforts) by lowering the cost of saying “none for you.” And people blame the greedy bastards they deal with directly rather than the greedy bastards in government who are the actual cause and who impose the cost of doing their will on others without compensation.
Price floors such as minimum wage laws, Davis-Bacon “prevailing wage” requirements (which far exceed prevailing wages), and agricultural price supports push allowed prices up instead of down. However, they also increase discrimination (by buyers rather than sellers), and reduce the quantity of mutually agreed arrangements and the wealth they would have created (by making buyers willing to buy less).
All of them increase the costs borne by producers, and therefore by consumers and taxpayers, but place blame on producers rather than the policy makers responsible. And as with all price controls, they make prices, which are the signals of relative scarcity by which social cooperation is maintained, misleading indicators. Market prices are messengers of the effects of government restrictions, but they are not themselves to blame.
Hidden taxes are another mainstay of greedy-bastard economics. They give the government resources and control, but give the blame to those whom people deal with directly. The employer half of Social Security and Medicare is a prime example. Employers must pay 7.65 percent directly to the government, on top of the wages they pay employees.
“Market prices are messengers of the effects of government restrictions, but they are not themselves to blame.”But since employers know they must bear those costs, they offer less pay for a given level of employee productivity. The consequence is anger at employers for not paying employees what they are worth, when any such effect is actually the result of compensation being siphoned off by government.
Similar effects are triggered by employer-paid unemployment, worker’s compensation insurance, and other nonwage forms of compensation. The resulting government rake-off from employees’ total compensation leaves them less to take home, triggering resentment at employers. But government claims credit for all the benefits those dollars finance.
Corporate taxes, which economists particularly object to for the large distortions and costs to society they cause, are another major example of greedy-bastard economics. To the extent that those higher costs result in higher prices, the corporations are demonized for greed, but government gets the resources. Similarly, to the extent these costs lead to reduced wages, workers blame employers, but government gets the resources. In addition, these taxes reduce the after-tax rate of return on corporate investments, reducing the level of those investments, slowing the growth of worker productivity and the income it would generate.
Similarly, taxes imposed on “not me” are ways for government to claim credit for the resulting spending without the blame for the tax burden. America’s highly disproportionate, “soak-the-rich” income-tax burdens are the largest and most obvious example. These income taxes not only finance the largest fraction of government spending, but also allow almost two in five households to have negative income taxes, largely because of the refundable Earned Income Tax Credit.
In addition, taking away a great deal of the after-tax incentive for high-skill individuals to bear the risk and put in the effort to find ways to benefit others reduces the value of output supplied. Thus, it acts as a tax on others when the reduced supply of productive services raises prices.
“Not me” taxes include hotel room taxes, which are largely imposed on people from out of state to finance benefits for residents. They also include import tariffs and quotas, dumping restrictions, and other barriers to international trade. By the time the goods reach consumers, their burdens are already included in the price (as with value-added taxes in other countries), and sellers can once again be blamed for the revenues government receives.
Government mandates and regulations, whose estimated burdens exceed $1 trillion a year, also take advantage of greedy-bastard economics. The web of restrictions is vast, running the gamut from Sarbanes-Oxley burdens to low-income housing set aside to qualify for permission to build, yet buyers are only dimly aware of the burdens these rules impose on producers.
But whatever they are called, those regulations give government added control over resources. And, since they act like taxes (an employer doesn’t care whether a $100,000 burden of dealing with government is called a tax or a regulation), they raise costs and prices to others, for which suppliers will largely be blamed.
Similarly, government barriers to entry, like licensing regulations, restrict supply and competition, but focus complaints about prices and shoddy performance on those in the industry. Antitrust laws, which often restrict competition in the name of protecting it, are used to demonize efficient firms and practices. Such laws let the government claim credit for consumer protection even as they undermine the competitive process that is the real protection.
Inflation is another page from the same playbook. While it is caused by government expansion in the money supply, those in government can always point fingers at some greedy bastards other than themselves, whether it is businessmen raising prices or workers demanding higher wages in response.
Greedy-bastard economics is also used to separate responsibility from blame for financial bubbles. For instance, the housing and bad-loan bubble was widely blamed (especially by those overseeing government regulations) on greedy loan originators and unregulated markets. This blame was used to promote increased government intervention as a cure.
“Greedy-bastard economics is also used to separate responsibility from blame for financial bubbles.”But government’s hand was everywhere you looked in any serious attempt to understand the alleged “market failure.” The Fed’s maintenance of interest rates far below what the level of savings would actually sustain made housing falsely profitable. Allegations of redlining led to implicit government requirements that banks lend to borrowers who didn’t meet conventional financial standards, and whom banks knew often couldn’t repay their debts.
Under pressure for financial malfeasance and other failings, Fannie Mae and Freddie Mac made it clear that they were in the market for “bad” loans in a big way (well over $1 trillion). Given that their hidden subsidies (particularly implicit government guarantees worth over $2 billion a year and lower capital requirements than the rest of the financial system) had made Fannie and Freddie by far the dominant players in mortgage lending, this declaration told others that bad loans were far safer than they really were. No matter how bad the loans, Fannie and Freddie would take them off your hands. When that implicit guarantee suddenly dissolved, market participants (worldwide, not just in the United States) were suddenly faced with the real risks and far-lower values of these assets.
Even the latest healthcare “reform” reflects greedy-bastard economics. Pundits blame insurance companies for rising healthcare costs, yet ignore the plethora of government mandates and restrictions, not to mention subsidies to subgroups of citizens (e.g., the elderly or poor), which raise the costs to everyone else. Similarly, insurance companies are blamed for excessive administrative costs, even though these are directed largely at dealing with fraud, government impositions, and the supposedly obvious waste of profits.
Having tarred insurance companies with the blame, government now proposes more greedy-bastard economics as the solution. Such policies will further increase costs that can be blamed on insurance companies: Companies won’t be able to deny coverage for preexisting conditions, which means they must pool higher cost customers in with lower cost customers, thus requiring higher premiums. They will not be able to control risk by putting annual or lifetime caps on coverage, similarly raising costs that must be borne by all policy holders. They will be required to include certain preventative care with no extra charge, and to limit out-of-pocket costs, which also may maim the private markets for catastrophic coverage.
$20 $14
“Government has no power to eliminate scarcity.”In reality, scarcity is the cause of many of the difficult choices individuals face. However, governments prefer to find “greedy-bastard” bogeymen to blame. This allows governments to play as saviors rather than as the parasites causing the problems in order to benefit favored constituencies at others’ expense. But government has no power to eliminate scarcity.
Government, beyond its role of defending voluntary arrangements against force and fraud, only makes the effects of scarcity worse. It substitutes decisions by people with worse information and incentives, backed by the power of coercion, for decisions by people with better information and incentives. That is why it is actually government “solutions” that increase the influence of greedy bastards in society. After all, “greedy bastard” is an excellent description of someone who demands power over others without cost or their willing consent; and falsely blames others to gain it.”
Joined: 7 Oct 2009
Posts: 0
Comments: 1
CBO - BINGO! You hit the nail on the head. Eliminate all income tax. Our country did very well and had virtually no inflation for approx our first 150 years…with NO income tax and sound money.
Good question… what happened to the co0nstitutuonal limits of gov’t ? Well, its pretty clear NOW that violating the law (the conaswtitution) has very real conseqwuences. Something politicians never seem to be concerned about.
Yea, lots of people like to denounce corporations and business’s. However those are the very entities which provide jobs, pay taxes and many (not all) produce things (unlike gov’t which produces nothing).
Correct again…gov’t always accuses the greerdy corpotation, greedy business and the greedy buiness man of being the guilty parties - so they can heap on more oppressive laws, rules, regulations, statutes and at times even more taxes. This is MAJOR reason companies and jobs go “off-shore”. Its a 100% reaction t0 gov’t over regulation. The term frequently used is “UNINTENED CONSEQUENCES,” again, something that politicians don’t seem to care about. Politicians care only about what there new law looks like to the general public - but are unconcerned about the results of their actions. Who is John Galt?
