Why on Earth Anyone Would Want to Order OOBonomics, Part Two: Excerpts
OOBonomics on Spending:
Since 2008, people have been managing their money like responsible adults, which is about the worst thing that can happen in a consumer-driven economy. Cutting people’s taxes and hoping they will spend the extra money wisely won’t work any better than giving people treadmills and hoping they will exercise on them regularly. They will probably just hang clothes on them instead. Some newer models even come with extra hangers.
OOBonomics on the Stimulus:
For years, our economy grew because we all spent large sums of money justified by the illusion of housing and stock value appreciation – this was like readily available heroin. This spending created an abundance of stores, restaurants, hotels and malls that needed our money to stay afloat. One could say that consumers became addicted to a certain level of consumption based on the assumption of ever-rising home values, and businesses became addicted to a certain expectation of demand based on ever-rising consumer spending.
The heroin supply of housing stock appreciation suddenly dried up. Given the choice of sending the country cold-turkey into a Depression or helping us to keep spending, the Government has chosen to keep spending, through the Stimulus Package. Like Methadone, this money is supplied by the Government and doesn’t provide remotely the same high, but it does keep us from going into acute withdrawal. The aforementioned 2008 Stimulus Check was the first Methadone “fix.” Another fix followed in 2009. And it is inevitable that further deficit spending will follow.
Welcome to the Methadone Economy.
OOBonomics on busting up the real estate brokerage cartel, in order to slash commissions:
The residential real estate brokerage industry, with their fat, unyielding, anti-competitive commission structure, is doing more than any other group of smiley-faced part-time workers to exacerbate the housing crisis and increase the size of various bailouts. This chapter tackles the reason it requires not one but two of these brokers to tell you to ‘notice this hardwood floor,’ as though you could possibly not be noticing it because you’re standing on it in lieu of falling into the basement.
Most of these brokers won’t even let you pay them by the hour no matter what rate you offer. I offered $100/hour – much more than most of them make – but they acted like they had no interest in taking my business even though I wanted to give it to them. It reminded me of the time I tried to take a train in a Red State.
No one has gone after these people yet. The closest the industry came to being held accountable was that in 2007 the Justice Department entered a consent decree making the National Association of Realtors agree to adhere to their own standards, which would be like making a drunk driver agree to adhere to the standards of driving expected from drunk drivers.