Why Obama is Wrong on Helping the Construction Industry

Many Americans lack an understanding of home construction and its history in our economy. Like Obama, they pretend that construction can come back.

Prior to the mid-1970s and the huge run-up in home prices, housing was not nearly as dominant a sector as it became over the following 30 years. Why? Post-war wealth and the Baby Boom.

It was called a “Boom” because there were ALOT of us. We needed to be housed. Because of our increasing standard of living in post-War America, added-to by the Reagan revolution and the increase in wealth it brought to the Middle Class through the tax cuts passed by the Democrat Congress, Boomers needed, and could afford, huge numbers of homes.

So the construction industry built them. And employed millions to do so.

But the Boomers all have homes now. We don’t NEED the numbers of construction workers we needed when building homes for the Baby Boom. This OUGHT to be obvious to anyone understanding the word “Boom.”

As we no longer need houses, we no longer need large numbers of construction workers. Helping them with bailouts only (stop me if you’ve heard this one before) kicks the can down the road.

Boomers also think those homes are their nest-eggs. Why? Because when they needed homes, their parents and grandparents were retiring and selling their homes at hugely inflated prices – supply and demand worked FOR the parents & grandparents of the Boomers. Boomers – STILL – think that THEIR homes will be worth exorbitant amounts of money when THEY retire.

They won’t; Supply and Demand now is working AGAINST Boomers.

Because Boomers basically didn’t have kids.

The Total Fertility Rate (TFR) in America now is barely 2.1 – replacement. (It’s worse – far worse – in Blue states; they don’t believe in the future so aren’t populating it – but they ARE demanding entitlements for which those future generations will have to pay – they just are refusing to populate those generations.)

With a 2.1 TFR, we won’t NEED any new homes… population is FLAT…. Sure, folks may want a newer style or a different floor plan etc., but those are predicated on increased wealth – and the Boomers have done everything they can to ensure our wealth does not increase. On the Left we have the socialists of Pelosi and Obama, and on the Right we have the theocracy crowd doing their best to force intelligent voters to the Left.

Home values have plummeted. They are not coming back – there simply are not enough people for a need to build MORE houses, and not enough money to modernize what’s there. So we won’t need more construction workers to build or modernize them.

Those 2nd-half Boomers, the Bridget Jones Generation*, need to take a new look at their nest eggs, because home price are NOT going to come back – there is no force to drive a return to pricing of the 1980s or 1990s.

It’s been commented by other that things that can’t happen generally won’t.

Home pricing won’t come back… not in the lifetime of anyone now living. And if current generations don’t pick-up the baby pace, those prices will NEVER come back – and there will be NO ONE to pay in to SS when those now in childbearing years need it. (Frankly, if you & your wife haven’t had at least 2 kids you should not be eligible for SS as you collectively have chosen to be a parasite on society rather than a net addition.)

Tangentially, with housing prices in the tank, it’s a perfect time to implement a flat tax. One of the primary arguments against a flat tax has long been that it would tank housing prices by ending the mortgage deduction. Well, housing is in the tank, not coming out any time soon, so it would be wise to take advantage of this.

With Obama’s precedent of ignoring Congress to do whatever he wants (DREAM, DOMA, etc.), Romney could implement a new tax code by fiat. What’s good for the goose is good for the gander. Or he can ram it down our throats (Obamacare) with nary a Dem vote. Again, goose-meet gander.

*The Bridget Jones generation has been postulated by demographers in America as the 2nd-half of the Baby Boom (among other things – women staying single longer, putting-off childbearing, etc.). There seems a convincing argument to be made that those born 1945-1953 and so eligible for the Vietnam Draft, who were raised on Gunsmoke, Wyatt Earp, Combat, Bonanza, etc., have a decidedly different outlook on life than the post-1953 Boomers – not eligible for the Draft, raised on 8 is Enough and The Brady Bunch. To me, it’s a convincing argument. I was born in 1954 with a brother in 1953.)

About Alex Scipio

About Alex Scipio: Alex moved out of the People's Republic of California to the Free State of Arizona, finally tiring of the lack of the Bill of Rights, the overgrown idiocracy, and the catering to non-Americans & welfare recipients. He still wonders how America got from Truman, Eisenhower, and Daniel Patrick Moynihan to the Liberal and Conservative extremes so badly managing America today. And, yes, islam DOES need to be annihilated. And doing what he can to get folks away from the extremes of political life.
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