And correct again…the real culprit is the GOVERNMENT (a single body - two headed beast). Don’t get me wrong. I’m in favor of gov’t …you can’t run a country without it. It does assist in coordinating necessary services BUT gov’t has MUTATED. The SERVENT has become the MASTER, and America is suffering because of it.
And finally CBO -you are correct, the gov’t sucks up taxpayer money to justify their existence, and give handouts to dependents in order to buy votes. That reminds me of this very asstute saying. “If you rob Peter to pay Paul, Paul will ALWAYS VOTE FOR YOU.”
The solution to our problems is to return to LIMITED Government, follow the law of the land (the Constitution), and restore the countless freedoms we have lost by eliminating the laws which caused the loss of our freedoms in the first place.
Thought for the day: “if we have more laws than other countries - are we truely more free ?” Honest Abe.
Joined: 21 Sep 2009
Posts: 8
Comments: 133
So where is the spell check function on Patrick.net? Never the less, I clearly understood the message.
Joined: 3 Apr 2005
Posts: 429
Comments: 1230
Menlo Park, CA
That’s one function I don’t have. Not sure how hard it is to implement, but I’ll add it to my to-do list.
Joined: 7 Dec 2007
Posts: 18
Comments: 283
Chicago, IL
just write the comment in word first, then spellcheck, then copy and paste into the forum comment section. writing in word is easier anyways.
Joined: 25 Nov 2007
Posts: 4
Comments: 44
Or use Ubuntu.
Auto spellcheck for every and any text field. . . Nice, ’cause I cant spell for my life.
Joined: 3 Apr 2005
Posts: 429
Comments: 1230
Menlo Park, CA
I have Ubuntu Linux on my laptop, and it’s great, but that doesn’t help the other readers. Mac also seems to spellcheck every text field.
I can’t choose the server OS at my ISP. It’s some version of Linux, but can’t tell which one. Not sure if there’s any spellcheck plugin for Wordpress, or maybe I already have it and just need to turn it on somehow.
Joined: 21 Sep 2009
Posts: 8
Comments: 133
BAD SPELLERS OF THE WORLD UNTIE ! (one of my favorites)
Joined: 24 Aug 2007
Posts: 161
Comments: 2818
Yesterday I coodant spel callig stoodint, to day I are won… (my fav)
Joined: 18 Oct 2009
Posts: 0
Comments: 1
Hi Patrick,
Is there a website that names and shames the perpetrators of the financial crisis:
Rubin, Geithner, Summers, Phil Gramm, Blankfein, Pandit, Alan Greenspan, Hank Paulson, Mack and others.
Perhaps, these people have no shame, so it is futile to shame them?
Joined: 12 Nov 2009
Posts: 0
Comments: 1
The funny thing is that while you and I argue about “right” and “wrong”, the world moves right along past us.
I am a true believer in the economic structure of this country. From first hand experience, I can say that in this country you choose (actually make a decision) to either have it all, or choose to have nothing. If you want great income and a relaxed life style, you will notice institutions and resources available to boost you to your goals. On the other hand, if you don’t have goals or standards for yourself, you’ll find that it’s really tough to even make a meager living. So you choose, which is the way it should be. Read below for my personal story.
I am an immigrant from Iran. I was brought to this country with nothing at the age of 8. My parents made a total of $1,300/month combined income for a family of 5: my older brother, me and my younger brother, plus my parents = 5
We moved here in 1987.
My youth was troubled. I found myself in juvenile detention facilities repeatedly (juvenile jail). I had many social and economic problems. In order to eat lunch at shcool, I stole my neighbors wallet. In order to play video games, I climbed into neighbors windows and stole their system. By 15 years old, I had entered Juvenile Hall over 8 times!! Finally, I was sentenced to a long 2.5 years and when I got out, I was nearly 18 years old.
As for my brothers, the older one stayed focus on school and he’s now a an optamologist, a graduate of Harvard. My younger brother is well on his way to pro level tennis playing.
I operate an asset protection franchise and made over $200,000 this year. I drive a BMW, have the highest quality health insurance, have a fully funded retirement plan, live on the beach and all of this at the age of 29.
Moral of the story is that if you want better for yourself, this country, especially it’s extreme capitalist economic policy (at least compared to the rest of the world) allows you to reach that level. If you want mediocrity, you can have that too. If you, however, have very low standards for your life, you will find that the entire country is designed to oppress you.
In what other country can you come out of a life of having absolutely nothing, to being top 1% earner? In what other historical political phenomena do we have a system that favors personal motivation and provides opportunity to achieve whatever you want in life?
Don’t blame the policies of this country for lack of health care because a lot of people have excellent insurance. Ask yourself why you don’t have that same quality health insurance. Don’t ask the world around you why you’re not satisfied with the here and now because that is found within yourself, not in any political or economic policy.
Work hard and you will achieve everything you want. And once you’ve achieved your goals look back to everyone else who has not, and you may realize that they too could have everything you have — but they simply don’t want it bad enough.
God Bless this absolutely wonderful country.
Joined: 23 Sep 2009
Posts: 30
Comments: 762
Maybe it would work better if the parents took an active part in their children lives. We need the services, but if we truly want our children to excel then parents need to play a larger role.
Joined: 12 Dec 2009
Posts: 0
Comments: 4
Another thing, we’re not getting younger, only getting older. My goal is to buy as many as I can and as long as I can considering my income so when I’m older, I will have these passive income coming in. Guys again, we are getting older! Now we still work, can produce and make our fortune! Who gives a “f’ if prices may come down !?! so what ?!? I wont wait 2 -3 years just to buy the property at a cheaper price. These are 3 years of my life during which I can build my self a portfolio. Don’t you get it guys, people who dont try will never make it. Yes, its ok to lose some money on the way while trying! its part of trying!
Just the act of researching properties, taking on a commitment, managing my properties, collecting rents and building my wealth teaches me a lot! This is the best knowledge in the world. I have a BA in accounting and economics and master in law. Its not even close to what I have learned during my 10 years doing real estate.
Joined: 18 Nov 2009
Posts: 5
Comments: 1371
Bellingham, WA
Being somewhat new here, I hadn’t read this from Patrick yet.
Ultimately, there should be no income tax at all, only a tax on land values.
Ah, a fellow Georgist! I’m a left-libertarian like Patrick but I’d like to think that if rentierism was punitively taxed we wouldn’t need so much Socialism; people living on the other side of the tracks would only have housing expenses relative to the value of the improvements the occupy, not the whole “cash flow” of the property, which would enable them to divert more of their income to hopefully productive pursuits.
Henry George himself had no truck with the big-S Socialists of his day. Alas, we’re a million years away from any Georgist solution gaining ground. The economics of it are too subtle, and like Patrick I see the conservatives have enough riot power now to muddy and dumb-down any attempts at intelligent debate.
Joined: 9 Nov 2009
Posts: 14
Comments: 542
Milpitas, CA
@ashkoninsd
Well said. I am happy for you and your family. I hope everyone on this board will achieve their dream, too.
Good luck to everyone
Joined: 9 Nov 2009
Posts: 14
Comments: 542
Milpitas, CA
Joined: 22 May 2009
Posts: 17
Comments: 466
Portland, OR
DANAIY, wow, so inspirational. I think I’m gonna pull the trigger today. Sure the only thing we can afford after putting away for retirement, maintainance, and rainy day fund etc is 800 square feet in the gang buster area but hey it’s a home to call my own. I will be so proud of my sh!tshack and my kids will no longer be considered homeless. Yeah, the schools completely suck in the neighborhood but who needs an education these days when they can learn on the streets of hard knocks.
Sorry, but Portland has a ways to fall. I will sit on my dp and wait and see the slippery slope of unemployment, foreclosures, and expiration of the housing subsidy continue to impact housing prices. Rents continue to drop around here, too, down about 20% in the neighborhoods I’m tracking.
I highly doubt the Fed will raise interest rates as things continue to look ugly well into 2010.
I, too, have researched my area and I’m very comfortable sitting and waiting.
Yes, good luck to all.
Joined: 7 Dec 2009
Posts: 1
Comments: 29
San Jose, CA
Leigh says
Here, here…well said. DANAIY…love ya man but while inspirational, your words are a bit “young.” I am happy for you and your family…that you are in a position where you have the resources to buy up property and, perhaps, not care if you lose money. Some of us are not in the same position. For me, I’ve taken risks in the past and failed. You talk about looking back on your life when you are an old man. I look back on the last ten years and realize that due to my risk and subsequent financial failure, I just lost 10 years of earning time and potential.
