Stop Shoulding All Over Yourself

When I relaunched this blog in the heat of the polarization of a new leader, I was chastised by some for my calling the President’s economic initiatives as positive for the economy. One dissenter and a strong believer in Libertarian and Ayn Rand like views is JP Micek.

I told JP I get it. But I am an advocate for real estate in this blog. In fact, the main purpose of this blog is to spread positivity about real estate. And often syndicated anything that can be construed as positive. Being an unapologetic propagandist for the market.

If our objective is to change the real estate market through the new media. Then anything that can be construed positive, is positive.

However on the deeper economic issue of all this Government meddling I am totally in agreement with JP. In fact, Jay Thompson (The Phoenix real estate guy ) recently wrote a very convincing reason why Government intervention is a bad idea:

What if we did nothing? Blasphemy! DO NOTHING? “Are you insane? We have to do something… why we can not simply stand around and wait for this thing to fix itself!’

Why not?

Markets, be they stock markets, commodity markets or real estate markets all behave in similar fashion and are guided by basic economic principles. The Law of Supply and Demand, the economic general equilibrium theory, elasticity – these and more dictate the behavior of markets, including the real estate market.

Back in 1776, Adam Smith wrote about the “invisible hand” in The Wealth of Nations. Grossly over-simplifying and paraphrasing, the theory of the Invisible Hand states that the greatest benefit to a society is brought about by individuals acting freely in a competitive marketplace in the pursuit of their own self-interest.

The government really has no place interfering in a free market economy. The real estate market will, over time, move toward equilibrium and “fix itself”.

However, this reminds me of the debates I have with my Libertarian friends. It seems the line between what should be and what is, gets lost in the need to be right. I once heard some self help guru ask, “would you rather be right, or successful?”. I understand it isn’t that easy.

Many believe, that much of what we have witnessed overtly over the start of this administration and previous administrations is nothing more than tyranny. For many this strikes at a visceral level called patriotism. So it is a much deeper issue than just winning an argument.

As Jay writes, a free market is a better market. But let’s then bring it closer to home. What if we took away easy loans, loan mods, cram downs, etc. But those are today’s words. What about the age old easy loans for Vets and other groups? What about the interest write off? OUCH!

In the end, our modern economy has been built around Government incentives. And by all designs it seems like the economic meddling will continue. When entire markets are built around these incentives, I am not sure how you can ever turn that ship around. But one thing is for sure. If we don’t, the system will simply eat itself as Atlas Shrugs.

So let’s be careful on what we accept as incentives for trade-offs for our economic pain.

Related articles:

• Rand’s increasing relevance (schansblog.blogspot.com)