All I am saying is it takes all types. That is why the math is sooooo important. It is objective and a universal criteria upon which we all can determine whether a particular purchase is wise or risky. Best of luck to you my man.
Joined: 18 Sep 2009
Posts: 56
Comments: 972
Badd speling is a cine of inteligense.
Joined: 22 Sep 2009
Posts: 2
Comments: 761
I would like to see usery on money outlawed.
I would like to see a 50 year jubilee - where all debts reset to zero every 50 years
I would like to look and feel like I did at 20, but be as smart as my grandpa was at 80
Patrick is a good dude. And Patrick.Net is a bigger blip each day. I just hope Barry’s Brownshirts don’t find us.
Joined: 18 Sep 2009
Posts: 56
Comments: 972
Thanks Patrick for the information on the evil rich. I never ever knew that the rich consisted entirely of those nasty, evil conservatives. Apparently, liberal rich like George Soros are just in it to help people and not enrich themselves. Funny too, how liberalism promulgates control by the state over individual lives. The liberalism of today is not classical liberalism at all, but is in fact a radical form of leftist statist control over the individual. True conservativism, however, does in fact promote limited government powers in conjunction with individual rights. When liberalism forces their social agenda on those that may not agree with it, that too is a limitation on rights. Admittedly, the term conservativism has been tainted as well, due to people like George Bush and his neocon ilk. Our founders, who were true classical liberals, wouldn’t recongnize this obtrusive government that continues to grow regardless of which party rules.
Joined: 22 May 2009
Posts: 17
Comments: 466
Portland, OR
LOL, born and raised in the conservative Midwest. Please tell me why conservatives are so demanding of their form social welfare via MASSIVE FARM SUBSIDIES!?!?!
Don’t act like liberals are the only ’socialists’ in this country.
Oh, and oil subsidies, WTF?!?!
Joined: 12 Dec 2009
Posts: 0
Comments: 4
RayAmerica, I have been in the US for only 5 years now, so yes, English is not my first language and I apology for having any typos or misspelling in my comments, i trust you native English speakers to be able to read between the lines and generate intelligent responds…
Joined: 18 Sep 2009
Posts: 56
Comments: 972
DINAIY …. my post wasn’t aimed at you. I was attempting to make fun of those that mistakenly think that bad spelling necessarily means a lack of intelligence … it doesn’t.
Joined: 18 Sep 2009
Posts: 56
Comments: 972
DINAIY …. and by the way … is you speak 2 languages, you speak one more than I do.
Joined: 22 May 2009
Posts: 17
Comments: 466
Portland, OR
And some of us native speakers can barely speak or write in our primary language!
As an RN who works with a few Indian doctors I have learned long ago to read their notes, bad spelling and all. Heck, if you got into and completed med school in the US, you ain’t no dummy.
Joined: 12 Dec 2009
Posts: 0
Comments: 4
Patrick, I’m a young CPA and have been investing in real estate for the last couple of years. I’m buying foreclosures right now in the SJ area. I read your website and find it very interesting. There is a lot of logic in what you present here but I think that you ignore one important key point here. Economy is all about psychology. Its not math. If we all think and behave as you suggest on your website, we can all kiss our dreams goodbye. Isn’t dreams what we all live for? look at your self 20-30 years from now and ask yourself, what did I do with my money? I personally prefer to try and fail than not to try and keep my head in between my knees. Guys, money is nothing! don’t be afraid to take a commitment on yourself (i.e. a mortgage), manage the risk and live better. A rental would never look and feel like your own home! its as simple as that. Its only money people. Care about your health and your family. ..! We should do as much as we can to support the real estate market. Go and buy properties, stop defaulting thinking about your own sake, think about everybody’s sake.
i’m not suggesting that what was happening here over the last couple of years was right. This was all about greed. But now, its different. unemployment rate is easing, economy is picking up, i see more IPOs, better corporate earnings, hiring’s picking up, look at the nasdaq!.
I agree, the real estate market is still sick and the recent stabilization is not real, mostly government assistance. SO WHAT! Government is helping real estate in the short run and economy improvement in the long run…! We will all together help reduce and fund the US deficit.
real estate market is not an isolated market. it is effected by the whole economy which is hopfully improving!, finally.
Bottom line, stop thinking how miserable and horrible and unfair our world is. Having gone through a terrible health issue with my son, I thank god everyday for being where I’m now.
I will keep buying real estate, hold it for 20-30 years and retire rich. Good luck to you all.
Joined: 3 Apr 2005
Posts: 429
Comments: 1230
Menlo Park, CA
DINAIY says
I disagree. It’s all about lending. Most people will borrow as much money as they possibly can. House prices are limited only by interest rates and lending standards. If there is unlimited money to borrow, house prices will become infinite.
But now money is limited, and interest rates must rise, so prices must fall more.
Joined: 12 Dec 2009
Posts: 0
Comments: 4
Patrick, investing in real estate is an investment. You have to sacrifice your present for your future benefit. Renting may make sense today but the mind set of renters is a way different. You rent today, you most likely have more money in your pocket today which will be spent on retail consumption rather then investments and then what? Investing in real estate is a way of life, its learning how to save, being committed to something that you believe in and most likely self discipline. That is how you grow wealth.
I hope people are not that stupid as you describe Patrick. Cheap money is just one factor but also need to look at the numbers. I don’t invest betting on appreciation. I put my money today in properties that make sense financially. I agree with your overall logic and theory but as much as there are still overpriced properties out there there are opportunities as well. Look for instance at San Jose which for the first time have cash flow properties. I’m taking about condo units which sell for $130-$160 and can rent out for $1,300-$1,400/month. There aren’t much out there like these. All of them are foreclosed properties or short sales. I absolutely I agree with you, there will be more inventory coming in to the market, prices will go down in 2010 for the most part by 10%-15%, yet will the price on this specific condo units continue going down? I doubt it. Even if it will go down by another 20% within next 1-2 years from now so what? so instead of $160k it will be $130k? Rent will still be around $1,000 (job market is better then 2-3 months ago, corporate earnings’ improving) its still not a bad investment. My advise to you all, yes it may go down by a little bit, but if you find a cash flow property in the silicon valley go for it. be patient. Its a long term investment. Sit on it for 10 years. As long as you can get it rented, you are safe.
Joined: 22 Sep 2009
Posts: 2
Comments: 761
DINAIY says
if I could reach ya, I’d slap ya. Trolly McTrollerson.
Joined: 22 May 2009
Posts: 17
Comments: 466
Portland, OR
I’d rather live life as a renter in wonderful Portland than live life as a homeowner in a place I can afford, ie, Sioux City, Iowa, my home town, or anywhere w/in 1,000 miles of that place!
What is a life worth living if you are slave to your debt?!?!
Joined: 12 Aug 2009
Posts: 54
Comments: 827
Leigh,
I did some ecological research just north of Sioux City. Broken Kettle Grasslands, a Nature Conservancy project. As I recall the city did smell of a meat packing plant, but what else about it don’t you like? Just wondering.
Joined: 24 Aug 2007
Posts: 161
Comments: 2818
Bap33 says
How in the hell could a rental not look/feel like your own home? A home is where you make it. I’ve had many rentals, owned a few houses. They all “felt” and looked like home.
Joined: 9 Nov 2009
Posts: 14
Comments: 542
Milpitas, CA
hooch_raider says
That’s why I love talking to the older generations because you can learn so much from them and hopefully not making the same mistakes as they did.
@DINAIY
Congratulation! I agree with you. Buy only properties that cash flow. Have someone pay off your debt and you own it out-right 30 years later. Appreciation would be an icing on the cake.
@ EVERYONE,
Please read and analyze the posts and threads with a grain of salt. Real estate is local. Yes, real estate might have bottomed for the LOWER END market in San Jose, but that might not be the case elsewhere in the country. Crunch your own number. Buy if the number makes sense. Sit your you behind and wait if the number is still out-of-whack.
Joined: 22 May 2009
Posts: 17
Comments: 466
Portland, OR
AdHominem says
Ahhh, that reminded me of a good friend who did his research for his masters in the grasslands of South Dakota, I think north of Rapid City. He was counting beetles, I think, it’s been so long. I do remember him saying how easy it was to get lost since the grass was nearly 8 feet tall and the place was as flat as could be, not too many landmarks. Makes me dream of the time when much of the Midwest was covered in native grasses and the top soil was over 2 feet deep. Now we are holding onto the last 2 inches and praying for science to save us.
Sioux City, if you approach from the south via I29 you first get greeted with the sewage treatment plant and then John Morrell. I do remember Sioux City making it into the New York Times when the stockyards closed in about 2002. Now a Home Depot is located in that spot.
If you are a home body, go to work and just head home, hit a couple of dive bars and focus on high school sports then the place is for you. Many of my friends that remain live across the river in Dakota Dune, SD, it’s like the new country club plus no income tax though it’s safe to say that most commute to jobs in Sioux City, IA. The lucky ones make it to Mexico every couple of years, some venture to Florida for a vacation.
The weather was a big factor, too, for my escape, the summers are hot and humid and the winters are frigid cold.
Now Portland, Oregon, have you ever been to Oregon? I’m a little over an hr from the Pacific Ocean, beautiful beaches though the water is cold! And I’m a little over an hr from Mount Hood though I’m just a snowshoe-er and Xcountry skier. The Columbia River Gorge down I84 is breath taking, many great hikes, wonderful for day trips. The Hood River Valley is amazing in the spring with all the pear, apple, and cherry blossoms and then head back in the fall for harvest time!
And for Portland, imagine neighborhoods where you can leave your car parked for days since the grocery store, cafes, parks and playgrounds are all a walk or bike ride away. We have numerous neighborhoods like that.
I’ve lived here for 15 years and it feels like permanent vacation. It’s a great fit for me, the temperate climate and all. Some love the Arizona desert and heat, my sis loves upper New England, next month my brother is packing up and heading to Kauai for a while…follow your bliss!
Once again, what life is worth living if you ain’t enjoying it?!?!
Joined: 24 Aug 2007
Posts: 161
Comments: 2818
Leigh says
Some people prefer to complain about how the government is trying to shove healthcare coverage down their throats rather than to enjoy the health that they have. Not just here - at my work I overheard a conversation between two people who agreed that, if there was universal healthcare coverage, more people would go to the doctor. And that was a bad thing. (If more people go to th doctor, it’s possible that less people would go to the hospital. Big savings in charity care currently funded by tax dollars and tax breaks to corporations).
Leigh says
There are many places that appear beautiful in pictures, only to smell really bad or be next to enviornmental disasters.
Joined: 15 Dec 2009
Posts: 0
Comments: 1
Heh Patrick, you have an interesting perspective, one worth listening to. My hubby and I came to the Bay Area in 2005 when people laughed at us for not buying a $650K condo in Dublin that was like 4 crazy break your neck on the stairs levels, 1100 square feet, ridiculous HOA. We were like, “Huh, if we buy this, what are we going to eat?” We were literally told by a real estate agent that no one in Calif. owned their houses anymore, they just had govt subsidized leases. When I told her, it’s all a house of cards, it’s going to come crashing down, she laughed and said not to worry, if that happened, the govt would have to bail everyone out because it would be utter catastrophe to the economy. Uhhh … guess she was right! Most involved knew all along what would happen.
Anyway, that’s not the point of my post. I’m curious as to your thoughts on outsourcing? I used to be all for it until I lived it or had to work where some functions are outsourced and now I just think it’s pretty ridiculous and feel it’s another way for executives to cut “expenses” (read: people doing work) so they can fatten their already insane bonuses. Why don’t CEOs ever say, “Hmm … heh, I should outsource my CFO because after all, what does he need to be sitting right here in sunny California for? His job could be done by email and telecon. He needs to be “strategic” so all the better if he’s not here, mired in the day to day administrivia.” No, no CEO or any exec ever says their job can be outsourced but the jobs of the real workers, execs want to outsource them all! Never mind that’s how real work gets done and having actual people to run things is how actual work gets done. In all my experiences with outsourcing, it’s a major pain to deal with for people on the ground, makes simple processes very complex and makes everything take 2 weeks longer to even have a meeting or tie one’s shoe.
Let us know where you stand and what your perspective is.
–Avid patrick.net reader
Joined: 3 Apr 2005
Posts: 429
Comments: 1230
Menlo Park, CA
The CEO and all upper management of all US companies should be immediately outsourced for sure. I’m sure there are some very competent Indians who could do their jobs much better than they could for, oh, 1% of what our upper management is getting paid now. But of course that won’t happen, because it’s not about efficiency or fairness. It’s about making the rich even richer. Especially rich executives.
Totally unregulated international capitalism will make the rich even richer, but the rest of us will be doomed to lives of poverty under a hereditary artistocracy, just like our ancestors were trying to escape in Europe by coming here in the first place.
And not just the workers will be hurt. I think the whole country has been harmed in the long term by moving all manufacturing to China. Now when we can’t pay our debts, and the smoke all clears, who actually has the factories that make the things we all need? China, not us. We will be dependent on them. We lose. We will have to pay whatever they say, or rebuild our own factories, and that won’t be quick or easy.
There are efficiencies to be gained by different countries making different things, but the key to national freedom and prosperty is to avoid critical dependencies.
Joined: 12 Apr 2008
Posts: 2
Comments: 320
Leigh says
I lived in Astoria, Vancouver WA, and Zig Zag (oddly enough at totally different times in my life). Portland rocks, really great city. You must be one really, really fast driver to make it to the Pacific in an hour, especially with the traffic gestapo in Hillsboro. Almost moved to Hood River but took a job in NZ instead.
Joined: 22 May 2009
Posts: 17
Comments: 466
Portland, OR
Bob2356, ‘little over an hour’, I live in the west side right now and go midweek at odd hours so never hit any traffic and I only go 5 over the limit;O).
What were you doing in Zig Zag?!
Joined: 19 Nov 2009
Posts: 0
Comments: 6
I believe in these principles but i am confused about my identity in US. I am an immigrant and i came to know that there are only two parties in this country and i have to either accept one or the other. seems like GOD designed the parties and not humans.
OK here is what i believe in
1) fairness - All kids born on this planet should have equal rights and oppurtunities. Earth and its resources are part of nature and you have every right to grab it if its not fairly distributed. this means people cannot inherit anything from parents. schools are well funded to give education on par with best private schools. We don’t allow monopolies in industry and same goes with not allowing monopolies ( family) in society.
i believe in global warming and i also believe that we need to use earths resources wisely.
2) Free - Everybody should be free to think and do what ever they want as long as they don’t harm other emotionally, socially and in any form.
3) I am against gay people claiming the right to use the name “marriage”. they shoudl keep low profile and get all the rights but not distort the meaning of normal by taking over the media.
4) i am against “abortion” ( exception : when its a risk to mother)
5) i am strong believer in “well regulated” free market. Regulation should be only to make it free and fair ( to avoid cheating like what happened recently during financial collapse)
6) tax ratio between rich and poor should be adjusted in such a way that the wealth distribution in the country remains in line with historic trends ( unilke what happened in last 10 years)
7) i believe in strong family principles, moral values and if possible a healthy dose of any religion.
Ok so am i democrat or republican ?
Joined: 18 Nov 2009
Posts: 5
Comments: 1371
Bellingham, WA
^ your 2 and 3 seem to be in conflict a bit, unless you want to say gay people getting married are harming other people emotionally, which is really a bit weird : )
I think gay people getting married should be just as normal as interracial people getting married, which was similarly illegalized and repressed 50 years ago.
As for 6, I think talking about tax ratios is really the wrong approach. As our host would say, we should tax land values a LOT more (this goes well with your 1, fairness). After we tax the rents out of land values, we may find we don’t have to really tax incomes or sales more than nominally if at all. This is the Single Tax proposal from 100 years ago that makes a lot of sense to me since land is the primary artifact for disproportionate wealth distribution and also the main avenue for getting something for nothing in this country.
The reason there are only two parties in this country is because in any representative system there are two coalitions form in opposition of each other.
Your pro-life and religious stances makes you socially conservative and your fairness stance puts you way out sync with even liberal Republicans these days. I’d say you’re a conservative Democrat, like say Senator Reid.
Joined: 12 Apr 2008
Posts: 2
Comments: 320
Leigh says
Yea, sounds good. It’s a really nice drive, although I’ve hit ice frequently by the cutoff to jewell. I Always made it policy to stop and eat at camp 18 as much as possible.
Being in Zig Zag involves getting really wet mostly, otherwise skiing hood as much as possible. I had a forest service cabin that I stayed in a lot, especially when I lived out of state or country. I was there last year from Nov to Feb with all the big snow. Funny how the roads above Sandy were just fine, below Sandy were impassable. I’m overseas long term for now so I just very reluctantly sold it. Making 25-30 hour trips each way, 18 hours of it flying the rest sitting in airports with 2 small kids is just not practical in any way shape or form.
Joined: 22 Sep 2009
Posts: 2
Comments: 761
doing anything with two small kids, other than watching Pheneus and Ferb, is not practical in my world
Joined: 17 Dec 2009
Posts: 0
Comments: 1
Libertarians are anarchists without the bombs (most of the time) and shouldn’t be part of any serious conversation concerning government. They don’t want one. Libertarians should have been born at least 150 years ago. They’d be happier poking their flintlock out a loop-hole.
Joined: 12 Apr 2008
Posts: 2
Comments: 320
Bap33 says
That’s really sad. What about playgrounds, pools, beaches, the woods, doing puzzles, reading books, cooking, and all of the other activities that are supposed to be part and parcel of the parenting thing?
Joined: 22 Sep 2009
Posts: 2
Comments: 761
bob … buddy … humor somethimes is not based on reality. Lighten up a tad.
Joined: 12 Apr 2008
Posts: 2
Comments: 320
Bap33 says
Sorry, sometimes things don’t always appear as humor. I have a great time with my kids and really am surprised by people who think their children are a drag on their life. I thought that was what you were saying.
Joined: 22 Sep 2009
Posts: 2
Comments: 761
I’m an ultra conervative in my parenting too. The fact my wife has been at home since before the first kid got here 13 years ago shows our approach. Anyone that starts breeding and then drops Skyler and Citrus off at childcare to head off to work should be ashamed.
Oh, ya, and I spank my kids for doing bad things. Sneaking, telling lies and disrespectful acts result in swift action. It has resulted in my kids being frustrated by the behavior that is accepted at school from other kids, but they are doing ok so far. One thing is obvious, welfare kids and working-mom kids all attend the same pre-schools and childcare. More than one teacher has said, “it is obvious to tell when a kid has a stay-home mom”. That makes up for living in a shack and being poor. I just hate the fact that I have to toss them into the sea of dispare that is being created by liberalism, where hard work and moral behavior are laughed at.
Joined: 18 Nov 2009
Posts: 5
Comments: 1371
Bellingham, WA
Bap33 says
LOL. You should be glad for this special form of liberalism that inhabits your mind. In your world, liberalism is creating a bunch of dopes ripe for the plucking.
Joined: 22 Sep 2009
Posts: 2
Comments: 761
and only the intelectual highground inhabited by liberals would allow a person such a great view of all of mankind so as to allow one to see what is in my mind, and in my world. Am I supposed to bow or check my shoe-laces?
Joined: 22 Sep 2009
Posts: 3
Comments: 1479
Bap–
Seriously, does it make you feel better to blame everything on “liberals”? You don’t really think that way, do you?
Joined: 23 Nov 2009
Posts: 3
Comments: 157
Phoenix, AZ
tatupu70 says
Liberals are currently destroying this country. I am sick and tired of people sugar coating this shit. WE WILL STAND UP TO THESE PEOPLE. WE ARE GOING TO TAKE OUR COUNTRY BACK.
people like this: http://www.sphere.com/nation/article/border-crossings-theres-an-app-for-that/19286630
deserve to be shot.
Joined: 6 Nov 2009
Posts: 4
Comments: 549
Oakland, CA
Why is it that conservatives always threaten violence when people do things or say things they don’t like?
In my view that’s a sign of a very weak mind.
Joined: 6 Nov 2009
Posts: 4
Comments: 549
Oakland, CA
Bap33 says
Wow, really?
My Mom was a “stay at home Mom.” And she’s always been very liberal, and so was Dad. And we even got spanked. Whenever the school punished us or called home, we got it at home. They always believed the school in these matters. And I went to private schools where we had corporal punishment and uniforms. In high school we had a strict dress code. Disrespect, lying, and sneaking were always dealt with swiftly at home and at school. We were forced to attend religious services and pray at home. We were taught to love our country and to serve it. They made sacrifices to give us all of this and we were never “well-to-do.” I wore “hand me downs” and yet we always had enough food and decent shelter. And my parents were madly in love and never divorced.
Why is it that conservatives always believe that they are the only ones who espouse certain ideals?
Joined: 9 Nov 2009
Posts: 14
Comments: 542
Milpitas, CA
Bap33 says
Good for you. I know it hurts when you discipline your kids, but you have to do it. Kids in this country do not give much respect to the teachers and elders like where I ame from. Some even call 911 when you spank ‘em. So sad!
Having said that my first one is on the way. It’ll be a girl and I am so excited. My grandma used to say having a baby girl first will change my fortune. I don’t know whether or not this is true or just a coincident, but everything I touched, since my wife pregnant in late May, has turned into gold. Wow!!!
Joined: 22 Sep 2009
Posts: 2
Comments: 761
girls are much more fun than boys in the early years, but at 11 or so they make-up for it really quick. girls dont whine and cry as much, and are smarter/quicker to understand stuff. or, my son is just a hard head. lol. enjoy the experience. the time flies by.
Joined: 6 Nov 2009
Posts: 4
Comments: 549
Oakland, CA
Bap, any answer to my question and my telling of how I was raised? Is that any different from what you are trying to achieve?
Joined: 27 Jun 2009
Posts: 2
Comments: 66
I do this to my kid… I do that to my kid… to raise them proper. Ok, good for you. But, when I hear complaints about my kids being frustrated by the behavior of other kids. I have to ask, what are you doing to solve the problem of the other kids behavior. If the answer is, nothing because they are not my kids, then stop the whining.
A couple years ago I was a a friend’s place in his complex’s recreation room (not a gym). There was a Christmas tree and we were there enjoying ourselves in part of the room. About 5 of the complex neighborhood kids came in being noisy. These were not my kids, but I still told them to quiet down a couple of times. They would quiet down for a while then become noisy again and they began rough housing. One of the little boys about 8ish hit one of the little girls about the same age and this caused one to the ornaments on the Christmas tree to break. I told them all to go home and, if they would not go home, I’d call the manager to take them home. One of the kids (the one that hit the little girl) threatened to tell his father on me. I told him that I would walk him home to talk to his father. He did not take me up on that offer. About 30 minutes later, his father walks in steaming mad at me. He began telling me that I do not tell his son what to do.
I raised my voice to him telling him that he was responsible for the damage his son caused and I’d be more than happy to call the manager to clean up his son’s mess. I also told him that I didn’t know how he was raising his son, but when I was growing up, my father would have tanned my hide for hitting a little girl. I asked him if his dad taught him the same thing. He admitted he did not realize that his son hit a girl. He walked out nearly dragging his son behind him. Don’t know what happened to the kid after that.
Point of this little story, I don’t whine about how other kids act. If I see something that should not be happening I have no fear of stepping in and opening (what some people say) is my big mouth.
Joined: 22 Sep 2009
Posts: 2
Comments: 761
Good job of horn blowing, but all your point did was prove mine.
When you(or me) send a kid to school having tought them right from wrong and they get to see idiot kids not be held to the acceptable standard for behavior, our kids pick-up on it and expess it as anything from “that’s not fair, so-n-so gets to XYZ and nobody else does” to “I dont like so-n-so, they always XYZ and the teacher don’t make them stop. Since I aint sitting in the class room or standing on the playground, I cant very well pick on the little kids as you so proudly did.
The only point of your story was that you enjoy empty bravado for “standing up” to roudy 8 year olds. I bow to you - you badass.
Joined: 27 Jun 2009
Posts: 2
Comments: 66
I’d call it active involvement in solving problems rather than sniveling about the problems. Hardly standing up to kids or anyone else. More like standing up for principles. And, was able to accoplish it without a threat of corporal punishment.
But, if it is pity you want, ok. Poor Bap he can’t sit in the classroom or stand on the playground to solve the problem that he wants to whine about. Let us weep for him. Give him a hug. Get him a beer for his tears.
But, wait…before we pity him any farther, let’s ask:
1) Did Bap ask his child’s school if he could volunteer to watch the playground?
2) Did Bap ask his child’s school if he could volunteer to be a teacher’s assistant in the classroom?
3) Does Bap attempt to do anything else to solve his problem, i.e. become a leader of the PTA or even just attend?
Given the fact that I have worked with several school districts (it was 5 years ago before I switched jobs), I know that most schools have volunteer programs. Even if Bap’s school does not, a little less whining and a little more gumption and perhaps he could start a volunteer group for the school.
But hey, whining and complaining are rights protected by the Constitution.
Joined: 22 Sep 2009
Posts: 2
Comments: 761
go get ‘em you badass. I think that one even has some candy you can bully from ‘em.
Joined: 22 Sep 2009
Posts: 2
Comments: 761
by the way, badass, you did threaten corpral punishment upon the kid (when you marched him to his not-as-good-as-you daddy, and you also imply physical harm to the daddy at the hands of your badass) … go get em tuff guy.
Joined: 22 Sep 2009
Posts: 2
Comments: 761
simchaland says
your post started out saying your mom was liberal, and then you described an ultra-conservative upbringing. My best guess is you mistook a kind heart for liberalism … or you just made up the whole thing. Either one?
All I am trying to achieve is to give my kids all of the tools I can to give them a good solid foundation for life. And, in my opinion, raising kids is a hard job. Also, in my opinion, subsidizing the expansion of the lowest common denominator of society has resulted in very poor results. Lazy people are crappy parents.
Joined: 22 Sep 2009
Posts: 2
Comments: 761
Ryan says
lol … “I raised my voice and threatened to call the manager” … ooooh … wow.
Joined: 27 Jun 2009
Posts: 2
Comments: 66
Pity party for Bap. Can anyone take care of his problems for him?
An antonym of gumption is lazy. What was that, Bap, about lazy people?
Joined: 17 Jul 2009
Posts: 20
Comments: 878
Bankstere Originale says
Do tell, exactly how are you going to “stand up to these people and take your country back”? Lets face it, you aren’t going to do anything beyond listening to lots and lots of AM talk radio
I wish I had someone to blame my problems on.
Joined: 17 Jul 2009
Posts: 20
Comments: 878
Ryan says
That would cut into Bap’s AM talk radio time.
Don’t forget, Bap33 is on welfare. He didn’t follow his own advice and figure out how to provide for his family before he started “breeding”. Now you and I have to pay to raise his litter, and just look at the thanks we get. It’s a sure bet that Bap33’s mother and/or father were also on welfare. Most likely his children will end up on welfare unless he starts providing for himself, stops blaming other people for his problems, and teaches his children to do the same.
Joined: 23 Nov 2009
Posts: 3
Comments: 157
Phoenix, AZ
Bap, your kids will not do better as a result of your proper upbringing. They will be victimized and will generally find it difficult to operate in a system that rewards sneaky lying behavior.
Joined: 17 Jul 2009
Posts: 20
Comments: 878
Bankstere Originale says
Will you people EVER try to break out of the victim mentality? Poor little victims that raise their children to be poor little victims.
Teaching your children that it’s OK to take welfare and government handouts is not what most folks consider to be a proper upbringing. Most parents teach their children the value education, hard work, and personal responsibility.
Joined: 22 Sep 2009
Posts: 2
Comments: 761
Nomo, you’re a disingenuos fable teller. While I can not prove that I have never taken a hand-out, you can not prove I have. And the reverse is true. As a matter of fact, I can not prove that I am anybody that has done anything, and you can’t either — but you will never stop attacking. In other words, a perfect liberal. kudos to you.
…. how my posts ignite you to attack me is really funny. So lib, and so predictable. Cheers.
I can almost imagine DocNomo all hunched over, typing really hard on each key to prove his point !! lmao. “What a maroooon” (in the voice of Bugs Bunny).
What was the topic again?
Merry Christmas folks.
Joined: 24 Aug 2007
Posts: 161
Comments: 2818
Nomo,
you’ve been (im)properly spanked and put to bed without supper. NO BOX OF CHOCOLATES FOR YOU!
tee hee hee - I love it when I’m clever!
Joined: 18 Nov 2009
Posts: 5
Comments: 1371
Bellingham, WA
Bap33 says
You forego the $1000 per child tax credit? Thought not, leech.
Joined: 22 Sep 2009
Posts: 2
Comments: 761
you miss the point my dear Troy. Proof. lmao. I think it is more than that too.
on that child credit thingy … if a person put $X into the IRS’s strong-hold over a years time, and through the tax filing system is returned $X it is a hand-out in my opinion. That earned income child credit thingy is just hidden welfare in many cases .. in my opinion.
What’s the topic again?
@ellie,
are you suggesting my spellling and grammar may have issues? lol. Merry Christmas ellie.
Joined: 22 Sep 2009
Posts: 2
Comments: 761
Nomograph says
DocNomo … are these values your personal top three and are they listed in order?
Joined: 9 Nov 2009
Posts: 14
Comments: 542
Milpitas, CA
Troy says
“You forego the $1000 per child tax credit? Thought not, leech.”
Don’t call people name like that. I sincerely expect you to be better than this.
Merry Christmas Everyone.
Joined: 18 Nov 2009
Posts: 5
Comments: 1371
Bellingham, WA
E-man says
George Bush hands him $1000 /yr just for sprogging, increasing the national debt by over a million dollars (through the magic of compounding) by the end of the century.
Bap didn’t do anything worthwhile to merit that tax credit, yet he took the government handout anyway. What a leech
Joined: 23 Sep 2009
Posts: 30
Comments: 762
Nomograph says
Not to mention he is taking out a FHA loan to recoup the 8K tax credit that conservatives so love.
Joined: 23 Sep 2009
Posts: 30
Comments: 762
Troy says
How about that 8K tax credit you chose to receive.
Joined: 22 Sep 2009
Posts: 2
Comments: 761
trying, but as of yet, no success.
Joined: 24 Aug 2007
Posts: 161
Comments: 2818
Bap33 says
Bap33 says
Bap, I’m not suggesting that your spelling & grammar may have issues. I’m flat out saying it. You often use language that reverses the meaning of your message to make you sound - gasp! - liberal. lol, I enjoy it, and I’m sure that I’m not the only one to do so. An example:
Bap33 says
Ignite: To set on fire; kindle. Chemistry, to heat intensely, roast.
Incite: To stir; encourage, or urge on; stimulate or prompt to action: to incite a crowd to riot.
Your comments after your misuse of the word “ignite,” instead of fulfilling your mission of appearing condescending and propping your ego ’cause you’re smarter than a doctor, actually gives one the impression that you lack education and/or intelligence.
Joke’s on you. Merry Christmas.
Joined: 22 Sep 2009
Posts: 2
Comments: 761
ok … jokes on me …. I meant ignite … as in “light a fire under ones butt and makes them jump up in a flash”. Thanks for your support. lol I know my writing sux. I know, my writing sux. I know my writing, sux.
Joined: 24 Aug 2007
Posts: 161
Comments: 2818
Bap33 says
Bap - I don’t doubt that your posts invite a response, as evidenced by the responses to your posts. But you might be flattering yourself if you believe that you light a fire under Nomo’s butt, or make him jump in a flash.
A response written in a laid-back manner doesn’t lend itself to the urgency you’re intimating. I don’t know Nomo, but believe that he has the ability to decide when something is worth jumping up in a flash. He (and various others) exploit your lack of command of the language as they make fun of you. It’s funny, and clever.
So, I thank you and several other posters on this forum for the untold hours of amusement you’ve given - and look forward to many more. Merry Christmas.
Elliemae
Joined: 22 May 2009
Posts: 17
Comments: 466
Portland, OR
RE: the child credit. I like to think that my government pays me to have sex;O)
Joined: 6 Nov 2009
Posts: 4
Comments: 549
Oakland, CA
Bap33 says
Um nope, I really mean my Mom was and IS a LIBERAL. She’s very liberal. And I made nothing up. That was my upbringing. Child rearing according to political ideology is stupid. Most parents of any political orientation will use discipline. My whole point is that you and other conservatives seem to think that only you hold certain ideals dear. And my point is that we have some ideals in common. You neglect to take a look at the true definition of the political word “liberal.” Liberals are free thinkers. My parents were free thinkers who voted for whomever they thought would get the job done well. We worked on campaigns. Trust me, we didn’t work on conservative campaigns. My upbringing wasn’t exactly “conservative” in a political sense. Liberals have traditions and ideals we like to uphold too. And we share many of the same ideals as conservatives claim to hold.
So, why is it that you think that only conservatives have ideals?
Something tells me that you are fighting a “straw man” liberal that exists only in your imagination. We liberals love our children and want the best for them. And we even believe in discipline. However, we don’t all hold the same ideals because we are free thinkers. We can be liberal and pick and chose from many traditions. We liberals aren’t “boxed in” like it seems conservatives are.
So, again answer the question that I really asked, why is it that you think that only conservatives have ideals?
Joined:
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Just wanted to ask if anyone else is having trouble viewing the forums with Google Chrome?
Joined: 3 Apr 2005
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Menlo Park, CA
What kind of trouble? Could you send me a screenshot?
Please email me about problems with the forum: p@patrick.net
Joined: 27 Jan 2010
Posts: 0
Comments: 1
Hey Patrick, When do u think the interest rates will raise to 10+ percent so prices on homes will be very cheap?
Also do u own many properties? and how did u start
Joined: 3 Apr 2005
Posts: 429
Comments: 1230
Menlo Park, CA
I think interest rates will rise to 10+ percent when either the Federal Reserve Board all goes to prison, or when the Federal Reserve Board succeeds in destroying the dollar. Whichever comes first.
I don’t own any property, but now that I track the rental rates vs price, I’m tempted to buy rental property in some bad neighborhoods. There are good deals there.
Joined: 18 Nov 2009
Posts: 5
Comments: 1371
Bellingham, WA
I think we’ll see 2% mortgage rates before 10%.
10% would utterly destroy everything, including the wealth basis of people buying the bonds.
A real mexican standoff.
Joined: 3 Apr 2005
Posts: 429
Comments: 1230
Menlo Park, CA
I think you’re right that interest rates will probably be kept low to protect wealthy bond holders, esp. US Treasury Bond holders. Bond prices fall as interest rates rise.
But I disagree that high interest rates would destroy everything. I think low interest rates are already destroying everything by artificially inflating assets and preventing rational investment.
Joined: 18 Nov 2009
Posts: 5
Comments: 1371
Bellingham, WA
L.10 Assets and Liabilities of the Personal Sector (1)
Total financial assets
2004: $34.7T
1Q09: $37.1T
(+7%)
Total liabilities
2004: $14.7T
1Q09: $19.8T
(+34%)
The market has rallied since 1Q09 so assets are up ~20%
Bernanke needs inflation, but so did Japan.
We’re finding, like them, that there’s no clean way to back out years of massive and systemic misinvestment in land valuation and unneeded construction.
It’s hard marking that $5.1T gain in liability to $0.
Japan’s M1 was ~$1.5T when I was FOB there in 1993. Now it’s $4.8T and wages and prices there are lower now than then.
We’re not Japan in the specifics but the liquidity trap is the same AFAICT.
Joined: 1 Feb 2010
Posts: 0
Comments: 1
Patrick -
First of all I would like to start for thanking you for putting up this site…I have been following it since 2007 and it is awesome!! You seem to be very focused on Bay Area or CA in general because that is where you are….I am also orginally from the Bay but moved to VA in 2005. Can you please add some information on Loudoun County in VA. Where do you see the future of this county?
Joined: 3 Apr 2005
Posts: 429
Comments: 1230
Menlo Park, CA
I don’t know anything about Loudoun County. But I always say just look at the rent/price ratios.
If yearly rent is under 5% of purchase price, then prices are too high. Rents are determined by jobs. You can’t borrow to pay rent. So rents are usually at market price.
That means the house price compared to rent tells you whether to walk away — or whether to run away!
Joined: 10 Feb 2010
Posts: 1
Comments: 6
I had once read that the market is always right. Unlike you Pat, I was a licensed Real Estate Agent from 1981 to 1997. Mostly in the bare land sector some business opportunities and multi. unit. It was futile to argue value with sellers as neighbor’s prices skyrocketed. The new logic was BUY at any price because it will be worth 20 % more next year ! Yippie Kia Yae !
If we become educated as to WHY real estate prices became detached from reality we would understand where the values will return to. This IS what happened !!! One day In 1973 each american family was given double the credit for the purpose of buying a home. The reason was never discussed because its chauvinistic. ( Women were not considered credit worthy prior to 1972 !!! ssshhhh!!! ). Home prices exploded till 1981 when real property prices fell nationwide by 17%. I know this well as a regular comment around the office was that real estate sales were profitable till I got in the business. In the meantime Woz and Jobs were introducing a gadget that created more profit than ANY other invention Since and even BEFORE the alleged big bang. Virtually everyone in the free world bought some for the house and some more for the business And they replaced each and paid about $1,500 for each one every other year from 1982 until Around 2002 when Charles Schwab was asked why they have not replaced their work stations this year. The response was they do not need to. Hardware sales hit a brick wall. Do a little math. The amount of money generated by hardware is only a portion of that era’s cash flow. Consider peripherals, software, ink sales, remember the “DOT COM BUBBLE”.
That orgasm of cash flow caused over exuberance when shopping for Real Property and actually caused multiple buyers to offer MORE than asking prices. They did not have google earth nor did their Selling agents (for some reason) disclose the fact that their is still plenty of land to go around.
Humans phenomenally pay a multiple of 2.5 times their annual income for a home. When they hit the lotto, bets are off. The Bay area’s prices actually passed 8 times median income.
No one argues that 17% of the people who live in the Bay Area can afford to buy in the Bay Area. I am willing to wager that approximately 17% of the Bay Areas wage earning population is/was in the high paying Technology field.
Thank You Pat, Promote freedom of education.
Joined: 14 Feb 2010
Posts: 0
Comments: 1
I echo the first post about your 3% rental figure EVEN in the Bay Area. The calculation does not work out at all. I like most of what you say, but that is simply not an accurate calculation of the rental market. For example, I am renting in the Claremont Hills in Berkeley, CA. It is fair to say the home value is 550K to even 600K because of a likely bidding war due to desirable area, front yard, back yard, three car ports, and great view. There is no way I could rent this home for less than 2,000 which your formula concludes. $2,300 to $2,500 is the rental range of this home.
Joined: 3 Apr 2005
Posts: 429
Comments: 1230
Menlo Park, CA
I’ve been collecting a TON of rent/buy data lately, and more than 40% of rentals in the Bay Area are returning less than 4% of their valuation (from Zillow, tax records, etc).
So maybe you rental is closer to break-even for the landlord, but very many are not, especially in more expensive neighborhoods.
This is from my Bargain Finder service: http://patrick.net/forum/?cat=3
Joined: 14 Mar 2010
Posts: 0
Comments: 1
Hi Patrick,
One variable you have not addressed is the national debt and the probabilty the dollar will devalue an additional 90% within the next year. It has already devalued by some 40% in the past year. If a home was purchased today for $400,000 then conceivably it could be worth $4,000,000 in a year if the dollar drops as predicted.
Joined: 23 Mar 2010
Posts: 0
Comments: 4
Hello Patrick,
I was falling for the whole “housing market hit bottom” line from my realtor, and the different institutions that try to profit from real estate. I live in the Florida Miami-Dade County/ Broward County area. I was hoping to buy my first home in the Broward area. From what I understand… these areas are the worst in the list for overvalued homes, and where foreclosures are at their worst. The market value is set to fall here the most. I recently found a 2 bedroom / 2 bath 1047sq foot home built in 1976 in the Broward county area for $95,000 as a short sale. It has many renovations and a new roof from 2006. I have put in an offer but this process can take months. After reading so much information on statistics from your site I’m thinking about forgetting the whole home buying thing for now anyway.
I was hoping to get some insight into this. I rent now for $800 in a duplex in a decent area in Dade County. I split utilities with the homeowner and I always spend around $900-$1000 a month for everything.
If I purchased that home in Broward County for $95,000, I estimated my closing costs to be around $10,000. And because the taxes on that property have a homestead exemption, taxes would be around $1900 a year. Plus hazard insurance, flood insurance, along with my principle/ interest/ and PMI at around the 5.25% interest rate… my payments should be around $870 all together. Of course this is not counting utilities. I would be paying $70 more a month to have my own property as opposed to renting, which at one point seemed to be more of a security than it is now.
Should I back out now for the next couple of years and continue renting?
Joined: 10 Feb 2010
Posts: 1
Comments: 23
lillybee62002 says
Personally I am of the opinion not to buy unless you plan to be there for at least 10 years. I work in the default services industry and have a glimpse of what is in the pipeline and it’s pretty ugly. I bought this year (at about rental parity) but I plan to be where I bought for well over 10 years.
At that low of a cost of a property you probably won’t get a tax savings as you would only pay about 5K in interest. You would be putting money to principal though. Assuming your there for 10 years you would still owe 77K on the property (30yr/5.25).
Will your rent still be around $800 in 2020?
Will your place be worth $77K in 2020?
Do you want to be there in 2020?
Joined: 23 Mar 2010
Posts: 0
Comments: 4
I wish I had answers to your questions. I’m not sure about them. What is your guess to what values might be like around that time in the area I was planning to buy in? I wish I had some kind of reliable information that can give a good indication of the condition of the market in 2, 5, 10 years.
That house that I’m thinking about purchasing… what do you think the values might be like in 3-5 years based on the information you see everyday?
Joined: 10 Feb 2010
Posts: 1
Comments: 23
lillybee62002 says
I wish I had the answers too. Short term is pretty bleak.
I only know everything point to the pice dropping over the next couple years. One of our larger clients has a HUGE back-log of loans that are already delinquent that they need to figure out what to do with. The “Shadow Inventory” is real. In 2008, we were seeing 4000+ loans per week of just HELOC’s that were >90 days late from one bank.
FWIW one company is taking the a current BPO value and cutting it by 20-45% (depending on state/zip) adding in closing, foreclosure costs, holding and reo costs when deciding what to do. For FL your looking in the 40% range and it taking 330 days or so to handle the whole process.
I would say if your looking to live there for only 5 years, rent.
Joined: 23 Mar 2010
Posts: 0
Comments: 4
Good advice. But to clarify… the house I was looking at is a short sale. I noticed on the tax roll that the assessed value last year dropped to $129,000. They are asking in the short sale for $94,000. Do you think the banks are already taking into account the drop in value that is coming?
Is the 40% drop in value the worst of what will happen? Or that is just this year alone and we will be seeing more drops in value in coming years?
And I was thinking 5 years, but I would not mind being in that area I found for longer… I thought I could always rent it out too in case I need to move. Not sure if renting it out will be worth it at that time.
Joined: 24 Aug 2007
Posts: 161
Comments: 2818
Wow - patrick, a side of you we never knew!
edited response: I wrote this in response to a spam ad for sex-related material. But since he removed it, I retract my observation….
sorry!
Joined: 3 Apr 2005
Posts: 429
Comments: 1230
Menlo Park, CA
Not a side of me. Sex spam deleted. Those guys are like cockroaches.
Joined: 3 May 2010
Posts: 0
Comments: 1
Socialism is not freedom.
Joined: 24 Aug 2007
Posts: 161
Comments: 2818
andrew.lieberman says
And pertinence is everything.
Joined: 18 Nov 2009
Posts: 5
Comments: 1371
Bellingham, WA
Socialism is not freedom.
Au contraire, mon frère.
Socialism provides liberty of action by leveling the playing field between the haves and have nots. Without socialism, “all the freedom you can afford, but not one drop more” obtains.
It can go overboard, but when done right (eg Canada, the Eurosocialists, Australia, NZ, Singapore, Japan to some extent) the real-world results speak for themselves.
Any unregulated economy is just a money pump that sucks wealth from the weak to the strong in a self-reinforcing closed feedback loop.
In such an economy there’s generally opportunity at the margin to escape the rat-race through entrepreneurial effort, but overall the great bulk of jobs are uncreative and soul-killing. Socialism just recognizes that in a modern economy somebody’s got to pick up the trash, drive the buses, clean the toilets, front the storeshelves, and do the millions of other shit jobs that need to be done. These shit jobs have low skill levels and so are fungible and the people stuck in them lack bargaining power, but socialism obviates this dire state of affairs by attempting to provide subsidized social services — health, education, transportation, recreation — that the toiling masses would normally lose access to as they become increasingly peonized by predatory capitalism.
Few jobs outside the rat-race are really wealth-creating. Most are just naked rentierism, parasitical intermediary activities like real estate agents, mortgage brokers, landlording, resource extraction. A good example of socialism that kills two birds with one stone in this area might be Norway, with their oil-funded Pension Fund, but I haven’t been there so I don’t really know. But I do think they’ve got their act together better than the US.
Joined: 4 May 2010
Posts: 0
Comments: 1
National Socialist Party… that’s socialism.
Joined: 7 May 2007
Posts: 27
Comments: 588
Davis, CA
Bernanke is caught in a trap. He CANNOT raise interest rates as it would destroy the only certain money-maker the big banks have right now. Borrowing at nearly zero and using it to buy Treasuries or similar lame “money-printing” schemes is what is keeping their leaky boats afloat. All jawboning about raising rates, is just whistling past the graveyard. I would expect this “we might raise rates next cycle” to repeat for at least 3 more years, possibly as much as 5.
Joined: 3 Apr 2005
Posts: 429
Comments: 1230
Menlo Park, CA
Heck, he can’t lower them either! So the Fed is completely impotent, except for the possibility of helicopter drops of cash.
This next crash in the stock and housing markets will be interesting, because there’s nowhere for interest rates to go. Looks like the stock market is crashing at this very moment, down >2% today.
Joined: 22 Sep 2009
Posts: 2
Comments: 761
Patrick,
I think it would be a very good idea to see where the NAR and CAR are putting their political money. Who is getting their lobby money for this next Nov. Can you get that info? Do you think it would be important for voters, specificly PatNet voters, to know? I know it would matter in my vote.
Joined: 3 Apr 2005
Posts: 429
Comments: 1230
Menlo Park, CA
I’ve heard that the NAR and CAR contribute to everyone to make sure everyone owes them something. But it would definitely be interesting to see exactly where the money goes. There are laws about recording contributions, but I think they’re pretty weak.
Anyone know how to get data on which politicians have been bribed the most by realtors?
Joined: 29 Apr 2007
Posts: 1
Comments: 163
I think you’re right Patrick, it seems about 50/50 bribing to both parties:
http://www.opensecrets.org/industries/indus.php?ind=F10++&goButt2.x=7&goButt2.y=8
Click on the “Recipients” tab from that site to see who is receiving the most RE bribes.
It is slightly higher in recent years to Dems. They probably bribe the party in charge a bit more, but they definitely spread the obligation around.
Joined: 6 Nov 2009
Posts: 4
Comments: 549
Oakland, CA
andrewl570 says
No, that’s fascism. It’s an entirely different political philosophy. Why don’t you look it up in the dictionary or in a history book? You may also want to look up another word, “propaganda.” Then you might understand why that particular fascist party wanted to try to come across as “socialist” when in point of fact, they were fascists.
Joined: 18 Nov 2009
Posts: 5
Comments: 1371
Bellingham, WA
NSDAP shipped the real socialists in Germany to the KZs in the mid-30s. That’s what the KZ system was originally established for.
Red triangle—communists, trade unionists, liberals, social democrats, Freemasons, anarchists.